Strata Management Agency Agreements

Strata Management Agency Agreements

Strata Management Agency Agreements Agency agreements  The appointment of a strata managing agent may take place only by an instrument in writing au...

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Strata Management Agency Agreements Agency agreements 

The appointment of a strata managing agent may take place only by an instrument in writing authorised by a resolution at a general meeting – Section 27(1) of The Strata Schemes Management Act 1996 (the Act).



Requirements for agency agreements include the requirements as set out in Clause 6 of Schedule 6 of the Property, Stock and Business Agents Regulation 2003 (effective September 2005).

Validity of appointment 

Requirement to hold certain licences under the Property, Stock and Business Agents Act 2002 such as a strata managing agent’s licence.



Initial period restrictions – An owners corporation cannot appoint a strata managing agent for a period extending beyond the holding of the first annual general meeting – Section 113 of the Act.

Validity of Agency Agreements 

Certain functions can only be delegated to strata managing agents - Section 29A of the Act and clause 13 of the Strata Schemes Management Regulation 2010.



For agreements entered into after 1 September 2005, Clause 3 of Schedule 14 of the Property, Stock and Business Agents Regulation 2003 provides that the agreement must not contain a provision that operates to renew the agreement for a subsequent fixed term of more than 3 months unless the agreement also provides for termination by giving 3 months’ notice at any time during the subsequent term.

Improving performance 

Depends on the terms of the specific agreement and can be a matter of differing expectations which can be overcome by having an open dialogue with the strata managing agent.



Contract terms could be sought to be modified to include KPIs, although they are difficult to measure and set due to the fact that KPIs are often monetary targets.

Termination of Agreements 

Before seeking to terminate an agreement advice should be sought in regards to the balance of the agreement, repudiation, etc.



An owners corporation may terminate the appointment of a strata managing agent in accordance with the instrument of appointment if authorised by resolution at a general meeting of the owners corporation - Section 27(2) of the Act.



Termination of a contract may occur where there is poor performance by a managing agent.



The usual obstacles a scheme may face in the process of terminating an agreement may include difficulty in convening a meeting, invalid requisitions, obtaining strata roll and documents from the managing agent, liens and refusal to hand over scheme’s records.

T: (02) 99290226 M:0403 738 996 ABN: 61 649 876 437

E: [email protected] W: www.bannermans.com.au P: PO Box 514 NORTH SYDNEY NSW 2059 AUSTRALIA

Liability limited by a scheme approved under Professional Standards Legislation

Agency Agreements – Section 162 and 183B of the Act 

The Consumer, Trader and Tenancy Tribunal can appoint a managing agent to exercise all or specified functions of the owners corporation, where orders are usually made only if: 

the management structure of the scheme is not functioning or is a not functioning unsatisfactorily; or



owners corporation failed to perform one or more of its duties or to comply with an order made under the act.

Prepared by David Bannerman 7 March 2011

T:T: (02) (02) 9929 9929 0226 0226 M:0403 M:0403 738 738996 996 ABN: ABN: 6161 649 649876 876 437

E:E: [email protected] [email protected] W:W: www.bannermans.com.au www.bannermans.com.au P: P: POPO Box Box 514 514 NORTH NORTH SYDNEY SYDNEY NSW NSW 2059 2059 AUSTRALIA AUSTRALIA

Liability limited by a scheme approved under Professional Standards Legislation