This article discusses whether a lot owner can act as a building manager, explaining how a lot owner building manager may be appointed, paid, and restricted from committee roles.
Question: Can an owner who lives in the building and has no qualifications as a Building Manager and who isn’t registered as one, be hired as a Building Manager and be paid for their duties?
Can an owner, who lives in the building and has no qualifications as a Building Manager and who isn’t registered as one, be hired as a Building Manager and be paid for their duties?
Can the Building manager receive an annual Honorarium instead of a salary?
If not, then can the person do the job, without remuneration?
Can the Building Manager be on the Body Corp committee or is that considered to be a conflict of interest?
Answer: A building manager may be appointed only via ordinary resolution at a general meeting of the owners corporation.
In NSW, the Strata Schemes Management Act 2015 (‘Act’) includes provisions governing the engagement of building managers (or facilities managers, caretakers, or any other similar title carrying out the functions of a building manager) for strata schemes.
There is no specific statutory framework that regulates building managers (unlike strata managers who have licensing requirements). However, building managers have traditionally been practitioners who have sufficient knowledge and experience in facilities management and/or building trades, as they are primarily engaged to assist the owners corporation in management, control, maintenance, and repair of common property. The Facility Management Association of Australia is the peak industry body for building and facilities managers, raising the profile for their industry and supporting their members by promoting high standards of practice.
A building manager may be appointed only via ordinary resolution at a general meeting of the owners corporation. The ‘building manager agreement’ (or contract) would outline what functions of the owners corporation are delegated to the building manager (but this does not prevent the owners corporation from continuing to exercise those functions). The ‘building manager agreement’ should also stipulate the remuneration or contract price to be paid to the building manager.
Section 66(4) of the Act states that a building manager may be a resident or occupier in the strata scheme, however, it should be noted that section 66(2) states that if a person is carrying out the role of a building manager on a voluntary or casual basis, or is a member of the strata committee, then he/she is not considered a building manager for the purposes of the Act.
In the case of an owner, a strata committee member, or a resident/occupier performing the duties of a building manager, if they enter into a ‘building manager agreement’ with the owners corporation then they may receive remuneration as part of the terms of that agreement. The building manager would then be considered a contractor of / supplier to the owners corporation.
Alternatively, section 46 of the Act states that the owners corporation may resolve at an annual general meeting to pay an honorarium to a strata committee member for services carried out for the owners corporation since the last annual general meeting, usually for the last 12 months of services already performed. Strata committee members cannot be paid in advance each month as a normal contractor would be.
In some instances, owners corporations are able to directly employ someone as a building manager, however, we would generally caution against doing this as this comes with a number of statutory requirements on the part of the owners corporation as an employer such as paying superannuation and providing leave provisions, and in our experience, direct employment of building managers by an owners corporation has created a number of legal issues for strata schemes in the past when things do not work out well, e.g. termination of employment procedures and long service leave issues.
So essentially, it may be possible to engage someone who lives in the building as a building manager, and payments to be made to that person/s will depend on the agreement with or resolutions made by the owners corporation. We, however, do not think this would be wise for strata schemes to do so.
Finally, section 32(1)(a) of the Act states that a building manager may not be appointed to the strata committee.
This post appears in Strata News #461.
Rod Smith
The Strata Collective
E: rsmith@thestratacollective.com.au
P: 02 9879 3547
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