VIC OC Committee approving each others requests?

[adonis_paradise]

Hi all.

I own a flat in a block of 19 units. Owners have always put the 'outdoor part of their split system air conditioners' (which I'll refer to as the 'aircon') on our (small) balconies. About 6 months ago I noticed one owner had moved his aircon off his balcony, onto the front of the (common property) building (partly hidden by bushes). Then about a month ago I noticed he had put a second aircon, again on a (common property) wall, right next to the steps people take to enter the building.

I also noticed that the owner of the adjacent flat ( lets call him 'Owner2') had ALSO recently moved his aircon off his balcony, onto the outside wall (you can see its' pipe on the far left of the pic above).

I assumed these were all done without permission, and that the owners would be asked to remove them, but I was also suspicious, because [plot twist] both of these owners happen to be on the OC committee. I contacted the Body Corp manager who (to my astonishment) told me that this use of the common property was approved(!?) ... by the OC Committee. I should also mention that [plot twist2] Owner2's wife owns another flat in the building, and she is also on the committee... So... the committee had five people; three with a vested interest in wanting to free their balconies of aircons .. and...it seems that they used their positions on the committee to approve each other's requests .. without consulting the other owners.

Q1: Can an OC Committee make these kind of decisions? ie ones that (can be argued) permanently alter the external appearance of the building? Even though one could argue two of the aircons are partly hidden by shrubs, what if in future we wanted to redesign the garden beds?
Q2: I'm confident the other owners will object to this. Can the Committee members now be forced to remove their aircons, even though they were 'approved'?
Q3: If so, I assume they will argue that the OC (ie all owners) should pay for this, because the aircons were 'approved', BUT I read in the Owners Corporations Act 2006 Sec 117 that:

Duties of members of committees and sub‑committees
(1) A member of a committee or sub-committee of an owners corporation must, in the performance of the member's functions—
(a) act honestly and in good faith; and
(b) exercise due care and diligence; and
(c) act in the interests of the owners corporation.
(2) A member of a committee or sub-committee of an owners corporation must not make improper use of the member's position to gain, directly or indirectly, an advantage for the member or for any other person.

If committee members fail in these duties (I'm assuming only VCAT can decide/decree this), can be forced to pay for the removal of their aircons from the common property?

 

[Nighthelyn]

Hi adonis_paradise,

Q1 - unclear, could be legal. OC committee cannot effect such approval by itself (approval of installation of air condition, exclusive right for that area of the common property for a particular owner) - they can only make interim approval, then have it affirmed in a meeting and will need sufficient votes to make it official. You will need to ask for a copy of how and in what form has the approval been obtained.

Q2 - an owner can make a motion to revoke an approved exclusive right, and you will need it to be voted. >50% from your description but depends on what was approved, could be >75% owners. Need to check how the decision was made before.

Q3 - No - VCAT can order removal, but a brief look at their jurisdiction they may not have the power to order cost. If it has to be paid by owners 1 and 2 and there is no agreement on this, the matter may have to be tried in local court or above.

Good luck!

-Nighthelyn

 

[adonis_paradise]

Nighthelyn:
You will need to ask for a copy of how and in what form has the approval been obtained

Thanks Nighthelyn.

I've asked for the minutes of the Committee's meeting from the OC Manager (which I believe they are obligated to make/keep) .

.. to be continued

 

[adonis_paradise]

Well.. the OC manager says "there are no minutes, the correspondence was all via email"... I'm going to ask for a copy of the emails ( I assume we have the right to see them(?)).

Furthermore, regarding "Can an OC Committee make these kind of decisions?" she responded with "...the committee are appointed by owners at each AGM to undertake the decisions on matters that arise".

Regarding owners of the two Units both being on the committee: "there are other members on the committee, the units did not vote on their own application, this was approved by the other members".

(I didn't mention Owner2's wife's potential conflict of interest issue).

Let's see how the OC Manager responds to the email correspondence request...

 

[adonis_paradise]

Ok, well the OC manager sent the email correspondence, and it appears that (because so many Committee members had a conflict of interest), only one committee member (lets call him "Mr Impartial") ended up approving everything! Here's a sample [edited for privacy reasons]:

Received xx/xx/2021 – “Hi [Owner1 & Mr Impartial], As discussed by phone, thanks for agreeing to the installation of the AC compressor onto the external wall at [the address], which had previously been proposed for installation on the unit balcony. Please would you confirm your agreement by replying to this email so we have a written paper trail
Kind regards
[Owner2].

Received xx/xx/21 – “Hi [Owner2],
Confirming my agreement for the AC compressor onto the external wall at [the address].
Regards,
[Mr Impartial]

Regarding the second aircon request, again, a minimalist:

I have no concerns with the proposed location of the AC unit.
Kind regards,
[Mr Impartial]

And that's it! No discussion, no minutes, and no mention of the third unit. Surely this cannot be 'legal'.

NightHelyn: can you please tell me where in the Owners Corporations Act 2006 these rules are outlined:

OC committee cannot effect such approval by itself (approval of installation of air condition, exclusive right for that area of the common property for a particular owner) - they can only make interim approval, then have it affirmed in a meeting and will need sufficient votes to make it official. You will need to ask for a copy of how and in what form has the approval been obtained.

thanks!

 

[adonis_paradise]

Ok I've had a look, and I think the pertinent bits are in Sections 109, 111, 112, 114 and 115.

I believe NightHelyn was referring to Sec 112: (excerpt):

6) If there is not a quorum for a meeting of a committee, the members of the committee present may make an interim resolution.
(7) An interim resolution does not take effect unless it is confirmed—
(a) at the next meeting at which a quorum is present; or
(b) by ballot under section 111; or
(c) in accordance with the rules.

I believe the next step is to lodge a complaint.

Q: Isn't part of the OC Manager's responsibility to make sure that things are done properly? eg to ensure Committees conduct themselves in accordance to the OC Act? I'm looking through the 'PART 6--MANAGERS' Section, and I cant see any such provision...

 

[adonis_paradise]

UPDATE:
Well, it appears that there has been an 'approval frenzy'! Not only did two Committee members vote to approve of each other's use of the common property, but they also approved of two *other* Aircons, also to be placed on the common property. There also appears to be two additional aircons on the common property without permission. The existing committee (3/4 of whom are beneficiaries of these approvals), of course want to just approve of them all, and end the matter. The OC Manager agrees.. but she also has made some surprising (to me) claims about how the Law works here:

1. DEFINITION OF 'QUORUM'
The OC Manager says that a 'Quorum' means that over 50% of Committee members need to 'participate' in a meeting, NOT that they necessarily voted. Therefore, (she says) that even if ONE Committee Member voted, as long as over 50% of the others 'were present', that counts as a 'Quorum'. Therefore 3 out of 4 can abstain from voting, and one sole person CAN cast the deciding vote!
Q1: Is this the correct legal definition of a quorum (as applicable to the OC Act 2006)?

2. DOES VCAT CONSIDER A BUILDING'S 'CURRENT APPEARANCE' RELEVANT WHEN DECIDING WHETHER TO ALLOW ILLEGAL AIRCONS TO REMAIN?
Re: The Aircons on the common property which DIDN'T get approval, the OC Manager claims there's no point going to VCAT, because VCAT will allow them to remain, because (i'm paraphrasing) "there are already plenty of Aircons on peoples balconies", and "the extra ones on the Common Property do not significantly affect the building's appearance". I asked "but isn't that different, because balconies are 'private property?", and she said 'no', because 'VCAT will just assess how/whether they detract from the building's appearance, regardless of whether they are on Common property, or were placed without approval'.
Q2: This doesn't sound right to me... is it? Surely someone putting their private appliance on the common property without approval is a 'big deal'? I know there's some Law stopping people from (eg) painting their balconies pink, but isn't that a completely different issue (and law)?

any response appreciated..

ps The OC Manager wants to resolve this by asking "Is the current Committee willing to reconfirm these install approvals?".. Q3: Surely an admission that they have NOT been (legally!) 'confirmed'?

 

[Nighthelyn]

Dear adonis_paradise,

Sorry just saw your further follow up messages today - I don’t usually check a post after answering once.

1. Your question about quorum - she is right but if there is not enough number to meet quorum the resolution is still treated as an interim to be formalised by annual general meeting or extraordinary general meeting - s78.

2. Your question about “current appearance” - the law is silent on the appearance issue. It is more about affecting property value. Just looking at your photo above, she may be right. You would have more say if you have other owners backing your claim in the development. Those aircon looks like they are for outdoor installation so not necessarily.

3. Your question about reconfirm - it is generally in position of strata law that a decision that is generally favorable for most owners or minimise disruptions - which could be retrospective approval of unapproved works or unapproved approval in common property happens all the time.

Conclusion - I am unsure what you are trying to do here - so far everything seems to be failure of process not actual dodgy actions etc. If you absolutely must have those aircon removed, VCAT action isn’t enough for you - on present information there is a high likelihood even at VCAT it may recognise some or all of the processes were interim and need to be formalised by a extraordinary general meeting, and without evidence of more than just they being “rubber stamping” it is unlikely for anything “punishing” to be imposed. And it is time and cost for everyone. My impression reading between the lines you may need to consider instead or at the same time reaching out to other owners have enough people supporting your position then raise a resolution at a strata meeting.

Good luck!

-Nighthelyn

 

[adonis_paradise]

Hi Nighthelyn, thanks for the response, much appreciated.

Re: Quorum
Wow. So, with four members on the Committee ... as long as two participated in a discussion (albeit over email), that's 50%, and counts as a Quorum. Furthermore (if I understand you correctly) if one (of the two) abstains from voting.. and therefore only one person votes, that one person can be the sole decision maker, and therefore, the approvals are legit!? Wow.

Re: “current appearance”
My question focused on whether someone who places their unapproved private appliance on the common property, can "get away with it", by arguing to VCAT that (effectively) "it doesn't make a difference" etc. (I suppose in this case they could argue that even though an uglier building decreases value, having more space on balconies increases value).

Re: My objective
My objective is to keep the building's outward appearance as attractive as possible. We've had an (unwritten[1]) policy over the last 50 years to keep the front of the building clear of air conditioners (as anyone looking around the building can attest to), so everyone has put them on their balconies.

The Committee is supposed to represent the Owners, but in the space of a few years, there are now five aircons on the common property, three approved, and two not. Ideally I'd like them ALL removed from the common property, but I'm not sure what the options are now.

There are 19 lots, 5 Owners will want to keep the new Aircons, so how many do I need to revoke/remove them? 50% of 19 9.5 .. so do I need 10 Owners to agree..?

Is this now the proper procedure:

1. Contact the other owners
2. Ask them to agree to ... a Strata meeting (does it have to be a live 'meeting' (ie face to face or online), or can I just get them to sign something, ie via emails?)
3. Have them agree to make a motion to revoke the approved exclusive rights (the three approved aircons). If the approvals were legal, I assume the OC would pay for this.
4. And Give Notice to the Owners with the two unapproved aircons to remove them (within some reasonable time). I assume the OC would NOT pay for this. (Notwithstanding the possibility that, as discussed above, they might have a chance to convince VCAT to let them keep their unapproved installs)

Thanks heaps for the feedback, much appreciated!

ps
[1] I just realised, if there were rejections in the past for similar requests, that might count as a 'policy', which the Committee can be said to have deviated from, thus Breaching Sec 117

(b) exercise due care and diligence; and
(c) act in the interests of the owners corporation

otoh.. would that invalidate approvals given?? Ugh, I'll stop now.