What strata owners should expect from their strata managers and what services are and are not included as part of a strata manager’s duties can be a heated topic.
The Acts dealing with a strata manager’s functions are analysed below.
Under section 3 of the Property and Stock Agents Act 2002 (formerly known as the Property Stock & Business Agents Act 2002), strata managers are included in the definition of “agents” and under section 4C of the Property and Stock Agents Regulation 2014 strata managers may exercise the following functions:
“(1) A strata managing agent who holds a class 1 or class 2 licence may exercise all strata managing agent functions.
(2) Despite subclause (1), a strata managing agent may not authorise the withdrawal of money from a trust account unless the strata managing agent is the licensee in charge of the business to which the trust account relates.”
Section 52 of the Strata Schemes Management Act 2015 provides that:
“(1) An owners corporation may, by the instrument appointing a strata managing agent or some other instrument, delegate to the strata managing agent—
(a) all of its functions, or
(b) any one or more of its functions specified in the instrument, or
(c) all of its functions except those specified in the instrument.
(2) An owners corporation must not delegate to a strata managing agent its power to make—
(a) a delegation under this section, or
(b) a decision on a matter that is required to be decided by the owners corporation, or
(c) a determination relating to the levying or payment of contributions.”
This means that unless the strata management agreement restricts the strata manager, they may be delegated power to make decisions that are not required to be resolve, specially resolved or unanimously resolved by the owners corporation at a general meeting. Some common examples of decisions that must be made by the owners corporation at general meeting are:
- setting contributions to the administrative or capital works fund;
- amending or adding to the by-laws for the scheme;
- approving additions or alterations to the common property;
- approving a lease of part of the common property.
Section 54 further specifies that a strata manager may exercise the Strata Committee’s functions:
“(1) The instrument of appointment of a strata managing agent may provide that the strata managing agent has and may exercise all the functions of the chairperson, secretary, treasurer or strata committee of an owners corporation or the functions of those officers or the strata committee specified in the instrument.
(2) However, the chairperson, secretary, treasurer and strata committee of an owners corporation may continue to exercise all or any of the functions that the strata managing agent is authorised to exercise…”
The role of a strata manager is therefore, that of a “facilitator” of the activities and duties of an owners corporation; a strata manager can represent the owners however they cannot make decisions on behalf of the owners corporation. The exception to this is if they have been delegated power by the owners corporation when they are appointed to approve and pay expenses (generally only a minor amount) on its behalf. In which case, the strata manager exercises their delegated authority to approve and pay the expense.
For a more specific description of a strata manager’s responsibilities, you should refer to the strata management agreement with your owners corporation.
The agreement will usually detail the basic functions of a strata manager included in the yearly fee payable by the owners corporation to the strata managing firm (Schedule “A” fees); the agreement will also include the additional services that could be provided by a strata manager at additional costs for the owners corporation (these are often known as Schedule “B” fees). Examples of additional services that a strata manager may provide at additional cost include dealing with third parties, such as lawyers and local authorities, in connection with redevelopment/sale of common property and acting for the owners corporation in the NSW Civil & Administrative Tribunal.
If you are in doubt as to what your strata manager can and cannot do for you, we suggest that you contact your strata manager and obtain a copy of the agency agreement.
Article by Michela Alesse and Allison Benson.