Mike Spencer – Platinum Global
Dear Confused Reader,
The reports by retired Judge King especially King III were intended to create good governance of companies and were to a great extent including in the new Company’s Act.
It is actually quite a technical report that is suitable for reading by the likes of CAs and Directors of major companies. It is not easy ready for the everyday man.
In essence is says that companies should be run as ethically as possible and this includes HOAs.
If an HOA is run openly, with good accounting and reporting to home owners, with the involvement of home owners in decision making and Directors who understand the difference between their personal feelings and those that benefit the majority, then there will be few occasions when anyone need to get so technical.
If an HOA is run in the way that a Body Corporate should be run then there would be no difficulties.
In all the body corporates that we manage they have good reserves, we seldom if ever has an official vote but work by consensus, virtually nobody is in arrears and those tiny number that are have had action taken against them. We don’t have a need for such as King III.
It should be remembered that HOAs come in many forms and are not officially controlled until such time as the new Act comes into being and the Ombudsman is created. After that happens if you are not happy in the way that your building is being managed or feel that some of the rules are unreasonable you will be able to make an official complaint to him.
However one must be very careful not to get into the situation that you are going against what the majority wants or is happy with.
In many buildings there are individual who want things to happen “their way”.
A sectional title building or HOA should be managed by the views of the vast majority. So if you go to a meeting and get out voted you have to accept the decision of the majority. Having said that poor management or accounting is never acceptable.
Regards,
The Landlord
See the reader’s question here.
