This article discusses whether strata committee members can be paid per job for maintenance work, explaining why payments usually need owner approval as an annual amount instead.
To save our owners corporation money, I claim for odd jobs I carry out on common property on a job by job basis. The new strata manager insists I claim an annual amount. Does it have to be this way?
We have a strata manager for our block of units in NSW. I am the chairperson and I control all aspects of the management including organising repairs and approving all payments.
Sometimes I also fix things myself – such as changing a globe and buying things for the block. I attend to repairs and I am the main contact for owners if there are any issues, on-call 24 hrs a day. I carry out these duties so we don’t get charged unnecessarily and to save the owners corporation money.
Recently, I purchased and changed globes on the common property. I sent the receipt for the globes plus a request for $20 for my time changing the 4 stairway globes. The strata manager says he can not pay me directly for the work I performed and advised me to put a motion in the next AGM for an annual amount to be paid yearly to cover the costs of small jobs I do around the building.
With the previous strata manager, committee members would approve the payments. This strata manager states he cannot do this because it’s not legal and if we get audited there will be fines. I prefer for claims to be approved by the committee members and paid to me on a job by job basis.
The strata manager is correct.
Whilst this seems like a simple and reasonable request, the strata manager is correct, and a scheme cannot ask a strata manager to act outside the law. In the legislation, this is referred to as a gratuity, which relates to the services a member provides and acknowledging that service financially.
46 Payment of officers of owners corporation
An owners corporation may pay to a person who is an officer of the owners corporation or another member of the strata committee of the owners corporation an amount determined by the owners corporation at an annual general meeting in recognition of services performed by the person for the owners corporation in the period since the last annual general meeting.
The other aspect that goes with “adding a fee” to each transaction is that the Tax Office would likely view this as an income/earnings paid to you. If you don’t have an ABN or are not quoting one, this too has ramifications for the Owners Corporation. It is they who would be fined or penalised if the ATO were unhappy with what was occurring. Who knows what the sum may add up to over a financial year.
There is also the need to disclose to the Owners Corporation that these things are being done for a fee. Someone else may be happy to do those tasks for a lesser sum, or no fee at all.
So, it is complex and does need owners to be aware of the arrangement and sign off on it. It is their money at the end of the day, and the agent is holding it in trust. The agent also has the obligation to the scheme as a whole (a duty of care) in handling their affairs, so you don’t run into other issues, eg with the ATO.
If everyone is expected to be OK with the arrangements once they are informed, then there should be no issues in waiting for it to be disclosed. In the meantime, keep a log of what you do, dates, how long, so full appreciation of the time and effort is reflected when the matter is discussed at the meeting (or sent with the agenda).
This post appears in Strata News #477.
Karina Heinz Progressive Strata E: manager@prostrata.com.au P: 02 9389 9599