VIC: Q&A Roles and Responsibilities of the Owners Corporation Committee

This Q&A is about roles and responsibilities of the Owners Corporation Committee.

Table of Contents:

• QUESTION: A committee member’s family owns a plumbing company. That company has been engaged to carry out extensive work in the building. Should the committee member have declared this conflict and been excused from the decision making process?
• QUESTION: Are sub-committees in effect until dissolved by the committee, or are sub-committees appointed every year during the AGM in a similar manner as the Owners Corporation committee?
• QUESTION: I live in a 4 lot strata building. Our newly appointed strata management appointed me as Chair without my knowledge, consent and approval. Do I have to accept?
• QUESTION: Could you clarify changes to numbers on an Owners Corporation Committee?
• QUESTION: What is the best way to contact the Owners Corporation? I’d like to address some issues like hygiene and the cleaning of common areas.
• QUESTION: Are you able to remove our current chairperson and appoint a new chair before the next AGM? What is the process?
• QUESTION: We have 3 separate buildings at our complex. Should there be a proportionate number of Owners Corporation committee member representatives for each building?
• QUESTION: Why are unit owners not permitted to attend Owners Corporation committee meetings as silent observers?
• QUESTION: I recently took on my first Owners Committee Chairperson role. Our management company has asked me to sign contracts. Can you clarify if this is usually part of the Chairperson’s role?
• QUESTION: Who usually chairs the AGM? Does it always have to be the Owners Corporation Manager? Why can’t we elect a Chair at the AGM each year?

Question: A committee member’s family owns a plumbing company. That company has been engaged to carry out extensive work in the building. Should the committee member have declared this conflict and been excused from the decision making process?

We have a committee member who works for his father’s plumbing company. The committee voted to engage the plumbing company to upgrade the building’s hot water system. The price for the work has gone from around $500k to over $1m. The committee member’s family are gaining financially from this work that could have been done for half the cost with another plumbing company.

The committee have issued owners with a special levy to cover the extra expense. Should the committee member have declared this conflict and been excused from the decision making process?

Answer: You may decide to lodge a formal complaint.

Under section 117 of the Act, committees and their members must perform their duties honestly and in good faith, with due care and diligence and in the interests of the owners corporation. Further, the Act states a member of a committee must not make improper use of the member’s position to gain, directly or indirectly, an advantage.

Also in regards to the costs you have quoted, section 24 of the Act states, in summary, that special levies may be raised to cover extraordinary items of expenditure however a special resolution (75% of lot entitlements) is required if the amount is more than twice the annual budget.

You may decide to lodge a formal complaint in regard to this issue by referring to Part 10 – Dispute resolution – of the Act.

Stratabase Holdings
E: [email protected]
P: 0412 247 589

This post appears in the February 2023 edition of The VIC Strata Magazine.

Question: Are sub-committees in effect until dissolved by the committee, or are sub-committees appointed every year during the AGM in a similar manner as the Owners Corporation committee?

Answer: The OC Committee has the authority to create and dissolve sub-committees as it wishes

The OC Committee has the authority to create and dissolve sub-committees as it wishes, subject to a resolution at a general meeting that stipulates that sub-committees can only be appointed or dissolved at a general meeting (and/or subject to other resolutions or OC Rules that dictate how sub-committees are to be governed).

It would be rare that the OC Committee is not granted this authority. Given that sub-committees exist to help the OC Committee with their decision making, it would (in my opinion) be counter-intuitive to revoke this authority as it would likely stifle the decision making process.

Callum Wilson
Bright & Duggan
E: [email protected]
P: 0427 339 980

This post appears in Strata News #620.

Question: I live in a 4 lot strata building. Our newly appointed strata management appointed me as Chair without my knowledge, consent and approval. Do I have to accept?

Answer: As you have not been appointed by the Lot Owners, or via a majority vote, your appointment is not official.

It is possible that your Manager appointed a Chair due to stipulations within the Owners Corporations Act that a Chairperson must be appointed see Section 98 and Section 105:

98 Chairperson of owners corporation

(1)If an owners corporation does not have a committee, the lot owners must elect a member to be the chairperson of the owners corporation.

105 Chairperson of committee

1. The members of the committee must appoint a member of the committee to be the chairperson.
2. An appointment as chairperson under subsection (1)—
   
   1. Is to be conducted by means of a majority vote;
   2. may be revoked by means of a majority vote.

However, as you have not been appointed by the Lot Owners, or via a majority vote, your appointment is not official.

It is worth noting that there is no penalty outlined within the Act for not appointing a Chair, and many Owners Corporations do not have one.

We would recommend that you email your Manager to say that you do not accept the position, and to advise the remaining 3 Owners that the position of Chairperson is still vacant.

The Knight Team
The Knight
[email protected]
P: 03 9509 3144

This post appears in the December 2021 edition of The VIC Strata Magazine.

Question: Could you clarify changes to numbers on an Owners Corporation Committee?

Answer: The new changes say that a committee has a maximum of seven but it can resolve to have up to 12.

The result is going to be the same. The current situation is: a committee must have a minimum of three and a maximum of 12 members. It’s perfectly lawful when electing a committee for an OC to resolve to reduce the numbers to somewhere less than 12 but more than three. Just to repeat: a maximum of 12, but an OC can resolve to have less currently.

The new changes say that a committee has a maximum of seven, but it can resolve to have up to 12. It really ends up the same result. Currently, it’s 12 and you can come down, with the amendment it’s seven but you can go up.

Tim Graham
Bugden Allen Graham Lawyers
E: [email protected]
P: 03 9086 5832

This post appears in the December 2021 edition of The VIC Strata Magazine.

Question: What is the best way to contact the Owners Corporation? I’d like to address some issues like hygiene and the cleaning of common areas.

How to best contact the Owners Corporation?

I only want to address some issues like hygiene and cleaning common areas. This is less formal than a complaint, but I’d still like to submit in written form for tracking any progress or in an open platform or portal for other residents to participate in a discussion.

Any suggestions?

Answer: Email the appointed Owners Corporation Manager for your property

I would suggest you email the appointed Owners Corporation Manager for your property and if you don’t know who the individual is then email the Owners Corporation Management Company.

Typically, there should be an email address for the Manager on documentation that has previously been issued (i.e. AGM notice) or on their website.

Gregor Evans
The Knight
Email
P: 03 9509 3144

This post appears in Strata News #500.

Question: Are you able to remove our current chairperson and appoint a new chair before the next AGM? What is the process?

Our Owners Corporation Manager made the decision to re-appoint our chairman for the next three years. The minutes were recorded as – Mr ‘So & So’ was appointed Chairperson of the Committee.

Two meetings later, committee members are seeking to revoke the chair and vote a new person into the position.

What is the process to revoke the Chairperson of the Owners Corporation Committee and implement this change?

Answer: If the committee is wanting to remove the chairperson before the next AGM, a meeting of the committee should be arranged.

Usually a committee member or the chairperson of the committee is voted in or out at an AGM.

If the committee is wanting to remove the chairperson before the next AGM, a meeting of the committee should be arranged.

In line with the OC Act 2006, the relevant notice of meeting including meeting agenda must be issued to all committee members by the committee secretary at least 3 days before the meeting. A quorum (50% or more) must attend the meeting for any resolution to be a final resolution of the committee. (A committee member is considered present if attending via teleconference/Zoom).

Voting can be via a ballot or a show of hands at the meeting. If the resolution to remove the current chairperson is put forward and the majority vote to remove him/her, then a new chairperson can be elected. The intention to elect a new chairperson should also be stated as an agenda item.

The chairperson can be removed by a majority vote of the committee.

Minutes of the committee meeting must be kept on file for possible future reference.

A chairperson can also be removed via a postal or email ballot of the committee members. Please see section 111 of the OC Act 2006 for the correct process as arranging a postal ballot differs from a physical committee meeting.

The results of the ballot (votes) must be kept on file for possible future reference.

Guy Garreffa
StrataPoint
E: [email protected]
P: (03) 8726 9962

This post appears in the August 2021 edition of The VIC Strata Magazine.

Question: We have 3 separate buildings at our complex. Should there be a proportionate number of Owners Corporation committee member representatives for each building?

Answer: Yes, there should be, however, the Owners Corporations Act is silent on this. There’s no requirement for there to be people from particular areas of the property representing owners in the community.

We deal with this quite a bit in terms of a property having multiple Owners Corporations.

So if there are multiple Owners corporations, you have an overarching Owners Corporation called Owners Corporation One being the Unlimited. Then you have Limited Owners Corporations in addition to that.

My view is that the Unlimited Owners Corporation should have representatives from each of those Limited Owners Corporations and if not, specifically on the committee, there should be a subcommittee that is created or a working group where each of those Limited Owners Corporations are represented.

Very similar situation to what is posed in this question. If there are individual properties, there may not be Limited Owners Corporations, there may just be the one Owners Corporation. I would say that yes, there should be, however, the Owners Corporations Act is silent on this. There’s no requirement for there to be people from particular areas of the property representing owners in the community.

Gregor Evans
The Knight
Email
P: 03 9509 3144

This post appears in Strata News #500.

Question: Why are unit owners not permitted to attend Owners Corporation committee meetings as silent observers?

Answer: It comes down to the Owners Corporation

I guess it comes down to the Owners Corporation. Here in Victoria, the Act is silent when it comes to observers at committee meetings.

It really comes down to the appetite of the committee. If the committee wishes for there to be observers, then that’s fine. It’s up to them. But they have the right to exclude other members from participating in committee meetings.

Committee members have been elected by the greater membership or the other owners to represent them. And therefore, that’s their role to discuss committee business and make those decisions on behalf of the Owners Corporation. So really, it’s horses for courses type of scenario when it comes to observers and silent visitors at a committee meeting.

Gregor Evans
The Knight
Email
P: 03 9509 3144

This post appears in Strata News #497.

Question: I recently took on my first Owners Committee Chairperson role. Our management company has asked me to sign contracts. Can you clarify if this is usually part of the Chairperson’s role?

I recently took on my first Owners Committee Chairperson role. Our management company has asked me to sign two contracts for supply of a new nbn connection for the cctv system and for the install of facility management software.

The previous chairperson has told me that he never signed any contracts in the 2 yrs that he was chairperson. He states this has always been the responsibility of our management company.

Can you clarify if this is usually part of the Chairperson’s role?

Answer: The manager typically has delegated authority under the terms of the management contract that enables them to execute contracts on behalf of the Owners Corporation.

The manager typically has delegated authority under the terms of the management contract that enables them to execute contracts on behalf of the Owners Corporation.

The Committee may choose to execute contracts themselves, but they are not obligated to if they employ an owners corporation manager.

It’s important to note that the Committee member signing the contract cannot be held personally liable for any litigation or loss that may arise if they acted in good faith and for the benefit of the Owners Corporation.

Tristan Veurink
VIC Branch Manager
Civium Communities
E: [email protected]

This post appears in the February 2021 edition of The VIC Strata Magazine.

Question: Who usually chairs the AGM? Does it always have to be the Owners Corporation Manager? Why can’t we elect a Chair at the AGM each year?

Answer: Each owners corporation is different.

It really is on a case by case basis and each owners corporation are different with their preferences on who chairs their AGM.

In line with the Owners Corporation Act 2006 “the members of a committee must appoint a member of the committee to be a Chairperson” and this position is generally filled at each AGM when the committee is elected.

The Chairperson does often chair the AGM and other meetings that are held by both the committee and the owners corporation, however this role can also be delegated to the owners corporation manager if the owners corporation decides to at the time that each meeting is held, and that does include the AGM.

One reason that an owners corporation may decide to delegate the role to the owners corporation manager, is so they can run the meeting professionally and help mediate any matters that may arise without any conflict of interest. They may also be able to continue to move the meeting and decisions along so that the agenda is adhered to and the meeting runs within the required timeframe.

Jane Giacobbe
Strata Reports Victoria
E: [email protected]
P: 0402 341 848

Have a question about roles and responsibilities of the Owners Corporation Chairperson or something to add to the article? Leave a comment below.

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This article is for reference purposes only and is not intended to be a comprehensive review of the developments in the law and practice or to cover all aspect of the subject matter. It does not constitute legal or other advice and should not be relied upon this way. Readers should take legal or other advice before applying the information containing in this publication.

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• VIC: Q&A Conflict of Interest on the Committee?
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This post appears in Strata News #301

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