By Phillip Leaman

16 July 2020

See our video on tips for lot owners in dealing with the Owners Corporations’ manager and committees:

For an Owners Corporation Manager in Victoria, sometimes it can feel like there is an overwhelming amount of complaints to deal with.

 

Compliments and praise can be a rare experience.

But most complaints from lot owners are caused by a fundamental misunderstanding about what their Owners Corporation actually is, and the difference between the Owners Corporation, and the Owners Corporation Manager.

 

Managers are likely to always fall short of a lot owner’s expectations if those expectations are unreasonably high.

 

The team at Tisher Liner FC Law will briefly explain the difference between an Owners Corporation, and the Owners Corporation Manager and give lot owners some tips on how best to approach their Owners Corporation with questions and requests.

 

An Owners Corporation, is a separate legal body that is created to own and manage the common property at a subdivided property, like a residential apartment building or a commercial office building.

 

Its members are the people who own the lots, otherwise called lot owners.

 

At each annual general meeting of the members of the Owners Corporation, the Owners Corporation makes key decisions for the year including:

 

  1. Setting the amount of the annual fees that the members will pay;
  2. Ensuring that the mandatory insurances are in place;
  3. Listening to the manager’s and committee’s reports about achievements since the last annual general meeting.

 

At each annual general meeting, the Owners Corporation’s members also elect a Committee of lot owners or lot owner proxy holders.

 

The Committee is delegated the power to make decisions on behalf of the Owners Corporation until a new Committee is elected – usually at the next Annual General Meeting. However a Committee is not allowed to make decisions that require a special resolution or unanimous resolution under the Owners Corporations Act 2006.

 

Remember, the Committee Members are volunteers who give their time to consider Owners Corporation issues and make decisions.

 

Most Committee Members still have other full time employment.

The Committee also has to make its decisions by majority vote,  meaning that it cannot always consider issues or make decisions as quickly as an individual could.

 

Most Committees these days stay in touch by email, and hold meetings and ballot votes to make decisions. The number of Committee meetings that a Committee has each year varies. There is no legal requirement for how many times the Committee must meet.

 

So, where does the Manager fit in?

 

The Manager of the Owners Corporation is a separate, third party service provider to the Owners Corporation.

 

There is a management agreement between the Owners Corporation and the Manager (which is usually a business).

 

The Management agreement sets out the functions that the Manager will assist the Owners Corporation with, and the Owners Corporation’s obligations to the Manager.

 

However, where there is an elected Committee, the Manager still has to act under the direction and instruction of the Committee (subject to the conditions of the management agreement).

 

On many matters that are raised by lot owners to the Manager, the Manager has to refer to the Committee, who then makes a decision, and communicates its decision back to the Manager, who will then relay the Committee’s decision to the lot owner.

 

Three common misconceptions, that should be corrected are:

 

  • The management agreement between the Manager and the Owners Corporation, does not involve lot owners in their personal capacities. In other words, there is no contractual agreement between a lot owner and the Manager; and

 

  • The Manager is not responsible for personally making most decisions, and is definitely not responsible under its management contract, for personally going out to your property and doing common property repairs or maintenance. The Manager assists the Committee to hire third party contractors to do that kind of work for the Owners Corporation;

 

  • Your Owners Corporation is not the only Owners Corporation that your Manager services. Managers can manage anywhere from 20 to 100 Owners Corporations in their portfolio at any one time.

 

So, next time you’re thinking about sending a grumpy email to your Owners Corporation’s manager, use these tips instead:

 

  1. Recognise whether your question or request is something that the Manager can answer, or whether the Committee has to make a decision about;

 

  1. Educate yourself about whether or not the Committee is even allowed to make the particular decision you are requesting – if it is something that requires a special or unanimous resolution – the Committee can’t make that decision;

 

  1. Use manners.

 

Show the Manager that you understand what the different roles of the Manager and the Committee are;

  1. Ask whether the Committee has an upcoming meeting or not;
  2. Ask politely for your request to be put onto the Committee’s agenda;
  3. Do not press unnecessarily or constantly for responses but rather ask the Committee to advise you of their proposed response timeframe;
  4. Remember, although the Owners Corporation does have some strict duties, especially in relation to maintaining common property, on other matters sometimes you are not legally entitled to a particular outcome from an Owners Corporation and democracy will determine the outcome.

 

Keep the words of Dale Carnegie’s “How to make friends and influence people” in mind

 

“A well known principle of human behaviour says that when we ask someone to do us a favour, we will be more successful if we find a reason. People simply like to have reasons for what they do.”

 

We hope this video helps reduce the number of Owners Corporation disputes between lot owners, Managers and Owners Corporations in Victoria.

 

If your Owners Corporation is involved in a legal dispute and wants advice for options for bringing it to an end, please don’t hesitate to contact Phillip Leaman, Principal at Tisher Liner FC Law.

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