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Posted 24 October 2017
Owners corporations, strata committees, lot owners, tenants and many other people rely heavily on the information and services provided by strata managers to make informed decisions in the management of their schemes.
There are many relationships to manage in strata schemes, together with different interests each of these people may have. Often these relationships and interests are in conflict and being able to identify and properly deal with these can be challenging.
Ethics or ethical behaviour is defined in many ways. The SCA Code of Ethics defines ethical behaviour as ‘in accordance with the moral standards customarily applied in a business or professional relationship’.
A lot of the written materials, rules and the like focus on the behaviour of business persons, such as:
There are a number of materials and cases affecting owners and business persons, such as:
The Office of Fair Trading handles complaints made by people against licensees or certificate of registration holders for a variety of reasons, such as, for breaches of the Act and Regulation or breaching a licence or certificate condition.
If the Director-General is satisfied that there are grounds for taking disciplinary action, the Office of Fair Trading has a number of options available. These include cautions or reprimands, issuing a directive, undertakings, issuing penalty notices, imposing licence conditions, licence suspension or cancellation and disqualification.
The members of the strata committee of an owners corporation owe obligations to the owners corporation which may exceed their expectations, suggesting that considerable care should be exercised in accepting their appointment as a strata committee member and performing their functions once appointed.
The Corporations Act 2001, which imposes fiduciary and other duties on company directors, does not apply to owners corporations.
Under Section 37 of the Strata Schemes Management Act 2015, each member of a strata committee of an owners corporation has a duty “to carry out his or her functions for the benefit, so far as practicable, of the owners corporation and with due care and diligence”, but subject to Section 260, which provides protection from personal liability for members of strata committees who act in good faith.
The main ethical dilemmas faced are those of:
Many ethical complaints are made about performance issues, but most of these are not about ethical issues.
The following ethical issues are likely in the coming months and years:
What to do?
Ethical issues are often difficult to determine and traverse many grey areas. If faced with a conflict of interest or if you have an ethical concern, you should seek advice from the professional body of which you are a member, SCA or the Office of Fair Trading.
***The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.