Should we pay strata committee members?

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There’s a truism in strata that the people you want on your committee – smart, informed and energetic – are often too busy making money to pay their mortgages (and levies) to devote too much time to the building in which they live.

Serving on a committee can be time consuming and a drain on energy, especially if there’s a level of dissent or frustration with other members.

And considering it is purely voluntary, it can be a truly thankless task, giving up your time and sharing your experience, only to be abused and harassed because one neighbour doesn’t like a decision that’s been made.

All of which leads to the question, should committee members be paid for their services? A couple of times on Flat Chat we’ve come across cases where committee chairs (especially) have been paid substantial amounts every year.

In one case, a high-powered lawyer was collecting $20,000 from his owners corporation.  His argument was that while other chairs gave their services for free, he was offering his time, considerable experience and boundless knowledge at a drastically reduced rate.

But is it even legal?  As with most things strata, it depends on which state you’re in.

NSW

In NSW, strata committee members can be paid for work they’ve done on behalf of the scheme, but only retrospectively. 

The high-powered lawyer referred to previously would have known that he had to include his payment for the previous year on the agenda of the next AGM.  That way the owners who were, after all, paying for his services, could decide whether or not he was worth it.

To be honest, in the case I’m thinking about, the gentleman in question had made it clear that he expected the retrospective approval every year, which shifts it into a slightly different, but still perfectly legal, area.

But as long as the payment was approved at a general meeting after he’d done the work and  before he was paid, it was entirely kosher.

Queensland

Up in Queensland, things are different and, as usual, more complicated. The payment of expenses and remuneration is a “restricted”  decision – i.e. it can’t be made by the committee alone – unless it isn’t.

Section 42 of the Standard Module of body corporate law says that the committee can’t decide on its own to make a payment to its members.  However Section 43 says they can do so if the payment has been previously detailed and approved at a general meeting open to all owners.

This includes expenses for attendance at meetings which mustn’t exceed $50 per meeting or $300 a year. 

You’d imagine that the whole question of restrictions on the committee having been lifted would come into play if one of its members sought payment for work they were about to do.

If that was previously agreed at a general meeting, the rest of the committee could later decide whether or not the work had been done satisfactorily.

Victoria

Scouring the Victoria Owners Corporation Act and Regulations for any reference to remuneration to committee members, I’ve drawn a blank.  As far as I can see there is no restriction on committee members being paid so you might reasonably assume that some are.

Your state or territory may have its own ideas on payment of committee members or office-bearers but it all leads to a bigger question – should committee members expect to be paid at all?

There are fears that payments would lead to people joining the committee just to make pin money. 

However, as discussed on the Flat Chat podcast this week, payments could be seen as an incentive for committee members to undertake a course in basic strata law and committee work.

And that alone would be value for money – certainly more than paying someone just because they think you should.

A version of this column first appeared in the Australian Financial Review.

2 Replies to “Should we pay strata committee members?”

  1. Avatar Jimmy-T says:

    If you want to start a discussion or ask a question about this, log into the Flat Chat Forum (using the link above). More people will read it there and you can more easily keep track of responses.

  2. A similar interesting question is “Do Strata Committee members want to be paid”.

    I suspect that in most cases the answer is “No, I’m not doing it for the money but I am not happy with the number of unpaid hours I have to put in”.
    And this is usually for one of two reasons – the Committee just has too much work to do or other members of the Strata Committee aren’t pulling their weight and sharing the workload.
    Trying to change the work habits of fellow Strata Committee members is hard to imagine !
    Trying to reduce the workload on volunteer Strata Committee members is the more practical approach.

    How does a Strata Committee set a workload appropriate to half a dozen unpaid volunteers, who might talk on a Whatsapp group once a week and have meetings every month or two?

    They need someone to point them towards what decisions they need to focus on and someone to pick up on what gets missed and someone to make sure decisions translate into action. This is especially so for buildings dealing with major issues such as defects or buildings keen to take a proactive stance on energy efficiency. But in every case the need is for the Committee members to be able to make timely well informed decisions without spending hours on detail.

    They can only do this with help.
    In a larger building a good building manager will ensure that he obtains the necessary decisions from the Strata Committee and then implements them.
    In buildings without this calibre of building management the Owners Corporation needs to engage a ”Business Manager” to research issues, put relevant points to Strata Committee members for their focus, obtain their decision and ensure follow through action.

    Is your Strata Manager the person to do this ?
    Strata Committee members have to decide, but in many cases it is likely that the strata manager’s skillset is elsewhere.

    John Hutchinson
    m: 0418 797470 e: john.hutchinson@strataanswers.com.au

    S T R A T A A N S W E R S PTY LTD practical solutions for strata living
    abn 11 600 590 083
    http://www.strataanswers.com.au

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