Company title home units face a range of complex legal issues on a day-to-day basis. They have to comply with corporations’ law regulations, work health and safety regulations and environmental and planning regulations.
This legal complexity is worsened by the fact that company constitutions are often old and out-dated. This can make the process of responding to emerging challenges difficult.
Company title home units need a few items in place
The constitution is a binding legal document that regulates the internal management of a company. Older constitutions may be known as memoranda and articles of association.
The house rules
The house rules are a formal policy that regulates the management of the building and the conduct of its residents on a day-to-day basis. They may be issued by the board from time to time, or formally adopted by the company by way of an ordinary resolution.
Generally, it is preferable if the Constitution provides the board with a power to issue house rules. This way it allows the board to respond quickly to developments in relevant commercial and regulatory contexts.
The collection of levies
Boards must take a proactive stance to ensure that levies are paid on time and in full. The company cannot operate unless it has sufficient funds to finance its operations and any proposed works.
There are a number of things that the company can do to efficiently collect levies:
- The constitution provides for the restriction shareholders’ voting rights when their levies have remained unpaid for an extended period of time.
- The board has a constitutional power to charge interest on unpaid levies.
- The company has a constitutional power to recover any unpaid levies through debt recovery proceedings in the Local Court.
- The constitution makes provision for the eventual forfeiture of shares in the event of a failure to pay levies.
- The constitution provides the company with a charge over the proceeds of the sale of any share as security for any unpaid levies.
How can we help?
We can help boards of company title home units by:
- Assisting you with putting in place effective governance structures.
- Reviewing your constitution and helping you with the process of changing it.
- Advising you on your legal obligations under the Corporations Act 2001, the Work Health and Safety Act 2011, the Environmental Planning and Assessment Act 1979 and other legislation.
- Assisting you to manage disputes with shareholders in a cost-effective manner, including taking action in the Local Court.
- Advising you about processes that can be put in place to ensure that levies are collected efficiently.
- Assisting you to put in place effective structures to regulate leasing and short term licensing.
- Guiding you through the process of converting the building to strata title.
- Providing in house training to board members on their rights, duties and obligations.
Experienced company title lawyers can be hard to come by. Contact our team now to discuss how we can work with you to ensure that your building is run smoothly and successfully.