Most Owners Corporations have a committee with powers delegated under Section 11 of the Owners Corporations Act 2006 (Vic) (the Act).
However, many committees are inefficient and as a result can be more of a hindrance than a help to the Owners Corporation manager and can result in the Owners Corporation incurring unnecessary costs.
Set out below are some practical tips for increasing the efficiency and effectiveness of your committee.
1. Manual for Committee Members
Prepare a written manual for a committee member and in particular new committee members that confirms their obligations under the Act and the expectations of their position on the committee.
That manual will act as a useful reference tool for committee members and will also reduce the number of questions that you need to answer and therefore the amount of time that you need to allocate to your role on the committee or as manager.
2. Make sure Committee Members understand their obligations
Committee members are volunteers but they also have specific duties under the Act which are set out in Section 117 as follows:
- they must act honestly in good faith in the performance of their functions;
- they must exercise due care and diligence in the performance of their functions; and
- they must not make improper use of their position as a member to gain, directly or indirectly, an advantage for themselves or for any other person.
Committee members should be reminded of those obligations as often as is necessary.
3. Immunity of Committee Members
Committee members should understand that they have immunity under Section 118 of the Act for anything done or omitted to be done in good faith in the conduct of their role.
It is important that committee members understand that protection so that they are more willing to be usefully involved in the operation of the Owners Corporation.
They also need to be aware that this immunity does not apply where they do not act in good faith. An example of a committee member acting in bad faith would be using their position on the committee to gain an advantage (financial or otherwise) for themselves or a third party.
4. Make sure Committee Members understand the functions of the Owners Corporation
Section 4 of the Act sets out the functions of an Owners Corporation.
The members of the committee must understand those functions and the powers delegated to the committee.
Functions which may be delegated to the committee may include (subject to the specific rules of the Owners Corporation and some specific legislative limitations):
(a) To manage and administer the common property;
(b) To repair and maintain the:
- Common property;
- Chattels, fixtures, fittings and services related to the common property or its enjoyment;
- Equipment and services which are for the benefit of all or some of the land effected by the owners corporation
(c) To take out, maintain and pay insurance premiums as required under the Act;
(d) To provide an owners corporation certificate;
(e) Any other functions conferred on the Owners Corporation by:
- The Act and regulations;
- Subdivision Act;
- Any other law; or
- Rules of the Owners Corporation.
5. Conduct of meetings
To maintain the enthusiasm of the committee members and more importantly make sure that the Owners Corporation runs efficiently and effectively, committee meetings should be properly conducted.
Accordingly, the following procedures should be adopted:
- A clear agenda should be circulated to the committee members in advance of the meeting with copies of any materials proposed to be reviewed or discussed at the meeting;
- A chairperson should administer the conduct for the meeting to make sure that the agenda items are addressed and that the meeting runs on time;
- The secretary of the committee should be at the meetings to clearly record the minutes of the meeting and any resolutions or decisions of the committee.
KCL Law’s Owners Corporation team are available to assist if you have any questions in relation to your role as a committee member or in relation to the management of an Owners Corporation or its committee.
More information
For more information, please contact Anton Block, Principal Lawyer and Head of Owners Corporation, on (03) 8600 8833 or ablock@kcllaw.com.au.
If you are interested in receiving our Owners Corporation legal updates, please click here.