This article is about dealing with a WA strata manager or council of owners who are not acting in the best interest of lot owners. It is in response to requests for information we received from troubled lot owners in WA.
Table of Contents:
- QUESTION: Under the new WA strata legislation, can a member of the Council of a strata company be fully responsible for their dysfunctional performance? What penalties apply?
- QUESTION: How do I approach our strata management company when they have been putting through maintenance costs without approval from the Council of Owners?
- QUESTION: Our strata manager is not performing the functions that we believe the management company should be doing. We are getting no response from the Director of the Management company.
- QUESTION: I’m on the strata council of owners in WA with three others. They are making decisions without including me in the correspondence. It is a very dysfunctional COO. What should I do?
- QUESTION: I am a new owner and new on the council of owners and I’m very concerned about the governance and incompetence of this committee.
- QUESTION: The Council of Owners is not acting in the best interest of the lot owners. We’ve tried to make changes but the Chair holds proxies. We are at a loss as to how we can change anything.
- ARTICLE: How to handle a strata manager or council of owners who are not working in your interest
Question: Under the new WA strata legislation, can a member of the Council of a strata company be fully responsible for their dysfunctional performance? What penalties apply?
Can a member of the Council of a strata company be fully responsible for their dysfunctional performance, non compliance with bylaws and breaches and any other wrong decisions, especially financial, by not acting in the best interest of strata owners and exposing strata owners to unnecessary costs? What kind of penalties could apply under the new legislation?
How can lot owners protect their funds so no money is wasted?
Answer: No liability attaches to the office bearers of the Council for anything that the person has, in good faith, done or omitted to have done.
In section 141 of the Strata titles Act 1985, it says specifically, this section applies to a person who is or has been a member of the Council of a strata company, including when acting as an officer of a strata company, or an individual authorised under Section 136(2) by a corporation to perform the corporation’s functions as a member of the Council or an officer of the strata company.
Protection from liability
Subsection 2 says No civil liability attaches to a person to whom this section applies for anything that the person has, in good faith, done or omitted to be done —
- in the performance of a function under this Act or scheme by-laws; or
- in the reasonable belief that the act or omission was in the performance of a function under this Act or scheme by-laws.
Subsection 3 says A liability that would, but for subsection (2), attach to a person attaches instead to the strata company.
It doesn’t matter how big or bad a job they make of running the place improperly or incompetently or inefficiently or cause legal action. No liability attaches to the office bearers of the Council and the strata company has to wear liability even if they are exposed to legal risk and unnecessary costs. As far as penalties, there are no penalty, no liability attaches to the council member.
How can lot owners protect their funds so no money is wasted? The simple answer is to take an active part in the management of your strata. Get on the council. You can attend various educational courses run by SCA or other service providers and learn more about how to run a strata company or take an active part in a council.
Shane White
Strata Title Consult
E: [email protected]
This post appears in Strata News #568.
Question: How do I approach our strata management company when they have been putting through maintenance costs without approval from the Council of Owners?
Answer: You may have uncovered a one-off instance, or it may be part of a larger problem amounting to misappropriation of funds.
My first thoughts about this question are to ask more questions?
What is the nature of the strata management contract that should be in place?
Has there been any given consent for the strata manager to take on any additional duties of the strata council?
Were any of the maintenance costs that have been expended the subject of immediate action to make the building safe? Were the repairs done to a Lot or the common property?
If any of the above questions answered the problem then that is good. If not, then a search of the financial records should be made and ascertain the limits and proportions of the various items of expenditure month by month or request that a full audit of the financials be requested at a general meeting.
You would need to ascertain what expenses have been put through and have the appropriate paperwork or inspections to back it up.
The answer to the question may be that you need to seek legal advice on how to proceed if you can demonstrate that maintenance costs have been paid with proper authority.
You may have uncovered a one-off instance, or it may be part of a larger problem amounting to misappropriation of funds.
Shane White
Strata Title Consult
E: [email protected]
This post appears in Strata News #515.
Question: Our strata manager is not performing the functions that we believe the management company should be doing. We are getting no response from the Director of the Management company.
We feel our Strata Manager has been incompetent when dealing with our Strata property in relation to a very important fire Alarm system. We’ve complained to the Director of the Management company and we are getting no response. What is the best course of action to follow?
Answer: Firstly you will need to check the management contract you have in place and check the functions and duties that they have agreed to perform.
Yes, you do have an issue. Effective strata management is a cooperative and a partnership between the strata management company and the strata company i.e. represented by their strata council of owners. Both elements need to work effectively and together.
Firstly you will need to check the management contract you have in place and check the functions and duties that they have agreed to perform. Under the act, you have the right to issue a notice indicating that they are contravening the duties as per the contract and advise a time frame to have the issue addressed. If the matter continues you have the right to terminate the contract.
The council of owners must act in the best interest of the strata company.
Brian Rulyancich
StrataTAC
E: [email protected]
P: 0428 970 067
This post appears in the March 2021 edition of The WA Strata Magazine.
Question: I’m on the strata council of owners in WA with three others. They are making decisions without including me in the correspondence. It is a very dysfunctional COO. What should I do?
I am on our strata council of owners in WA. The other three “collude” together and always outvote me. One, in particular, has a vendetta against me for no reason.
One of them obtained a quote to change the Strata Manager and without including me in negotiations apart from a couple of emails with the details of the proposed manager. They regularly communicated with each other, not including me.
It is a very dysfunctional COO. The existing SM has been very very patient with them. They have been sending up to 20 emails a day back and forth asking stupid questions and not following the email thread. It is all very frustrating!
Answer: Is there some alternative dispute resolution (e.g. mediation)
I can’t comment on the specifics of WA legislation and by the sound of it, you need some qualified advice in that regard to respond to some of your specific concerns.
Looking at your comment more broadly;
- What is it that you are wanting to achieve? Is it a specific outcome or something more general?
- There are legal solutions – see my comment above – but are there non-legal solutions?
- Is there an underlying issue that is driving the actions of the other parties? If so, what can be done about that?
- Is there some alternative dispute resolution (e.g., mediation) that you could consider to resolve some of those concerns?
- You don’t have to be best friends with the other parties – I think that’s unrealistic – but you do have to be able to get along enough so that you can exercise your rights and responsibilities.
Ultimately you probably need a circuit breaker of some sort, because otherwise, this situation will likely continue unchecked.
Chris Irons
Hynes Legal
E: [email protected]
P: 07 3193 0500
This post appears in the August 2020 edition of The WA Strata Magazine.
Question: I am a new owner and new on the strata council of owners in WA and I’m very concerned about the governance and incompetence of this committee.
Answer: Each strata scheme needs to deal with the various problems as they may arise using their best skills.
It is up to the owners in this WA strata scheme to form a council of owners.
Each strata scheme needs to deal with the various problems as they may arise using their best skills and most persevering endeavours to keep the building maintained and keep everyone happy.
There is no official qualification requirement to be on a Council of Owners but there are some good training courses available.
Shane White
Strata Title Consult
E: [email protected]
Disclaimer: this article should not be relied on as legal advice.
This post appears in Strata News #373.
Question: The Council of Owners is not acting in the best interest of the lot owners. We’ve tried to make changes but the Chair holds proxies. We are at a loss as to how we can change anything.
How can we change the council of owners if the existing chairman currently holds a majority of proxies.
At our recent AGM the owners present in WA tried to elect a new strata council of owners.
Our Strata Manager advised that all existing Council of Owner members had renominated and no other nomination were presented. Did we all concur that the CoO would remain unchanged?
An owner stood and asked “could we nominate at the meeting?” to which the strata manager advised “yes but you cannot nominate yourself unless you are a sole owner and Co-owners can only nominate the person they nominated to vote and owners can not nominate other owners.
We proceeded with 6 additional new nominations, however, it was a complete waste of time as the Chairman held the majority of the votes in the form of proxies made out to the Chairman, so no changes were made.
Lot owners are concerned about the way our Council is being run. The Council of Owners does not seem to be acting in the best interest of the lot owners. We are at a complete loss as to how we can ever change anything.
Answer: Prior preparation prevents poor performance.
Please note: this response was provided prior to the proclamation of the new strata title amendments.
Firstly, it is great to see a group of owners wishing to nominate for a position on their strata council.
The role of strata council is an important one with many responsibilities.
In this response, we specifically refer to Schedule 1. This can be accessed to follow the references to specific sections mentioned below.
At a properly constituted meeting, – see Schedule 1 Bylaw 11 – the chairperson is required to consider the proxies as valid or not and then follow the process in accordance with Schedule 1 Bylaw 5 Election of Council.
See Schedule 1 By Law 5 (1) – 9 (b) for full details on Council nomination process, validity, voting and ballots.
Prior preparation prevents poor performance, with any well prepared meeting prior preparation always sees a better outcome.
If you believe that your existing council has a hold, so to speak, then it is best that well prior to your AGM, the owners seeking to be nominated/appointed either try and communicate with the existing council to seek their endorsement OR seek other owners support of their nomination.
Council may be elected in as a majority vote or a by a Ballot – see Schedule 1 Bylaw 5 especially (4) & (5).
You do also mention why you believe your strata council isn’t acting in the best interest of the lot owners. You should write to the chairperson noting your concerns in a simple, clear and objective manner and ask for further clarification. Or better still, ask to meet and discuss the scheme. If there is no resolution and if any owner believes the strata council has contravened the Strata Titles Act, then they may apply to SAT – State Administrative Tribunal for orders.
This is general advice only, owners are to seek their own professional or legal advice. We can offer further assistance, however, to avoid risk, liability, unnecessary conflict and drama we suggest employing the services of a professional strata manager.
Elizabeth Florence
Abode Strata
E: [email protected]
P: 08 9368 2221
This post appears in Strata News #303.
How to handle a strata manager or council of owners who are not working in your interest
Please note: this information was provided prior to the proclamation of the new strata title amendments.
Choosing a strata manager is one of the most important decisions for property owners to make. But what happens if you become disenchanted with your strata manager because you believe they’re not meeting their contractual obligations?
The first thing to do is review the strata management contract to ensure the services in question are required to be performed by the Strata Manager, as contracts may vary. You may also need to seek legal advice for any termination of contracts.
It’s essential for owners to clearly understand the role of the Strata Council and the Strata Manager, as well as the services Strata Managers are expected to provide under the strata management contract.
Role of the Strata Manager
The role of a Strata Manager is to work cooperatively with the council of owners to successfully manage, maintain and administer all aspects of the property and; to foster an appropriate community environment for the owners.
Tasks that may be required of a Strata Manager include:
- General accounting services
- Preparing Budgets
- Invoicing of levies/service charges
- Arrears collections
- Financial reporting
- Contract management
- Meeting preparation
- Communication with property stakeholders
- Coordination of maintenance tasks
- Enforcement of rules/by-laws
- Issuing of notices, orders and certificates
- General secretarial tasks
- Advise the Strata Company on matters of compliance, procedure and management issues.
A Strata Manager is not permitted to make decisions on behalf of the Strata Company or do anything that requires a resolution of the Strata Company.
If you have concerns about the conduct of the Strata Manager you may raise your concerns directly with the Council of Owners to address with the Strata Manager. The Council of Owners may need to seek legal advice about the obligations and conduct of the Strata Manager before any action can be taken.
The Role of WA Strata Council of Owners
The strata council acts for and on behalf of the strata company in accordance with the conditions specified in the Strata Titles Act, the by-laws in force for the strata scheme, and subject to any restriction imposed or direction given at a general meeting of the strata company.
Members of the council of owners do not acquire any privileges by virtue of their election to the council, or if they become official office bearers. They are required to carry out their duties without favour, for the benefit of all owners.
If you believe your strata complex is not being managed properly by the council of owners on behalf of the Strata Company or they are behaving like a corrupt council of owners, you may apply to the State Administrative Tribunal (SAT) to have the matter resolved.
Sandy Papalia
Realmark Corporate
P: 08 9328 0999
Have a question about dealing with a strata manager or council of owners who are not acting in the best interest of lot owners or something to add to the article? Leave a comment below.
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I am an owner of an Apartment(Motel Room) in The Atrium at Mandurah. .About two weeks ago I received a letter of demand for outstanding Strata Fees and interest to be paid if late. This came from a Newly Appointed Strata Manager. After a phone call I was informed that there is a new committee and they have voted on fees so the building can be kept up to a high standard. I have asked for copies of meeting agendas./minutes and correspondence for the last 2 years since my ownership. I have still not received anything and do not feel comfortable on paying fees without any documents to support the request. The strata Manager has requested the Atrium Chairman and secretary to contact me and email me the documents requested. Nothing forthcoming. I am very suspicious of what might be happening there. Any advice?
Thank you for your assistance!
A question about how strata managers can be changed.
Two owners (who happen to be on the three-person council of owners) recently organised to change our strata management to someone one of them has worked with in the past.
There was no tender process; no documentation from the council of owners about why this manager was selected; and no opportunity for owners to vote on electing this new manager.
Is there a legal requirement for a council of owners to invite tenders, document the tender process and decision making? We feel blindsided.
Thank you
Hi Sue
Many of your questions have been addressed in this Q&A article:
WA: Q&A Procedure for Appointing a New Strata Manager
Subject:Parking on grass verge in Como WA
Does the lawn and reticulation which we installed and maintain come under common ground or other law?
Has the council of owners (who are the main offenders) have the right to allow parking on it or does it have to be a ratified by all owners?
If it is the latter would this have to be a majority or unanimous vote to allow parking?
Do the individuals responsible for damage have to pay for repair works?
Hi Larry
The following response has been provided by Shane White, Strata Title Consult:
The verge is the area of land outside the boundary of the strata scheme and as such is outside the operation of the Strata Titles Act 1985.
The strata company is at liberty to install reticulation in the verge area (they may require Local Council approval to do so.
Any parking control on the verge would rest with the Local Council to either permit or prohibit verge parking as the verge belongs to the Local Council.
You could request to have the verge lawn recorded with the Local Council as a registered lawn where parking is not permitted.
One would hope that you could recover any damage to the reticulation system.
This can be dealt with at the AGM if necessary.
Really important to ensure there is a motion under notice on the Agenda. Any owner can request an item of business – but advise the strata manager FAST – as Notices are usually issued 3 weeks prior.
Provide background explanation for the agenda…. paving on the common area is uneven and increases risk of injury. To minimise risk and liability claims, it is proposed that repairs are undertaken prior to summer.
Make the motion specific…. “that the council of owners be authorised to receive quotes and engage the most appropriate contractor to undertake the work for repair to paving on the common property to a maximum of $…, from the General Repairs budget.”
Request that this sum be included in the budget.
Google average paving costs and estimate the amount. This will be the maximum that can be spent and doesn’t specify where, so ensure all dangerous paving is repaired at the same time.
The insurer will be very pleased that risk is being minimised.
If you need extra help, contact Nikki (Look Up Strata) and she can pass on my email if privately permitted.
Thanks so much, eM. Happy to do that if required, Sorn.
As members of the council are nominated and elected at the AGM, if you examine the attendance record for the last meeting it will (or should) indicate the owner of each lot and who is ‘present’ which may clarify ownership. Oftentimes the Minutes will also state the unit from which the member is elected.
As a council member and the owner of the lot needing the work, you may have a conflict of interest too which may (not will) mean you need to abstain from voting on the issue.
in relation to the maintenance work, it sounds like there is an exclusive use arrangement, which rather alters the equation about whether the strata company or the owner is responsible for maintenance and repairs.
If, as you say the work needed is not just cosmetic then the first step is to examine the strata plan and determine where the boundary of each lot lies (inside or outside).
So, for example, if the boundary is the inner surface and there is damage to the walls the strata company will need to address the work.
However, if the work relates to cracking of garden walls within the exclusive use area then it is more than likely your own responsibility under exclusive use arrangements.
Without more detail it’s not as simple as it sounds. However, rather than go to the trouble of a SAT application the matter could be clarified relatively simply by carefully reading the strata plan, any by-laws and management statement then taking the question to the strata manager asking for help in clarifying your responsibility as a lot owner. . . my understanding is that is part of the strata manager’s role.
All the best and let us know how you go on.
No exclusive use clauses. Damage is to area around unit, ie paving related, could be a safety issue.
Even if i don’t vote, couple have majority block then.
If i go to the SAT does it take weeks or months?
Is it worth waiting till the new laws pass in WA, i think by years end.
Can the SAT compel a strata manager to release funds.
Also, i have asked the Strata manager for advice on what to do about this matter but have just been ignored.
Can i pay for repair and then be reimbursed by Strata, possibly after SAT application?
AGM in next few weeks.
Hi,
I need some advice if possible please.
I live in a block of units which are covered by strata in Perth. I own my unit. There are 4 people on the Council of Owners (COO), i am one of these. 2 of the others are a couple and effectively form a voting block.
They own 2 units in the complex though I do not know if they both co-own or only one owns both or one each. Does any of this make a difference as to whether they can be on the council of owners?
My main query however is that I need some work done on my property on parts that are considered common property, in my backyard but still part of the common property and not just cosmetic either. I have requested the COO to approve the expense, there is plenty of funds available for this. Naturally i approve of the request and so too has the 4th COO member but the couple are remaining silent and without a further vote there is no majority.
What are my options to compel the 2 other COO’s to vote or to compel the strata manager to release the funds?
Apart from remaining silent, can the couple realistically vote ‘No’ as the work is required to maintain the property in good condition?
Will an application to the SAT help in this regard?
thanks
Sorn
Hi Jeffrey, they should have been elected at your last AGM if you attended. If you didn’t they should be on the Minutes of the Meeting. It is also best the request to the Strata Manager actually comes from the owner your wife and not you. Always in writing, as this forms evidence if the issue has to go further, which hopefully for everyone’s sake it doesn’t.
My wife who is our owner has not been told the names of the Council of owners and after many requests by myself to the Strata Manager I am completely ignored.
Hi Dorothy
The council of owners is supposed to be representative of all owners. The members are elected at the AGM each year and the Minutes distributed to all owners who will then know who is a member of the council. It really is an individual owner choice (and responsibility) to raise something for discussion – whether at a council meeting or an AGM.
There is no requirement to notify other owners when council meetings are scheduled and, indeed, non-councillors would generally not attend council meetings unless invited. Owners will usually voice their concerns via the strata manager if there is one in place, and as council meetings usually include financial oversight it would be helpful for the strata manager to be notified so that any matters can be included on the council’s agenda.
Where there are just a few owners, and particularly if they are also occupiers, it can be beneficial to include them in seeking perspective, to encourage participation in future years, or draw on their experience. “Notification” then becomes an informal process where neighbours speak to each other and the community generates feedback.
As every strata company is different, there can be multiple ways in which items are raised for discussion… to a councillor, via strata manager, in person, by mail, noticeboard, or electronic means.
Should Counsel of owners notify other owners when they are having a meeting ,so the others can put forward items to be discussed
We received the following comment from an SA Resident about this article:
Does this Question & answers in the article apply for South Australia?
Tony Johnson, Horner Management has provided the following reply:
Absolutely the main focus of this article would be accurate, in terms of the main functions of a Manager, and to review your Management Contract if there is a concern with an S.A Manager.
The Council of Owners would be called a Committee in S.A and again the scope would be similar in their duties, and fulfilling Officer Bearer’s roles as outlined under the Act.
The basis is applicable to a similar concern in S.A. I suggest you review the Management Contract and the Legal Services Guide for Strata Titles.
We are in year 3 of a 5 year term with our Strata Manager. The Strata Council is not including the Strata Manager in any meetings of the Strata Council. The minutes of these meetings do not include financial reporting or any input from the Strata Manager. I am contributing via my Strata Fees a salary for the Strata Manager who Is being denied doing their job. What can be done to make the Strata Council include the Strata Manager in the role that they are paid for.