A Word on Strata Manager Contracts
Is your strata manager not meeting the mark? Whether it’s an issue of inadequate maintenance, fund deficits, general disorganisation or anything else, if you’re seeing signs of poor management, it may be time to change strata managers.
That said, contracts and legal documents can often be confusing, so here’s what you need to know about contractual obligations and how the process for appointing a new strata manager works.
How do strata management contracts work?
As you might already know, a strata manager can only be appointed by the owners corporation at a General Meeting (GM). If a strata manager has already been appointed by a developer before the first AGM, their contract length must be a maximum of 12 months. In any other case, strata managers can be appointed for a maximum contract length of three years.
If a strata agent’s contract is for the maximum period of three years, it automatically includes an option for them to extend the contract by three months at the end of the term with the consent of the Strata Committee.
How much notice needs to be given to end a contract?
Once the owners corporation has come to an agreement to end the strata manager contract, written notice needs to be given:
- Three months before the end of the contract period for a three-year term
- One month before the end of the contract period for a three-month extension
If the contract term is less than three years, there’s no specified notice period under the Strata Schemes Management Act, so it’s best to check the terms of your agreement.
What’s the process for ending a strata manager contract?
If your strata agent’s contract is nearing the end of the term, you should take action as soon as possible.
- Call a meeting with the strata committee of the owners corporation
You’ll need agreement from the owners corporation to switch strata managers, so arrange a formal or informal meeting with the strata committee to discuss ongoing issues with your current agent and confirm a majority in favour of ending the contract.
- Research your options
Before jumping into a new contract, make sure you’ve done thorough research to compare strata managers’ services, level of experience, and testimonials. It’s a good idea to create a shortlist of strata management agencies and have each one visit your building to provide a quote and proposal before you make a decision.
- Call a General Meeting (GM)
Once you’ve weighed up your options and come to a consensus on your new strata manager, you will need to have a General Meeting to ensure that:
- Vote on terminating the existing strata manager and appointing your new manager
- All the necessary documentation – including motions and agendas – has been provided by the new strata manager
- A majority vote has been made to switch to a new manager
The new strata manager can also draft up a letter notifying your current strata manager of the change and attend the General Meeting if needed.
- Make the switch
When the outgoing strata manager has been notified of the change, they are required by law to send a copy of the notification with the meeting’s minutes to all owners. Your new strata manager will then need to arrange to get all of the essential documentation, keys and passwords needed to get started managing your scheme.
Thinking about changing strata managers? Get in touch with our professional strata management team to see how we can help.