Paper 3 - How Owners Corporations are Governed

Membership of an owners corporation confers on the owner an intrinsic right to use the common property, a legally binding obligation to heed the rules that govern that use and other aspects of communal living, and the right to participate in the management and administration of the unit plan.

As the fourth level (see Paper One), an owners corporation may be the lowest, but it is essentially the most democratic of any level of government.  Its members meet annually to review progress, to approve budgets for the forthcoming year, to elect an executive committee that in effect will govern the corporation and exercise its functions during that year, and to pass resolutions directing the committee as to how those functions are to be exercised.  Generally speaking, each unit gets one vote of equal value, but in some special cases, votes are multiplied by unit entitlement.

In addition to AGMs, an executive committee, whenever it deems it appropriate or necessary, may convene a general meeting of the corporation to resolve an issue of policy, an equivalent to the referenda sometimes called by other levels of government. 

Unlike other levels of government however, the power to demand a referendum-equivalent general meeting resides in the voting membership of the owners corporation at all times, and on receipt of a request signed by people eligible to vote on behalf of units representing one quarter of the total unit entitlement, the executive committee must convene a general meeting within 28 days to resolve the matters identified in the request.

Note: Voting procedure, including the use of proxies and absentee votes, are elaborated in Paper 4 – Decision-making by Owners Corporations.

The executive committee elects one of its members to the office of Chairperson, whose functions include coordinating the work of the other office bearers and manager (if there is one) and chairing meetings of the committee and corporation 

Owners corporations must maintain one or more bank accounts, into which all amounts received must be paid, and from which all accounts paid must be withdrawn.  Oversight of the finances is the function of the member of the executive committee elected by the committee to the office of treasurer, and the committee must present proper financial reports to the AGM.

Owners corporations must maintain Information about the ownership of units and membership of its executive committee.  The member of the committee elected by the committee to the office of Secretary is responsible for keeping that information in the corporate register and overseeing the giving of access to the information as required by the Act.  The collection of information about names and addresses is subject to the operation of the Privacy Act, but the Legislation Act and the Acts Interpretation Act are also relevant, since they allow for more information to be collected than is mentioned in the UT(M)A.

Failure to provide the information required for the corporate register or to pay the monetary contributions required by the budget approved at the AGM expose delinquent members to a variety of remedies, from reference to the ACAT (see Paper 15 - Making an application to ACAT) through recovery action in a civil court.

An owners corporation may enter into a contract with an eligible person to help the executive committee manage the functions of the corporation as specified in the contract  (see Paper 6 - Employment of Managers).

Managers may be delegated some of the functions and powers of the corporation or committee, but all of those functions can continue being exercised by the committee, which supervises the manager and remains responsible at all times for the proper exercise of the functions. The Act specifies codes of conduct for both committees and managers. There are financial penalties for committees who fail to perform their functions as required, while for managers, delinquency can lead to termination of employment.

(Revised 21 May 2015)