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WA: Q&A Procedure for Appointing a New Strata Manager

The LookUpStrata Team
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These Q&As are about the correct procedure for appointing a new strata manager in WA. Before you begin looking for a new strata manager, download our Free ‘Appointing A New Strata Manager Checklist’ for WA. It is full of tips on what to look for and it includes a comparison table to keep track of your candidates.

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Question: We are approaching the expiry of the current strata management contract and wish to find new management. We have yet to decide on a new strata manager. Can we contract with the current company on a short-term basis – i.e. three months?

The strata management contract for our 14 scheme lots runs out in a few weeks. The council of owners is seeking to find new management, as we have not been happy with the service provided by our current management company.

Unfortunately, we need more time to research other management companies for various reasons, e.g. poor health. Is there any provision in the legislation to renew the contract with the current management company on a short-term basis – i.e. three months? If they disagree with a short-term extension, where does that leave the scheme and the council of owners?

Answer: There is no reason why your strata company can not negotiate with the strata manager to provide a short term contract to facilitate due process in appointing a strata manager.

Selecting a strata manager to appoint as an agent to your strata company is an important task and not a decision that should be rushed.

In any circumstance, if a strata company is not happy with the service provided by their existing agent, I encourage them to have an open conversation with the agent and express their concerns. Work with your strata manager to help them understand your strata company’s needs and resolve your concerns. I often find concerns owners raise relate to tasks outside the management authority’s agreed services.

Your strata manager will be aware that section 144 of the Strata Titles Act 1985 requires that a person is not authorised to perform functions as a strata manager unless a contract is in force between the strata manager and the strata company, so any lapse in contract prohibits the strata manager from acting on behalf of the strata company.

If in agreement, there is no reason why your strata company can not negotiate with the strata manager to provide a short term contract to facilitate the due process in appointing a strata manager. Three months is a reasonable time frame to achieve this. It would also be prudent to ensure that the relevant authorities are provided for the council to proceed with the selection process, that being sufficient budgeted expenditure via the strata company budget and authority under section 118 of the Strata Titles Act 1985.

Luke Downie Realmark E: ldownie@realmark.com.au P: 08 9328 0999

This post appears in the September 2023 edition of The WA Strata Magazine.

Question: Our council of owners would like to communicate with all owners while tendering for a new strata manager. Our current strata manager will not provide us with a copy of the strata roll. Is this correct?

I chair a mixed-use strata with 47 residential units and nine commercial units.

We are calling tenders for strata managers as part of due diligence to assess the current market and capabilities. One of the tenderers will be our current strata manager. As part of this process, the council of owners (COO) wishes to communicate with owners, but our strata manager will not provide contact information. It would be inappropriate for the current strata manager to be a party to the communications due to a conflict of interest.

Is there anything in the Act or Regulations that prevent a strata manager from providing owner contact information to the COO, especially as the strata manager operates as an agent of the COO? Does the COO need to apply to the strata manager or pay a fee to access the information?

Answer: Request the strata manager circulate an email asking owners to make contact with the COO.

As a council member, you should be able to request a copy of the strata roll from the strata manager’s office. They can charge a fee for providing the document, treating the process as a record inspection, but the fee should be low for an owner and sometimes free for council members. It’s at their discretion.

Due to the privacy act, the strata roll rarely contains email addresses unless the owner has specifically requested/permitted this. This is why your strata manager won’t release this information to you.

You can get around this issue. Request the strata manager circulate an email asking owners to contact a nominated COO member’s email account. They can register their email and get approval to receive COO correspondence directly (and not via the strata manager) on sensitive issues that the COO only want owners to be privy to.

Whilst all owners may not respond, the ones that take an active interest at AGMs or in your strata manager tender likely will, and these are the ones more likely to vote and participate in the new appointment process or assist in feedback the COO maybe after to create the tender document or for selection. Hopefully, this approach will help.

Kylie Nelson EYEON Property Inspections E: kylie.nelson@eyeon.com.au P: 0401 448 308

This post appears in the July 2023 edition of The WA Strata Magazine.

Question: I live in a five unit strata complex. My son owns the unit and I am a tenant for life. As a tenant, can I be a volunteer strata manager for the units? Previously, I was an owner occupier in a scheme for eight years where I managed a complex of nine units.

Answer: If the person is not an owner of a lot in the strata titles scheme, we do not believe this person can act as a volunteer strata manager.

Under Section 3 of the Strata Titles Act 1985 – Volunteer Strata Manager –

Means a strata manager of a strata company who –

  1. Is the owner of a lot in the strata titles scheme; and

  2. Does not receive any fee, reward, or benefit for work performed as a strata manager other than on honorary fee or reward not exceeding, in an amount fixed by the regulations, that amount; and

  3. Personal performs the work of the strata manager.

Section 144 of the Strata Titles Act 1985 as amended in 2018 further states:

  1. Despite an authorisation under Section 143, a person is not authorised to perform functions as a strata manager unless –
    1. A contract or volunteer agreement is in force between the strata manager and the strata company; and

    2. The requirements of the regulations are met by the strata manager and each agent, employee or contractor of the strata manager for –
      1. The conduct of, and verification of the conduct of, criminal record checks; and

      2. Education or other qualifications; and

      3. any other matter relevant to the performance of functions as a strata manager;

Strata Titles Regulations 2019 – section 94 – A volunteer strata manager must table a national criminal record check obtained in relation to the strata manager at a meeting of the strata company or the council of the strata company at least once every three years.

Section 95 of the Strata Titles Regulations 2019 stipulates that the educational qualifications prescribed for strata managers do not apply to a volunteer strata manager.

If the person is not an owner of a lot in the strata titles scheme, we do not believe this person can act as a volunteer strata manager.

This advice does not constitute legal advice and we recommend that the owner obtains their own legal advice to suit the circumstances.

Marietta Metzger magixstrata E: marietta@magixstrata.com.au P: 08 6559 7498

This post appears in the May 2023 edition of The WA Strata Magazine.

Question: Our strata manager informed us they were exiting our management. We appointed a new strata manager and discovered the outgoing manager had charged us a $2,500 transfer fee. Are transfer fees legal and can they be charged without agreement?

Our strata manager informed us in writing they were exiting as our managers and had sought out another strata manager to take over. At the EGM, owners decided on their own managers.

Without consultation, the outgoing strata manager charged $2500 for the transfer. We only became aware of this when we received the final accounts. Is this legal and can they charge a transfer fee without agreement?

Answer: It is not usual to charge a $2,500 transfer fee, or invoice for the remainder of the current contract, if the Strata Management company terminated the contract.

Further to proclamation in 2020, all schemes would have had to sign a new Strata Management Agreement with their chosen service provider. SCA(WA) provided a best practice Strata Management Agreement template for use by all strata management companies in WA.

The following is indicative of the content, where a Strata Manager ends the contract, rather than the Strata Company (of which terms appear in Section 153 of the Act).

This Agreement may be terminated without penalty at any time by mutual consent.

This agreement will terminate on the expiry date if a party gives to the other party not less than 2 months written notice of termination before the expiry date.

If this Agreement does not terminate on the expiry date or is not otherwise terminated during the term, this Agreement will automatically continue for successive terms unless and until terminated:

  1. without penalty, by the Strata Company giving to the Strata Manager or the Strata Manager giving to the Strata Company at least 2 months written notice of that termination at any time during the successive term;

This agreement may be terminated without notice by the Strata Manager if:

  1. the Strata Company fails to pay any money owing to the Strata Manager under this agreement within 14 days after the Strata Manager services a written notice on the Strata Company providing details of the unpaid amount; or

  2. the Strata Company acts or fails to so act as to prevent the Strata Manager from properly and lawfully carrying out its obligations under this Agreement.

There may be a number of reasons why your Strata Management company terminated your Agreement, but they can only suggest a replacement. The decision of which Strata Management company to appoint, and which contract to sign, must lie with the owners.

I would suggest that it is not usual to charge a $2,500 transfer fee, or invoice for the remainder of the current contract, if it was the Strata Management company rather than yourselves who terminated the contract. In this scenario, it is the Strata Management company who is placing a burden on the Strata Company, rather than the Strata Management company being fairly compensated for termination of the contract, during its term, without a valid reason being provided by the Strata Company, and without valid notice being given.

The first place to start is read your current Strata Management Agreement, particularly the termination clause and additional fees which may have been incurred during the transition to a new Strata Management company.

ESM Strata E: mchurstain@esmstrata.com.au P: 08 9362 1166

This post appears in Strata News #619.

Question: Our strata manager has only even submitted an unsigned management contract, although they insist it is valid. Is this correct?

Our Strata Manager took over the management of our scheme without providing a Strata Management Contract. They have been our Strata Manager for more than a year. The Strata Manager submitted an unsigned contract when recently requested by an owner.

The Strata Manager insists the contract is valid. Are the Strata Company and the Strata Manager in breach of the Act? If so, what is the best course of action?

Answer: A contract needs to be signed by all parties. Anyone can provide a copy of an unsigned document.

A request to search the information and Records and Correspondence of the strata company under section 104(1)(vii) – being any contracts entered into by the strata company.

Section 109 details the method of requesting such information.

Bearing in mind that a contract needs to be signed by all parties. Anyone can provide a copy of an unsigned document.

You may need to take the matter up with the Tribunal and seek legal advice.

Shane White Strata Title Consult E: shane.white@stratatitleconsult.com.au

This post appears in Strata News #540.

Question: According to our strata manager, due to the new legislation she may only be re-appointed for a minimum of 12 months. Is this correct?

Our strata manager states that under “new legislation” she may only be re-appointed for a minimum of 12 months.

Is this true? Is there legislation that backs up her claim?

Answer: Check your contract

The new legislation – section 145

Strata management contracts : minimum requirements

    1. specify when the contract starts and ends;

As a rule, if you sign a contract, you are bound by the terms and conditions of that contract, provided they are lawful.

Some Management contracts may stipulate that they are for 12 months as a minimum term but can exist for a defined period greater than 12 months.

There is also the matter of practicality and the work processes required for a strata management company to manage a strata scheme.

A certain amount of time invested at the start to enter details onto their strata management programs and bring forward the previous financial status.

The best advice is to always check your contract.

Shane White Strata Title Consult E: shane.white@stratatitleconsult.com.au

This post appears in Strata News #514.

Question: As a member of the Council of Owners (COO), can I request the COO dismiss the current Strata Manager and appoint a new one?

As a member of the Council of Owners (COO), I ask the COO to vote by email on dismissing the current Strata Manager and appoint a new one.

  1. Is it legal to ask the COO to keep the voting process confidential from the current Strata Manager to the potential of conflict of interest?

  2. Will the resolution pass without dissent if no COO vote is received within 14 days pursuant to Section 1230 (2)(b)?

Answer: You will not be able to just fire the strata manager and get a new one, you will need to follow the new process that has been set down in the Act.

Removal of a Strata Manager

Just to clarify a few things first:

Voting at Council level is covered by Schedule 1 Governance BL8 (1) – A simple Majority Vote.

You should also make a careful study of section 151. Termination of a Strata Management contract.

Whilst the Schedule BL8 (2)(b) allows for the council to employ and engage persons as it thinks necessary, there are now statutory requirements to be fulfilled to terminate a strata management contract.

Section 151 requires you to identify what it is that the strata manager hasn’t fulfilled in the contract of services they provide and discuss what they will do to improve their service.

Failing that, the Act details the requirements of a show-cause notice that has to be sent to the strata manager. See section 125 (2)(3) and (4).

You will not be able to just fire the strata manager and get a new one, you will need to follow the new process that has been set down in the Act.

Shane White Strata Title Consult E: shane.white@stratatitleconsult.com.au

This post appears in Strata News #514.

Question: During the change to the new WA Strata legislation, what happens to a current strata management contract that may extend for several years?

Answer: If it’s an existing contract, the act is quite clear that there’s only a six month period from 1 May 2020 and after 1 November 2020 they had to have a new contract in place.

If it’s an existing contract, the act is quite clear that there’s only a six month period from 1 May 2020 and after 1 November 2020 they had to have a new contract in place. It has to be compliant with section 144 and it has to comply with all those conditions.

As to whether or not the strata company, through the council, want to negotiate a new fee with the strata management company, that’s entirely between those two parties.

Shane White Strata Title Consult E: shane.white@stratatitleconsult.com.au

This post appears in Strata News #457.

Question: What is the role of Section 118 of the act for appointing a new strata manager? How long is the life span of this section’s approval?

In regards to section 118 for the power to appoint a strata manager, how frequently must the corporation of owners make this?

In my strata scheme, for the past 4 years no such motion has been made and many properties have changed hands. How long is the life span of such approval, and must this approval have been given at an AGM or EGM?

Answer: Section 118 is for the Strata Company to determine by Ordinary Resolution to authorise a party

Section 118 does not give the power to appoint a Strata Manager, Section 118: Common seal and execution of documents provide the authority for executing a document. Section 118 is for the Strata Company to determine by Ordinary Resolution to authorise a party (a member of council, members of council acting jointly, or the Strata Manager) to execute the document on the Strata Company’s behalf. The documents to be executed would include the Strata Manager’s contract. There is no time limitation put on this motion and therefore may be seen as being in place until changed or the next resolution is passed.

There is also no requirement for the appointment of the Strata Management Company to be part of the motions put to the AGM. The council members are provided the authority to appoint the Strata Manager on behalf of the Strata Company and therefore, the Councillors may have appointed the Strata Manager within the 4-year period.

The question more specifically would be to determine what the contracted term with the appointed Strata Manager is. If you have an appointed Strata Manager, then you may wish to ask the council members for a copy of the current contract for your files, or they may refer you to the Strata Manager directly. This will clarify the duties and responsibilities and provide you with the details on the term and remuneration of the contract.

Shelley Fitzgerald Emerson Raine E: shelley@emersonraine.com.au P: 9330 3959

This post appears in Strata News #457.

Question: If the Strata Manager contract expires after an AGM, should a resolution be made to renew the management contract prior to the AGM?

If the Strata Manager contract expires after an AGM, should a resolution be made to renew the management contract prior to the AGM? Or does the contract continue until the end date, and if so, is a general meeting required to continue the contract and pass the additional costs for the strata manager.

Answer: There should be a motion on the agenda to deal with the strata management contract at the AGM.

If it finished at the annual general meeting, there should have been a motion on the agenda to renew the contract. Being that there is a deadline that all new contracts must comply with the act before 1 November 2020, if there was a resolution at the meeting, or an item of general business at the meeting to elect a new strata manager or review the contract, then the contract ceases at the end of that meeting as my interpretation of that question.

So unless there’s a presentation of another contract with new renewed terms and it complies with section 144 and 145 of the Act (especially 145 because that has the minimum requirements) then you’re at the mercy of the meeting.

Someone should move a motion to deal with it at that meeting, as to who’s going to be the next strata manager or whether the current strata managers contract is renewed.

Shane White Strata Title Consult E: shane.white@stratatitleconsult.com.au

This post appears in Strata News #450.

Question: Is this an appropriate clause to include in a strata management contract?

Is this an appropriate clause to include in a strata management contract?

  1. The Strata Company acknowledges and warrants that:

    1. The Strata Company will validly nominate a Strata Company Representative to communicate with the Strata Company Manager on behalf of the Strata Company;

    2. the Strata Company Representative is a member the Council, or in the case of a corporate member of the Council, the person nominated by that member of the Council to act for it, and

    3. if the Strata Company appoints another member of Council to be the New Strata Company Representative, that appointment will not take effect until the Council has given notice of that new appointment to the Strata Manager.

  2. The Strata Manager must act upon lawful instruction from the following and in the following order of precedence:
    1. the Strata Company (by resolutions of a general meeting) of the Strata Company.

    2. the Council (by resolutions of a Council meeting); and

    3. the Strata Company representative. I find this very troubling.

Answer: The clause referred to in the Contract appears to be a preferred clause to reduce the number of emails received by the strata manager. This in turn also creates efficiencies.

The clause referred to in the Contract appears to be a preferred clause to reduce the number of emails received by the strata manager. This in turn also creates efficiencies in that there is one designated person from the strata council nominated as the contact point.

As to it being appropriate, I am unable to provide any legal opinion on the matter.

Shane White Strata Title Consult E: shane.white@stratatitleconsult.com.au

This post appears in Strata News #445.

Question: Does a Strata Managers contract need to be supplied 14 days prior to an AGM where it is listed in the Agenda?

Answer: It would be prudent just like any other works contract to see a copy of the strata management contract with the meeting notice if it is up for renewal.

Shane White Strata Title Consult E: shane.white@stratatitleconsult.com.au

This post appears in Strata News #434.

Question: Some of the Strata Company have appointed a new Strata Manager without Extraordinary Meeting of owners or requesting a meeting of all members of the Council. Can this be done?

I appears that 3 of the 6 owners of our Strata Company have engaged a new Strata Manager without either requesting an Extraordinary Meeting of owners or requesting a meeting of all members of the Council.

It also seems that the new “Strata Manager” may have encouraged this by telling them they constituted a quorum and therefore could engage him.

As no Notice of the meeting, nor an agenda were circulated it seems that the meeting was illegally convened and therefore any actions resulting from the meeting are to be taken as if they hadn’t happened. However the new “Strata Manager” is insistent that he has been legally appointed.

One of the three owners at the meeting subsequently wrote to the existing Strata Manager dismissing him.

What can one or two of the other owners do? An extraordinary meeting of owners would result in a deadlock.

Answer: The Council of the Strata Company are empowered to appoint a strata managing agent to act on their behalf.

Please note: this response was provided prior to the proclamation of the new strata title amendments.

It appears from this query that this is a group of 6 lots, of which 3 of the lots are council members, and the council members have appointed a new strata managing agent.

The Council of the Strata Company, via the (standard) bylaws, are empowered to appoint a managing agent to act on their behalf.

There is no requirement for this decision to be referred to a General Meeting of the Strata Company (or the other owners) as per Schedule 1 bylaw 8 (2)(b):

  1. The council may —
    1. meet together for the conduct of business and adjourn and otherwise regulate its meetings as it thinks fit, but the council shall meet when any member of the council gives to the other members not less than 7 days’ notice of a meeting proposed by him, specifying in the notice the reason for calling the meeting;

    2. employ on behalf of the strata company such agents and employees as it thinks fit in connection with the control and management of the common property and the exercise and performance of the powers and duties of the strata company;

    3. subject to any restriction imposed or direction given at a general meeting of the strata company, delegate to one or more of its members such of its powers and duties as it thinks fit, and at any time revoke the delegation.

If the 3 members (who appointed the new manager) are the council members, and they have arranged a council meeting and agreed to the change of Strata Managers for the Strata Company, then this is within their duties and responsibilities.

There may be other considerations to take into account, such as the budgeted management fees etc, however, the Council members do have authority to employ agents as it thinks fit for the control and management of the common property and performance of the Strata Company duties.

Shelley Fitzgerald Emerson Raine E: shelley@emersonraine.com.au P: 9330 3959

Note: this general information about strata council member problems is an opinion only and suitable specialists in these areas should be sort for clarification and assistance on all points.

This post appears in Strata News #294.

Question: Must a contract or renewal of a contract with a strata manager be put to a vote at an AGM? Does this require a special resolution?

In reference to what Andrew has explained as the required functions of the strata company s.118, must a contract or renewal of a contract with a strata manager be put to a vote at an AGM? Does this require a special resolution?

For the past 2 contract renewals our strata manager has simply presented the new contract to the council of owners to vote on. Within the act is this legal?

Answer: As long as the Strata Company has authorised the Council by ordinary resolution under section 118 to execute documents then the Council may enter into a contract with a strata management company without the requirement to present to the AGM.

Please note: this response was provided prior to the proclamation of the new strata title amendments.

Schedule 1 by law 8 (2) (b) states:

The council may employ or engage, on behalf of the Strata Company, any person as it thinks is necessary to provide any goods, amenity or service to the strata company

As long as the Strata Company has authorised the Council by ordinary resolution under section 118 to execute documents then the Council may enter into a contract with a strata management company without the requirement to present to the AGM (unless at a general meeting they have restricted the Council from doing this)

Andrew Chambers Chambers Franklyn Strata Management E: andrew@chambersfranklyn.com.au P: 08 9440 6222

This post appears in Strata News #421.

Question: For a Council of Owners meeting to vote a new strata manager, do you have to table the proposals prior to the meeting? Or if they are tabled and voted on at the meeting only, is that sufficient to appoint a new strata manager?

Answer: The appointment of a new strata manager is simply a majority decision by the council members at any time.

Please note: this response was provided prior to the proclamation of the new strata title amendments.

The appointment of a new strata manager is simply a majority decision by the council members at any time. It doesn’t even have to be a decision made at a meeting.

Whether quotes/proposals are tabled at a meeting or not is completely up to the council but there is no specific requirement on the process of it. However, you may want to be conscious that all owners may want to see that the appropriate due diligence occurred.

Jordan Dinga Abode Strata E: abode@abodestrata.com.au P: 08 9368 2221

This post appears in Strata News #342.

Have a question about the procedure for appointing a new strata manager in WA or something to add to the article? Leave a comment below.

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Please note this advice was provided prior to the proclamation of the new strata title amendments and will be updated in due course.

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