Lawyers Central Pty Ltd

If the management structure of a self-managed strata scheme is dysfunctional, a Strata Schemes Adjudicator may make an order under section 162 of the Strata Schemes Management Act 1996 for the compulsory appointment of a strata managing agent.

Such an order is usually made by way of an application filed with the Consumer Trader and Tenancy Tribunal. The application may only be made by:-

• A person who obtained an order under the Strata Schemes Management Act that imposed a duty on the owners corporation or office holder of executive committee that has not been complied with; or
• A person having estate or interest in lot or, in the case of leasehold strata scheme, lease of lot; or
• The authority having benefit of positive covenant that imposes a duty on the owners corporation; or
• A judgment creditor to whom the owners corporation owes a judgment debt.

The applicant for the order is required to describe how the management structure is dysfunctional and list the functions they want the managing agent to have and exercise. The written consent of a nominated managing agent, listing their terms, conditions, fee and license must accompany the application.

While the applicant is only required to nominate one managing agent, we recommend nominating a number of agents, perhaps three. When providing their written consent, the strata managers should set out their history and experience in management and, if possible, compulsory management. If the applications are properly prepared, they have greater chances of success and are less likely to be rejected on technical grounds.

The Adjudicator will make their decision based on the written submissions of the parties concerned (usually the applicant and any other interested party supporting or opposing the application).

In special circumstances, an order appointing a compulsory managing agent may be made by an Adjudicator without an application. In this case, the strata managing agent will be selected by the Adjudicator from a panel of nominees of prescribed persons or bodies.

The Adjudicator may set out terms and conditions of appointment, which the owners corporation and strata manager must abide by. Such terms and conditions may include those relating to remuneration and the duration of the appointment. A common duration for compulsory appointments is 12 months. An Adjudicator may also order that the strata manager is to ensure compliance with any previously contravened orders of the Adjudicator or Tribunal.

Depending on the level of dysfunction within the strata scheme, the order may permit the appointed strata manager to exercise all the functions of the chairperson, treasurer, secretary and executive committee. In that case, the strata manager has the power to unilaterally resolve to undertake required works, whether on common property or within a lot. Compulsory appointments are therefore often sought by disgruntled owners as a means of ensuring the proper maintenance of their property, which they have otherwise been unable to achieve due to a deadlocked owners corporation.

Apply for the compulsory appointment of a managing agent using this form.