Four essential questions for a first AGM

Strata buildings’ AGMs can happen at virtually any point on the calendar but the beginning of the year is a peak period for those occasionally tempestuous, often tepid, always rare meetings of the owners as a group.

And for those of us attending our first AGMs – especially when they are also the first AGMs of the building – it can all be very confusing.

So what happens at the initial AGM? Mostly you approve contracts that are presented by the developer and elect your committee for the next year. Often the developer will, if you let them, gently push forward their choice of contractors and committee members.

Sometimes this is simply pragmatic, other times it’s more sinister if, for instance,  they want to run down the clock on defects until your opportunity to claim has passed.

This is also where your first strata committee will be elected, and that too could have long-term consequences.

But most dodgy behaviour can be exposed by asking these four key questions:

  1. Why has the developer recommended a certain contractor and were there any “sweetheart deals” involved? For instance, did the lift company discount the installation costs in return for an inflated maintenance contract?

Why? It’s common practice for developers to get discounted services from providers in exchange for feather-bedded contracts.  This saves them money but potentially costs you heaps.

  1. Do the service providers have any previous contracts with the developer and are there future developments are they currently negotiating?

Why? You don’t want your block to be either a pay-off for previous services rendered or a pawn in negotiations for future contracts. If the developer has a favourite strata manager, it’s unlikely to be because they’ll fight your corner in a dispute.

  1. What if any relationship do the people standing for the committee have with the developer – either personal, professional or financial?

Why? It’s not uncommon for developers (especially small ones) to stack the committee with mates, family members and other people who have bought in at lower prices in exchange for dominating the committee and making sure claims for defects, for instance, get nowhere.

  1. What experience do the people standing for the committee have in other buildings and what do they individually bring to the committee?

Why? Many people stand for their strata committee because they have a personal agenda  or, very simply, want to make sure no decisions, good or bad, are made that would disadvantage them. You want people who understand strata law and why there are by-laws (rules) in the first place, preferably having served on committees before.

Now some of these issues are covered by strata laws in some states but that doesn’t mean the developer, who is handing over control of the building (or should be) either knows or cares about the law.

But the mere fact that you have raised these issues puts everyone on notice that they are being watched – and that may be all the advantage you need.

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