NSW: Owners Corporation Run With No Meetings + No Maintenance

Can your strata scheme in NSW operate with no meetings? Are you having trouble getting maintenance done? Check out our Q&As below for help with this topic.

Table of contents:

• QUESTION: For our AGM, we are changing to an Informal Meeting with no agenda provided, no minute taking and no call for submissions. Are these processes in line with the legislation?
• QUESTION: Our strata manager won’t conduct even a phone meeting. All voting is done via post. There is no forum to talk to other owners or discussion. How is this right?
• QUESTION: We are having difficulty getting services fixed in our older small unit block. We also have no strata meetings and the same 2 people have been on the committee for years.
• QUESTION: I own an investment apartment but do not live close. The Strata Manager tells me they have no meetings, therefore there are no minutes to send. How is the complex running without meetings?
• QUESTION: I am part of a newly formed strata committee in a 12 year old building containing 60 units. We’d like to prioritise what needs to be addressed. How do we proceed?

Question: For our AGM, we are changing to an Informal Meeting with no agenda provided, no minute taking and no call for submissions. Are these processes in line with the legislation?

Since the last AGM in September, our Secretary has not called General Meeting although a good deal of subjects have arisen.

Re our next AGM, our Secretary/Treasurer has followed a procedure of what he calls An Informal Meeting. They will bring forward spreadsheets regarding Finances etc. whilst we make decisions at the meeting. The Strata Manager’s view is that we don’t need to take Minutes / Record Decisions. 

I have been on other Owners Corporations as both an Owner of an Investment Apartment & a Company Board who hold an asset via an Apartment Block. I don’t agree with this stance, of note:

1. Providing an Agenda in Advance of the
2. Calling for Input / Recommendations
3. Not recording Decisions made
4. Not finding it appropriate to provide Minutes.

Answer: The Act and Regulations have some specific requirements in regards to meetings of the Owners Corporation.

If the required processes under Strata Legislation for the holding of meetings are not followed there is the potential for all decisions being open to challenge and an Order invalidating these decisions if the provisions in the Act or regulations are not complied with.

The Strata Schemes Management Act 2015 and Strata Schemes Management Regulations 2016 have some specific requirements in regards to meetings of the Owners Corporation.

The Strata Schemes Management Act 2015 Section 18 specifies that the Annual General Meeting must be held once in each financial year, there is no requirement to hold additional meetings but the Secretary can convene a general meeting at any time and must call for a meeting if a ‘qualified request’ is received from at least one-quarter of the owners (via the aggregate of unit entitlement) as per Section 19 of the Strata Schemes Management Act 2015. So there are mechanisms under the Act for a meeting to be called if individuals feel that the correct processes are not taking place.

Sections 24 & 25 of the Strata Schemes Management Act 2015 specifically allow for Tribunal to invalidate resolutions and nullify these decisions.

Schedule 1 of the Strata Schemes Management Act 2015 has numerous sections that specify how a meeting must be called, what motions must be included on the agenda and that minutes must be prepared. Anyone who is holding Annual General Meetings and other meetings of the Owners Corporation and Strata Committee needs to be across their requirements and obligations by familiarising themselves with these section of the Act.

Robert Fothergill
Strata Life
E: Robert@thestratalife.com.au
P: 02 9456 9917

This post appears in the October 2021 edition of The NSW Strata Magazine.

Question: Our strata manager won’t conduct even a phone meeting. All voting is done via post. There is no forum to talk to other owners or discussion. How is this right?

Our strata manager won’t conduct even a phone meeting. According to them, the quorum is achieved by people sending in their voting forms prior to the date/time of the (non) AGM meeting.

I am very frustrated by this as there is no forum to talk to other owners at all. I feel the strata manager receives our fees but is not carrying out all their required duties including convening the AGM.

Answer: There are committees who are making the decision to conduct the business of the scheme in this manner.

Unfortunately there are committees who are making the decision to conduct the business of the scheme in this manner, particularly AGM’s for larger schemes. Many in our industry would say they are hiding behind the option to not face owners (for some reason) during Covid.

Some agents find it too challenging to manage an on-line meeting eg via zoom with many people (say a dozen or more people) participating via that option.

In larger scheme’s it is hard to gather people for a meeting and social distance per the Covid requirements by the Government. For example, a scheme where say 20 unit owners would attend for face to face, it would be difficult to get a room big enough, or if you did risk the weather by holding the meeting outside, it would be hard to hear each other if you are standing one or two arm lengths apart.

Hopefully now with the vaccine being rolled out in Australia, in around 6 months face to face meetings and greater interaction may be permissible by Government. For now, the Government is trying to manage the pandemic, allow schemes to function on a minimal level and just get through this time until it is safe to return to other options of gathering.

Some larger schemes have created chat forums for their scheme. Individuals who know each other have set this up and invited other lot owners into the group. Over time, a vast majority who are interested, active and make themselves available are then involved in discussions online as to the issues affecting their scheme. Hopefully, one or two committee members participate and can feedback the group’s consensus on issues before them.

Karina Heinz
Progressive Strata Services
E: manager@prostrata.com.au
P: 02 9389 9599

This post appears in Strata News #456.

Question: We are having difficulty getting services fixed in our older small unit block. We also have no strata meetings and the same 2 people have been on the committee for years.

I live in a small unit block that was built around 1970.

We have a security door that is automatically opened from switches within each unit. Visitors buzz individual lots via an intercom system which is the original system. The automatic switch device has stopped working and so we are required to walk down 2 to 6 flights of stairs to let people in via the security door.

A couple of residents have spoken to the strata committee secretary to get it repaired but he has said that it will cost a lot of money. He had the original company come to fix it and they informed him that it will need to be replaced. He did not receive any quotes or anything in writing about the cost associated with this. I am concerned about the safety implications of not having this lock fixed.

Also we do not have AGMs and there are no regular strata committee meetings as the strata committee secretary said they are not necessary. We have had 2 meetings in the last 8 years. We also do not have a 10 year plan or capital works fund. The same 2 people have held strata committee positions (secretary and treasurer) for as long as I have been an owner. There are now only 3 owner occupiers left in the building.

Answer: There is a lot of strata legislation on the AGM so it is hard to refute that it doesn’t need to be held or that no meetings are required.

I am sure you have read articles in the past on the scheme’s obligation to repair and maintain the common property, however, what is often not in the advice is the definition of common property. I believe it is important here. Chances are that given the building was built (and I assume strataed) in the 1970’s that the intercom/security to which you refer did not exist at the time the strata plan was registered, so then it is not common property in that sense.

Further, for a long time a bylaw was required for the scheme to obtain additional common property and I am guessing this wasn’t done either. In which case, there may not be a leg to stand on to press the scheme to fix the security system.

However, given you are clearly self-managed it is highly likely the secretary is not aware of all this. For now, I would simply write to him (and give a copy to the other person on the committee) advising them that they are in breach of their obligations to repair and maintain under S106 of the Act and refer them to Siewa’s case. Here is what Judge Brereton said:

“4 The duty to maintain involves an obligation to keep the thing in proper order by acts of maintenance before it falls out of condition, in a state which enables it to serve the purpose for which it exists. Thus the body corporate is obliged not only to attend to cases where there is a malfunction but also to take preventative measures to ensure that there not be a malfunction. The duty extends to require remediation of defects in the original construction of the common property. And it extends to oblige the owners corporation to do things which could not be for the benefit of the proprietors as a whole or even a majority of them. 5 It follows that as soon as something in the common property is no longer operating effectively or at all, or has fallen into disrepair, there has been a breach of the s 62 duty.……..”

No court case since has altered the very strict obligation the Judge indicated here. You could indicate you plan to refer the matter to NCAT if it isn’t addressed. You may take it to mediation if push comes to shove but I wouldn’t try my luck at the Tribunal. So if this doesn’t work I suggest you write a letter and a motion to place on the next meeting agenda:

Schedule 1

4 Inclusion of matters on agenda

1. Any owner, or any person entitled to vote at a general meeting of an owners corporation, may require a motion to be included in the agenda of the next general meeting of the owners corporation.
2. The requirement is to be made by written notice given to the secretary of the owners corporation that:
   
   1. sets out the required motion, and
   2. states the name of the person making the requirement, and
   3. includes an explanation of the motion of not more than 300 words in length.
3. The secretary must give effect to the requirement.
4. However, if the requirement is made after notice has been given of the meeting, the secretary must include the motion in the agenda for the next subsequent meeting.
5. An owner or a person may make a requirement even if the owner or person cannot vote because the owner is an unfinancial owner.

which takes us to point two: the lack of AGM.

AGM means Annual General Meeting, hence the meeting is supposed to occur annually.

This has become a bit more flexible under the current legislation, but it is still required to occur. You may point out that should the Secretary fail to do this you can go to NCAT for a compulsory appointment (of a licensed strata manager) under S237:

STRATA SCHEMES MANAGEMENT ACT 2015 – SECT 237: Orders for appointment of strata managing agent

This order is made where the applicant can show that the scheme is dysfunctional – which means various sections of legislation are being breached.

At the moment the scheme is in breach of Section 18 of Schedule 1

STRATA SCHEMES MANAGEMENT ACT 2015 – SCHEDULE 1

18 AGM must be held

An owners corporation must hold an annual general meeting once in each financial year of the corporation.

6 Required items of agenda for AGM

9 Additional matters to be included in notice of AGM

As you can see there is a lot of strata legislation on the AGM so it is hard to refute that it doesn’t need to be held or that no meetings are required. It is very clear that it does and what it needs to cover.

So again I suggest you politely ask for it to be done but definitely if it isn’t called within 3 weeks of your request, I would apply to Fair Trading. They will mediate and inform the secretary he does have to have meetings. If he agrees you should seek a consent order with a timeframe in which he agrees to call the meeting. If he doesn’t, you can then return to NCAT and they will sort things out, probably by taking the affairs out of his hands.

Karina Heinz
Progressive Strata Services
E: manager@prostrata.com.au
P: 02 9389 9599

This post appears in Strata News #286.

Question: I own an investment apartment but do not live close. The Strata Manager tells me they have no meetings, therefore there are no minutes to send. How is the complex running without meetings?

I own a Strata unit in Sydney but live in the North of the state. As a result, I cannot take an active role in the running of the Strata.

In the last few years, I have requested to receive copies of the minutes from the Strata Committee meetings via the Strata manager. Each time I have been told there are no meetings, apart from the first one post the AGM.

According to the Strata Manager, there are no meetings held therefore no minutes. Yet during that time the building has been painted, the tree in the garden pruned and other work has been done at the complex.

How can these decisions have been made without meetings? How can I find out if there are no minutes in existence?

Answer: The first step is to carry out a strata report.

The first step is to find a strata inspector who will carry out a strata report specifically listing all the meetings that have been held in the past 3 to 5 years. The report will also include income and expenditure for the same period. I’d recommend that the strata inspector gets a copy of the Managing Agency Agreement as well.

Of course the owner can do their own, but they’ll need a professional strata report if you have to go to Fair Trading.

IF the scheme is under FULL MANAGEMENT and not part management, the second step is to submit an application to Fair Trading for mandatory strata management. If they have full management, the Strata Manager is lax, to say the least, and may well be in breach of the agreement for not carrying out their delegated duties.

If the Strata Manager can’t prove they have advised the lot owners/Committee in accordance to their legal obligations, then the owner should make a formal complaint against the Strata Managing Agent. This proof would preferably be notes added to minutes of meetings, but even emails are better than nothing.

Paula Byrne
Founder
Strata Gophers
E: admin@stratagophers.com.au
P: 1300 405 605

This post appears in Strata News #269.

Question: I am part of a newly formed strata committee in a 12 year old building containing 60 units. We’d like to prioritise what needs to be addressed. How do we proceed?

I am part of a newly formed strata committee in a 12 year old building containing 60 units. 40% are owner occupied and the remainder are investor-owned.

Prior to these new appointments, it seems all previous roles and tasks normally performed by an elected committee have been attended to by just 3 people, including the same strata managers who have also been involved over this period.

We feel it’s time for a change! We would like to survey the lot owners to see what they feel are the important issues. Is there a fairly comprehensive survey template that can be sent to all owners so that we can start prioritising what needs to be addressed?

Is this the best way to proceed? If not, as a new committee, how should we proceed?

Answer: The best way to get owner feedback is through owner feedback provided at the Annual General Meeting.

It is an interesting idea to survey owners, however, most buildings would only survey their owners on a particular issue (eg do you want to keep the pool heating on all year at an additional cost of $500 per owner or are you happy to only have the pool in operation October to April each year) rather than a survey on general priorities for the building.

The best way to get owner feedback is through owner feedback provided at the Annual General Meeting. You can encourage owner attendance by sending the owners a letter with the AGM agenda explaining that you are a new strata committee, you want to discuss the future of the building at this meeting and would love to have as many owners as possible attend that meeting to seek feedback.

In addition to this, as the first step for the strata committee, I would also suggest that the strata committee reviews the below items to determine some priorities for the building:

1. Review the capital works fund forecast for your building. This will be able to provide good insights into how you are meeting your obligations under the Strata Schemes Management Act 2015 to repair and maintain common property, as well as if your funds collected are on track with future requirements.
2. Have you reviewed your cleaning, fire and other maintenance contacts, both for quality and to check prices to make sure that you are receiving a good offering compared to the market?
3. Have you reviewed your electricity, gas and phone contracts to make sure you are getting good pricing? It is very easy to save 20% on electricity costs and in our business, we just negotiated a 28% saving company wide.
4. Is the strata committee meeting each quarter to review the financials, discuss any compliance (by-law issues), review works recently completed and discuss future works to the building?
5. Are there any outstanding maintenance items that you as a committee are aware of and have they been prioritised, with the highest priority items costed?

Once you have completed the above exercise and prioritised these items, you can then survey the owners to confirm that the strata committee’s priorities are in line with the owner’s priorities (which I’m sure will be, as you have good motives).

Rod Smith
The Strata Collective
E: rsmith@thestratacollective.com.au
P: 02 9879 3547

This post appears in Strata News #234.

If you have a strata question about no meetings, some tips or something to add to the article, please leave a comment below.

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