A lot owner from NSW is wondering about the tender process for changing strata managers in NSW. Andrew Terrell, Bright & Duggan provides the following response.
Question: We are looking at changing Strata Managers in NSW. What is the process to carry out? How can we call for quotes for the Strata Management of the scheme? There are some ‘scare tactics’ going on with the current Strata Manager.
I live in a strata complex for over 50’s where the average age of owners is 80. The complex was built pre 1974.
We are looking at changing Strata Managers in NSW. At the last AGM held in October, there was a motion put to the meeting with a process to follow for calling for tenders for the Management of our Strata Complex as our current contract comes due this October. Historically there has been no other quotes sought for the Management of the complex.
The process was to compile a committee with the chairperson of the Strata Committee and 3 other owners not those of the Strata Committee. (So that it was removed from the Strata Committee.), that this committee take control of the compiling of the information and what is required, receiving tenders and these not to be opened on receipt but opened on a date advertised where all owners have the opportunity of attending. That the committee peruses these tenders and make further inquiries as may be required. That the chairperson then takes the recommendations of this committee to the AGM.
The current Strata Manager was present at the AGM when this motion was presented and she stated – vote for this and we will increase our fees.. I have been told that this was taken by those present (aged persons) that they would increase the fees for this year and they voted no to the motion.
My questions about changing Strata Managers in NSW are:
- can this be legally done – that is vote down a motion to call for quotes for the Strata Management of the Complex?
- if this is so, how can we now call for quotes for changing Strata Managers?
- and if time is not our friend this year, can we insist that we only vote on a 12 month contract where the others have been 3 years?
Answer: The process you wish to go about using to tender seems to be very sound.
The process they wish to go about using to tender seems to be very sound.
If the current manager has made a statement along the lines of “vote for this and we will increase our fees” in order to stop a tender process occurring that would seem like scare tactics at best – contract lengths are now statute limited and good managers welcome competition.
In relation to the questions posed:
- Yes the owners can of course vote down a motion at the AGM to call for tenders. That is not to stop the committee conducting their own process in calling for tenders (unless the meeting for some reason decides to restrict them from doing so in the compulsory motion about placing restrictions on the committee).
- Per my above advice, the committee is able to call these tenders and should do so by way of a motion at a committee meeting.
- The owners can negotiate any term of contract they wish up to a maximum 3 years.
This post appears in Strata News #186.
- NSW: Q&A Can We Terminate Because We Don’t Have a Licensed Strata Manager?
- NSW: Q&A Strata Management Tenders /KPIs. What Should We Include?
This article is for reference purposes only and is not intended to be a comprehensive review of the developments in the law and practice or to cover all aspect of the subject matter. It does not constitute legal or other advice and should not be relied upon this way. Readers should take legal or other advice before applying the information containing in this publication.