By Prof Graham Paddock

Prof Graham Paddock
Below is an example of a question on the discussion forum on Paddocks Club. We want to show what is available to our Community Members!

Can trustees agree to have arrears paid off?


I have received an argument that trustees are not authorized to negotiate the payment of arrear levies with owners.  If, for instance, the owner proposes to pay an arrear amount off over 6 Paddocks Clubmonths, do trustees have a say as to whether this is approved or not?

What are your views in this regard?

Graham’s answer:

In my view this argument makes no sense at all. I presume that the person making this argument insists that each and every default be handed over to debt collectors as soon as the notice period has expired.
The legislation clearly contemplates late payments and authorises the trustees to do all things reasonably necessary for the administration of the scheme. If there is a reasonable possibility that an owner may be able to recover from an arrears situation by paying the arrears off, it is the obligation of the trustees to negotiate payment terms and avoid incurring legal/debt collection costs.

Can a trustee also be the managing agent?


There is a complex with only six units, with the managing agent also being a trustee in this sectional title complex. Is this allowed? Please could you also supply the sections in the Act that substantiate your answer?

Graham’s answer:

If a person is the owner of a unit in a scheme, that person can also be a trustee and the managing agent.
The relevant provision is not in the Act but in the prescribed management rules. PMR 5 deals with the qualifications of trustees generally and 5 (b) specifies that a managing agent be disqualified from serving as a trustee unless that managing agent is also an owner.
Article reference: Paddocks Press: Volume 7, Issue 11, Page 4
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