This Q&A about the term of appointment of strata manager has been answered by Andrew Terrell, Wellman Strata.
Question: There is a discrepancy around the term of appointment of strata manager. How should we proceed?
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I am hoping you can please provide some advice about our term of appointment of strata manager.
Our medium sized block of apartments was only completed towards the end of last year and at our first AGM the Strata company put in place by our developers signed us up for a 3 year term even though we agreed at the meeting that the first term be for 12 months only. The minutes reflect 3 years. The commencement date of the agreement was the beginning of November, 2016.
I have been told that as this was our first AGM, a strata manager may only be appointed for 12 months.
Can we contact the agent and advise them that their contract is in breach of the Act? Is this grounds for immediate termination of their contract?
Answer: I suggest you look to meet with the principals of the business to raise your concerns.
The new legislation which came in 30 November 2016 statute limited contracts to 3 years or 12 months, if at the First AGM – see the bold highlighted area of the Legislation below.
As the AGM and commencement date of the agreement occurred prior to the commencement of the new legislation, the agreement falls under the old legislation, so it can be for a 3 year agreement.
If they agreed at the meeting the appointment was 12 months and the minutes reflect 36 months, a number of owners should look to call a meeting and clarify that via the minutes (and also be willing to sign a statutory deceleration to this point).
(1) The term of appointment (including any additional term under an option to renew) of a strata managing agent for a strata scheme expires (if the term of the appointment does not end earlier or is not ended earlier for any other reason):
(a) if the strata managing agent is appointed by the owners corporation at the first annual general meeting, at the end of the period of 12 months following that appointment, or
(b) in any other case, at the end of the period of 3 years following the appointment.
(2) A person may be reappointed by the owners corporation by resolution at a general meeting as the strata managing agent for a strata scheme at the end of the person’s term of appointment.
I suggest you look to meet with the principals of the business to raise your concerns. I note also that the tribunal now has the power to terminate agreements where it did not previously.
This post appears in Strata News #150