WA: Q&A New Financial Year End Date – Regulation 175

This article is about the new WA financial year end date.

Table of Contents:

• QUESTION: Our strata manager has not called a strata meeting for the last 15 months. Are there any valid reasons for a late AGM?
• QUESTION: We are over five months late for our AGM. Is the strata manager in breach of legislation by delaying the AGM?
• QUESTION: How can lot owners add items to an agenda when they are not consulted on upcoming AGM dates?
• QUESTION: Section 127(1) of the Strata Titles Act 1985 states that a strata company must hold an AGM once in each 12 month period and not more than 15 months after its previous AGM. These statements seem to contradict each other. What is the rule?
• QUESTION: Can our WA strata company have a financial year end date other than 30 June and the AGM at a designated time? How long do they have to make these changes?

Question: Our strata manager has not called a strata meeting for the last 15 months. Are there any valid reasons for a late AGM?

Our strata manager has not called a strata meeting for the last 15 months. Are there any valid reasons for a late AGM? How about works being undertaken on common property, such as pool renovation and painting, or one council member being away? What action can we take to get things back on track?

Answer: There are no valid reasons that allow a strata scheme to not abide by this legislation, and only a court/tribunal can order otherwise.

Section 127 of Strata Titles Act notes:

Annual general meetings of strata company

1. A strata company must hold an annual general meeting once in each 12 month period and not more than 15 months after its previous annual general meeting.

The Act does not make any exemptions to this, i.e. there are no valid reasons that allow a strata scheme to not abide by this legislation, and only a court/tribunal can order otherwise.

The Act states the strata company (not the strata manager), which means the secretary of the strata council would look to call an AGM to ensure the strata company is complying. The strata manager may be in breach of the strata management agreement in place between your scheme and them. The council of owners should review the strata management agreement and check the requirements of the contract and the actions the strata company needs to take if the strata manager has defaulted on them.

There will be a section in your strata management agreement advising your course of action if your strata manager is in default of their requirements in the agreement. This is generally the default section of your contract.

Jamie Horner
Empire Estate Agents
E: JHorner@empireestateagents.com
P: (08) 9262 0400

This post appears in the July 2023 edition of The WA Strata Magazine.

Question: We are over five months late for our AGM. Is the strata manager in breach of legislation by delaying the AGM?

The financial year for our strata plan ends on 30/11. We still haven’t had our AGM and are over five months into our new financial year. The registration date of our strata plan is 30/10.

Is the strata manager in breach of legislation by delaying the AGM? If this is outside the legislated period, what do we need to do?

Answer: The council of owners need to speak to the strata manager and request they send a notice of meeting as soon as possible.

Section 127 of the Strata Titles Act Annual General Meetings of strata company notes:

1. A strata company must hold an annual general meeting once in each 12-month period and not more than 15 months after its previous annual general meeting.

If your financial year ended on 30 November, it is ideal to have the meeting within 1 to 3 months from this end date. You are already nearly halfway through the next financial year. The key legal aspect is that your meeting must be within 15 months of the last AGM, so you need to check that date.

The council of owners need to speak to the strata manager and request they send a notice of meeting as soon as possible and to see if the strata manager is capable of holding meetings closer to the end of the financial year date.

Jamie Horner
Empire Estate Agents
E: JHorner@empireestateagents.com
P: (08) 9262 0400

This post appears in the May 2023 edition of The WA Strata Magazine.

Question: How can lot owners add items to an agenda when they are not consulted on upcoming AGM dates?

I’m aware a lot owner can request an item to be included on the AGM agenda and the strata manager must include these. How does the lot owner know when the AGM is being called so the matter can be requested in time for inclusion?

Historically our OC Committee agrees a date and time and calls for agenda items before the 14 day notification deadline. This year our Strata Manager specifically advised our committee was responsible for arranging the AGM and, despite numerous requests to our strata manager for dates/times of their availability, did not respond.

The 15 month deadline for the AGM was fast approaching. A lot owner emailed all committee members (cc’d the strata manager) for the AGM date. The strata manager immediately sent out a notice of the AGM with no consultation as to date or time, or to the agenda items.

Where a committee exists, can the strata manager convene the AGM without instruction from the OC Committee or Chairperson/Secretary? Do they have delegated powers allowing them to act unilaterally without any consultation with the committee?

Answer: An owner can submit any motion they see fit at any time regardless of when the AGM is due.

As AGM’s are normally the same time each year and owners would be aware of that, there should be no need for reminders. Also, the act allows that an owner can submit any motion they see fit at any time regardless of when the AGM is due and a resolution on their motion.

It is not unusual for the strata manager to organise the AGM, due in part to the number of AGMs they would control and, they are privy as to when previous AGMs were held.

Owners are aware when AGMs are due and at any time should let their committee or strata manager know of any issues they would like discussed at the AGM.

Brian Rulyancich
StrataTAC
E: strata@stratatac.com.au
P: 0428 970 067

This post appears in the June 2022 edition of The WA Strata Magazine.

Question: Section 127(1) of the Strata Titles Act 1985 states that a strata company must hold an AGM once in each 12 month period and not more than 15 months after its previous AGM. These statements seem to contradict each other. What is the rule?

Answer: Whilst there is a requirement for the AGM to be held in each 12 month period, there may be circumstances that prevent that from happening.

The strata company is required to hold its AGM every 12 months. Usually this is taken from the registration date of the strata plan which is when the strata company came into existence and Titles issued.

Whilst there is a requirement for the AGM to be held in each 12 month period, there may be circumstances that prevent that from happening such as Covid 19 and having owners that aren’t techno savvy to join a Zoom Meeting.

The Act allows for an extension to occur so that the strata company fails to hold the meeting within the 12 month period, it is permitted to hold the AGM not more than 15 months after the previous AGM.

It is also important to note that as part of the changes to the Act, there is a very discreet mention within the section 3 Terms Used definitions that states the following:

financial year for a strata company means —

1. if the scheme by-laws are silent on the matter, the period of 12 months ending on 30 June; or
2. if the scheme by-laws specify a period of 12 months ending on a different date as the financial year for the scheme, the period specified in the by-laws;

You would also need to refer to the Strata Title General Regulations Reg 175.

Without including the full copy of this regulation in this explanation, it can be best summarised as:

You have 5 years from the 20 May 2020 to register a change of by-laws to specify that your financial year will be the date that you chose.

If you fail to register the preferred financial year end date, then after 5 years, any strata accompany will have to have its AGM on the 30 June each year.

It is not known why this obscure amendment was written into the Act.

Note for this regulation:

If a strata company makes a by‑law before the end of the 5‑year transitional period specifying the financial year it uses or chooses to use under subregulation (2)(b) or (c) as its financial year, it will be able to continue to use that period as its financial year at the end of the 5‑year transitional period under the definition of financial year for a strata company as inserted by the 2018 amending Act.

You would also have to take into consideration that since the 20 May 2020, any changes to the by-laws will require a Consolidation of By-laws document to be registered at Landgate. (This only applies to all strata plans registered before 20 May 2020).

Shane White
Strata Title Consult
E: shane.white@stratatitleconsult.com.au

This post appears in Strata News #525.

Question: Can our WA strata company have a financial year end date other than 30 June and the AGM at a designated time? How long do they have to make these changes?

Does the new legislation state that our strata can have a year end other than 30 June and the AGM in a designated time thereafter if they seek to have an alternate date by amending their bylaw with an alternate year end date?

Given the five year timeframe, would be better to amend the bylaw sooner rather than later?

Answer: This is an inclusion into the act that comes under Regulation 175 Phasing‑in of financial year requirements. The transitional period is 5 years.

This is an inclusion into the act that comes under financial year end date. If the Strata scheme ByLaws are silent on the matter, the period of 12 months ending on the 30 June (so the financial year end means that it’s going to end on the 30 June), or if the scheme bylaws specify a period of 12 months ending on a different date as a financial year for the strata scheme. So without anyone knowing, now you have to do something.

Under Regulation 175 Phasing‑in of financial year requirements, sub clause 3 – during the five year transitional period – there is a transitional period for requiring you to do something about this. Otherwise, after five years, if you do nothing your financial year end date is required to be 30 June, unless you have changed it by registering a bylaw.

A strata company that under subregulation 2 (b) or(c) uses, or chooses to use as its financial year, a period of 12 months ending on a different date from the 30 June, may make a bylaw that specifies that period as to its financial year.

Subclause 4 – such a bylaw has effect for the purpose of the definition of financial year of the strata company, as inserted by the 2018 amending act as if it is made by an ordinary resolution of the strata company and it is taken to be a governance bylaw. The rules of passing a governance bylaw say that they have to be passed by resolution without dissent, but here we have part of the legislation allowing an ordinary resolution to be passed to allow a bylaw to be registered to change the financial year end date to whatever date (e.g. the 30 May, the 30 April, or the 1 December, etc).

Why was this section put in the act in the first place and in effect, it’s operating as a compulsory method of getting people to do a consolidation of bylaws if their schemes registered before the 1 May 2020. So it puts an impost on people to have to do a consolidation of bylaws, and change their financial year end date. No one probably expected anything that we put in the act, but it’s the implications of it and you’ve just got to deal with it.

They can sit on it for as long as I want but eventually it’ll catch up with them at the end of the 5 years transitional period.

Lot owners can leave it and end up changing their financial year end date to 30 June. For strata schemes that are run as commercial enterprises in some instances that suit them to have a financial year end on the 30 June. Whereas for everybody else it’s a nuisance, especially for Strata Management Companies, because generally, financial year end date means that’s when we have got to have an AGM. You wouldn’t be able to find a function room, convention centre etc, especially with COVID-19 restrictions, to have a general meeting either on or near June, July, you wouldn’t find a venue available in Perth, that was empty. They would all be booked out. Large Strata Management companies would be could possibly be holding 100, 200, 500 AGMs in a two month period. It’s a real inconvenience for anyone that’s in that position.

Shane White
Strata Title Consult
E: shane.white@stratatitleconsult.com.au

This post appears in Strata News #490.

Have a question about council of owner’s conflict of interest or something to add to the article? Leave a comment below.

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Read next:

• Strata Titles Act 1985 (WA): Key Changes to Dispute Resolution
• WA: Q&A Procedure for Election or Removal of Council Members
• WA: Q&A Access to Council of Owners / Strata Information

Disclaimer: this article should not be relied on as legal advice.

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