I recently had a client provide the following question:
Is it lawful for one person to be President, Secretary and Treasurer of a body corporate? My friend is looking to purchase a unit. She said there is one person with this role. She was the only one who attended the last meeting. Property seems to be running well but it seems odd that this is possible for 57 units.
I thought firstly about their rules of governance with a quorum, but if she is all the roles, then where does that leave everyone else?
Yes, this is fine for a Strata Corporation.
The Strata Titles Act 1988 simply states that the corporation must appoint a Presiding Officer, Treasurer and Secretary as per section 23(1)(a) and that these offices may be held by the same person (2):
23—Officers of strata corporation
(1) A strata corporation must have the following officers:
(a) a presiding officer (to preside at meetings of the corporation); and (b) a secretary; and (c) a treasurer. (1a) Unless all of the units comprised in the strata scheme consist of non-residential premises, the officers of a strata corporation must be unit holders.
(2) Any two or more of the above offices may be held simultaneously by the same person.
(3) Until the first appointments are made to the above offices, they will be held by the original proprietor (or, if the original proprietor is a body corporate, by its nominee or in the absence of a nominee, by its secretary).
(4) Appointments to the above offices must be made by the strata corporation at a general meeting of the corporation.
(5) A strata corporation must not allow any of the above offices to remain vacant for more than six months.
(6) A strata corporation may appoint or engage a person to assist any person appointed under this section as an officer of the corporation.
Some managers really push to work with just one owner and commonly this is an extension of the attitude whereby owners ‘report’ to the manager who is seen by those owners as the boss of the group. Personally I have never liked this attitude as the role of the body corporate manager is as a consultant reporting to the Management Committee in almost the same way that the CEO reports to the board of directors who run the company on behalf of the shareholders (who in this case are the unit owners).
My preference for mid to large unit groups (of 20 units plus) is to deal with a small group representative of the ownership of 3 or 5 members, always with an odd number to ensure a decision is made on a resolution proposed and with a mix between owner occupiers and investor owners that is representative of the broader ownership of the units within the corporation.
While Strata Management SA assists corporations of all sizes, below are just some of the committee setups we are working with:
42 units - 3 committee members
30 units - 3 committee members
132 units - 3 committee members
176 units - 3 committee members
22 units - 5 committee members
37 units - 5 committee members
155 units - 5 committee members
46 units - 7 committee members
51 units - 9 committee members
While I would prefer to work with a committee of 3 or 5 unit owners as it is easier to get to a sharper decision with fewer opinions potentially clouding, delaying or stopping the job, it is up to the corporation as to what they wish to have in place for their property and in some of the larger committees there are people with specialised skills working among the committee members which can be extremely useful for those corporations given that some are marinas, shopping centres, mixed use, high rise and holiday accommodation.
While most of my day to day dealings as a body corporate manager are with the Presiding Officers of the corporations, we report back to the management committee who are responsible for making decisions and the management committee reports back to owners at the Annual General Meeting.
In the case of my clients friends’ property from the question above this model with a sole decision maker has worked pretty well with strata groups over the years and is the setup favoured by the vast majority of smaller corporations where it is often very difficult to get anyone to want to be involved and if it is working with this corporation then that is great but if the purchaser wants to get involved they should attend the meeting and offer their assistance.
At one corporation I was assisting with all unit holders present the meeting stalled at the point of electing the office bearers simply as no one wanted to take on the role until someone finally relented and at another meeting more recently for a newer property with 8 of the 11 owners in attendance we had to appoint someone who wasn’t at the meeting when none of the owners present would take on the role.
While we all have other things happening in life and the thought of taking on additional work for the corporation can be daunting to some, these positions are really just what the owners make them. As body corporate managers we are here to carry out the Secretarial and Treasury functions of the corporation and we will happily chair the meeting which is the duty of the Presiding Officer too. The workload for the property depends on what the property is like, where it is at in its maintenance cycle and what improvement works are proposed along with the management of any regular contractors, caretakers or employees that the property may have.
In many corporations there is simply one person who is usually an owner occupier who really wants to be involved, keeps an eye on things and generally works to keep costs down and many of the groups with these people run very simply with the manager and that unit owner working closely together during the year between meetings.
In some cases the committee positions are highly sought after and for a couple of meetings a year we have multiple staff attend in order to have one working as a returning officer while the manager for the property is assisting with the chairing of the meeting and recording the minutes.
Any model or committee setup works while it works but when put under pressure the committee approach involving a cross-section of investors and owner-occupiers works best as there are more voices to be able to share the message with owners that are representative of the total ownership of the property.
Working in a management committee can be a rewarding experience that ensures that as an owner you have complete clarity and transparency around what is happening within your corporation and as an appointed committee member you have the power to help shape the future of your property.
Please note that the above is solely correct in the case of a Strata Corporation while a Community Corporation has different legislative requirements around the office bearers positions.