Can the EC elect new EC members? | Executive Committees | Flat Chat Forum
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get the required signatures to hold an EGM (25 percent) or take them to Fair Trading and the CTTT and ask an adjudicator to order the election to take place
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When a vacancy occurred on our EC caused by a member selling, the requirements of replacing him were bought to the EC's and Strata Manager's attention. Neither were keen on replacing this member of their 'clique' with an outsider, though several other owners were keen to join and would have made worthwhile contributions.
"Ahhh" said the all-knowing Strata Manager, "But the Act doesn't say WHEN he has to be replaced." And on that basis, he wasn't; and they got away with it.
What might we have done?
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The minutes from our last AGM states that should someone be elected to the EC during the year it would have to be approved by 2 EC members. As we only have one EC member on the committee, not much chance of this happening is there.
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Strata law is quite clear on this – an EC member vacates their seat when they cease to be an owner. The Executive Committee is then required to replace the member with someone who occupies their place until the next election.
Your strata manager really should know this – it's pretty basic stuff. This is what the law says:
4 Vacation of office of member of executive committee
(1) A person elected as a member of an executive committee vacates office as a member:
(a) if the person was an owner at the time of election and the person ceases to be an owner
(2) When a vacancy occurs in the office of a member of an executive committee … the owners corporation must appoint a person eligible for election as a member to fill the vacancy. Any person so appointed holds office, subject to this clause, for the balance of his or her predecessor’s term of office.
In my experience, the Executive Committee, acting as the representatives of the OC, are required to elect a new member and, if there was no other candidate and you are eligible, you should be invited to fill the vacancy
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I own a Unit in a small complex of 5. The Strata Manager sent my AGM papers to the wrong address hence I was unable to attend the recent meeting. At that meeting the EC was resolved at 2 members. One of those members has recently sold his unit.
I contacted the Strata Manager and offered to replace him on the EC and was told nominations can only be accepted at the AGM (which I couldn't attend due to their error). Is it correct that we can now only have 1 EC member until September when the next AGM is due? Or can I be appointed as a replacement for the other member who is no longer an owner until that time?
Seems unrealistic to have an EC member who is not an owner.
Problem is, Jeremy, the Act doesn't say 'when' the EC member bowing out has to be replaced which is an aspect heavily abused in my strata.
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I can accept the arguement of Jeremy @ Newcastle but it would mean the number of candidates, if less than 9, then determines the maximum number of EC members in the determining motion of clause 17(3).
BUT recall that 17(3) places no restriction on the number of EC members. If "ghost vacancies" were meant to be prohibited it should have been picked up in 17(3). Perhaps it was an oversight by the legislators.
Clause 4 of Sch 3 is generally about filling a vacated position, not a ghost position. Cl 4(2) of Sch 3 is not necessarily restricted to the circumstances of cl 4(1) but I can see Jeremey arguing that 4(2) is clear the new member serves for the rest of the term of his/her predecessor and a ghost is not a real predecessor therefore there is no clear mechanism to full the ghost vacancy. I would accept that.
I can follow Jeremy's line of thought and it is a good case. I would agree that until the Supreme Court, or the Court of Appeal, make a statement the matter will remain an unresolved debate.
Until then the best practice would be to respect the wishes of the AGM as long as it is not something that obviously breaks the Act or Regs and i don't feel there is an obvious breach; but Jeremy is on to something.
It's not a simple question!
If I can pick out reg 17 (4) to highlight the wording:
17 (4) If the number of candidates:
(a) is…fewer than the number of members of the executive committee decided on—those candidates…are taken to have been, elected as the executive committee
So it depends on how you interpret "as the executive committee"
I think you could argue that this part of Reg 17 has been added to rule out so-called "ghost vacancies". If it was decided to have 8 candidates but then there are only 7 nominations then reg 17 (4) states those seven are elected as the executive committee. They are not for example elected "as part of the executive committee", or elected "to the executive committee".
Even if a "ghost vacancy" was created there is no mechanism to fill that vacancy. Schedule 3 clause 4 makes it clear when a vacancy becomes available, for example when an already elected member hands in their written notice, a meeting of the owners corp must appoint a person to fill the vacancy. Ghosts do not hand in their written notice!
So can the EC elect new EC members – I don't think so!
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@Billen Ben, good point. In THAT case if the vacancy is valid, the empty seat is filled by the following ways:-
1. OC in a general meeting passes an ordinary resolution to appoint the person: cl 4(2), Sch3.
2. EC passes a resolution to appoint a person provided a general meeting has not removed this power from the committee: cl4(2),Sch3. The EC has authority to do this based on s21(1) and cl17, Sch3.
3. The strata managing agent records a decision in the OC's minute book appointing a replacement, and only if the managing agent if the managing agent has been expressly or impliedly delegated the power in the agency agreement or resolution of appointment.
The detailed procedures of nomination and election, detailed in regs 17,18, don't need to be followed in options 2 and 3 above.
Source: pages 102-3 of Alex Ilkin's book, NSW Strata & Community Management & the Law (4th).
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My Uncle Jamal said:
The eighth seat is cancelled, because it was not filled by a valid candidate (Reg 17(4)(a)). The executive committee is now finalised: it comprises seven seats by seven people.
17 (4) If the number of candidates:
(a) is the same as, or fewer than, the number of members of the executive committee decided on—those candidates are to be declared by the chairperson to be, and are taken to have been, elected as the executive committee
Why do you feel this means the eighth seat is cancelled. The Regs says nothing about seats being cancelled if the number of seats is more than the number of candidates.
The idea you put forward is that the maximum number of EC members is restricted to the number of candidates in cases where there are less candidates than 9.
What you imply is that if there are only X people nominated, the OC is restricted to passing a resolution that says the EC will be X members.
One would think that 17 (3 or 4) might say something about that if such was the case.
I do not see a problem with having 7 candidates and then stating the EC will have 8 members. There is no contradiction or circumvention of the Act or Regs in doing so.
Regulation 17 of the SSMA is to elect an executive committee.
Clause 4 of Schedule 3 is about filling vacancies.
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Sounds invalid to me.
To elect an executive committee, the chairman must first announce the names of the candidates of the executive committee (Reg 17(1)). Only eligible people may be nominated, and ghosts aren't eligible.
After the chairman declares nominations have closed, the owners corporation votes on how many seats will comprise the executive committee (Schedule 3, Clause 2(2).
You have seven valid nominations, but eight seats reserved. Each nominee has secured a seat because there are more seat vacancies than nominees. The eighth seat is cancelled, because it was not filled by a valid candidate (Reg 17(4)(a)). The executive committee is now finalised: it comprises seven seats by seven people.
* Also note, some people occupy several office bearer positions (ie. chair, secretary, and/or treasurer) of the executive committee in the mistaken belief that this gives that one person two or three votes. It doesn't. On the executive committee it's one head, one vote, and no ghosts.
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All I can add is "what he said". But there's one small point, the quorum for an EC of seven is exactly the same as an EC of eight – at least one-half of the number of members of the EC – which is four in both cases.
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SSM regulations 2010
17 Election of executive committee
(1) At a meeting of an owners corporation at which its executive committee is to be elected, the chairperson must:
(a) announce the names of the candidates already nominated in writing for election to the executive committee, and
(b) call for any oral nominations of candidates eligible for election to the executive committee.
(2) A written or oral nomination made for the purposes of such an election is ineffective if it is made by a person other than the nominee unless it is supported by the consent of the nominee given:
(a) in writing, if the nominee is not present at the meeting, or
(b) orally, if the nominee is present at the meeting.
(3) After the chairperson declares that nominations have closed, the owners corporation is to decide, in accordance with clause 2 (2) of Schedule 3 to the Act, the number of members of the executive committee.
(4) If the number of candidates:
(a) is the same as, or fewer than, the number of members of the executive committee decided on—those candidates are to be declared by the chairperson to be, and are taken to have been, elected as the executive committee, or
(b) is greater than the number so decided on—a ballot is to be held.
It is like cooking a cake and the Regs are the recipe.
Jeremy; do you think what happens meets with the Regs.
Clause 4 of Sch 3 of the SSMA 1996
(2) When a vacancy occurs in the office of a member of an executive committee (otherwise than by reason of subclause (1) (d)), the owners corporation must appoint a person eligible for election as a member to fill the vacancy. Any person so appointed holds office, subject to this clause, for the balance of his or her predecessor’s term of office.
It sound as if the vacancy needs to be filled ASAP but what it says and what it actualy means can be different things.
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Dear FlatChat,
The practice at our AGM is to accept and receive the number of nominations
for the EC as being e.g. 7 lot owners putting their hand up plus "1 vacancy" equals 8. It is then resolved to set the number of EC members as eight. Then the seven are elected as members of the new EC, with one vacancy. I am told this is to help with quorum numbers and to give flexibility to the EC if anyone wants to join the EC between AGMs.
- Is this practice legal?
- Can the Executive Committee then elect new members to fill a vacancy at an EC meeting or does election have to occur at a general meeting?
Thanks
Jeremy
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