Question: Our Strata Manager has been paying contractors for unauthorised work. The committee has not been provided with any invoices. Can we request a reimbursement of the funds?
There are unauthorised payment transactions in Owners Committee financial reports. Our Strata Manager has been paying contractors for work carried out on a rented unit in our block. This work has not been requested by the Owners Committee.
The Committee has received no paperwork regarding the job or contractor invoices. Is the Owners Corporation entitled to request a refund from the Strata Agency for these non-authorised transactions?
Answer: Strata Managing Agents are delegated the functions of an Owners Corporation by way of their agency agreement.
Strata Managing Agents are delegated the functions of an Owners Corporation under Part 4, Division 2 of the Strata Schemes Management Act 2015, and by way of their agency agreement with the Owners Corporation.
It is not uncommon for a Strata Managing Agent to be delegated functions to arrange repairs and maintenance (so that the Owners Corporation can meet its legal obligations to repair and maintain common property) and to arrange payments to the Owners Corporation’s suppliers (tradespeople) for the services they provide. This is done in order to outsource these functions, instead of having to manage them personally.
The terms of the agency agreement will usually impose certain limitations on the kind of works that can be arranged, or how payments are authorised. It is important to clearly understand these and to negotiate them as needed.
Each Owners Corporation operates differently, as does each Agent. Some Owners Corporation want more control (but this means more work for them) – others may wish to outsource. Too much control can become micro-management. Too little control can give too many liberties. Trust also becomes important.
This post appears in the November 2022 edition of The NSW Strata Magazine.
Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440