These ACT lot owners are concerned about the actions of their owners corporation and / or strata manager in the ACT. Christopher Kerin, Kerin Benson Lawyers provides the following information.
Question: I’m a member of the Executive Committee of the owners corporation and am in a constant battle with the other 6 members, trying to get them to do the right thing.
I’m a member of the Executive Committee of the owners corporation and am in a constant battle with the other 6 members, trying to get them to do the right thing.
Among other things, the other members of the Executive Committee recently voted to pay for a security breach caused by a tenant when they were informed by the managing agent that it was clearly the tenant’s responsibility.
Is there anything I can do?
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Answer: You will need to mobilise the owners corporation to act.
Executive committees are responsible for the day to day management of the owners corporation. This responsibility is a serious one in that the executive committee members have fiduciary duties to the owners corporation. A fiduciary is a person bound to act in another’s best interests. This means that the fiduciary must not only consider how that other person might be affected by their actions but must also ensure that other person does not suffer a detriment from the actions of the fiduciary.
In relation to any expenses incurred by an owners corporation. Section 31 of the Unit Titles Management Act applies if an owners corporation has in carrying out its functions incurred an expense, or carried out work, that is necessary because of:
- a willful or negligent act or omission of a lot owner or an occupier; or
- a breach of its rules by a lot owner or an occupier.
Section 31(2) provides that an amount spent or the cost of the work by the owners corporation is recoverable by the owners corporation from the lot owner as a debt.
However, you will need to mobilise the owners corporation to act.
This post appears in Strata News #325.
Question: Is it possible to sue the owners corporation and the strata company for not acting fairly and with honesty? Has anyone done this before?
Answer: Consideration should also be given the Codes of Conduct.
The most recent and detailed case in regard to the executive committee Code of Conduct is the ACAT decision in Leonard & Anor v Michie & Ors (Unit Titles) [2019] ACAT 14 UT 25/2017.
There are no decisions in the ACT in relation to the strata manager Code of Conduct except for Kajula Pty Ltd v The Owners – Units Plan No 682 (Civil Dispute) [2010] ACAT 61 but this decision says very little.
Consideration should also be given the Rules of Conduct under the Agents Regulation 2003 (ACT).
Finally I refer to chapter 11 of my book, Kerin Benson Lawyers Guide to ACT Strata Law, for more on the Codes of Conduct and Rules of Conduct.
Executive Committee Code of Conduct
11.06 The UTMA sets out a code of conduct for executive committees in the ACT. Section 46 of the UTMA states that each executive committee member must comply with the code of conduct set out in schedule 1, part 1.1.
Non-compliance with section 46 is not an offence under the UTMA (and consequently there are no penalties due to non-compliance). Rather the executive committee code of conduct is most likely to be used to assist in determining whether an executive committee member has been negligent or not. In addition, non-compliance with section 46 might also give rise to an action for breach of statutory duty. (p. 316)
Strata Manager Code of Conduct
11.16 Section 56 of the UTMA provides that strata managers must comply with the code of conduct for managers set out in part 1.2 of schedule 1. The manager code of conduct will pate precedence over any contractual provisions in the strata management contract engaging the strata manager.
While the code of conduct will only apply to managers who carry on the business of managing owners corporations, such managers are required to take reasonable steps to ensure that their employees comply with the code of conduct when exercising their functions. (p. 322)
This post appears in Strata News #304.
Have a question about suing your owners corporation or strata manager in ACT or something to add to the article? Leave a comment below.
Read next:
- ACT: Q&A Difference Between House Rules, Rules and ByLaws
- ACT: Q&A Proxy Votes, Absentee Votes and the Quorum
- ACT: Q&A Is there a Code of Behaviour for Difficult Lot Owners?
Christopher Kerin
Kerin Benson Lawyers
P: 02 8706 7060
E: [email protected]
This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.
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