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Hello
I am a villa owner in NSW.There are 11 villas in total.
We had our AGM end of October and i attended as the previous chairperson has not been approachable and helpful. I was appointed the chairperson and at the same meeting and on the same day i was presented with Agency Agreement to sign.I was not provided with a copy of agreement prior to the AGM and refused to sign. The agreement was made available to previous chairperson who did not share or discuss with anyone else.
In the mean time after reading the contract and consulting other lot owners, i find 6 out of 10 lot owners are unhappy and want to change strata company.
I emailed the SM and informed him that we will not be signing the contract as we are looking at other options and asked for explainings of spendings and strata roll details.
I was informed last week that the prev chairperson (who does not own a property here anymore) as gotten the contract signed by 2 of the lot owners and it has been handed back to SM.
Is that legal?
Options and advice please
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No, this is not legal. The contract has to be agreed at a general meeting. This has not happened.
So tell the strata manager that the contract is not valid and if they persist you will raise the issue with Strata Community Australia and Fair Trading as well as pursuing it at NCAT. If they don’t want to lose their licence as well as their reputation, they should behave.
And tell the former chair to back off too, or risk being sued for any costs the owners corp accrues in rectifying their illegal moves.
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.
What kind of meeting are you referring to – committee or general?
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.
In the ACT, the strata manager is not permitted to be appointed as proxy for an owner but anyone else can be. Eg. a non-owner agent or friend of an absent owner can be appointed as that owner’s proxy.
In answer to your question momo – a non-owner can attend a general meeting as a proxy, or duly appointed representative or attorney of the owner.
Re your other question re costs of changing strata managers – $20 to $40K sounds absurd.
Re dismissing a managing agent (from the Fair Trading NSW site):
A managing agent can only be dismissed, or have a delegation changed at a general meeting by a majority vote. Termination conditions, including payments, are detailed in the agent’s contract. Written notice of the decision must be given to that agent.
Ask for a copy of the Managing Agent Contract. The cost of breaking the Contract will be contained within the Contract.
Jimmy has pointed out above that it is likely that the contract is not enforceable, as it was not approved at a general meeting. Therefore the terms of the contract aren’t really relevant.
We decided to get rid of a very naughty strata manager once, who insisted that we pay her out the two years remaining on her contract. We didn’t pay her anything. She ended up serving prison term for fraud, but that is a different story.
Momo – Without seeing the Strata Manager Agent Contract for your scheme I cannot make a proper assessment but ……
I have had another look at your issue and am wondering if the Strata Manager’s Contract was to set to expire at your AGM in October 2016 or whether the Contract was still on foot? Some Strata Manager Agent contracts are entered into for a fixed period of 3 years. Was yours?
If the Strata Manager Contract was still on foot at the 2016 AGM and was not expiring then the document you may have been asked to sign may have been a mere acknowledgement that you were the new Chairperson of the OC.
If the Contract was still on foot then there would have been no need to include an Agenda item about this issue in a General Meeting until the Contract was about to expire.
This issue all depends upon the terms of the Contract, including when it was entered into, its duration, and its expiry date. Please obtain a copy and read it carefully. You have a right to obtain a copy of this Contract.
Also read previous AGM Minutes which will also inform you about the date at which the Strata Manager Agent Contract commenced. This would show up as a resolution in the Minutes of the AGM.
The relevant legislation is: The Property, Stock and Business Agents Act (2002) Schedule 14: Clause 3: Renewal of agreement for fixed term.
and
Strata Scheme Management Act (2015) Section 50: Term of appointment of strata manager agents.
That being said….it could also be a scenario where dodgy deals went on, the possibility of which was alluded to in Jimmy T’s, Scotlandx, and Peter C’s comments above.
Not advisable as you would be breaking a Contract.
I suggest you read the Contract, particularly the section on how to Terminate the Contract, grounds for Termination, and what repercussions occur for the strata scheme if the Contract is Terminated. Your scheme may be required to pay your strata manager a lot of money as a penalty for breaking the Contract.
Termination of a contract may occur where there is poor performance by a strata manager but be prepared for a fight.
Unless something has gone really wrong it may be best to stick with your current strata manager until the Contract date comes to an end.
See the Act for Strata Managing Agents (Sections 49 to 65) at
https://www.austlii.edu.au/au/legis/nsw/consol_act/ssma2015242/#s48
and Strata Managing Agent agreements may be terminated or varied by Tribunal at
https://www.austlii.edu.au/au/legis/nsw/consol_act/ssma2015242/s72.html
Who wrote the minutes?
You were at the meeting – you indicated in your original post there was no resolution to sign the agreement. If that is the case the minutes are incorrect.
Was there a resolution on the agenda to enter into the agreement?
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