@HillsAnn said:
The agreement has a clause that the agreement can be terminated at any time by MUTUAL agreement. Presumably as long as the company has been operating according to the new laws, they could refuse to accept the owners corporation request to terminate?
Why would the Owners Corp want to terminate if the strata managers have been fulfilling their contract?
Is that correct? Can the OC determine the length of the agreement and the period of notice to terminate? It would be more logical to have the end date of the agreement fall 3 months after our normal AGM.
Strata management contracts are like any other (apart from the three year limit). The terms can be negotiated at the beginning of the contract by both parties. If one or other party doesn’t agree, they don’t sign. And if neither party breaches the terms of the contract then it runs its course.
Here is section 50 of the Act, which lays out the basic terms governing strata management contracts.
50 Term of appointment of strata managing agents
(1) The term of appointment (including any additional term under an option to renew) of a strata managing agent for a strata scheme expires (if the term of the appointment does not end earlier or is not ended earlier for any other reason):
(a) if the strata managing agent is appointed by the owners corporation at the first annual general meeting, at the end of the period of 12 months following that appointment, or
(b) in any other case, at the end of the period of 3 years following the appointment.
(2) A person may be reappointed by the owners corporation by resolution at a general meeting as the strata managing agent for a strata scheme at the end of the person’s term of appointment.
(3) The appointment of a strata managing agent may be terminated in accordance with the instrument of appointment if authorised by a resolution at a general meeting of the owners corporation.
(4) The term of appointment of a strata managing agent may be extended by the strata committee for successive periods of up to 3 months after it would otherwise expire (but not for any period that would extend beyond the date of the next annual general meeting of the owners corporation) pending a decision as to the reappointment of the strata managing agent.
(5) However, if a strata committee has extended a term of appointment of a strata managing agent under this section, the strata committee must give the strata managing agent at least 1 month’s notice of a decision not to reappoint the strata managing agent or not to further extend the appointment.
(6) A strata managing agent must give the owners corporation written notice of the end of a term of appointment:
(a) at least 3 months before the end of the term of appointment, and
(b) at least 1 month before the end of each extension of a term permitted by this section.
(7) An instrument of appointment of a strata managing agent for a period of 3 years (as referred to in subsection (1) (b)) is taken to include an option for the agent to extend the term of the appointment for a maximum period of 3 months after the end of the term of 3 years, if the owners corporation decides not to reappoint the agent and does not extend the term of appointment under subsection (4). The agent must give the owners corporation written notice of the exercise of the option.
(8) A strata managing agent is not entitled to exercise an option under subsection (7) if the owners corporation gives the agent written notice that the agent will not be reappointed at least 3 months before the end of the term.
(9) In this section, a reference to the appointment of a strata managing agent includes a reference to the reappointment of a strata managing agent.