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Critical information withheld from minutes to assist resale
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SJ1965
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06/06/2018 - 8:06 pm
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Hi all,

I need some advise about an apartment I’ve purchased recently.

When I made the purchase I was aware of some works that were going to be needed in the complex and budgeted for this. These works were noted in the committee meeting minutes.

Ive joined the executive committee to try and assist in rectifying the problems I was aware of and during the last meeting I’ve now found that there are some other significant issues in the complex that need repairs.

These other issues have been known about and talked about in previous meetings but weren’t noted in the minutes as it seems some of the members of the executive committee are wanting to sell up to avoid the repair cost. It now seems pretty clear this is what the previous owner of my apartment has done.

So my question is do I have any options of recourse in this situation?

The previous owner of my apartment was the Chairperson of the committee and the strata manager was also aware of these issues.

The complex is looking at thousands of dollars per owner to make these repairs.

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SJ1965
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06/06/2018 - 8:08 pm
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Sorry, we are in the ACT.

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Lady Penelope
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06/06/2018 - 9:56 pm
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In general, a strata committee must keep full and accurate minutes of its meetings.  The minutes must include details of all resolutions passed, including those considered without holding a meeting.

What does “full and Accurate minutes” really mean? This is a ‘grey’ area. Legal opinion varies on this issue.

A NSW opinion regarding the recording of debate and discussions in the Minutes of a Committee Meeting is: Strictly speaking, these need not be recorded, as they are not resolutions. 

See:  https://www.lookupstrata.com.au/body-corporate-meeting-minutes/

In contrast, a QLD legal opinion from Hynes Lawyers stated: 

At a minimum, there should be a record that discussion about the issue occurred. Subject to what the issue of concern it is may be appropriate to leave the decision out of the minutes, but I think the chances of that are remote.

What the committee discusses, and decides, should be a matter of community record – even if the subject is controversial. Ultimately, proper decisions on matters of substance are reserved for owners in general meeting anyway.

https://www.lookupstrata.com.au/qld-body-corporate-committee-meeting-minutes/

I note that your issue relates to the ACT. I do not know whether the ACT situation is more akin to NSW or to QLD.

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Sir Humphrey
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06/06/2018 - 10:16 pm
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Not really sure but questions that occur to me: Were non-EC members aware of the impending expense? Was it anticipated in the sinking fund plan? Did you see a copy of the sinking fund plan before purchase? Was there correspondence about the expense (Eg. quotes for repairs) on the OC records that a thorough conveyancing lawyer might have been found?

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Sir Humphrey
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06/06/2018 - 10:24 pm
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The ACT Unit Titles (Management) Act 2011 does not say a lot. “Sch.2.1 The executive committee of an owners corporation must— (a) keep minutes of its proceedings…” does not give a lot of detail. 

Part f says: “…keep proper records and books of account in relation to—(i) the corporation’s assets and liabilities (including all amounts owing to and by the corporation)”

Perhaps this impeding expense was a ‘liability’ but perhaps this just means invoices already presented that have not been paid yet. 

If an owners corporation fails to comply with this section, each executive member of the corporation at the time of the failure commits an offence.”

Legal advice might be in order. 

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scotlandx
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07/06/2018 - 1:37 pm
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A key issue is whether the OC or Committee have any type of duty to prospective purchasers. I don’t think so.

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Tess McGill
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08/06/2018 - 9:31 pm
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Surely the Strata Manager has some sort of professional (huh!) duty to properly record issues…. and they surely will have professional indemnity insurance. I suggest a scatter-gun approach – letters to Strata Manager, Conveyancer, Vendor and Vendor’s real estate agent alleging misleading and deceptive conduct, and indicating a preparedness to sue.

Work out what your claim is in monetary terms. Engage a solicitor to send another round of letters, then let the bargaining begin. If it’s not a huge amount the “professionals” (I use the term loosely, again) may decide to settle with you directly rather than damage their no-claim bonus on their professional indemnity insurance!

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JimmyT
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08/06/2018 - 10:16 pm
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Tess McGill said
Surely the Strata Manager has some sort of professional (huh!) duty to properly record issues….

The strata manager can only act on the information given to them by the committee.

The clear breach here is an alleged deliberate attempt by an owner in a privileged position to  conceal the true status of repairs required in the building. I am no expert in conveyancing law but i would say that was probably illegal.

If committee members have colluded in this (with the intention of doing so themselves) then they have lost their individual indemnity by not acting in good faith.

But if you go after the committee members as well as the vendor, they will all claim there were no discussions.

Talk to a solicitor then, if they agree,  focus on the vendor and get evidence from the other committee members to back you up.

I doubt very much if the strata scheme as an entity (rather than individual members) has any liability.

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SJ1965
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09/06/2018 - 8:36 pm
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Thanks everyone.

so I guess my next question is can anyone recommend a good solicitor in this field from Canberra?

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Lady Penelope
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10/06/2018 - 8:14 pm
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SJ1965 – What is the outcome that you are trying to achieve? Are you trying to obtain from the previous owner the cost to you of your share of the common property repairs? 

If so, is it worth the cost of the solicitor’s fees? The financial result of chasing the previous owner for the cost of the repairs via the solicitor is very likely to far outweigh any benefit that you may be able to obtain.

A favourable outcome for you is far from certain as the legislation is very unclear as it what must be included in the Minutes. 

If I was in your position I would not be pursuing this matter any further. 

If you want to make sure that Committee discussions are Minuted from now on then you could raise a Motion at the next General Meeting. The Motion could state something like this:

“That in the interests of transparency that all topics that are discussed by the Committee at a Committee Meeting are to be recorded in the Minutes and this is to be regardless of there being a resolved outcome from the Committee’s discussion of the topic”.

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