Compulsory Appointment of a Strata Managing Agent and Section 162 of the Strata Schemes Management Act 1996
This year has seen an influx of compulsory strata managing agent applications before the Consumer, Trader and Tenancy Tribunal of NSW. Despite the increase, it is quite common for such applications to be fraught with difficulty and always need to be handled delicately from the beginning.
Section 162 of the Strata Schemes Management Act 1996 allows an Adjudicator to make an order appointing a strata managing agent to a strata scheme compulsorily if certain requirements are met in that section of the Act.
An order for a compulsory appointment will be made if an adjudicator is satisfied, in accordance with s162(3A), that one or more of the following is found:
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the management structure of the strata scheme is not functioning or is not functioning satisfactorily; or
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an owners corporation has failed to comply with a requirement imposed on the owners corporation by an order made under the Act; or
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an owners corporation has failed to perform one or more of its duties; or
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an owners corporation owes a judgment debt.
An Adjudicator may also give a compulsorily appointed strata managing agent the power to exercise all the functions or specific functions of the chairperson, secretary, treasurer or executive committee of the owners corporation. The following persons only have standing to apply for an order:
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a person who obtained an order under the Act that imposed a duty on the owners corporation or on its executive committee, chairperson, secretary, treasurer and that has not been complied with; or
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a person having an estate or interest in a lot in the strata scheme concerned.
In Jennifer Elizabeth James v The Owners Corporation Strata Plan No. SP 11478 (No 4) [2012] NSWSC 590, Justice Ball of the New South Wales Supreme Court examined the power of a compulsory appointed strata manager.
Justice Ball found, at paragraph 39 of his reasons, that “if a function of the owners corporation is to be exercised by a strata managing agent pursuant to section 162 of the Strata Schemes Management Act 1996, that function is not exercised by the owners corporation itself and any requirement of a general meeting has no application”. In other words, the compulsory appointed strata manager is the owners corporation!
If you need advice or assistance with making or defending an application to appoint a compulsory strata managing agent, please contact our strata law specialist Michael Pobi on 8710 3430 or email him at michael.pobi@pobilawyers.com
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