The All-Powerful Chairperson? Nope…

Strata Matters

The All-Powerful Chairperson? Nope…

It can be a thankless job, serving as a Committee Member of an Owners Corporation for a residential or commercial property.

Sometimes a proactive Committee Chairperson may think that making unilateral decisions to further the interests of the Owners Corporation is the most practical and quick thing to do.

But beware. Committees are democratic groups. A Committee must hold Committee Meetings and ballots to make decisions, and must do so by majority vote of Committee Members at a meeting or ballot with a quorum (50%) of Committee Members participating.

In Victoria, Committees must elect a Chairperson, but that Chairperson does not have any ‘additional powers’ from an ordinary Committee Member except for:

  1. The power to convene Committee meetings;
  2. At a Committee Meeting or general meeting, if the voting is equal, the Chairperson has the choice of exercising a second / casting vote – if the votes are equal and the Chairperson chooses not to exercise a second / casting vote – the motion fails;
  3. The power to convene annual general meetings or special general meetings or ballot votes of all lot owners;
  4. The ability to chair an annual general meeting unless the lot owners elect another lot owner or the manager to chair the meeting;
  5. Witnessing the Owners Corporation’s common seal being applied to an owners corporation certificate;
  6. To receive handover of the funds and records from a former manager (but only if there is no elected Secretary of the Committee).

The above Chairperson powers are the only ‘additional’ powers that a Chairperson has. The Chairperson does not have any other general power to make decisions on behalf of the Committee unless:

  1. The Owners Corporation has passed a resolution at a general meeting to delegate certain powers and functions to the Chairperson; or
  2. The Owners Corporation has by way of instrument, executed with the common seal in the presence of two lot owners, delegated certain functions and powers to the Chairperson; or
  3. The Committee has by way of instrument delegated its functions or powers to the Chairperson (in this case the Chairperson must be a lot owner).

A Committee has the power by majority vote to revoke the appointment of a Chairperson. In that case, the Chairperson still remains a Committee Member until the next Committee election. Also, in order for a Chairperson, or any Committee Member for that matter, to be eligible to remain as a Committee Member, it must not be in arrears to the Owners Corporation for any amount.

VCAT has the power under section 165(1)(h)(i) of the Owners Corporations Act 2006 to appoint or revoke the appointment of a Chairperson. However, such an application will likely require evidence that the Chairperson has acted dishonestly, in bad faith or failed to exercise due care of diligence, or made improper use of their position to gain, directly or indirectly an advantage for itself or any other person.

Article shared with permission from Tisher Liner FC Law, specialists in providing owners corporations in Victoria with easy to understand legal advice. If you would like a quote please email the details of your matter to ocenquiry@tlfc.com.au.

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