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We have a Strata Manager who brought up in “general business” at the AGM that she had dissolved her partnership and created a new business and sought to be appointed as the “new” strata manager. The “secretary” of the EC approved and signed the agreement. This was all wrong as per Flat Chat and The Office of Fair Trading so it was decided to call and EGM to discuss appointing a new Strata Manager and also raise a “special levy” for some large repairs.
The Strata Manager has sent out the agenda with only one item – appointing her under her new business as Strata Manager. The Proxy forms are worded that should an owner give a poxy the proxy is to appoint her as the manager. There is nothing an the Agenda re the special levies. The secretary is not a registered owner and did not have a proxy at the AGM so my view is she should not be on the Committee. Can we (the owners) cancel this AGM due to the content of the agenda? We wanted to put out to tender and seek applications from a few Strata Managers and also only one item on the EGM means we cannot discuss the special levy – am I correct? Can this be brought up as “general business”? My understanding is you cannot have “general business” at an AGM or EGM – am I correct?
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If what you say is true (and I have no reason to believe it isn’t) your new strata manager has pretty much proved that she is the last person you would want to run your scheme.
Anyone can be elected to the EC provided they are nominated by an owner who is not standing for election. A co-owner can’t nominate him or herself but they can be nominated by their co-owner (I’m guessing this is the situation with your secretary).
The appointment of the new strata manager by the current secretary’s OK was not legal. This required the approval of a general meeting.
The easiest way to resolve this is to hold a quick EC meeting to remove the secretary and replace them with someone on the EC whom you can trust (you?).
Once you have a new secretary in place, cancel the meeting and issue a new agenda with the items you require on it. The fact that your “new” strata manager has even considered putting anything requiring a decision under ‘general business’ at a general meeting shows that she is fundamentally incompetent. Add to the fact that she has manipulated the proxies so that they all approve her appointment and I wouldn’t even consider her for renewal, except for this: You want all the documents related to the strata scheme to be brought to the meeting so you have to let her think she’s in with a chance of keeping the business.
Contact a couple of other strata managers (and I would include our sponsors Strata Choice among them, if only because they would be sponsoring this website if I didn’t rate them) and you could even ask if they’d be prepared to help with this process without any guarantee that they will be signed up.
Your strata manager’s behaviour is extraordinary and either shows a lack of knowledge of strata law or a preparedness to ignore it. Either of these would disqualify her from re-appointment, in my book.
Act quickly and decisively and all this will soon be behind you.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
It is not uncommon for a strata management company to be sold or for a portfolio to be sold and transferred to another agency. The terms & conditions of your existing agreement will determine the process for how this should happen.
The standard agreement from Strata Communities Australia has the following relevant clause;
7. Transfer of the agreement
7.1 The agent cannot transfer the agreement without the written consent of the owners corporation, which consent shall not be unreasonably withheld if the agent satisfies the owners corporation that the proposed transferee and related persons are fit and proper persons and have the qualifications, competence and experience to perform the agreed services and additional services at an agreed services fee and an additional services fee not greater than the current agreed services fee and additional services fee.
7.2 The owners corporation must advise the agent of its decision whether to approve a proposed transfer within 28 days after receiving from the agent the information reasonably necessary to make the decision.
7.3 If the owners corporation approves the transfer, the owners corporation, the agent and the transferee must enter into a transfer agreement, or alternatively if the agent elects to enter into a new agency agreement then clause 7.5 will apply.
7.4 For the purposes of clause 7.1 to 7.3 (inclusive) the parties agree that “consent of the owners corporation” can be provided by the Executive Committee, unless the Act is amended to expressly provide that approval of the owners corporation for transferring the functions of a strata managing agent requires a resolution at a general meeting of the owners corporation.
7.5 After the transfer agreement has been entered into or, if an election has been made by the agent under clause 7.3 the new agent must request that the owners corporation enter into a new agency agreement, and the owners corporation must advise the new agent of its decision to enter into a new agency agreement within 28 days after such request, such approval not to be unreasonably withheld if the new agency agreement is on the same terms as this agreement, or on terms not less favourable to the owners corporation as this agreement. The new agent must pay the reasonable cost of preparing the new agency agreement, preparing and holding the meetings of the executive committee and the general meeting of the owners corporation, however if the meeting relates to more than approval of the minutes of the last meeting and the resolution relating to the new agency agreement, then the new agent must pay the proportionate share of the total cost relating to approval of the new agency agreement.
So, the executive committee can approve a new agreement in these circumstances without a general meeting being called. HOWEVER, the secretary should not be doing so without the approval (by a resolution of a committee meeting).
Having said that, there seems to be a number of other issues with the way this matter has been dealt with which points to Jimmy’s summary of the strata managers competence being correct.
Further to my last post, the strata manager asking for proxies to be given to her is counter productive for her purposes as she will not be able to use these to vote on the motion regarding her appointment.
SSMA – Schedule 2 Clause 11(7A) states;
(7A) Other limits on exercise of proxy
A vote by a proxy who is a caretaker, an on-site residential property manager or a strata managing agent is invalid if it would obtain or assist in obtaining a pecuniary interest for, or confer or assist in conferring any other material benefit on, the proxy.I agree with all the other comments.
ALSO The SM works for the EC and OC and has to comply with their wishes. They can make no arbitary decisions (unless authorized by a previous motion i.e. to spend up to $xxx without EC or OC approval for repairs).
If the Sec has approved spending without approval from EC or OC then tell him to refund the money to the Strata fund untill a subsequent motion is passed approveing the spending via a vote.
You can threaten him with action at CTTT to revover the money from him (you can use this threat to get him to cancel the EGM).
Also get Sec to organise another EGM (without inviiting the SM) to vote the motions that you wish to be voted.
Get rid of this SM ASAP is the bottom line.
Thanks everyone for your input. This forum is a wonderful place to learn!
I contacted the Office of Fair Trading today who advised not to cancel the meeting but to attend and put forward a vote to have another EGM to discuss the Special Levy. They also recommended to get as many owners as possible to vote against this motion and table it in the next EGM. They confirmed that anything can be discussed at the meeting but only Agenda Items can be voted upon. Also, the Secretary did not have a proxy nor did anyone nominate her for the committee who had not nominated themselves – she was nominated by 3 others on the committee so this was invalid. All I want is to have an Agent I can trust and an EC that I can trust! Is that too big an ask??
No, it’s not too much to ask but you must follow due-process and seek the active support of a sufficient number of like-minded Owners to bring about the changes that you seek.
As examples, if the appointment of the new strata management company is resolved at the EGM, then your Owners Corporation will likely need to give a minimum 3 months written notice of its intention to terminate that company’s Agreement and to appoint another; check the termination clause in the document.
Additionally, as there’s currently no EGM Agenda item (Motion) to convene yet another General Meeting to vote on the special levy, contrary to Fair Trading’s advice those present cannot resolve that way at the Meeting. That’s where the active support of other Owners is critical, as a requisition to the Secretary by ≥25% of those (by unit entitlement) is required to force the convening of that further EGM or indeed any other that may be necessary.
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