Everyone knows that lawyers are engaging – with sparkling
repartee. However, a more pertinent issue for an owners corporation
after the commencement of the Strata Schemes Management Act
2015 on 30 November 2016 is:
"How does an owners corporation engage a
Changes introduced in the Strata Schemes Management Act
2015 make it easier to engage lawyers for urgent advice
without requiring a resolution being passed at a general meeting.
Urgent advice may be required where a statutory warranty period or
a home owners warranty insurance period is due to expire, or where
advice on urgent rectification works is required.
The general principle for engaging lawyers under the Strata
Schemes Management Act 2015 is that an owners corporation or a
strata committee must obtain a resolution passed at a general
meeting approving the legal services.
Exceptions To The General Principal
An owners corporation or a strata committee is exempt from
obtaining a resolution passed at a general meeting approving legal
services in the following circumstances:
Urgent Action –
Where the owners corporation or strata committee considers that
urgent action is necessary to protect the interests of the owners
Where the cost of the legal services does not exceed
Non Urgent Action –
Where the cost of the legal services for non urgent action does
not exceed $3,000.
Obtaining legal advice before commencing legal action.
Taking legal action to recover unpaid contributions, interest
on unpaid contributions or related expenses.
Proceedings Where No Resolution Was Obtained Will Not Be
It should be noted that the Strata Schemes Management Act
2015 expressly provides that proceedings or other legal action
commenced by an owners corporation will not be invalid due to any
failure on the part of the owners corporation or the strata
committee to obtain a resolution passed at a general meeting
approving the legal services.
This is a welcome development from the position prior to the
Strata Schemes Management Act 2015 where a failure on the
part of an owners corporation to obtain a resolution ratifying the
commencement of proceedings could provide the basis for an
application striking out those proceedings.
So How Does An Owners Corporation Engage A Lawyer?
Accordingly, for those matters where an exception to the general
principal for engaging lawyers applies a strata committee may
engage a lawyer after resolving to approve the law firm's fee
proposal and scope of works, unless an owners corporation has
passed a by-law restricting the strata committee from engaging
Otherwise, an owners corporation or strata committee must obtain
a resolution passed at a general meeting of the owners corporation
approving the law firm's fee proposal and scope of works.
Where a fee proposal is provided to an owners corporation, the
owners corporation must give a copy to each owner and strata
committee member within 14 days of receipt.
We can assist your scheme to chart a path through the Strata
Schemes Management Act 2015.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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