One of the biggest causes of confusion in strata is how to change Strata Managers. The reality is that changing Strata Managers is quite a straight forward process and all the 'hard work' happens behind the scenes by the new incoming Strata Manager.
Generally, there are three ways for an owner to change Strata Managers:
- If the owner is on the Strata Committee - By calling a Strata Committee Meeting to pass a motion to arrange a General Meeting to vote to change Strata Manager. This method is best for large schemes due to practicalities as listed in options 2 or 3;
- If the owner is not on the Strata Committee - By emailing your Strata Manager as a lot owner with the below two motions approximately two months before the Annual General Meeting (AGM) prior to the AGM agenda being issued.
- If the owner is not on the Strata Committee - By arranging for 25% of financial owners based on units of entitlement to sign a requisition to call an Extraordinary General Meeting (EGM) to vote to change Strata Manager. This method is best for small schemes under 15 lots.
Please see below links to the key documents referred to above:
Download: Motions to change Strata Managers
Download: Requisition of EGM to appoint The Strata Collective
The above list has been prepared in order of simplest to most involved. By far, the easiest way to change Strata Managers is if the Strata Committee agrees that the level of service is not satisfactory and then seeks proposals from alternative Strata Managers. Once proposals have been sought, interviews should be conducted with both the proposed company and the proposed manager.
Check the contract
Important note. You will need to check the length of the current contract to make sure that your strata title is not under a fixed-term contract. In addition, most Strata Agreements have a three month termination period so there is often a delay between hand over.
What to look for in a new Strata Manager?
It’s recommended that the owners corporation get a quote from at least three different Strata Managers or strata managing agencies to help compare options. Some important things to consider are:
- Level of experience and qualifications – Be sure to check their level of experience and what other strata properties they have managed in the past. Ideally, you want to be working with someone who has experience running a similar sized property to yours. The Strata Manager should also have professional qualifications as well as a good understanding of relevant legislation and appropriate insurance cover.
- Communication – Find out how well they are communicating with you and are they efficient, especially when it comes to responding to emergencies. Also, how big is the team if using a strata management company, who can provide support in case of sick leave.
- Cost and fee structure - Pricing to be aware of include management fees, disbursement fees, insurance commission and any additional fees.
- Reference checks and reviews – Be sure to contact references and look at reviews such as on Google reviews or Product reviews to get an understanding of how previous clients regard them.
How to appoint a Strata Manager?
In order to appoint a Strata Manager, the owners corporation require a simple majority vote at the AGM or the EGM. They can then choose a Strata Manager. When the draft management agreement is provided, it’s important to carefully check through the contract terms and negotiate on these if required. Before the AGM, the secretary must attach the draft management agreement to the agenda to allow all owners time to consider the contract terms.
How long can a Strata Manager be appointed for?
If appointing a Strata Manager at the very first AGM of the owners corporation for a brand new building, the appointment can only last for 12 months. After this, strata management agreements can last for up to three years at a time. Once an agreement ends, a Strata Manager can also be reappointed for up to another three years, based on a vote at an owners corporation meeting such as an AGM.
If a Strata Manager’s contract ends before the next AGM, the strata committee are able to extend the contract for up to three months at a time until the AGM is held. However, if the Strata Manager’s contract is not extended, a minimum of one month’s written notice must be given to the Strata Manager.
How to remove a Strata Manager?
Sometimes Strata Managers can be removed if the job is being done poorly or there are ongoing issues with their work. Common reasons to remove a Strata Manager include:
- Lack of communication or ongoing slow response with the Strata Manager
- Poorly managed finances
- Common property areas not being properly maintained or cleaned
To remove a Strata Manager, you must first review the management contract to determine when and how the agreement can be ended and check what the early termination conditions are and how they apply to this scenario. A motion will then need to be passed with a majority vote at the next AGM. However, if the next AGM is too far away, you can all for an EGM to make this happen sooner. Once the motion is successful, the Strata Manager can be advised in writing.
A handover is also required between the outgoing Strata Manager and new one to run through important documents, financial information and the strata roll, although if there isn’t enough time, then the strata committee can perform this handover.
If there is an issue with the terms of the management agreement, then the owners corporation may apply to the Tribunal to resolve the dispute.
Get in touch
To find out more about how to change Strata Managers or learn how the Strata Collective can help your property, contact our friendly team today.