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We had a bit of a surprise at our AGM this evening. The Strata Managing Agent had proposed a budget including a very large increase in the Capital Works Fund. One owner prepared and circulated beforehand a spreadsheet showing budgets for 3 alternate increases. The Strata Managing Agent praised this initiative before the meeting.
At the meeting, after extensive discussion of the pros and cons, once voting commenced as soon as owners expressed votes in favour of one of the alternative spreadsheet options the Strata Managing Agent then dropped a bit of a bombshell. If we did not vote for their proposed budget they would no longer act as Strata Managing Agents for us. No warning of this stance was given prior to this point in the meeting.
The scheme is quite solvent and the alternatives were not irresponsible, and each resulted in a Capital Works Fund balance within a few thousand of the amount we were made to vote for. The Capital Works Fund Plan and desired upcoming project expenditure formed part of the discussion.
It felt like blackmail, with the not too subtle suggestion that the Strata Managing Agent staff member feels that she is in charge, not us. What is there to be gained by this behaviour by the Strata Managing Agent? As long as we are following the legislation and approving a budget and Capital Works Fund contributions based upon the items which must be taken into consideration, why hold us to ransom over a difference in amount?
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It would be interesting to know exactly why the strata manager issued this ultimatum but, given as I am to being allergic to threats, I would ask them why they did so and then politely invite them to take the door marked “exit”. Even if they are 100 per cent right, that is no way to run a business or a strata scheme.
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.
Having been on both sides of the same coin, in looking at a budget as an owner and preparing them as a strata manager I can say, Tell the Strata Manager to take her bat and ball and go.
As an Owner its my responsibility to ensure that the budget is appropriate for the short and long term needs of the property. As a strata manager its my duty to prepare such a budget. But its not my budget! Its the Owners. If they decide on a different budget that’s their responsibility.
I only insist on two things that the levies be enough to pay for building insurance and to pay the strata manager (I don’t work for free). If the owner decided that they don’t need funds for a cleaner, services, maintenance or upkeep in the future. Then they are fools, but nothing in the legislation says fools can’t own a strata lot.
How very unprofessional of the strata manager.
The strata managers job is to assist the owners, Sometimes the recommendations of the strata manager are knocked back by the owners. Thats life.
A professional strata manager will just take it on.
Maybe in this case the strata manager is considering their “liability”
The strata act absolves the strata manager of the decisions of the owners. It’s their decision and the owners are accountable for it.
A good strata manager would make a note in the meeting minutes that the recommendation of the SM was rejected and that the owners voted an amended motion
And in my opinion, a large part of a SMs job is to manage the “personal” part . That means managing peole and the various tribes and factions that exist. But never to intervene
While I can sympathise with the frustration that the Strata Manager may have been experiencing, at the end of the day this is not their property or affecting their hip pocket particularly. It will possibly create some additional work for the SM and maybe even the SC to carefully manage the available funds. Though this reaction suggests that the SM may not be the best suited for the strata scheme.
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