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: 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: info@stratabasemgt.com 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: callum.wilson@bright-duggan.com.au P: 0427 339 980
This post appears in Strata News #620.
Have a question about roles and responsibilities of the Owners Corporation Chairperson or something to add to the article? Leave a comment below.
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.
Read next:
- VIC: Q&A Conflict of Interest on the Committee?
- VIC: Q&A Bullying and Harassment by One Lot Owner in Our Small Scheme
This post appears in Strata News #301
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