WA: Q&A What if we Don’t Have a Council of Owners?

These Q&As provide information about strata council member problems and apathy. What do you do if you don’t have a strata company or council of owners?

Table of Contents:

• QUESTION: As a new resident, I’m concerned that we do not have a strata manager and there have been no AGMs at the building since 1999.
• QUESTION: At our AGM, it was resolved to have 7 council members and only 6 were nominated. With 1 vacancy and subsequently 3 more council members resigning, this leaves us with only 3 council members. Do we have a quorum?
• QUESTION: As our Strata Company has no Council of Owners, where does the Strata Management get its operational instructions from.
• QUESTION: How can we get the owners more involved and motivated to care for our strata community?
• QUESTION: There are 4 units in our strata. There is no strata company. Is this legal?
• QUESTION: We have Strata Council member problems. Our chair has just resigned. Are we required to call another general meeting to reestablish a viable committee? What options are there if no committee can be elected?

Question: As a new resident, I’m concerned that we do not have a strata manager and there have been no AGMs at the building since 1999.

I am a new lot owner in a 5-lot built strata development. There is no appointed strata manager and, prior to my arrival, there had not been an AGM since 1999.

I want to have AGMs so we can discuss things like insurance, by-laws and use of the common property. The problem is, two of the other lot owners aren’t interested. As secretary of the strata council, do I need them to agree, or can I just give 14 days notice for the AGM? What happens if no one turns up?

If owners are breaching bylaws at the property, can I send out a notice on behalf of the strata company? Can one owner do that, without a resolution?

Answer: Are you certain that no “Exemption by-law” for 3 to 5 Lot schemes has been registered at Landgate and recorded on the strata plan?

I would recommend that you are certain that no “Exemption by-law” for 3 to 5 Lot schemes has been registered at Landgate and recorded on the strata plan.

This would mean that there is no need to have any meetings or books of account or mailing receptacles for the strata company.

Without knowing how everyone is currently insured, I am unable to answer the question about insurance.

All strata schemes will have the standard by-laws in the Act by default, again, without a copy of the strata plan I am unable to tell if any amendments or additions have been made to the by-laws.

How did you become elected as the secretary if there hasn’t been an AGM since 1999 ?

There would appear to be a lot of details required to answer your enquiry.

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

This post appears in Strata News #564.

Question: At our AGM, it was resolved to have 7 council members and only 6 were nominated. With the 1 vacancy, subsequently, 3 more council members resigned. This has left us with only 3 council members. Do we have a quorum?

Answer: The number of Councillors is 7 – not 6, and therefore the quorum for the Council is 4.

If it was resolved that the Council of the Strata Company consist of 7 members, but at the meeting only 6 candidates were nominated and subsequently elected, the number of Councillors is 7 – not 6, and therefore the quorum for the Council is 4.

It’s important to understand that the quorum for a valid Council of the Strata Company meeting is determined by the number of Councillors elected at the general meeting, not the number of active Council members.

If the Strata Company doesn’t elect all 7 members, as there were insufficient candidates (being 6), that doesn’t create a ‘casual vacancy’ for the seventh position – it simply means that there is an unfilled position which can only be filled at a later general meeting by election.

Therefore, a quorum of 4 acting Councillors are still required to conduct a valid Council meeting. Schedule 1 4(11)

4. Constitution of council

11. Except if 1 person is the owner of all of the lots in the scheme, a quorum of the council is 2 if the council consists of 3 or 4 members; 3, if it consists of 5 or 6 members; and 4, if it consists of 7 members.

So what happens if a vacancy on the Council arises?

Should 3 Councillors resign during their tenure, ‘the remaining members of the council may appoint a person eligible for election to the council to fill a vacancy’. This may be classified as a ‘casual vacancy’. Schedule 1 4(12)

12. The continuing members of the council may act even if there is a vacancy in the council, but so long as the number of members is reduced below the number fixed by these bylaws as the quorum of the Council, the continuing members or member of the council may act for the purpose of increasing the number of members of the council or convening a general meeting of the strata company, but for no other purpose.

In summary, should the number of remaining Councillors fall beneath the quorum required, they may approach an owner/s to fill the vacancy for the remainder of the term, or, call an Extraordinary General Meeting to increase the number of Councillors for the remainder of the term.

ESM Strata
E: mchurstain@esmstrata.com.au
P: 08 9362 1166

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

Question: As our Strata Company has no Council of Owners, where does the Strata Management get its operational instructions from.

Answer: Section 138 of the Strata Titles Act states that where there is no Council, these functions may be performed by owners at a General Meeting.

Owner apathy is incredibly difficult to combat and management of the complex is more difficult when there is no Strata Council of Owners elected. Section 138 of the Strata Titles Act states that where there is no Council, these functions may be performed by owners at a General Meeting.

Your Strata Manager may be able to action the decisions made at a General Meeting without ongoing input from a council, however as not all scenarios can be considered at an Annual General Meeting (AGM), this may result in multiple Extraordinary General Meetings (EGMs) being called, at an expense to owners, to deal with matters that arise and cannot wait throughout the year.

Your Strata Manager may also be acting on authority that has been provided to them via the Management Contract which should outline tasks they will / can undertake on behalf of the Strata Company, however again, this is unlikely to cover all scenarios that will arise throughout the year.

It is best practice to elect a Strata Council at the AGM each year, and they can then provide the Strata Manager with authority to act and depending on their desired involvement, can set appropriate parameters on how much they wish to be contacted throughout the year, a potential expenditure limit, and for what further reasons.

Taryn Linfoot
Degrees Strata
E: taryn@degreesstrata.com.au
P: 08 6244 4824

This post appears in Strata News #439.

Question: How can we get the owners more involved and motivated to care for our strata community? 

What happens in a small strata of 4 if no one wants to be involved in doing anything? 

Two of the owners also do not want to pay for a Strata Manager to do the job. The verge does not get mowed, the limited common areas are not maintained, the two visitor parking bays are used by owners, cars are often parked blocking the carriageway, and the place has not been valued for insurance purposes for several years. 

There has never been a meeting and there are no accounts or funds. It’s generally free for all. How can we get the owners more involved and motivated to care for our strata community? Do you have any suggestions?

Answer: All I can suggest is that a concerted effort in communicating with the other owners will be required.

All I can suggest is that a concerted effort in communicating with the other owners will be required.

I am curious as to how all the units are being insured and how it is being paid for if you haven’t had a valuation done for “several years” ?

Outlining that the common driveway shouldn’t be obstructed as all owners need to use it could be a start but if you have no success then you will need to apply to the Tribunal for some form of enforcement.

The Act requires that if here has been a breach of by-laws that the strata company has sent out a written notice detailing what the breach is – refer to section 47 (2) of the Act .

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

This post appears in Strata News #437.

Question: There are 4 units in our strata. There is no strata company. Is this legal?

Answer: At the time of registration of the strata plan, a strata company is always created.

At the time of registration of the strata plan, a strata company is always created.

Strata Titles Act 1985

14. Strata company

1. On registration of a strata titles scheme, a strata company is established for the strata titles scheme.
2. The name of the strata company is “The Owners of [the name of the scheme] (survey-strata scheme/strata scheme [according to the type of strata titles scheme] [the reference number allocated to the scheme by the Registrar of Titles])”.
3. The name of the strata titles scheme is the name stated in the scheme notice.
4. The address for service of the strata company is the address for service stated in the scheme notice.
5. A strata company —
1. is a body corporate; and
2. has perpetual succession; and
3. is capable of suing and being sued in its own name; and
4. has, subject to this Act, all the powers of a natural person that are capable of being exercised by a body corporate.
6. The governing body of a strata company is the council of the strata company.
7. A strata company may have a common seal, but it does not have to do so.
8. A strata company is comprised of the owners for the time being of the lots in the strata titles scheme (who are the members of the strata company).

There should always be a Roll of the owners kept unless section 106 comes into effect:

106. Address for service if no roll maintained in 2, 3, 4 or 5-lot scheme

1. If, in accordance with section 140, a roll is not maintained by a strata company for a 2, 3, 4 or 5-lot scheme, the owner of a lot in the scheme must give written notice to the strata company and the owner of each other lot of the owner’s address for service.

Penalty for this subsection: a fine of $3 000.

2. If, on a change of ownership, the owner of a lot in a scheme for which a roll is not maintained notifies an address for service to the strata company and the owner of each other lot, each of the other owners must give written notice to the new owner of their respective addresses for service.

Penalty for this subsection: a fine of $3 000.

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

This post appears in the August 2020 edition of The WA Strata Magazine.

Question: We have Strata Council member problems. Our chair has just resigned. Are we required to call another general meeting to reestablish a viable committee? What options are there if no committee can be elected?

As a small strata company of 8 units, we are having strata council member problems. We had a committee of 3, which is the minimum number of council members noted at the last AGM.

The chair has just resigned. Are we required to call another general meeting to reestablish a viable committee? What options are there if no committee can be elected?

In order for a committee to be re-established:

• Can unfinancial lot owners now be elected to the committee?
• Can an owner nominate his/her tenant to the committee if the owner is unable or unwilling to be on the committee themselves?

Answer: The continuing 2 members of the Council form a quorum and can continue to act for the purpose of increasing their membership or to convene a General Meeting of the Strata Company.

Please note: this response was provided prior to the proclamation of the new strata title amendments.

I provide the following comments based on this Strata Company having the standard Schedule 1 & 2 bylaws in place.

Please see below Schedule 1 bylaws and Section 46 of the Strata Titles Act as reference points for this response.

In summary, the continuing 2 members of the Council form a quorum and can continue to act for the purpose of increasing their membership or to convene a General Meeting of the Strata Company.

If the Strata Company is unable to obtain the numbers for the Council then Section 46 of the Strata Titles Act provides for a General Meeting to perform those functions of the Council.

I would also note, to return to a General Meeting for the functions of the Council may be time consuming and costly process. The Strata Company (the collective 8 owners) will still be required to meet the requirements for the General Meetings, including:

• providing 14 days written notice to all owners for those General Meetings,
• ensure a quorum of the owners is present to be able to proceed to business,
• and obtain a majority vote for the items under notice.

It would be advantageous to all owners to ensure they meet the number of council members to comply with the bylaws, and to enable the Strata Company to continue to perform their functions in a timely and cost effective manner.

Schedule 1 Bylaw 4 Constitution of council

1. The powers and duties of the strata company shall, subject to any restriction imposed or direction given at a general meeting, be exercised and performed by the council of the strata company and a meeting of the council at which a quorum is present shall be competent to exercise all or any of the authorities, functions or powers of the council.

3. Where there are not more than 3 proprietors the council shall consist of all proprietors and where there are more than 3 proprietors the council shall consist of not less than 3 nor more than 7 proprietors as is determined by the strata company.

9. A member of the council vacates his office as a member of the council —

   1. if he dies or ceases to be a proprietor or a co-proprietor of a lot;

11. Except where there is only one proprietor, a quorum of the council shall be 2 where the council consists of 3 or 4 members; 3, where it consists of 5 or 6 members; and 4, where it consists of 7 members.
12. The continuing members of the council may act notwithstanding any vacancy in the council, but so long as the number of members is reduced below the number fixed by these by-laws as the quorum of the council, the continuing members or member of the council may act for the purpose of increasing the number of members of the council or convening a general meeting of the strata company, but for no other purpose.

Schedule 1 Bylaw 12 Proceedings at general meetings

1. All business shall be deemed special that is transacted at an annual general meeting, with the exception of the consideration of accounts and election of members to the council, or at an extraordinary general meeting.

Section 46 Performance of functions where no council or no quorum

If at any time there is no council of a strata company or there are insufficient members of the council to constitute a quorum in accordance with the by‑laws of the strata company, the functions of the council may be performed by the proprietors in general meeting of the strata company.

Can unfinancial lot owners now be elected to the committee?

Schedule 1 Bylaw 13 states that the person nominating the council member must be entitled to vote however the standard bylaws do not prevent an unfinancial owner being nominated to council by a person entitled to vote.

Schedule 1 Bylaw 13. Restriction on moving motion or nominating candidate

A person is not entitled to move a motion at a general meeting or to nominate a candidate for election as a member of the council unless the person is entitled to vote on the motion or at the election

Can an owner nominate his/her tenant to the committee if the owner is unable or unwilling to be on the committee themselves?

The language consistent in the bylaws speaks to proprietors or an authorised individual in the case of a corporation being a proprietor. A tenant or other person can be an owner’s proxy at a general meeting however a council member must be a proprietor.

Schedule 1 Bylaw 4 Constitution of council

3. Where there are not more than 3 proprietors the council shall consist of all proprietors and where there are more than 3 proprietors the council shall consist of not less than 3 nor more than 7 proprietors as is determined by the strata company.

Schedule 1 Bylaw 8 Meetings of council

3. A member of a council may appoint a proprietor, or an individual authorised under section 45 of the Act by a corporation which is a proprietor, to act in his place as a member of the council at any meeting of the council and any proprietor or individual so appointed shall, when so acting, be deemed to be a member of the council.

Shelley Fitzgerald
Emerson Raine
E: shelley@emersonraine.com.au
P: 9330 3959

This post appears in Strata News #281

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Note: this general information about strata council member problems is an opinion only and suitable specialists in these areas should be sort for clarification and assistance on all points.

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• WA: Reforms to WA Strata Legislation – As a Lot Owner, Should I Care?

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