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Changing the Strata Manager

Strata Manager

The new appointee can handle the bulk of the process when changing the strata manager. A few things to bear in mind.

Before you start changing the strata manager

  • Owners’ Corporation should check when their current contract ends. The incumbent strata manager may expect you to pay an early termination penalty. Don’t expect them to relieve you of this just because you believe they haven’t done a good job.
  • A simple majority of votes (i.e. 51% in person or by proxy) is required to change your SM. The vote must take place at a general meeting (GM).
  • If the AGM has already been convened, find out whether the SM has included in the agenda a motion to have themselves reappointed.
  • If they have, an owner’s option is to vote against the reappointment at the AGM, then the owner can propose an EGM at a later date to appoint the new strata manager.
  • If the AGM has been convened, the strata manager can extend your contract by up to 3 months (under clause 50(4) of The Act). Ensure your SM never sends notice of a GM without approval from the SC.

Begin changing the strata manager

  • Find reputable strata managers and review recommendations.
  • Study all new contracts and proposals you’ve received and question the differences.
  • Any owner can put forward a licensed strata manager.
  • The strata committee does not have any veto power.
  • Review and whittle down your SM proposals to create a shortlist of around 3 candidates.
  • Make a list of questions that are unique to your circumstances to test how each SM will respond to certain situations.
  • Request that they each make a presentation to the SC (or a sub-committee) in person and bring along the person who would be responsible for your strata scheme.
  • Once you have completed the shortlisting process, you’ll be in a position to choose the strata manager to put forward at the GM.
  • By following this checklist and choosing only one SM for the vote, you’ll find your preferred SM will be more willing and available to assist with the changeover process long before they’re appointed at the GM.
  • If your existing SM contract hasn’t reached its expiry date, expect the SM to request you to pay the balance.
  • It’s easiest to handle a changeover through the strata committee (SC) or initiate a changeover without the SC by convening an Extraordinary General Meeting (EGM) if 25% or more owners agree.
  • This checklist assumes that the next Annual General Meeting (AGM) hasn’t yet been convened and that a motion to change strata managers is likely to have a high chance of succeeding.
  • Appointment of a new SM must be approved by the owners voting in a general meeting (GM) – either the AGM or an EGM.
  • Your ability to act is constrained by your existing SM contract and the Strata Schemes Management Act 2015 no 50 (The Act).

Prepare for changing the strata manager

  • Depending on the date of the next AGM, the vote can take place then or at an EGM, which can be convened by the SC or 25% of the owners.
  • The motion to appoint a new SM must be tabled in the notice of the meeting, otherwise it will be ineligible for the vote.
  • If the general meeting is convened without the assistance of the incumbent strata manager, be sure to lean on the expertise of your preferred SM so the GM complies with legislative requirements, otherwise the vote may be invalid.
  • An owner needs the details of the strata roll to call for a general meeting without the presence of the SM.
  • The strata committee doesn’t usually have a copy, but they can request it from the strata manager under section 181 of the Strata Schemes Management Act 2015.
  • Owners can also request an appointment at the SM premises to inspect the Strata Roll (section 182 of the Act).
  • In both cases, the SM may decline to provide details other than the registered unit address, citing the Privacy Act as an excuse. However, this excuse is contentious and not founded in law according to many experts.
  • If finding, selecting, interviewing and choosing a new strata manager is going to take longer than the time remaining on your existing contract, you can use clause 50(4) in the Act to request an extension. The incumbent SM cannot refuse to do so.
  • Try to allow enough time for the SM to present to the owners at the GM before the vote takes place. NB: There’s no legislative requirement that the incumbent SM be present.

Next step when changing the strata manager

  • After the vote to change strata managers has been passed, the new strata manager can take over and advise on next steps.
  • If you’re under the impression that changing the strata manager is too difficult, follow this checklist to make the process more manageable.