|
articles
 The following articles were written by Barard Management Director Richard Holmes, and published in the Hotel Motel and Resort News.
Unit Owners Lists and the Privacy Act
There are times when unit owners want to be in contact with their fellow unit owners. The reason for this contact is varied but the more common reasons are for sending newsletters, reports on the common property and reports on the administration of their body corporate.
Initially these communications are sent by post but it is quickly realised that this method comes with costs of postage, photocopying and envelopes. So the senders start to consider sending their material by facsimile or e-mail or by contracting their fellow owners by telephone.
In order to obtain a list of unit owners, one of the most accessible locations is in the body corporate records. The Body Corporate and Community Management Regulations require a body corporate to keep a register call "The Roll". This register records the name of the owner of each lot and the address for serving notices and correspondence on those lot owners.
The Roll, however, does not record unit owners' telephone numbers, facsimile numbers or e-mail addresses. If a body corporate has engaged a body corporate manager or a service contractor, then there is a very good chance that that manager has possession of these extra contact details. The managers will have recorded these details from letters and various notices that unit owners have sent to them over a period of time.
Other locations of owner details are the Titles Office in the Department of Natural Resources, Mines and Energy, the Rates Department of the nearest Council, the Valuer Generals Department and by purchasing specialist property software. Unfortunately for a unit owner, the cost of obtaining unit owner details through government agencies is quite prohibitive and so it is to the body corporate records that they seek to obtain these details.
Now while unit owners might feel that they have a right to be able to be able to obtain a list of other unit owners, the Privacy Amendment (Private Sector) Act negates any such belief. The fact is unit owners private details are just that; private.
Of course unit owners do have the right to conduct a search of the books and records of their body corporate and these records contain The Roll. From a search of The Roll, unit owners can discover the names and postal addresses of their fellow unit owners. In order to obtain the other contact details, pressure is then put on the body corporate manager or service contractor to release those personal details that are protected under the Privacy Legislation.
While the body corporate manager will feel quite comfortable stating the Privacy Legislation as a reason for not releasing private details, it can become very difficult when a Committee of a Body Corporate wants the list.
Committees might wish to contact owners who are slow in paying their body corporate levies or might wish to quickly circulate some form of report and realise that communicating by post is too slow. However, the Privacy Legislation is clear, Committee’s also are not entitled to private details of unit owners. Of course if a unit owner consents to their Committee being supplied with these details, then that is a different matter.
Unit owners who reside at a great distance from their strata building or the location of the body corporate records often complain that they cannot conduct a search of The Roll and seek to have the body corporate manager or service contractor conduct the search for them. However, just because books and records are kept in the office of the body corporate manager, the manager has no authority to search the records for the purpose of releasing unit owner details to another owner.
It is possible to engage a professional search agent to conduct the search and details of these individuals can be found in the yellow pages of the telephone book under "Titles Searchers".
The Body Corporate and Community Management Regulations require a small fee to be paid by the searcher to the body corporate whether it is a unit owner or a professional search agent.
So while unit owners may wish to be in communication with other unit owners, they have limited rights to be supplied with private details of their fellow unit owners.
Levy Arrears Will Cost Unit Owners
Body Corporate levy arrears by unit owners have historically affected owner’s rights to vote at general meetings of a body corporate. However, since the introduction of amendments to the Standard and Accommodation Module Regulations in the Body Corporate legislation in December last year, a unit owner is further disadvantaged if levies fall into arrears.
Section 13(3) of the Standard Module and section 14(3) of the Accommodation Module provide that a lot owner can neither nominate themselves or another person to be a member of the committee if either the lot owner nominating or the proposed candidate owes a body corporate debt. So right near the commencement of a financial year of a body corporate, unfinancial unit owners find that by not paying their levies on time, they can be embarrassed to find that they are penalised by their body corporate.
A body corporate debt is defined in the Schedule of both Regulations as the following amounts that a body corporate can recover from a unit owner –
- the amount of any contribution or instalment;
- any penalty for not paying the contribution or instalment;
- any costs reasonably incurred by the body corporate in recovering the amount.
This means that a unit owner will be penalised for not paying levies on time, not paying any penalty interest on outstanding levies and not paying any court costs and legal costs resulting from a court action to recover the levies.
So if a unit owner who is currently a member of a committee of a body corporate and owes a body corporate debt, could find that a nomination to re-elect them onto the committee for the next year could be rejected.
Unit owners who are in arrears cannot vote on motions in general meetings or in the elections of members of the committee. The only exception to this rule is in motions where a Resolution Without Dissent is required. Here an unfinancial unit owner can cast a vote on motions.
In bodies corporate where penalty interest on outstanding levies has been approved, unit owners need to be cautious. Both module regulations allow for a penalty interest up to a maximum of 30% per year and if those same bodies corporate have adopted a discount of up to the permitted maximum of 20% for early payment of a levy, the real penalty could be as high as 50% of the outstanding levy.
These penalties are applied monthly from the due date that a levy must be paid. As there is a tendency by everybody to pay bills at the end of each calendar month, unit owners can still be in arrears in paying a penalty because the monthly calculation of the penalty interest might fall due in the middle of the calendar month. When paying the penalty interest, it is wise to check the lot's levy account either via the internet, if available, or by searching the body corporate's records to ensure that all of the debts have been paid on time. This action will then ensure that owners are not penalised when nominating candidates for election and voting in general meetings.
There may be further embarrassment for unit owners whose levies are in arrears following the holding of a general meeting of a body corporate. There is a requirement in both module regulations for the chairperson of the meeting to make a declaration on how owners have voted on motions which includes the reasons why some votes could not be counted. Typically such a reason is that an owner is in arrears with the levies. This declaration is usually recorded in the minutes of the meeting for all fellow owners to see.
It is therefore worthwhile for all owners to ensure that their body corporate levies are up to date so that they can participate in the elections of a new committee and to cast votes in general meetings.
The Importance of a Functioning Committee
In the December 2003 issue of Hotel Motel & Resort News, I raised the matter of the election of building managers to a committee of a body corporate. Under the new amendments to the Body Corporate and Community Management Regulations (Standard and Accommodation Modules), building managers now do not go through an election procedure but are automatically placed on their committees in a non-voting capacity.
I mentioned previously that problems could arise where a manager wanted to sell his business but as his building was made up of all non-occupier investor owners with the only committee being the building manager himself, he had no choice but to request the formal transfer of management rights be approved in an extraordinary general meeting of his body corporate. Such an exercise could take many weeks to be finalised, as there are statutory time constraints in holding such a meeting.
Building managers therefore should always be on guard that at all times their body corporate has an active committee so that when the time comes to sell the business, there will be a committee in place to approve of the transfer quickly. During this last "property boom", many an active committee disintegrated simply because committee members sold their units and moved on. One month there was a committee and the next month there was no committee at all.
The new legislation however will mean that building managers can no longer be on a committee in a voting capacity. The committee can now only be made up of unit owners (includes individuals and company nominees) and some of their relations as well as individual persons who hold powers of attorney of unit owners.
Building managers should actively encourage unit owners to be on their committees. To do this, they should remember that just prior to each annual general meeting, their secretary or body corporate manager would send out a notice to all owners inviting the nomination of candidates for election onto the committee. This is the time for building managers to talk to their owners and convince them that an active committee must be elected.
The new rules state that a unit owner (which includes the building manager) may only nominate one person as candidate for election to the committee. It is no longer the case that the building manager nominates every member of the new committee and that committee elect is chosen at the annual general meeting. So the manager needs to talk to his owners so that they will nominate themselves or one other person to go onto the committee.
Where bodies corporate with management rights are concerned, I think a large committee is preferable to a smaller one because if attrition occurs for some reason (eg., property sales), there will be enough committee members to carry out the decisions as they occur.
What happens if the building manager has not been able to convince his owners that they must be on the committee and a committee is not formed at the annual general meeting? Well there is a new Regulation (section 22 under the Accommodation Module and section 24 under the Standard Module) that requires the body corporate to hold an extraordinary general meeting within two months after the annual general meeting for the express purpose of either electing a committee or appointing the body corporate manager who will then have the power to act as a committee. This appointment at the extraordinary general meeting will require the body corporate manager to carry out many extra duties and make him wholly responsible for any liabilities of the body corporate that occur during his time of appointment.
The unit owners can expect the additional appointment of the body corporate manager to charge a hefty fee for this additional responsibility. That in turn will have a dramatic effect on the body corporate levies that each owner will be required to pay. If only for mercenary reasons, it should not be too difficult to convince unit owners to be on the committee otherwise they can expect an increase in their levies.
What will happen if at the extraordinary general meeting either a committee is not chosen or the new responsibility of the body corporate manager is not given?
Where no committee exists, all decisions can only be made in an extraordinary or annual general meeting however without a secretary who is a member of a committee, no person has the authority to call such a meeting. If the body corporate manager with the powers of a secretary has been engaged, a general meeting can be called and held and the required decisions considered. However as this body corporate manager cannot place motions on the agenda of the general meeting, the general meeting would not get off the ground.
So without a committee, the body corporate would require the assistance of the Commissioner for Body Corporate and Community Management to appoint a compulsory body corporate manager under the dispute provisions of the Act. Such an appointment would also incur a considerable expense to a body corporate.
It is in everybody’s best interest to have a committee elected at each annual general meeting. The building manager in having his decisions made and the unit owners not incurring unnecessary expense.
|
|
