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Welcome to The OMB Law Board, the podcast where legal insights meet practical advice. Hosted by Simon Bennett, Managing Partner at OMB Solicitors, this show delves into what you can expect when engaging with OMB Solicitors. Specialising in property law and commercial law, OMB also boasts dedicated teams for estate planning, contested estates, body corporate matters, litigation, and family law.
Each episode features in-depth discussions led by experienced team leaders, some with over 20 years of expertise. You'll gain valuable knowledge on initial consultations, cost assessments, timelines, and the importance of clear communication and confidentiality in legal matters.
Join us to break down barriers and navigate your legal journey with confidence. Tune in for expert advice, client stories, and tips on how to prepare for your legal needs. The OMB Law Board is your trusted source for all things legal.
00:00:06:14 - 00:00:09:03
Unknown
Welcome back to the OMB Law Board.
00:00:09:04 - 00:00:17:08
Unknown
I'm Simon Bennett, and today I have our body corporate partner. Juliette Nairn. Juliette. Welcome back. Thank you. Simon, it's good to be back. Okay.
00:00:17:08 - 00:00:36:01
Unknown
This mysterious thing called body corporate committees. No one really knows what they are or how they should operate. But these committees are dealing with often millions of dollars worth of assets making decisions regarding property or other
00:00:36:01 - 00:00:36:19
Unknown
valuable
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Unknown
assets,
00:00:37:21 - 00:00:50:17
Unknown
often without any qualifications at all, and without an understanding of their obligations or the formal process that they should go through in their decision making.
00:00:50:18 - 00:01:13:09
Unknown
Juliet, you deal with this all the time. Yes, that's exactly right, Simon. Unfortunately, we we are at committee meetings every week, which is great. But the reason we're often at committee meetings every week is because sometimes our individual lot owners are needing to resolve a dispute, deal with issues of transparency. Because the bottom line is,
00:01:13:09 - 00:01:14:23
Unknown
I'm a lot owner.
00:01:15:00 - 00:01:32:06
Unknown
I come from a whole range of different backgrounds, and I don't have any expertise in being a professional committee meeting. I may not have ever sat on a board of directors before, or I run a business, and I'm thrust into a situation where I'm making decisions on behalf of a very expensive asset,
00:01:32:10 - 00:01:36:16
Unknown
I'm relying upon my other lot owners to help me with those decisions.
00:01:36:19 - 00:02:03:13
Unknown
So if you want to understand the role of committees of body corporates, the obligations and a better understanding of what risks you might face as a committee member. Tune in for this episode. Now as we drill down on all things body corporate committees. So, Juliet, let's start at the beginning. Tell us about this committee. What is it? How does it form and how do people get on it?
00:02:03:14 - 00:02:28:04
Unknown
Well, that's exactly that's the best place to start. Of course, in terms of that, as lot owners will know about community title living. I'm a lot owner. I get to vote at a general meeting, and a lot of people don't take it much further than that. But behind that, our body, corporate, does not exist, and we cannot make committee decisions or any decisions on behalf of a body corporate unless we have a formal committee.
00:02:28:04 - 00:02:31:17
Unknown
And that means that I as a lot owner, I need to put my hand up.
00:02:31:17 - 00:02:32:20
Unknown
It's not glamorous.
00:02:32:20 - 00:02:34:06
Unknown
I don't get a thank you.
00:02:34:06 - 00:02:47:24
Unknown
People don't appreciate it. And I definitely don't get paid because I'm a volunteer. No. No money. Oh, okay. Well, let's get into it through the goodness of my heart. I've decided that I'm going to get on this committee.
00:02:47:24 - 00:03:10:08
Unknown
Yes. And I often think of body corporates like companies I know they're not. And the committee is kind of like the board of directors. So I'm on this board of directors. I'm on this committee. Correct. Now I'm responsible for this multi-million dollar building and all the decisions. Correct. That's exactly right. What do I do? And some of those decisions are within your power as a committee, and some of them are outside the power of the committee.
00:03:10:10 - 00:03:30:10
Unknown
So I know that's exactly right. Where is our starting point in in going through the mystery of being on a committee? So I go to my general meeting. I'm nominated at the annual general meeting. I become the chairperson of the Body Corporate. The first thing that I need to do is I should actually ask for some one on one time with my body corporate manager
00:03:30:10 - 00:03:37:06
Unknown
to take me through what is the role of a chairperson and what do I do as a chairperson of a body corporate?
00:03:37:08 - 00:03:52:10
Unknown
A lot of people think that becoming a chairperson of a body corporate means I am the sole person that all information must come into and out of the body corporate. And sometimes we take that a bit too far into social settings.
00:03:52:10 - 00:04:01:06
Unknown
So having a formal committee meeting around a barbeque, a swimming pool in a garage is not good governance for the body corporate.
00:04:01:07 - 00:04:21:10
Unknown
But I thought being a committee member would be a bit of fun. I thought I'd get on. It'd be a bit of a social thing. I don't have formal qualifications. I don't know about bodies. Corporate. When should I get advice? That's right. So the starting point is, as soon as you nominate, understand what is going to be those roles and obligations sitting down with your body.
00:04:21:10 - 00:04:45:05
Unknown
Corporate manager going through the commissioner's office website, touching base with appropriate experts. And there's a range of experts in the field, including us, of course, in those areas. And actually sitting with your body corporate manager and understanding, how do I make a professional decision on behalf of this body corporate with a group of my other committee members? Okay.
00:04:45:06 - 00:05:10:02
Unknown
And have I got risk? Yes. Well, that's not good. It is a reason why, as part of our body corporate insurance, we have office bearers, indemnity insurance. So we need to make sure that the appropriate insurances are in place. Correct. So first step. That's a great idea. Fantastic. Let's get into some some detail. Let's get into the good, the bad and the ugly of body corporate committees.
00:05:10:04 - 00:05:34:21
Unknown
Why don't we start with the bad? We're going to start with the bad. That's exactly right. What is a a difficult situation that arises is I'm a member of the committee. As part of that, I shortcut the process because I think I'm going to save money for my lot owners. I'm going to save money for my body corporate, because what I'm going to do is we're not going to have our body corporate manager involved in our meetings.
00:05:34:22 - 00:05:45:06
Unknown
We're going to make decisions around the pool side, and we'll just get our little group of five committee members together. We'll write it down on a piece of paper, and that'll be the decisions that we make.
00:05:45:06 - 00:05:56:23
Unknown
Unfortunately, that's well intended. Like people think that's a good idea. It's just not. We need good governance. We need our body, corporate managers involved.
00:05:57:00 - 00:06:15:06
Unknown
The first thing that we need to understand is what is our statutory obligations. If I'm going to call a committee meeting so the secretary of the body corporate calls a committee meeting with the assistance of the body corporate manager, I am going to send out a notice and agenda to every lot owner.
00:06:15:10 - 00:06:24:02
Unknown
Why? Because each lot owner needs to be involved and understand what is the decision making process and what is the committee thinking.
00:06:24:07 - 00:06:47:22
Unknown
As part of that notice and agenda. I'm going to invite you, Simon, as a lot owner, to say, hey, we're having a formal committee meeting. Would you like to come along? And the reason we ask that question is because a lot owners do wish to be involved. It's transparency. It's good governance. And it identifies what is the decisions that we're going to make that day.
00:06:47:24 - 00:07:09:18
Unknown
Okay. So a social setting meeting round the pool with a couple of beers. No go. That's a bad idea. Okay. What's a good one. We are going to hold our formal committee meeting in the boardroom of our body corporate management company, or in the boardroom of our building, because we may have working spaces in our building. Why? Because we're going to start with a professional setting.
00:07:09:19 - 00:07:24:11
Unknown
If we start with a professional setting, then we're able to get rid of the ugly part, potentially of body corporate committees. All right. And getting advice early, bringing experts in legal experts, other consultants, managers.
00:07:24:11 - 00:07:32:08
Unknown
That's exactly right. As part of that, think of all the bits and pieces that go together with the building. We're dealing with multi-million dollar budget.
00:07:32:13 - 00:07:40:09
Unknown
We're dealing with repair and maintenance of our building. We're dealing with complaints by lot owners. We're dealing with requests to put maybe
00:07:40:09 - 00:07:55:02
Unknown
shade sales on the western side of our building because of the sun, it gets hot. Do we want a hodgepodge of sales, or do we want beautiful consistency with respect to that? And committee members just won't have expertise in all of those areas?
00:07:55:03 - 00:08:19:23
Unknown
No, that's exactly in the experts. All right. So if we get things wrong. Tell us about the ugly. What have you seen what's happened in terms of the ugly regarding our committee meetings? It is the name calling. It is the talking over people. It is the lack of transparency of decisions. It is people going with personal agendas and not the best interests of the body, corporate as a whole.
00:08:19:24 - 00:08:45:01
Unknown
It's not understanding who has a conflict of interest when they sit on a committee, or is it a minority trying to control the majority of the decision making of the lot owners? And unfortunately, when that happens, it's like little bits of gossip running through the building. And then once that gossip starts, then we get name calling, then we get defamation concerns notices.
00:08:45:02 - 00:09:03:24
Unknown
Then we get breach of privacy and then we get factions. And once we have a faction in a body corporate, well, it's very hard to undo that and start again. So we want to stop all of that before it happens. So just like my board of directors example at the start, start with good governance,
00:09:03:24 - 00:09:10:21
Unknown
professional setting, professional setting, polite interaction between parties and expert advice when needed.
00:09:10:22 - 00:09:34:03
Unknown
Correct. That's exactly right. And what that will create for us is we'll be in an environment like our boardroom, where we have a record of the proper decisions being made, and that gets sent to you as a lot owner. So you know that the body corporate has made a decision that on the western side of the building, we're going to have a bylaw that deals with shade sales.
00:09:34:03 - 00:09:53:24
Unknown
And these are our forms and conditions that we're going to have regarding it. And everyone goes, oh, I get that. I understand where that's going. And I understand that if a lot owner wants it, the lot owner is going to pay for that. Or is that a body corporate expense? It creates good governance through transparency, through good record keeping.
00:09:53:24 - 00:10:22:05
Unknown
And then when that chairperson moves on and a new chairperson takes over, we have a formal record of all of those decisions. And I'm sure you see all the time examples of really well organized, well-run committees and unfortunately, the opposite of really badly run committees. Yes. And in terms of an harmonious living environment, because that's what community title scheme is.
00:10:22:07 - 00:10:58:16
Unknown
We want to live as community members, and we might just want to be the investor who lets it out every now and again. But as part of that, we still need to be involved in the decision making process. And I want to know that the money that I'm paying through levies is being spent by the committee in an appropriate way that manages our buildings correctly and using the expertise of, of, of us as legal representation, but also our body, corporate managers, is going to make a big difference in the future value of your building.
00:10:58:18 - 00:10:59:15
Unknown
So, Juliette,
00:10:59:18 - 00:11:26:24
Unknown
is there any tips or tricks for a chairperson of a body corporate and how to get their committees operating effectively? Yes, Simon, you'd be amazed at how many times we actually get asked that question, to the extent that what we've done at RMB is we've actually created a chairpersons checklist for committee meetings. And the reason why we did that is because it's a simple tick and flick to make sure that all the compliance obligations are there, and it helps a meeting run smoothly.
00:11:27:03 - 00:11:42:02
Unknown
just puts a bit more confidence into our chairpersons in running meetings, because they may not have done it before. Fantastic. Well, I'm going to have a special offer for any of our listeners or viewers. If you hit checklist in the comment below in this podcast, we'll shoot you a copy of that checklist for your body.
00:11:42:02 - 00:11:42:19
Unknown
Corporate.
00:11:42:21 - 00:11:44:04
Unknown
Oh. Excellent.
00:11:44:10 - 00:12:09:14
Unknown
Well, Juliette, super informative learning about body corporate committees, how they should operate and how they shouldn't operate, and what value they can provide to their buildings if they operate well. So to our listeners and viewers, if you've got any questions or comments, hit the comments section below. We'll get back to you or contact Juliette and our body corporate team about efficient and effective operation of your body corporate committee.
00:12:09:15 - 00:12:11:10
Unknown
Thanks, Juliette. Thank you. Simon.
00:12:11:10 - 00:12:15:02
Unknown
And we'll see you on the next episode of the OMB podcast.