A NSW Lot Owner is concerned about their Strata Manager misappropriating funds. Leanne Habib, Premium Strata provides the following response.
Question: We’re concerned our Strata Management Company is experiencing operating problems. Are there safeguards in place to ensure the Strata Manager is not using our fees to prop up a failing business?
We’re concerned our Strata Management Company is experiencing operating problems. In the last 12 months we have had 6 different Strata Managers who all disappear and we are told they are either on sick leave or personal leave and then they mysteriously vanish and then a new person makes contact each time. Some are only there for 2 months.
Now the Principal is answering our emails after telling us that the most recent Manager was on 2 weeks sick leave. Today they are now confirming he has left also. If a Strata Management Company becomes insolvent are the Owners Corporation’s funds safe? Are there safeguards in place to ensure the Strata Manager is not misappropriating funds and our fees are not used to prop up a failing business?
We are out of trust when it comes to our Strata Management Company.
Answer: The strata manager has a fiduciary duty NOT to misappropriate the funds which belong to the owners corporation ie it is a relationship of trust.
The strata manager has a fiduciary duty NOT to misappropriate the funds which belong to the owners corporation ie it is a relationship of trust.
The owners corporation’s funds should be in a trust account and those funds should only be accessed for bona fide owners corporation’s purposes. If there has been a misappropriation of funds or if the manager becomes insolvent, this would be grounds for termination of your strata management agency agreement and should be reported to the Office of Fair Trading.
Related article: NSW: Q&A Strata Manager Complaints
This post appears in Strata News #276.
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These articles are not intended to be personal advice and you should not rely on it as a substitute for any form of advice.
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