This article is about how the reforms to WA strata legislation will affect the council of owners.
Jump directly to the QUESTION you are after:
- QUESTION: Section 118 of the Strata Titles Act as amended in 2018 appears to conflict with section 135.
- QUESTION: What does “degree of care and diligence” effectively mean. Is it basically the same as directors duties?
- ARTICLE: How Will the New Strata Titles Legislation Affect our Council of Owners?
Question: Section 118 of the Strata Titles Act as amended in 2018 appears to conflict with section 135.
Section 118 of the Strata Titles Act as amended in 2018 appears to conflict with section 135. In section 135 it states that the Strata Council must carry out the work on behalf of the Strata Company. I assume that means organise the contracts for work required. Section 118 states that execution of documents must be authorised by a general meeting of the Strata Company.
If the Strata Council can carry out the work of the Strata Company then why do they have to get authorisation to execute documents? This appears to be contradictory.
Answer: Section 118 and s 135 are not in conflict.
Section 118 addresses the execution of documents. Such documents can range from contracts to engage a strata manager to contracts of insurance.
Once all relevant documents are signed under section 118, the council will typically then liaise with the strata manager to deal with work functions covered by section 135, i.e. things like maintaining the gardens and fixing the automatic gates.
Disclaimer: This response is of a general nature only and is not to be taken as legal advice. You should seek legal advice for your specific circumstances.
This post appears in Strata News #417.
Question: What does “degree of care and diligence” effectively mean. Is it basically the same as directors duties?
What does “degree of care and diligence” effectively mean. Is it basically the same as directors duties?
Several members of the CoO passed motions, but then reneged claiming they either hadn’t read or didn’t understand the supporting information provided nor did they raise any such issues during discussions at CoO meetings.
How do you reverse or enforce motions made when CoO members don’t correctly engage in CoO decision making?
Answer: Failing to read or understand the issues can potentially amount to a lack of care and diligence.
“Company directors do owe a duty of care and diligence to their companies. That kind of ‘care and diligence’ is similar to the kind expected of lot owners who are on a strata company council. Failing to read or understand the issues can potentially amount to a lack of care and diligence.
As a general rule, one may be able to reverse or enforce a resolution arising from a motion at council or general meeting by passing an appropriate resolution at a later council meeting or general meeting (as the case may be). Obviously, an appropriate majority would be needed to effect this. However, there may be limits on this, arising from the kind of resolutions in question, what actions have been taken as a result, legal limitations etc.
Disclaimer: This response is of a general nature only and is not to be taken as legal advice. You should seek legal advice for your specific circumstances.”
This post appears in Strata News #411.
Article: How Will the New Strata Titles Legislation Affect our Council of Owners?
How will the coming reforms in WA affect the way the Council of Owners operates? We cover the major changes you need to know about if you are a part of the Council of Owners in your scheme.
Functions and Constitution of Council
Section 135 (formerly section 44) is now where you will find the functions and the constitution of council. The functions of a strata company will subject to the Act and any restrictions imposed by an ordinary resolution be still performed by the council of owners.
Council of Owner Elections
One of the major changes is the way the Council is now elected, previously if an election was called the votes were counted by number, however now section 135 (3)(a) states that a person who is entitled to vote in the election and who is present in person or by proxy at a meeting may demand that the votes in the election be counted by unit entitlement of lots. This means that those who have a higher unit entitlement will have a higher voting capacity.
Section 135 (4) now formally states that one of the members of the council must hold the office as chairperson of the strata company.
It is also interesting to note that the previous word Chairman has now been replaced by Chairperson, which is more socially acceptable.
Declaring Conflicts of Interest
There is now more accountability for members of the council under the new legislation. Previously there was no formal requirement in the ACT for council members to act in the best interest of the strata company nor declare any conflicts (although common law would usually require this) the new ACT now addresses this under section 137 which now requires that a council member must at all times act honestly, with loyalty and in good faith.
They must also at all times exercise the degree of care and diligence in the performance of the functions that a reasonable person in the person’s position and the circumstances of the strata company would reasonably be expected to exercise, nor should they make improper use of their position to gain directly or indirectly an advantage.
In summary, council members must disclose any conflict of interest and not vote on any matter in which they have an interest.
Council Member’s Liability
Another very important addition is the protection of Council members (section 141) this states that a council member is not liable in any civil proceedings for any act that they do in good faith when performing the role of a council member.
So there is good news for members of the council in the new legislation which hopefully will encourage more owners to take an active interest in the running of their strata properties.
This post appears in Strata News #242.
Have a question about how the reforms to WA strata legislation will affect the council of owners or something to add to the article? Leave a comment below.
- WA: Reforms to WA Strata Legislation – As a Lot Owner, Should I Care?
- WA Strata Titles Amendment Act 2018: duties of a council member and how to protect yourself from liability
- Landgate: Strata Reforms: I own strata
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