Managers: Strata & Community Titles
In this chapter we look at body corporate managers, their appointment and common problems faced by unit groups. We also look at how to terminate and change managers.
Legislation – Strata Titles Act
Click on Legislation above, to view strata title legislation and hints.
Legislation – Community Titles Act
Click on Legislation above, to view community title legislation and hints.
The business of properly running a body corporate, such as keeping records and running meetings, can be complex, particularly when there is a large number of units/lots in a group. Many body corporates choose to appoint a manager to assist in running the affairs of the corporation. Professional strata management firms charge for these services. Common Duties Compare Fees
Managers can be appointed or dismissed at a general meeting by a simple majority. In a Strata Corporation the power to appoint or dismiss may be delegated to a management committee. A body corporate which appoints a manager should carefully consider the terms of the contract of appointment. Some contracts specify a penalty if the appointment is terminated before the end of the specified term.
The legal responsibilities of the corporation do not change with the appointment of a manager. It must still have a Presiding Officer, a Secretary and a Treasurer (any two or more of these positions may be held by the same person), and is still legally liable for decisions made on its behalf.
A manager can only act in an advisory capacity and does not have any powers independent of the corporation. Managers have to act in the best interests of the corporation, and if they don’t they can be sued by the corporation, but as a preventative measure it is advisable for the corporation to maintain an active involvement in its affairs.
Managers, Agents and Financial Records: Strata managers or any agent who is authorised by the strata corporation to receive and hold money on behalf of the corporation are under strict legal obligations. An audit report of the strata manager’s trust account must be lodged with each corporation under their management (Strata Titles Act Section 36H and Community Titles Act Section 127). All unit owners are entitled to view the report. As well, financial records must be produced to the corporation upon request, and must be kept for at least seven years. Any manager or agent who fails to comply with these requirements is guilty of an offence under the Strata Titles Act.
” I have always believed that a Body Corporate management company is only as good as the chairperson and committee as elected by the owners at the AGM. It is this committee that drives the show and instructs the Body Corporate manager on all issues pertaining to the complex.” … www.propertyinvesting.com
Management – common questions
Right to inspect records. Some managers claim that the Privacy Act prevents them from allowing access to Corporation records. This is not true. The legal advice is that the records are the Corporation’s and must be made available to owners if needed for the proper conduct of the Corporation, this includes a list of owners and their contact details.
How are they paid. Generally managers have the Corporation’s funds in Trust. They draw their fees from the account as permitted under the management contracts with their clients. Many charge monthly, some quarterly and in the case of Strata Data annually in advance.
How do we appoint a manager at a general meeting? Click on Appoint to access our chapter on meetings and appointing a manager.
How long is the appointment. Usually from AGM to AGM or for a period of a year. Some managers may seek longer contracts. We strongly suggest caution in appointing a manager for longer than 1 year at a time.
Commissions: Most managers receive insurance commissions. In the case of Whittles it has an associated insurance brokerage. Some managers receive commissions from maintenance firms or contractors. Some managers have a financial interest in maintenance firms or are owned by common directors.
Breach of contract: The following appears in Whittles contract, it spells out the grounds on which a client Corporation may terminate their agreement with their manager.
The Manager:
- does not carry out duties under this agreement and the Body Corporate has, prior to the resolution being passed, served a written notice on the Manager specifying:
- the conduct or failure said to constitute a breach of paragraph 12.3(a);
- that Manager must remedy the conduct or failure specified within 14 days of the date of the notice; and
- that the Body Corporate may terminate this agreement if the notice is not complied with; and the Manager has not complied with that notice
How do we change our manager? We have a page devoted to dealing with changing your manager.
How do we obtain our records and funds following termination?
Legislation – Strata Titles Act
Click on Legislation above, to view strata title legislation and hints.
Legislation – Community Titles Act
Click on Legislation above, to view community title legislation and hints.
Some cautionary tales of mismanagement.
- Manager helps developer stitch up new owners
- Manager’s carelessness sees owners at risk of bankruptcy
- Manager fiddles whilst balconies rotting
- Manager’s advice puts lives at risk
- Refusal to provide owner list to Presiding Officer ( Privacy Act )
- Manager charges for services not delivered
- Refusal to hand over ledgers – funds short
- Fees drawn 1 year in advance – funds taken from sink fund
- Manager keeps bank interest
- Group left uninsured by manager
How can our group can help ensure we appoint an honest and reliable manager? We believe our Manager Checklist makes for a good start.
How to make a complaint? Contact the office of Consumer & Business Services on call 131 882 from 9am to 4.30pm Monday to Friday. or lodge a complaint via their website at https://forms.sa.gov.au/#/form/5780e4f27c79ff278c3875af/app/622d7ad34d43318bb4b4b789
Please ensure that you have exhausted all avenues with your manager.
Tools
The following may assist your group.
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Manager Checklist |
Change Manager EGM Notice |
Sample agreement |
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Notice to hand over records |
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Call 131 882 from 9am to 4.30pm Monday to Friday. |
Our thanks to the Legal Services Commission of SA for some content in this chapter.
Body Corporate Managers – What do they do?
The following are some of the common duties performed by managers for their client corporations.
Accounting
Collect, bank and account for maintenance contributions, levies, interest and other amounts due to the Corporation.
Send notices levying maintenance or other contributions and pay accounts and outgoings.
Prepare annual statements of accounts of the Corporation and arrange an annual audit of the Trust Account.
Arrange for the preparation and lodgement of annual Tax Return and any other ATO related dealings.
Financial and activity reports to all owners annually.
Prepare a budget for the coming year.Meetings
Prepare and distribute meeting notices.
Attend meetings as requested and assist the Presiding Officer and Secretary in the conduct of meetings.Maintenance
Advise and arrange for maintenance, repair and replacement of common property.
Provide all hours access to emergency maintenance.
Organise emergency maintenance works.Insurance
Place and renew insurances.
Have any claim promptly processed.
Liaise with a qualified valuer to assess the Corporation’s replacement value if instructed.Secretarial
Promptly deal with Corporation correspondence and requests for search statements.
Regularly inform Officers of the nature and importance of correspondence.
Keep all records of the Corporation secure and confidential.
Hold and use the Common Seal in accord with the Corporation’s resolutions.Additional Duties
Unless specified otherwise the following are Additional Duties for which extra fees may apply.Legal Proceedings
Attend hearings and legal proceedings of a Tribunal or Court either as a witness or on behalf of the Corporation.
Instruct solicitors, attend conferences and generally supervise legal proceedings involving the Corporation.Extraordinary Maintenance
We can liaise with Architects, Engineers, Surveyors, Builders, Loss Adjusters and Assessors, Statutory Authorities, neighbours if major works are necessary.Additional Accounting
Keep any wage, Work Cover or other records required by law for employees or contractors of the Corporation and complete and submit returns.
Prepare at the request of the Corporation, financial statements and budgets other than for the AGM.
Arrange for the preparation and lodgement of BAS and other tax documents if required.Meter Readings
Reading of meters and recovery of electricity or other utility charges to individual units.
Hint
Ask you current or prospective manger to supply a contract that details the duties and terms of their management.
Fees & Services
We offer three management options.
PrimeCare and GroupAssist services are detailed in the PDF links below.
There is a SelectCare time based option.We find this best suits body corporates with strong committees that are hands on. The fee is $155/hour.
If you would like a printable copy of this information (pdf version) click here.
Management Agreement: If you would like a printable copy of our management agreement (pdf version) click here.
Audit Report (latest) : If you would like a printable copy of the latest audit reportt (pdf version) click here.
Strata Titles Act (plan number less than 20,000)
The Strata Titles Act permits a Strata Corporation appointing a person (manager) to assist the officers and committee in the running of their group.
Section 23
(6) A strata corporation may appoint or engage a person to assist any person appointed under this section as an officer of the corporation.
Section 35
(10) A strata corporation may appoint or engage a person to assist its management committee in the performance of the committee’s functions.
What does this mean?
The Strata Corporation can at a general meeting appoint any firm or person to assist the Corporation.
The Management Committee can appoint any firm or person to assist the Corporation. This is subject to any limits applied when the committee was appointed.
Community Titles Act
Section 76(9)
A community corporation may appoint or engage a person to assist the presiding officer, treasurer or secretary. The Community Corporation can at a general meeting appoint any firm or person to assist the Corporation.
Section 92
The Management Committee is prevented from doing so under Section 92:
(3) A committee cannot delegate its functions or powers but a community corporation may appoint or engage a person to assist the committee in the performance of the committee’s functions.
What does this mean?
The Community Corporation can at a general meeting appoint any firm or person to assist the Corporation.
The Management Committee cannot appoint any firm or person to assist the Corporation.
Strata Titles Act (plan number less than 20,000)
Recovery of Corporation Record. Section 39 gives the Corporation the right to recover its records and funds.
Section 39—Power to require handing over of property
(1) A strata corporation may by notice in writing to a person who has possession of any record, key, or other property of the corporation, require that person to deliver it to an officer of the corporation named in the notice, on or before a specified time.
(2) A person who fails to comply with a requirement under subsection (1) is guilty of an offence. Penalty: Division 7 fine.
What does this mean?
The Corporation must serve a formal written notice on a person or firm to hand over the group’s funds and records. An officer needs to be designated to pick up the records.
Hint
We suggest the notice be served by registered mail.
Community Titles Act
Section 147 gives the Corporation the right to recover its records and funds.
Section 147—Power to require handing over of property
(1) A community corporation may by notice in writing to a person who has possession of any record, key, or other property of the corporation require that person to deliver it to an officer of the corporation named in the notice on or before a specified time.
(2) A person who fails to comply with a requirement under subsection (1) is guilty of an offence.
Maximum penalty: $2 000.
What does this mean?
The Corporation must serve a formal written notice on a person or firm to hand over the group’s funds and records. An officer needs to be designated and pick up the records.
We suggest the notice be served by registered mail.
