An owners corporation can vote at a general meeting to have a strata building manager.
The appointment must be in writing under a strata building manager agreement. Before they are appointed, a strata building manager must disclose to the owners corporation:
- if they are connected with, or providing services on behalf of, the original owner (the developer), since this would present a conflict of interest where the owners’ interests may not come first
- any direct or indirect benefit – called a pecuniary interest – in the strata scheme (other than them benefiting from the prospective appointment itself).
An agreement between the original owner and the building manager, entered into during the initial period, ends at the conclusion of the first Annual General Meeting (AGM). The agenda for the first AGM of an owners corporation must include an item to decide whether to appoint a building manager and if so, what functions the building manager should exercise.
A building manager agreement can be transferred to another person but only if the transfer is authorised by a resolution at a general meeting of the owners corporation.
The period of a building manager agreement is limited to 10 years, but it may be renewed if the parties agree.
The appointment of a building manager may be terminated in accordance with the terms of the agreement, if authorised by a resolution at a general meeting of the owners corporation.
Using proxy votes
A building manager cannot use a proxy vote to obtain a financial or material benefit. For example:
- for the purpose of extending the term of their appointment, or
- Increasing their remuneration or in a decision about legal proceedings involving the proxy.
Before engaging a building manager, an owners corporation should:
- research a number of prospective building managers
- negotiate the contract before signing it, after seeking independent legal advice.
© State of New South Wales (NSW Fair Trading). For current information go to fairtrading.gov.au