The Wild West of OC elections
By Dr Janette Corcoran
Owners’ corporations (OCs) are often referred to as a fourth tier of government – and our elections are just as political!
Upon purchasing your apartment, as a lot owner, you automatically become part of your OC. But to join the committee, the key decision-making group for your building, you must be elected by your fellow owners (or their proxies) at your Annual General Meeting (AGM).
Sounds democratic – and seems like a great instance of hyperlocal democracy in action. That is, our vertical villages are managed by an annually elected group, drawn from fellow owners, and it is they who make decisions about how our building is managed, including how our levies are spent and what actions are taken to address problems.
Regrettably, this committee, most especially how it is elected, also typically involves hyperlocal politics. And in many buildings, the intensity of competition rivals that of other levels of government.
It is all too common to hear of buildings run as fiefdoms, where long-standing committee chairs have developed a sense of entitlement to the role. Woe betide any whippersnappers who dare challenge this status quo!
In other tiers of government, such as local council, procedures have been developed to ensure that our electoral systems are fair, transparent and promote effective participation. While you might initially think that the last thing our vertical villages need is more procedures, the calibre of our OC committee daily affects the quality and fabric of our home life – this committee is the maker of by-laws, the procurer of contracts and the setter of fees and levies.
And this is why the way each OC exercises its choice over who will represent them has never been more important.
So, what are these issues impacting the transparency of our elections – here are three: dummy nominees; proxy farming; and robust electoral processes.
In local government, this refers to a candidate who stands for election with no intention or realistic chance of winning. Their purpose may be to direct preferences to other candidates or split the vote or simply to block other candidates. In the case of OCs, someone can be asked to nominate (perhaps by the entrenched chair!) for the purpose of blocking others from securing a position on the committee. The way this works is that each owner can vote for up to 12 people. Proxies are collected (proxy farming) by the serious candidate, who then directs these votes towards their preferred 12. So, if someone collects 60 or 70 proxies, these can be used for their preferred 12 nominees, thereby blocking others from being elected. This can result in nominees being elected who have little interest in serving on the committee. One recent instance I have heard about involves a nominee who is currently selling their apartment and who has twice been previously elected and then resigned soon after.
Proxies are part of an important mechanism which allows owners to appoint someone (a proxy) to represent them if they are unavailable. The proxy can use this assigned power to vote in committee elections and on resolutions, and/or otherwise represent the lot owner. It is often the case, however, that owners do not direct the proxy as regards their wishes, with the result that the proxy has free rein and can direct these votes to whoever and however they choose. Proxy farming occurs when large numbers of proxies are actively sought for the purpose of concentrating voting power so as to determine outcomes (e.g. who is elected, which resolutions pass). If there is no direction given, this means that a small number of owners (maybe even one owner) can determine the outcome of meetings, elections and resolutions. At its heart, proxy farming is all about the balance of power – who has it, who wants it and what they want to do with it. It is deeply undemocratic and other Australian states (such as NSW) have strict limitations on proxy farming. Not so Victoria – yet.
While the current system has been in operation for many years, there remains a great deal of confusion regarding nomination and voting procedures, starting with the submission of documents. For example, proxy forms require all owners to be listed and to sign. However, this seemingly straight forward issue repeatedly proves problematic, especially for people from non-English speaking backgrounds. There is an array of other procedural issues, such as the practice of nominating “from the floor” which gives little time for strata managers to confirm nominee eligibility and little scope for owners to consider such nominations. Many of these issues could be resolved through a combination of clearer instructions from Consumer Affairs Victoria, regulatory improvements, and the introduction of tailored online strata registration systems, which could assist in checking submissions while they are being completed.
The way our community, the OC, is able exercise choice over who will represent us is fundamental to our wellbeing. These three issues – dummy nominees, proxy farming and electoral process – are just the tip of the OC electoral iceberg. Failure to improve robustness and transparency promotes undesirable and undemocratic practices, leading to the concentration of power in the hands of those most adapt at working this inadequate system. Now is the time to begin a genuine dialogue about how hyperlocal democracy can best work in our vertical villages.