NSW: Strata owners, don’t be misled by these questionable manager retention strategies

This article warns NSW strata owners and committees about questionable tactics used by some strata managers to retain contracts, such as inserting reappointment motions without consent, delaying meetings, using manipulative communications, and misusing the 90-day retention rule. If you are interested to learn more about this topic, join us for a free webinar presented by Megan Parkins from Tender Advisory on 19 June, 2025 – 10 am AEST.

With the evolution of the strata industry and current media focus, many strata schemes in NSW may be considering renegotiating with their incumbent provider or appointing alternate companies for their strata management needs.

While professional and ethical conduct is expected of managing agents, recent reports and experiences from various schemes under Tender Advisory’s care suggest that some agents are engaging in questionable tactics to retain their contracts.

These actions can dramatically undermine the transparency and trust that should underpin strata governance in NSW.

1. Reappointment Motions, Without Committee Consent:

One of the most concerning tactics emerging is the insertion of reappointment motions into general meeting agendas without the knowledge or consent of the strata committee (SC).

According to best governance practices and common courtesy, agenda items, especially significant ones like reappointing a managing agent, should be discussed with and approved by the SC before being circulated to lot owners.

Under Section 50 of the NSW Strata Schemes Management 2015 Act (SSMA), a managing agent can only be appointed or reappointed by a general resolution at a general meeting. However, when these motions are added without committee oversight, owners may be led to make uninformed decisions, or be pressured into decisions that have not been supported by their duly appointed SC, and lack adequate discussion or transparency.

2. Delaying Meeting Dates to Manipulate Timeframes

Another tactic involves intentionally delaying general meeting dates or failing to schedule meetings in a timely manner. This strategy can reduce the opportunity for SC’s or owners to consider competitive quotes or properly evaluate the performance of the current agent prior to the expiry of their current managing agency agreement.

According to Section 18 of the SSMA, an Annual General Meeting (AGM) must be held once in each financial year.

Further to this, according to Section 19 of the SSMA, the secretary of the owners corporation (or the strata manager acting on delegated authority) must convene a general meeting within 14 days of receiving a qualified request.

A qualified request can be made by:

• The strata committee, or
• Owners who have a total unit entitlement of at least one-quarter of the scheme’s aggregate unit entitlements.

If the secretary or strata manager fails to call the meeting, the requesting parties may apply to the NSW Civil and Administrative Tribunal (NCAT) for the issuing of an order.

However, vague scheduling or administrative delays can be utilised to create artificial time pressure, leading owners to accept reappointment by default.

3. Emotionally Manipulative Communications

Another example making the rounds in the industry is the issuing of a personal and poignant letter from senior management teams, which has been tailored to emotionally manipulate committee members.

Rather than providing clear, factual justifications for reappointment, the letter allegedly appeals to the emotions of owners, suggesting disloyalty or administrative chaos if the agent is not retained, which can rightfully only be criticised as an unprofessional and unethical tactic.

This approach not only disrespects the intelligence of lot owners and undermines the legitimacy of the SC’s due diligence, but can also create a false atmosphere of fear and urgency.

Professional communication should focus on performance metrics, value for money, and future strategy, not guilt trips.

4. The 90-Day Retention Rule: Misunderstood or Misused?

Under Section 50 (7) of the SSMA, a strata managing agent appointed for a three-year term may include an option to extend their appointment for up to three additional months if the owners corporation has not reappointed them or extended their agreement by the end of the term. The extension is not automatic – the agent must give written notice of their intention to exercise this option.

Importantly, under Section 50 (8), the agent cannot exercise this option if the owners corporation provides written notice at least three months before the expiry date stating that they will not be reappointed.

This provision exists to prevent a gap in management during transitions, not to serve as a default contract extension.

In truth, this period should be used if and as required by the SC and lot owners to properly evaluate options, not to reinforce the incumbent’s position.

What Should Owners and Strata Committees Do?

If your scheme is facing these kinds of tactics, here are a few steps to take:

• Review all meeting agendas early and question any unexpected reappointment motions.
• Request copies of all communications sent to owners by the agent.
• Set AGM dates early and transparently, don’t leave it in the agent’s hands.
• Know your rights under the SSMA, especially Section 50 and its implications.
• Get competitive quotes from other strata managers, stipulate future KPI’s and ask for performance summaries.

Final Thoughts

While strata managing agents are important service providers who are crucial to the ongoing smooth operations of an owners corporation/strata scheme, they are not permanent fixtures. Their role is to serve the owners, not the other way around.

Schemes should feel empowered to evaluate their performance, request accountability, and seek better value, if needed.

Ethical strata management is based on openness, collaboration, and respect.

Tender Advisory
E: [email protected]
P: 0423743714

This post appears in Strata News #747.

This article has been republished with permission from the author and first appeared on the https://tenderadvisory.com.au/nsw-strata-owners-dont-be-misled-by-these-questionable-manager-retention-strategies/ website.

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Read next:

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