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Our strata committee has seriously breached some strata laws. To make matters worse they didn’t give any other owners or the strata manager notice of any of their meetings and just started doing anything they wanted.
Other owners complained to the strata manager about what was being done to common property and inside and outside certain units owned by some people on the strata committee. They asked him why no meetings had been held for owners to vote on these works AND on several other types of breaches by the strata committee.
He replied that the strata committee had not told him about any intended works or anything else and so he couldn’t advise them on procedures. He then said, “But strata committees can really do whatever they want so there’s no point in objecting about what they’ve done.”
Other owners were incensed by this remark and consulted NSW Office of Fair Trading and other owners consulted their independent solicitors. Both said the strata manager was wrong. The solicitors recommended taking the strata committee to NCAT.
Some people on the strata committee have been owners for over ten years and already knew the necessary procedures but chose to ignore them.
Can we sack the strata manager for this reason alone?
Should we report him to the licencing authority? Who regulates licencing of strata managers?
Do we need to take action at NCAT to sack a strata manager urgently so that a new one can be appointed without delay?Surely strata managers know not to:
1)lie to owners,or
2)to favour one owner over another, or
3)to recommend making of by-laws that disadvantage owners and which, at the same time, may be contrary to some Sections of the SSM Act.Re what is acceptable as evidence:
In relation to para 3) above, some evidence of what the strata manager wanted owners to do is in writing in the form of motions in meeting notices and minutes of those meetings.However when it comes to what he said in meetings, no-one videod or tape recorded meetings. So if enough owners who were at the meetings swear on oath that he said something, will NCAT accept that he really did say it?
We are writing this on behalf of several owners who all hope that you can suggest the proper action to take.
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Replies
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There’s a lot you can do when a committee isn’t functioning correctly and the strata manager is allowing this to happen.
This is a trap a lot of strata managers fall into, where it’s easier to let the committee continue to do the wrong thing in the hope that they don’t give you any hassle and renew your contract when the three years standard period is up.
Also, some strata managers have a very tenuous grasp of strata law and how it’s supposed to work.
To answer the question on who regulates them, the answer is Fair Trading – but don’t hold out any hope there. Fair Trading are worse than useless in this regard. They have never struck off a strata manager for being crap at their job … ever.
However, there are a number of options open to you. The simplest, in theory, is to engineer the removal of the committee at the next AGM and then have the […] SM lift his game.
Failing that, and there are a number of reasons why that might not work, you can apply to NCAT to have individual members of the committee and/or officers of the committee removed under Section 238 (below).
You can also apply to the Tribunal to have the strata managing agent removed for a number of reasons, including failure to fulfil their duties according to the Act. That comes under Section 72 (also below).
Finally, there’s the Armageddon option where you apply for the appointment of a strata manager to take over the running of the scheme for the owners Corporation entirely. This comes under Section 237 (below).
You would only go for this when the scheme is so dysfunctional that you don’t mind giving up what little power you have, just to get things put right. This comes under “be careful what you wish for” as you might find the rule of one outsider more oppressive than the confederacy of self-interest you have at the moment.
And at this point my best advice is to consult an experienced strata lawyer and ask for their advice.
238 Orders relating to strata committee and officers(1) The Tribunal may, on its own motion or on application by an interested person, make any of the following orders:
(a) an order removing a person from a strata committee,
(b) an order prohibiting a strata committee from determining a specified matter and requiring the matter to be determined by resolution of the owners corporation,
(c) an order removing one or more of the officers of an owners corporation from office and from the strata committee.(2) Without limiting the grounds on which the Tribunal may order the removal from office of a person, the Tribunal may remove a person if it is satisfied that the person has:
(a) failed to comply with this Act or the regulations or the by-laws of the strata scheme, or
(b) failed to exercise due care and diligence, or engaged in serious misconduct, while holding the office.72 Strata managing agent and building manager agreements may be terminated or varied by Tribunal(1) The Tribunal may, on application by an owners corporation for a strata scheme, make any of the following orders in respect of an agreement for the appointment of a strata managing agent or building manager for the scheme:(a) an order terminating the agreement,
(b) an order requiring the payment of compensation to a party to the agreement,
(c) an order varying the term, or varying or declaring void any of the conditions, of the agreement,
(d) an order that a party to the agreement take any action or not take any action under the agreement,
(e) an order dismissing the application.(2) If the Tribunal makes an order terminating the agreement, the Tribunal may also order the strata managing agent or building manager to return to the owners corporation, within the period specified in the order, any documents or other records relating to the strata scheme that are in the possession of the agent or manager.
(3) The Tribunal may make an order under this section on any of the following grounds:
(a) that the strata managing agent or building manager has refused or failed to perform the agreement or has performed it unsatisfactorily,
(b) that charges payable by the owners corporation under the agreement are unfair,
(c) that the strata managing agent has contravened section 58 (2),
(d) that the strata managing agent has failed to disclose commissions or training services (including estimated commissions or value of training services or variations and explanations for variations) in accordance with section 60 or has failed to make the disclosures in good faith,
(e) that the strata managing agent or building manager has failed to disclose an interest under section 71,
(f) that the agreement is, in the circumstances of the case, otherwise harsh, oppressive, unconscionable or unreasonable.237 Orders for appointment of strata managing agent
(1) Order appointing or requiring the appointment of strata managing agent to exercise functions of owners corporation
The Tribunal may, on its own motion or on application, make an order appointing a person as a strata managing agent or requiring an owners corporation to appoint a person as a strata managing agent:
(a) to exercise all the functions of an owners corporation, or
(b) to exercise specified functions of an owners corporation, or
(c) to exercise all the functions other than specified functions of an owners corporation.(2) Order may confer other functions on strata managing agent
The Tribunal may also, when making an order under this section, order that the strata managing agent is to have and may exercise:
(a) all the functions of the chairperson, secretary, treasurer or strata committee of the owners corporation, or
(b) specified functions of the chairperson, secretary, treasurer or strata committee of the owners corporation, or
(c) all the functions of the chairperson, secretary, treasurer or strata committee of the owners corporation other than specified functions.(3) Circumstances in which order may be made
The Tribunal may make an order only if satisfied that:
(a) the management of a strata scheme the subject of an application for an order under this Act or an appeal to the Tribunal is not functioning or is not functioning satisfactorily, or
(b) an owners corporation has failed to comply with a requirement imposed on the owners corporation by an order made under this Act, or
(c) an owners corporation has failed to perform one or more of its duties, or
(d) an owners corporation owes a judgment debt.(4) Qualifications of person appointed
A person appointed as a strata managing agent as a consequence of an order made by the Tribunal must:
(a) hold a strata managing agent’s licence issued under the Property, Stock and Business Agents Act 2002, and
(b) have consented in writing to the appointment, which consent, in the case of a strata managing agent that is a corporation, may be given by the Secretary or other officer of the corporation or another person authorised by the corporation to do so.(5) Terms and conditions of appointment
A strata managing agent may be appointed as a consequence of an order under this section on the terms and conditions (including terms and conditions relating to remuneration by the owners corporation and the duration of appointment) specified in the order making or directing the appointment.
(6) Return of documents and other records
A strata managing agent appointed as a consequence of an order under this section must cause a general meeting of the owners corporation to be held not later than 14 days before the end of the agent’s appointment and must on or before that meeting make arrangements to return to the owners corporation all documents and other records of the owners corporation held by the agent.
(7) Revocation of certain appointments
An order may be revoked or varied on application and, unless sooner revoked, ceases to have effect at the expiration of the period after its making (not exceeding 2 years) that is specified in the order.
(8) Persons who may make an application
The following persons may make an application under this section:
(a) a person who obtained an order under this Act that imposed a duty on the owners corporation or on the strata committee or an officer of the owners corporation and that has not been complied with,
(b) a person having an estate or interest in a lot in the strata scheme concerned or, in the case of a leasehold strata scheme, in a lease of a lot in the scheme,
(c) the authority having the benefit of a positive covenant that imposes a duty on the owners corporation,
(d) a judgment creditor to whom the owners corporation owes a judgment debt.The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
Not to disagree with Jimmy T, but I think you may be taking the wrong approach with this matter. It is the Strata Committee that is (I assume) in the wrong here, rather than the Strata Manager. It is the Committee you need to take action against, not the Manager.
Legally the Strata Manager is the Agent of the Committee, or in other words, the Committee’s employee, and the Manager is normally delegated some of the Committee’s function, under the contract the Manager and Committee have signed. The Manager has the responsibility to (a) act on behalf of the Committee and (b) act in accordance with the law. However, as Jimmy T has also pointed out, the Dept of Fair Trading does not, as far as I am aware, discipline or remove Strata Managers for failing with respect to responsibility (b), so consequently Managers are primarily concerned with responsibility (a). Although, good Managers will resign or refuse to carry out delegated tasks if they contravene the law.
But some Strata Committees only use the Strata manager for only some tasks, like collecting strata fees, and manage other tasks on their own. The legal position is that a Committee will instruct and control the Manager, and Managers cannot overrule the Committee. You also need to read the contract the Manager has with your Committee, so see what tasks have been delegated to the Manager. It is possible that calling Committee meetings and make the minutes are not the Managers responsibility. Even if those tasks are delegated, the Committee does not have to use the Manager to do them, they can in theory hold a Committee meeting on their own and minute it themselves. The Manager has no legal right to interfere if that should occur.
It would be interesting to know what the Dept of Fair Trading would do, if they had evidence of a Strata Committee instructing a Strata Manager to take actions that are not in accordance with Strata laws… I fear, that there are no clear provisions about this in the law. The Strata Manager may be in the clear. Or at least, I suspect that Fair Trading would be struggling to find a means to discipline the Manager, legally. (And we know from experience that the Tribunal sees that following the law and legal precedent is not essential to their role – but that is another issue entirely.)
So I’d suggest you that you redirect your ire from the Manager to the Committee. But it may be useful to have a quiet word with the Manager to ask his opinion about the actions the Committee has taken. Be polite and conciliatory, you may learn some useful things.
@Quirky said:
Not to disagree with Jimmy T, but I think you may be taking the wrong approach with this matter. It is the Strata Committee that is (I assume) in the wrong here, rather than the Strata Manager. It is the Committee you need to take action against, not the Manager.I don’t think you’re disagreeing with me. The problem is the committee first and a complicit strata manager second.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
Interesting conversation. When recently on my strata committee, I asked both the Strata Manager and the Strata Committee for a copy of the strata roll. Both refused saying it was up to the other party to give me a copy. Consequently I never received one from either.
At a recent General Meeting, I pointed out that a motion was out of order and that it should be declared thus. The SM refused to do this and the SC remained silent.
Any thoughts on who is to blame here? And what SSMA breaches were both committing?
I’m with Jimmy on this.
Hi Jimmy you said that one way of removing a member of the SC is to:
…apply to NCAT to have individual members of the committee and/or officers of the committee removed under Section 238 (below).
Do owners have to go to Mediation at the “chocolate teapot” ie Fair Trading before going to NCAT?
What about other breaches of the SSMA? Is it necessary to go to mediation there as well? I’m getting mixed messages from Fair Trading.
The reason that you are getting mixed messages may be because it varies from issue to issue.
For instance, issuing a Notice To Comply, seeking interim orders or requesting the statutory appointment of a strata manager or the reallocation of unit entitlements don’t require mediation but most other things do.
Section 238 actions require mediation but that is often just a formality you have to observe before you can progress to the Tribunal. I wouldn’t expect anything from mediation – the other side might not even turn up – but you have to try.
The application form lists some of the issues that don’t require mediation … but yours does.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
@Ziggy said:
At a recent General Meeting, I pointed out that a motion was out of order and that it should be declared thus. The SM refused to do this and the SC remained silent.Any thoughts on who is to blame here? And what SSMA breaches were both committing?
Without knowing the motions and the context, it would be wrong to comment. Perhaps a motion that you thought was out of order wasn’t.
But the Strata Manager has a responsibility to bothe the strata scheme and to the law to correct errors when they have the opportunity to do so.
Strata committees are, almost by definition, populated by lay persons. If the strata manager isn’t going to offer professional advice, why are they even there in the first place?
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
Thanks Jimmy I had advice from Fair Trading so the motion was definitely out of order. The OC were asked to vote again on a same motion which we had previously approved and that had not been revoked.
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