Question: Does a strata managing agent’s duty of care require proactive follow-up when a known compliance issue goes unresolved for months?
I was reading an earlier question about strata managing agent obligations in newsletter #804. Does the strata managing agent’s duty of care, specifically the obligation to act with reasonable skill and diligence under Schedule 1 of the Property and Stock Agents Regulation 2022, extend to proactive follow-up and escalation when a known insurance compliance issue remains unresolved for five months without committee knowledge?
Answer: Whether a strata managing agent must act at all comes before any question of how well they acted.
I am unable to comment on a specific scenario that I have not been instructed on. I can respond generally. I observe that the enquirer might have conflated an obligation to act with reasonable skill and diligence with an obligation of having to act.
The obligations pursuant to Schedule 1 of the Property and Stock Agents Regulation 2022 are owed by strata managing agents in their dealings with owners corporations they act for. Thus, it would extend to when they make proactive follow-ups and escalations in respect of insurance compliance issues, or when updating the strata committee. However, from the phrasing of the query, it appears the enquirer is asking a different question. They are asking whether a strata managing agent must:
- make proactive follow-up and escalation in respect of an insurance compliance issue; and
- update the strata committee in less than five (5) months.
Whether a strata manager is required to do anything specifically is based on whether they were instructed to do or delegated those tasks. Alternatively, was there a reasonable expectation that the strata manager was to do something? If there is no obligation to act in the first place, then the question of reasonable skill and diligence doesn’t come up. There isn’t sufficient information provided in the enquiry to determine whether the strata manager was obligated to act in respect of those issues.
If they were delegated or instructed to act, the question is then what would be the reasonable thing to do in the circumstances. Hence the specific circumstances also need to be known to determine whether there has been any breach, even where there is an obligation to act.
Ultimately, obligations owed by strata managers are mostly proscriptive and not prescriptive (e.g. the fiduciary duty). Thus, when it comes to the question of whether a strata manager should have done something, that would really have to be decided by the facts. I would encourage the enquirer to seek legal advice to determine whether a breach of obligations has occurred in this specific circumstance.
This post appears in Strata News #805.
Matthew Lo
Kerin Strata Lawyers
E: matthew@kerinstratalawyers.com.au
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