The following question regarding what to do when you have no executive committee was submitted to our site via email from an ACT lot owner. Thank you to Jan Browne and Craig Bowditch, Whittles Strata Partners.
Question: What happens if a strata complex is not able to establish an Executive Committee because no owners are willing to step up?
If you have enjoyed this content and would like to be kept informed about strata matters, click here to subscribe to our weekly newsletter.
I was wondering if you could advise what happens if a strata complex is not able to establish an Executive Committee because no owners are willing to step up. Our complex is in the ACT.
Answer: Having no executive committee in any strata or community scheme is not ideal BUT it is hard to force people to volunteer.
Having no executive committee in any strata or community scheme is not ideal and would be in contravention of most of the different states’ legislation. BUT it is hard to force people to volunteer.
The Executive Committee is like a board of directors of a company. How would a company survive without their board of directors? Decision making will then revert to the CEO (Chief Executive Officer). The strata manager is like the CEO, but most strata managers would be reluctant to take on full responsibility for decision making within a scheme. Also noting limitations of the functions to the Managing Agent.
Executive Committee Members
If there are only 1, 2 or 3 members of your Owners Corporation then all owners form the Executive Committee (EC) as the default position in accordance with the legislation. (Division 4.1 Sec 39 (2) (a)).
If there are 4 or more members of the Owners Corporation then each AGM has a responsibility to elect an EC of between 3 to 7 owners. The legislation also allows that by special resolution for 8 or more executive members to be elected. (Division 4.1 Sec 39 (2) (b)).
If the number of members of the owners corporation is equal to or falls below the number of EC members as decided by the corporation, all the members of the corporation are EC members (even if not nominated or elected) (Division 4.1 Sec 39 (3)).
Depending on the size of your Owners Corporation this will become quite impractical as an EC meeting can only be convened if you have a quorum present (ie more than 50% of the EC) and this will make decision making between AGMs very difficult to achieve.
Other than finding a way to persuade at least 3 owners to stand for the Executive Committee, you are pretty much reduced to all decisions between AGMs to be handled by way of a general meeting or an Executive meeting which all owners are invited to attend.
This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.