When do you need a compulsory strata manager?

When do you need a compulsory strata manager article header image

When do you need a compulsory strata manager?

If your strata committee is dysfunctional, it might be time to look for the right strata provider to get things back on track. Mismanagement of a strata property not only affects your enjoyment, but also affects the property’s market value – after all, no one wants to buy a problem.

 

We cover three key topics on when your strata concern requires a compulsory strata manager:

  1. Appointing a compulsory strata manager

  2. What is the compulsory strata manager’s role?

  3. PICA Group’s three top tips on what to do when appointing a compulsory strata manager

 

1. Appointing a compulsory strata manager

In NSW if an owners corporation, strata committee, or strata manager becomes dysfunctional or fails to carry out its obligations, a lot owner can apply to the NSW Civil and Administrative Tribunal (NCAT) for an order appointing a new strata manager to exercise all, or specific functions, of the owners corporation, or the strata committee, or its office bearers (the chairperson, the treasurer and the secretary).

A compulsory appointment usually occurs when the owners corporation, strata committee or current strata manager:

  • is being negligent of its duties (such as not insuring the building, failing to keep records, or not holding AGMs, or failing to maintain common property)
  • is non-compliant with the state law and regulations
  • is mismanaging funds, or
  • is ignoring orders.


 

2. What is the compulsory strata manager’s role?

In New South Wales
The order can grant a strata manager powers to exercise all, or specific functions, of the owners corporation, strata committee or office bearers. These responsibilities are agreed upon by the owners and the contract is formalised by the Tribunal so that there is clear authority and responsibilities outlined for the strata manager.

A “section 237 appointed” strata manager will replace any existing strata manager and any existing strata managing agent agreement is automatically terminated.

A compulsory appointed strata manager owes a duty of care to act in the best interests of the owners corporation, however they are not obliged under s237 to consult with owners on matters before acting.

 

In Queensland and Victoria
If the situation of a dysfunctional or dormant body corporate committee becomes intolerable or has serious consequences such as a risk to health and safety of residents, there are avenues and options you can take to resolve the matter.  Your first port of call should be your strata or body corporate manager. Talk to them about the process involved in appointing a new committee.

Lot owners can vote at an AGM or EGM to terminate the commission of one or more members of the committee or appoint a new committee.

If this fails, then your relevant state governing body – Office of the Commissioner for Body Corporate and Community Management in Queensland, or Consumer Affairs Victoria, can provide mediation and intervention assistance.

3. PICA Group’s three top tips on what to do when appointing a compulsory strata manager:

  1. Be aware of the strata laws
    Know your rights and responsibilities as per your state law. Strata properties have common areas that are jointly owned by all owners. Hence, it is mandatory that there be a process and due procedure to maintain and manage the property correctly. If your committee is failing to take care of repairs to common property, then they may be putting the whole owners corporation at risk of being liable to a claim.

 

  1. Choose the right strata manager
    You have a say in who you appoint as a manager. It’s hard to be sure right of whether you are choosing the right strata manager so take time to evaluate strata companies and agents, look at their service history, Google reviews, and their systems. Do they have a website enriched with information? Can you access your strata information online? What does their Google Reviews say about their agents? Are they responsive?

 

  1. Try the strata manager’s services for a year
    As per New South Wales state law, strata managers can be appointed in an Annual General Meeting (AGM) for a 12-month contract term. If you’re happy with their work, you can choose to extend their contracts for a maximum of another two years.

Lastly, remember that when it comes to a compulsory appointment, you should take care to define the terms of the contract and decide the responsibilities carefully. While it is okay to trust the strata manager’s expertise, you as an owner should not feel powerless.  You own the property and the strata manager has a duty of care to act in your best interests.

 

If you’d like to find out more on how to deal with common strata problems for your strata property, download our FREE Community Living guide on disputes. Or for a consultation to review your by-laws by our Kemps Petersons Legal team, click here.