NSW: Can a strata manager refuse to deal with property managers?

Question: I have an investment unit in a NSW strata complex. Our Strata Manager says they won’t deal with property managers, just lot owners. Surely they can’t enforce this?

The strata manager at the complex I used to live at and now rent out says they won’t deal with property managers, just owners, and it’s up to the owners to pass on any information to the property managers who then pass it onto the tenants.

I have questioned this as most people who have property managers do so for good reason. We don’t all want to be involved or don’t have time. Surely they can’t enforce this?

Answer: The owners corporation should be clear with the strata manager about its expectations about how he conducts himself on its behalf.

There is no legal basis under the NSW Strata Schemes Management Act 2015 (SSMA 2015) for a strata manager to discriminate in this way between owners on the one hand, and property managers and tenants on the other. It is difficult to see how the strata manager can properly carry out his job when he discriminates in this way, and it may be that he is exposing himself and the owners corporation he manages to both complaint and legal action against them.

It seems that the strata manager has adopted a practice that would tend to increase costs and slow down the taking of action such as common property repairs. The owners corporation should be clear with the strata manager about its expectations about how he conducts himself on its behalf.

The SSMA 2015 recognises various circumstances in which an owner may appoint an agent and have that agent transact strata business on their behalf:

1. An owner must nominate an address for service of notices section 22 and that address can be an agent. There is nothing in the SSMA 2015 that says it must be the owner’s address.
2. A company that owns a lot may appoint a nominee section 154 and that nominee becomes the contact person for receipt of notices and may attend meetings.
3. An owner with an intellectual impairment or physical impairment, or who is illiterate or unable to read or write English sufficiently, or who is absent from their lot (eg a landlord) may appoint an agent to receive notices and the owners corporation must serve notices on the agent section 155.
4. An owner’s address for service must be an Australian postal address or an email address section 261 but once again there is nothing in the SSMA 2015 that requires it to be the owner’s postal address or email address, so it can be the agent’s postal address or email address.
5. Notices under the SSMA 2015 required to be given to an owner must be sent to the owner’s address for service section 263 and that address can be the owner’s agent.

Tenants are bound by a strata scheme’s by-laws and have a statutory obligation not to create a nuisance sections 135 and 153 of the SSMA 2015. Timely compliance by tenants with these obligations suggests that the strata manager would communicate directly with tenants or property managers. It seems that a strata manager who refused to do so could be adding to the problem.

The strata manager is usually delegated the secretary’s functions. Under section 43 of the SSMA 2015, those functions include answering communications addressed to the owners corporation and attending to matters of an administrative or secretarial nature in connection with the exercise of functions by the owners corporation or the strata committee. These functions do not discriminate between owners, property managers and tenants.

Indeed, if a property manager or tenant were to notify to the strata manager about a defect in common property and request that it be repaired, and the strata manager ignored that notice and request, then after two months, the owners corporation is deemed to have breached its duty under section 106 of the SSMA 2015 to repair and maintain common property see section 232(2)(b) of the SSMA 2015 and thus the owners corporation is exposed to having an NCAT work order made against it.

In those circumstances, the strata manager may also be in breach of their own common law, contractual, and statutory duties to the owners corporation, and their professional and ethical duties. This could result in a complaint to NSW Fair Trading and Strata Communities Association NSW if the strata manager is a member of that organisation.

You should look at the consequences of the strata manager not communicating with your property manager and if that failure amounts to a failure by the owners corporation to carry out its legal duties under the SSMA 2015, then you should consider lodging an application for mediation against your owners corporation at NSW Fair Trading with a view to bringing a case against the owners corporation at NCAT.

This post appears in the June 2021 edition of The NSW Strata Magazine.

Carlo Fini
Lawyer (NSW)