#16103
scotlandx
Strataguru

    Right, ok.  Bearing in mind this is not legal advice.

    The failure to specify which section applies re termination doesn’t necessarily mean the agreement is null and void, if the strata manager has been acting as strata manager then he has been performing services under the agreement so to that extent the agreement is “live”.

    The real issue is which clause applies to termination, there are three options.  Ordinarily where there has been failure to specify (where there are options), an agreement is read down, so the most onerous clause/s won’t apply.  Here the last option effectively gives the manager a term of 6 years, or maybe 3 years and 3 months, it’s badly drafted.  Arguably that wouldn’t apply because it hasn’t been specifically agreed to by the parties.  This is presuming that there hasn’t been anything else said or written, e.g. an email from an EC member saying that clause would apply.

    The first and second options are not as onerous and therefore one of them would likely apply.  The first one lets you terminate at any time provided three months notice is given, the second provides that the agreement expires at the AGM at which time presumably you would have to refresh the agreement. 

    Clause 15 read with the first and second options is a bit confusing.  Under the first option you can’t say there is a term (note in clause 15 it states “prior to expiry of its term (if any)).  If the second option applies, then if you terminated prior to the AGM then on its face you would have to pay out the term up to the AGM.

    Sorry if that is as clear as mud, but what I would be saying to the strata manager is could he/she advise you which clause in relation to the term does apply, i.e. what exactly is the term of the agreement.  They won’t be able to tell you.  If they can’t tell you, then on what basis are they seeking to enforce clause 15?