In South Australia, it is standard practice to appoint a manager at a properly convened meeting of a Corporation (either an Annual General Meeting or an Extraordinary General Meeting) and these contracts (management agreement) will usually run for a 12-month term. The Management agreement will have outlined the term of appointment. The Agency agreement may also outline other terms of the contract, including termination periods, termination notice periods and termination notice procedures.
Many times Members think changing Strata Managers is a difficult process, in reality, it is not difficult, but reaching out to your other Owners and discussing your group with them, is always an important part of making any changes. Strata Owners may need one Member to start this conversation, because often if you are thinking of changing strata managers, there is a good chance that now is the time discuss it with the rest of the vested Owners. You may find out that others are having the same issues, or you may find that perhaps your concerns were a one-off issue, that has since been resolved.
Contract Termination At A Meeting
The Annual General Meeting (AGM) is usually the time when the Body Corporate (Strata Members) will review the services and costs of the previous period, and review with the current manager will the terms proposing a renewal of the existing management agreement. At that time, the group may not wish to renew the services of the current strata management and alternatively appoint a new management company. To appoint a Body Corporate Manager (new or current) requires an ordinary resolution to be passed. Ordinary resolutions require a simple majority to pass and are how most decisions are made unless the Act, articles or bylaws specify otherwise.
Strata and Community Titled Properties in South Australia may also call an Extraordinary meeting prior to the AGM to cancel the services of a strata manager. The contract term will still need to run its course until the duration ends. However, the group have made their decision prior to the AGM date bypassing the ordinary resolution at this EGM to terminate the services of the current managers and appoint a new manager. If your group is contemplating changing Managers, we would suggest holding an Extraordinary General Meeting before the Annual General Meeting and after the contract has lapsed or is due to lapse. One of the reasons this may be preferable is if you hold an AGM with the management you do not want to continue with, they will no longer be authorised to act on your behalf and are therefore unable to carry out any instructions given. Another reason to do it this way is to give your new manager the opportunity to get to know your group and begin carrying out the everyday tasks and acting upon the instructions received at the AGM.
When Is It Worth Changing Strata Managers?
Body Corporate Members may consider reviewing the service of their Managers, in the same manner, they review other ongoing maintenance, contracts and works. Members should consider what a Good Strata Manager is? What service are we receiving? Are the services we receive at a reasonable and commensurate value? Only the Strata Members can determine whether or not now is the right time to consider ending a strata managing agent agreement.
If the Owners believe that current management has breached their duties under their agreement or the relevant legislation, then it may be advisable to seek legal advice on if and how the contract can be terminated prior to the management agreement term ends. If a decision cannot be reached between the two parties on early termination, the corporation may seek out dispute resolution as set out in the Strata Titles Act or the Community Titles Act (whichever is applicable).
It may be worthwhile speaking with your other Owners before running any meeting, to determine if the issues that you may be experiencing are common to others in the group, and therefore if there is a desire by Members to formally discuss those matters and/ or a desire by others to consider a change in body corporate management.
How Do I Call An Extraordinary Meeting
An Extraordinary General Meeting can be called by an Office Bearer, any two members of the Committee or by a certain percentage of the Owners (this number varies slightly depending on if you are a Community Title or a Strata Title). At least 14 days’ notice needs to be provided to all Owners before the meeting, along with an agenda containing the proposed motions so that Owners are aware of what is being voted on.
What Happens Next?
Once the meeting is held, and the motion passed to managers, an elected representative will need to notify both the outgoing Strata Manager and the incoming Strata Manager.
The outgoing Manager is then bound by law to provide the new Manager with all of the Corporation records and the funds held, in accordance with the provisions/ timeframes noted in the Act and/ or management agreement. This is the Handover.
Looking to change Managers? Stratarama is here to assist you every step of the way. Contact us by clicking on the link for an obligation-free proposal. Wanting to come on board? Our friendly team will arrange a smooth transfer from start to finish, assisting and guiding you on all the steps.