How do we sack our strata manager?

Some further ideas….. thinking on ways to avoid the NCAT journey…

Is it the strata manager assigned to your scheme who is the problem or is the strata management company failing to perform?

Have you tried speaking to senior management at the SM company to get your manager changed ?

Have you discussed a parting of ways through mutual termination of the agreement without penalty ? Sometimes it might be worth paying something short of the two years’ fees just  to get rid of them?

The very threat of  going to NCAT gives you some leverage.

But note… If you go to NCAT seeking a compulsory manager under s 237,  any lot owner can make the application.

If you don’t want a compulsory manager and just want to terminate the SM agreement under s 72, then it gets more complicated….

1. You need to go to Mediation first
2. The application has to be made by the Owners Corporation, not you as lot owner ; so you would need a resolution of owners ( will they support?) to do this, which no doubt the SM would try to obstruct

Others already gave some advice on the matter.

We like to provide more concrete options.

1. Strata committee can issue a notice of non-compliance as the first step in the process of remediation. We would expect that strata agency would often deny any wrongdoings.
2. Section 19 of the Strata Schemes Management Act 2015 (SSMA) allows that a general meeting can be convened by the secretary or the strata committee of an owners corporation.If you have an ethical, decent committee, that is an easy option.
3. Next best step is so-called “qualified request”. Basically, owner(s) with total unit entitlement of at least one-quarter of the aggregate unit entitlements, can call an Extraordinary General Meeting and include Motion for contract termination with the strata agency. Careful process is advised to ensure that strata agency does not delete, destroy, or remove any files before they are removed from office.
4. Based on our extensive knowledge of NSW strata laws, it is difficult to rely on NSW Fair Trading and NCAT. Formal processes to go through mediation at NSW Fair Trading and then NCAT if mediation is unsuccessful is: costly, especially if legal services are used, time-consuming, and risky, as public officials can ignore the evidence, or even not look at it if they see fit.
5. CTTT (in 2012) and NCAT (in 2020) declined to look at evidence against strata manager based on one single decision – “it would be unfair to look at evidence when strata manager failed to show up at the Hearing”. Unbelievable, but true. We have irrefutable evidence why we can make such claim.
6. To directly answer your question if NCAT can terminate strata (or building manager) contract under SSMA 2015: Yes, they can, under section 72. Reference case: The Owners- Strata Plan No. 64807 v Sunaust Properties Pty Ltd [2022] NSWCATD 20.

NCAT can terminate oppressive building management (or strata management) contract, as shown in January 2022, where NCAT exercised its power to terminate a building management agreement for the first time. After concluding that section 72 of the SSMA applied to the Agreement, the Tribunal determined that the Agreement should be terminated under section 72 on the basis that:

• Building manager had failed to perform the Agreement satisfactorily,
• Agreement was otherwise harsh, oppressive, unconscionable or unreasonable,
• Building manager regularly failed to act on instructions given by the strata managing agent for the OC, including its requests for CCTV footage and access passes, contrary to the Agreement,
• Building manager charged fee increases and additional fees inconsistent with the terms of the Agreement – further, there was no evidence to support a finding that the Agreement had been varied by, or the additional payments had been approved by, the strata committee,
• Circumstances surrounding the attempt by building manager to halt the AGM were knowingly false and improper and were intended to avoid a resolution for an audit being made at the AGM.

There are other possibilities to terminate the contract, but they mostly relate to criminal activities where civil law is useless. Criminal activities include fraud, stealing from common funds, and so on.

We want to clarify why we said:

4. Based on our extensive knowledge of NSW strata laws, it is difficult to rely on NSW Fair Trading and NCAT. Formal processes to go through mediation at NSW Fair Trading and then NCAT if mediation is unsuccessful is: costly, especially if legal services are used, time-consuming, and risky, as public officials can ignore the evidence, or even not look at it if they see fit.

.. and why it is best to avoid courts, even when you are completely right.

NCAT exercised its power to terminate a building management agreement for the first time, in case of The Owners- Strata Plan No. 64807 v Sunaust Properties Pty Ltd [2022] NSWCATD 20. After concluding that section 72 of the SSMA applied to the Agreement, the Tribunal determined that the Agreement should be terminated.

However, Sunaust Properties Pty Ltd found the loophole and then created three more legal events:

The Owners — Strata Plan No 64807 v Sunaust Properties Pty Ltd (2022) APLC 22-002, New South Wales Civil and Administrative Tribunal – Consumer and Commercial Division, 17 January 2022

Sunaust Properties Pty Ltd v The Owners — Strata Plan No 64807 (2022) APLC 22-075, Supreme Court of New South Wales, Court of Appeal, 27 July 2022

Sunaust Properties Pty Ltd v The Owners SP no 64807 (no 2) (2022) APLC 22-051, New South Wales Civil and Administrative Tribunal – Appeal Panel, 27 October 2022

Sunaust Properties Pty Ltd t/as Central Sydney Realty v The Owners-Strata Plan No 64807 (2023) APLC 23-025, Supreme Court of New South Wales, Court of Appeal, 14 August 2023

NCAT Appeal Panel (Sunaust Properties Pty Ltd v The Owners Strata Plan No 64807 [2022] NSWCATAP 246 (27 July 2022) and Sunaust Properties Pty Ltd v The Owners Strata Plan No 64807 (No 2) [2022] NSWCATAP 335 (27 October 2022) overturned the original decision on jurisdictional grounds (Supreme Court proceedings were already in progress and Clause 5(7) of Schedule 4 of the Civil and Administrative Tribunal Act 2013 effectively negated NCAT jurisdiction in these circumstances). Basically, owners corporation made a mistake to have cases at NCAT and the Supreme Court (albeit on different issues against Sunaust Properties Pty Ltd) at the same time.

NCAT Appeal Panel has, however, concluded that SSMA 2015 Section 72 could apply under valid legal circumstances.

We would not be surprised if this case drags even longer.

I’d just add that you are actually required to take the role back to the market after a maximum number of years, regardless of what any ongoing contract may state, or when it was agreed to. It’s about a 10 or 12 year max rolling engagement – check the legislation. It’s your good excuse that required by law to lose a contractor that has been there for too long. This makes sense, as your requirements may well have changed, your pricing may need reconsideration and some market competition might be what’s needed to see who-else is out there and allow for change that might well be long overdue.