Appointment of a strata manager
Strata and community schemes case study
Under the Strata Schemes Management Act 1996 (‘the Act’), an Adjudicator can make an order appointing a compulsory strata manager if satisfied that the management structure of the strata scheme is not functioning properly or if the owners corporation has failed to perform one or more of its duties required by the Act.
The roles of chairperson, secretary and treasurer had been undertaken by two long-standing lot owners. For many years the owners corporation had not complied with statutory requirements such as giving appropriate notice of meetings, keeping minutes of meetings and the provision of financial records to all lot owners. In addition, there were significant outstanding repair and maintenance issues with the unit block.
At an extraordinary general meeting, a motion was passed to appoint a strata managing agent and delegate all functions of the strata committee to the agent, but no action was taken by the owners corporation. At the same meeting a motion to increase the levies was put forward without any budget or financial statements.
Two lot owners of the block of strata units then made an application to the CTTT for the appointment of a compulsory strata manager. When the matter came before a Tribunal Adjudicator, it was noted that the appointment of a compulsory strata manager is a serious measure as it takes away some or all of the owners’ rights of self-management for a period. The Adjudicator found on the evidence presented by the applicants, and submissions by other lot owners and members of the owners corporation, that the management of the strata scheme was not functioning satisfactorily.
It was found that the owners corporation had failed to perform several of its duties and had a limited awareness of its statutory obligations. The Adjudicator also found that the owners corporation had ignored the resolution to appoint a strata manager and in the 18 months since the meeting, had made no attempt to make such an appointment.
The Adjudicator was satisfied that it was appropriate to appoint a compulsory strata manager to exercise all the powers of the chairperson, secretary and treasurer for a period, to get the records in order and arrange urgent maintenance works. Given the desirability of the strata scheme returning to a self-managed situation, the Adjudicator recommended that the new manager consult with lot owners before making any significant decisions and assist lot owners to become aware of the legal obligations as an owners corporation.