Strata Legislation reform and Building Managers

In Sept 2012, the NSW Government issued a Discussion Paper and invited feedback to proposed reforms of the Strata Schemes Management Act 1996 No 138 (the Act). 

Prior to launching the Discussion Paper, in 2011/2011 the NSW Dept Fair Trading commissioned Global Access Partners’ (GAP) to prepare the “Strata Laws Online Consultation Report”. That Report confirmed there was much that needed to be addressed in Strata Legislation reform.

The existing Strata Schemes Management Act makes three bodies collectively responsible to an Owners Corporation (OC) for managing the Strata Scheme:

• A Strata Managing Agent;
• A Caretaker; and
• An Executive Committee.

The GAP Report identified widespread discontent with dysfunctional Executive Committees and/or Strata Managers. However, the role of the Caretaker – and the lack of regulation concerning the minimum qualifications and experience of Caretakers – was not identified as being a reform issue in the GAP Report. 

If there is a dysfunctional Executive Committee and/or Strata Manager, having a properly trained, qualified and experienced Caretaker (Building Manager) is even more important yet the latest Discussion Paper released in Sept 2012 likewise does not flag the role of the Caretaker (Building Manager) as being a key area of reform.

Our Executive Committee has found our Strata Manager has often let us down but most of our frustration has been in dealing with unqualified Caretakers (Building Managers) with limited skills.

We have found that, on a day-to-day basis, the Caretaker/Building Manager has more influence on the effective management of our Strata Scheme than the Strata Manager, yet the current Act allows Caretakers to operate without any qualifications or formal registration.

When we were tendering for the appointment of a new Building Manager, the EC did extensive research of its own to produce a checklist of duties and responsibilities for a Building Manager after it found the current Strata Act provided little that could be relied on. 

Our Strata Manager was unwilling to offer advice on the preferred terms of engagement for a Building Manager and left it to the EC to consult with a lawyer on the minimum qualifications, experience and skill requirements and a possible schedule of duties. 

Most Executive Committees are made up of untrained lay-persons who rely on their appointed Strata Managing Agents to act as their professional advisors, not merely as administrators and record keepers.

I believe any reform of the Act should:

1. Establish minimum duties and responsibilities for both Strata Managing Agents AND Caretakers that cannot be ‘contracted out’ by biased or inadequate management agreements. (The original property developers who have no real concern for the ongoing management of a property often write these agreements. Caretaker Agreements are often compiled by inexperienced OC’s).
2. Include the ESSENTIAL RESPONSIBILITY of both Strata Managing Agent AND Caretaker to provide timely and professional advice in their respective areas of expertise to the Owners Corp and its EC;
3. Include also as an ESSENTIAL RESPONSIBILITY of the Strata Managing Agent to advise the Owners Corp on the minimum duties and responsibilities of the Caretaker when the appointment of a Caretaker is being considered. (The appointment of a Caretaker is a critical one and is often one of the first things a newly formed OC has to consider); and
4. Establish minimum education requirements, qualifications and experience of a Caretaker, particularly when the Owners Corporation is a large one (in excess of 100 owners).

Since the trend these days is toward larger strata schemes in excess of 100 owners the role of the Caretaker cannot be taken too lightly.   

I am preparing a response to the Discussion Paper on the proposed reforms to Strata Legislation.

I urge everyone reading this forum to do the same and also invite your comment here.