Flat Chat Forum Strata Committees Current Page

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  • #38029

    Can an owner who has exchanged contracts to sell their unit, but has not yet settled, and who is also a current member of the Executive Committee, continue to participate in the day to day decision making of the Exec Committee until such time as their property sale reaches settlement?

    It seems to me that as the Committee member legally holds title of the unit until property settlement they can participate in Committee decision making but I would like to confirm if that is the case.


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  • #38031
    Sir Humphrey

    I agree that until the unit has a new owner post settlement, the current owner remains a member of the owners corporation with all that entails, including continuing to have the functions and obligations of a committee member if they were elected to that position.

    Jay Walker

    I would have thought that the committee member ceases to be an owner on the date when the contract for sale is signed by both parties which is usually on or about the date of exchange.

    This from the ATO may be relevant: Timing of a real estate CGT event

    When you sell or otherwise dispose of real estate, the time of the event (when you make a capital gain or loss) is usually:

    • when you enter into the contract (generally the date on the contract), not when you settle – the fact that a contract is subject to a condition, such as finance approval, generally doesn’t affect this date “

    Ref: https://www.ato.gov.au/General/Capital-gains-tax/Your-home-and-other-real-estate/Timing-of-a-real-estate-CGT-event/



    Sir Humphrey

    Maybe for tax purposes. However, and I am not expert, I would think that the unit must at all times have an owner. The earlier owner is a member of the Owners Corporation until the moment the newer owner becomes a member of the Owners Corporation. So, when does the name on the title change? Isn’t that at settlement?

    From a real estate site: “Property settlement is the legal process that is undertaken to transfer the ownership of a property to another person during a sale. … Both sets of representatives will sign all the necessary paperwork and then it will be forwarded to the respective title office in your state or territory. The day of the property settlement is also the day you receive the balance of the payment from the purchaser, and the sale is subsequently finalised to completion.”

    Lady Penelope

    I tend to agree with SH.

    The Contract can sometimes ‘fall over’ before the date of Settlement (completion), though not without penalties.

    The new owners name cannot appear on the Strata Roll until after Settlement.



    I don’t want to get all bush lawyer on everyone but Section 35 of the Act refers to committee members vacating their seat because of ceasing to be eligible (not ceasing to own) and that makes sense because non-owners can be on the committee if nominated by owners.

    There is another clause that says if the committee member was an non-owner at the time of election and the owner who nominated them sells, then they lose their position

    By my reading, that means the committee member might have to vacate if they had self-nominated before the last election.  Otherwise, if they’d been nominated by another owner, they would be free to stay on because they were still “eligible” (and could stand for election again).

    That said, just the fact that a non-owner wanted to stay on the committee would have me sniffing the air for foul play.

    Sir Humphrey

    but they would only become a non-owner at the time of settlement. I don’t think the questioner was asking about someone wanting to stay on longer than that.

    Our OC had an EC member who stayed until settlement of her unit sale, not for any suspect purpose but just to help the committee finish off various matters, even though she would not be staying to benefit from them.


    In our OC, a committee member has sold, settlement has not yet taken place.  the levies fell due recently and have not been paid. Would I be right that neither owner is financial and unable to partake in strata matters?

    Jay Walker

    Re ‘maybe for tax purposes’. If the ATO’s timeline for the calculation of Capital Gains Tax was wrong in property law it would have been litigated out of existence.

    Settlement, who pays for damages or strata levies etc are terms of the contract for sale.

    To approach it from another angle: what is the relevant date, exchange or settlement, re payment of transfer/stamp duty?

    From NSW Govt Revenue:  “You must pay transfer duty within three months of signing a contract for sale or transfer, except in the case of off-the-plan purchases.”

    Ref: https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/transfer-duty

    Having said all that: who owns the title between signing the contract/exchange and settlement? If on the former date, an investor vendor is no longer liable for CGT whereas an investor purchaser is, and from that date the purchaser is liable for transfer duty, surely it’s the purchaser.

    So, methinks, the answer to Larry’s question is no (with Jimmy’s caveat: if self-nominated)


    Lady Penelope

    Exchange of contracts is the point at which both the buyer and the seller commit to the sale and the purchase.  However, that is not the point at which ownership of the house or Lot actually transfers to the new owner.  That only happens on completion i.e. Settlement.

    On Settlement: The sale is made final. Ownership is transferred from the seller to the buyer. Transfer of Title occurs. The purchaser is able to take possession of the property. The seller discharges any mortgage that they had over the property. The purchaser pays to the seller the remainder of monies as outlined in the Contract.


    If a member of the OC is unfinancial, then they are precluded from voting on motions. The purchaser, is not an owner so unless they have been nominated to the committee as a non-owner cannot participate.

    Jay Walker

    The point I was trying to make, albeit clumsily, is that I don’t think it is that simple. Now, after venturing down the rabbit hole researching this, all the way back to its underpinnings in early English common law and legal right to possession versus legal right of ownership etc, I think it’s well above my pay grade. Never mind …

    What is the acquisition date? Per the ATO re CGT and NSW Gov re Transfer Duty it’s the date of signing/exchange. Settlement and registration of title transfer etc are completing the terms of the contract which was entered into on or about the exchange date.

    Or, post-settlement, on which date did the committee member cease being an owner? Per the above, it’s the exchange or acquisition date.

    If correct, it would mean that the committee member was ineligible, if self-nominated, to be on the committee after the exchange date.




    It has nothing to do with exchange of contracts, ownership transfers when the transfer is lodged with the Titles Office and the new owner is put on the title. For so long as the current owner is on the title they are the owner – it is that simple. You don’t have to worry about the acquisition date, the relevant date for your purposes is when title transfers.

    The new owner then has to notify the strata scheme to have their name put on the roll, which is an extra step. We had one owner who had inherited their property, but their solicitor had not lodged that notification so they weren’t able to vote because they weren’t on the roll.

    CGT and transfer duty are also irrelevant, however note in the latter case when title transfers that is when you pay the duty, so the two go together.

    In terms of the Committee member they have every right to be on the Committee until title transfers, because they are still the owner. If levies have fallen due, if the levies are not paid then it is not until after the due date that the Committee member can’t vote.

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