This Q&A is about dealing with problem committee members. We look at destructive members and conflict of interest on a committee in Victoria. Responses have been supplied by Jane Giacobbe, Strata Reports Victoria and Alex McCormick, The Knight.
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- QUESTION: Our previous Chair has been replaced but still holds a position on the committee. They behave in a very destructive manner, undermining the committee. Can the committee sanction this person?
- QUESTION: One of our lot owner has a business which has a contract at the apartment complex. Are they able to nominate for an Owners Corporation committee position or is this a conflict of interest?
Question: Our previous Chair has been replaced but still holds a position on the committee. They behave in a very destructive manner, undermining the committee. Can the committee sanction this person?
I am the Chair of a large residential apartment building, serving on an OCC comprising twelve.
I was voted by the committee to replace the previous Chair who had been in the position for many years. This person remains on the committee but is behaving in a very destructive manner. This person engages in lengthy email battles with several members, descending into very personal insults and accusations posed as questions (eg “is he hiding something?”).
The rest of the committee is working extremely well together and has demonstrated great professionalism in attempting not to engage. However, mud sticks.
My question is how the committee might sanction this person. I understand that as they currently do not hold a position on the committee (ie Chair or Secretary), we can’t pass a motion of No Confidence. Can we pass a motion to sanction and what might this look like? Also, is there a model Code of Conduct (more comprehensive than the few lines in the Act) that we could use?
Answer: The legislation does not provide a method or means of ‘sanctioning’ a member of the Committee.
The legislation does not provide a method or means of ‘sanctioning’ a member of the Committee. The Committee may convene a Special General Meeting for the purpose of removing a Committee member, but other than that there is no authority or pathway granted to the Committee to manage the actions of a member who has been acting unruly, or ‘destructively’.
Each member has a statutory obligation to act in good faith, and generally this is taken to include acting in a constructive fashion for the good of the Owners Corporation. It may well serve to provide a timely reminder at the next Committee Meeting of this obligation.
Another avenue is to simply ‘push on’ with the matters of the Owners Corporation before the Committee and ignore communication that is personal in nature or clearly provocative in either content or purpose. Whilst not ideal in all scenarios or for all discussions, it may be the most appropriate path to demonstrate that both the Chairperson and majority of the Committee have the intention of managing the Owners Corporation needs rather than becoming embroiled in matters of personality.
If members feel strongly that correspondence is bullying or defamatory in nature, the rest of the Committee might choose to seek legal advice on the mater.
This post appears in Strata News #361.
Question: One of our lot owner has a business which has a contract at the apartment complex. Are they able to nominate for an Owners Corporation committee position or is this a conflict of interest?
One of our lot owner has a family business which has a contract at the apartment complex. Are they able to nominate for an Owners Corporation committee position?
If they do, can other owners object to that nomination as a conflict of interest?
If this situation occurs how should that objection be put forward at the AGM?
Answer: If there is any type of third party relationship it should be discussed so everyone is aware of the situation.
Conflict of interest is something that should always be disclosed, transparent and spoken about openly with all of the owners corporation.
Although I am not sure what service the family business delivers to the owners corporation, if there is any type of third party relationship it should be discussed so everyone is aware of what the current situation is.
If someone would like to join the committee then they do have to disclose any conflict of interest and should also make sure they do not profit from any decision that is made by the committee or owners corporation.
An example of this could be that a committee member is also an OC Manager with a different OC Company to the one that is currently managing the property.
Should the committee decide to look at appointing a new OC Company, this particular committee member would be able to submit a proposal from their OC Company but would need to disclose the conflict of interest and also be removed from any part of the decision process around the proposal and appointment of the new OC Management Company.
Referring back to your original questions I would suggest the below:
- Yes, the lot owner in question can nominate themselves or be nominated for a position on the OC Committee
- Yes, other lot owners may object to that nomination as a conflict of interest but it would come down to an overall vote and not just one owners objection.
In this case I would suggest putting in a written nomination before the meeting that openly discloses the conflict of interest and the service that is currently provided and how this owner intends to work in the best interest of the owners corporation in the new position on the OC Committee (if elected) and that it would not be to benefit his/her individual business. This can then be recorded in the minutes.
- If objection does occur at the meeting it could be verbally and in writing in the minutes but as mentioned above that could be addressed by openly disclosing it all very early.
I hope the above is helpful and please feel free to reach out if you would like any further information.
This article is for reference purposes only and is not intended to be a comprehensive review of the developments in the law and practice or to cover all aspect of the subject matter. It does not constitute legal or other advice and should not be relied upon this way. Readers should take legal or other advice before applying the information containing in this publication.
This post appears in Strata News #272.
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