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Hi, we (the strata committee) have noticed our strata management has not followed one of the motions set out in our agreement. This has has had a significant impact on the property (no money in account/no maintenance/premium insurance etc). We would like to terminate our agreement early. Do we need a lawyer or is there somewhere that spells out the steps in order that we do it ourselves following the appropriate steps/actions.
Thanks,
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@adanal Carefully read your contract with the manager and find the termination clauses. The one you are looking for is a clause that allows you to cancel for breach. It will probably say something like ‘…the OC may cancel with X days notice if the manager has failed to meet a requirement of this contract and has not rectified the breach within X days…’
Their failure seems to be significant. So make sure they were properly notified (which might require a formally-called strata committee, or even a general, meeting).
Probably the ideal would be to hold a general meeting that sets out the breach, its significance and consequences, and resolve to notify the breach to the manager, what would be required to rectify it and to terminate the agreement if it is not rectified in the stated terms (which might include some compensation for loss, perhaps in terms of a credit against future fees) by the deadline required by the contract.
If they don’t meet your times, on the appointed day, simultaneously notify the manager, all owners, Fair Trading, the Strata Hub and the bank that holds your funds that the strata managing agency agreement is terminated effective this date.
Key things: do everything by the book – properly called meeting by the secretary, the right notice periods, minutes distributed to owners etc. NOTE: assuming you have an elected secretary and a current strata roll, you don’t need to tell the strata manager anything about the meeting.
Build all the decisions into a single meeting, as separate motions: the sending of the letter, the rectification terms, the termination, granting the authority to the secretary to send all these letters etc.
If it’s a particularly tricky contract, there may be a clause requiring you to have the manager call and hold the meeting. This won’t stand legal scrutiny. The actual, elected secretary has the legal authority to call the meeting.
Now, if all the above feels do-able by the committee and owners who’ll help, go for it. If any of it feels out of reach, you should probably involve a lawyer, or a carefully-selected replacement strata manager, to help you with it.
We followed this approach a few years ago and successfully negotiated a ‘mutually agreed’ end to the contract (another termination option that’s usually there).
Good luck.