Building Managers And Committees
22 March 17
Legally, Owners Corporations or Bodies Corporate are viewed as corporations. They derive their power from the relevant State strata legislation and by-laws.
Like any other corporate, they need to be able to delegate part of their decision-making authority – hence we have Committees.
New South Wales
A lot owner or a company nominee is eligible for election. However, an individual who is not an owner of a lot in the strata scheme is also eligible for election to the Strata Committee if that person is nominated for election by an owner of a Lot who is not a member of the Strata Committee, or is not seeking election as a member of the Strata Committee.
Importantly, the Act provides that a building manager, a letting agent who is letting lots in the scheme or an associate of the developer, building manager or letting agent cannot be members of the committee unless they are a lot owner and have disclosed their interest prior to being elected.
Any member of the Body Corporate can be on the Committee, or a person in a prescribed category (eg member of a family of a lot owner, a person acting under a Power of Attorney, a company nominee or a representative of a sub-scheme). However, Body Corporate managers, service contractors, letting agents and associates of those cannot be voting members.
Powers and Functions of Committees
New South Wales
The Owners Corporation may be assisted in carrying out its management functions by the Strata Committee or by the building manager. However, a Strata Committee cannot make a decision on behalf of an Owners Corporation where that decision is required to be unanimous or by special resolution or only made at a General Meeting.
Any decision by the Committee is deemed to be a decision of the Body Corporate unless it is a “restricted” issue under the relevant regulation module. Restricted issues include fixing or changing contributions, any change of rights, privileges or obligations of owners, issues reserved by a resolution of the Body Corporate and the commencement of most Court proceedings.
Conflicts of interest
New South Wales
Any person on the Strata Committee must disclose any pecuniary interest they may have in a matter being discussed and particulars of their disclosure must be recorded by the Strata Committee and kept in a book. It is then up to the discretion of the Strata Committee whether a member is present during discussions and may exercise a vote.
In Queensland, a member of the Committee must disclose any conflicts of interest and is not entitled to a vote.
In both Queensland and New South Wales, Committee members owe the Owners Corporation/Body Corporate and Lot owners a duty only to act in their best interests and otherwise for the benefit of the Owners Corporation/Body Corporate.
Statutory Protection for Committee Members
New South Wales
The Strata Schemes Management Act 2015 provides that any matter or thing done or omitted to be done in good faith by a Strata Committee member does not, for the purpose of exercising a function, subject that person to any action, liability, claim or demand.
The Body Corporate Community and Management Act 1997 provides that a Committee member is not civilly liable for any act or omission made in good faith and without negligence in performing a Committee role. However, the relevant section specifically excludes defamation.
Anyone considering being a member of a Committee should ensure that the relevant Owners Corporation/Body Corporate holds office bearers liability insurance for an adequate amount.
Also, be careful about the wording of the policy as some policies only cover “elected” Committee members and not sub-committees and owners acting in the capacity of Committee members.
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