Having an active Council of the Strata Company is crucial to the effective running of a strata company.
Council of the Strata Company (Body Corporate) is a voluntary position who act for and on behalf of the strata company. The Council of the Strata Company operated in accordance with the Strata Titles Act and any specific by-laws in force for the strata scheme.
Statutory Duties for the Council of the Strata Company (Body Corporate)
The amendments to the Strata Titles Act has introduced new regulations to raise the standards of the council of a strata company and imposed new statutory duties for the members.
The council of a strata company are required to:
- act honestly, with loyalty and in good faith in the performance of their functions
- exercise due care and diligence in the performance of their functions
- ensure they do not make improper use of their position as a member to gain a direct or indirect advantage for themselves or any other person or to cause detriment to the Strata Company
- inform the strata council in writing of any conflict of interest as soon as is practicable after they become aware of them
The Chairperson is responsible for the conduct of meetings and to ensure decisions made at meetings are carried out.
The Secretary is responsible for issuing notices of meetings, agendas, and taking minutes of meetings – on occasions where the Strata Manager is not present or has not been asked to do so.
The Treasurer will receive a copy of the strata company’s monthly financial statement and will be expected to review any expenses against the agreed budget and check for anomalies. The Treasurer should also monitor arrears and issue instructions to the Strata Manager where debt collection services may be required.
Council of the Strata Company meetings
The Council of the Strata Company is not obligated under the Strata Act to hold meetings, however, in some cases, these are beneficial to the Council.
When calling a meeting the Council gives not less than seven days’ notice to other members, specifying the reason for calling the meeting.
The meeting must be quorate. This means at least 50% of Council members must be present either in person or by proxy in order to conduct business. Decisions at Council meetings are made by simple majority resolution.
What happens when a member of the Council resigns?
At each Annual General Meeting (AGM), there will be a motion relating to the constitution of the Council of the strata company and a vote to elect individuals who will form the Council for the next 12 months. It is usual that a council will consist of three, five or seven members as this makes a majority vote easy to achieve. However, the Council of the strata company can be made up of any number between three and seven.
What happens if we don’t have a council (Body Corporate)?
If zero, one, or two owners nominate for a council position at the AGM, the Act states that all owners will form the Council.
Impact of having no Council
The Council of Owners (COO) is made up of between three and seven lot owners. If there is no council for a complex, then any decision (including maintenance) which needs to be made, requires correspondence to be sent to all owners and more than 50% of owners need to approve any work prior to a Strata Manager taking any action.
Typical outcome of having no Council
Many owners, particularly in complexes where no owners want to nominate for a COO position, typically disregard any requests sent by the Strata Manager. This leaves the Strata Manager unable to carry out any non budgeted works, and the result will be a less well maintained complex.
Benefits of having a Council
Having an active Council of Owners who meet regularly and liaise with the Strata Managers to ensure ongoing maintenance is attended to, is a far more effective and efficient way to ensure your strata complex is well-maintained and the value preserved.
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