Can A Lot Owner Revoke the Appointment of a Compulsory Strata Managing Agent?

For many lot owners, the appointment of a compulsory strata managing agent to manage their strata scheme produces mixed emotions. Some lot owners view the appointment as draconian, as it has the effect of removing lot owners’ and the executive committees’ voting rights at general meetings and executive committee meetings respectively. For other lot owners who have endured months or years of poor management under self-management take the view that there is no alternative than to apply to an Adjudicator for the appointment of a compulsory strata managing agent to manage their strata scheme.

Under the existing strata laws:

• a lot owner can apply to an Adjudicator for an order to revoke the appointment of a compulsory strata managing agent during the term of their appointment in circumstances where the Adjudicator appointed the compulsory strata managing agent on their own motion;

• a lot owner has no right to apply to an Adjudicator for an order to revoke the appointment of a compulsory strata managing agent during their term in circumstances where a lot owner made the application for the appointment i.e. as opposed to being appointed on the Adjudicator’s own motion;

• an Adjudicator can revoke the appointment of a compulsory strata managing agent strictly in circumstances where the Adjudicator appointed the compulsory strata managing agent on their own motion and where the management structure of the owners corporation is not functioning or is not functioning satisfactorily;

• a lot owner has the right to apply to an Adjudicator for an extension of the appointment of the existing compulsory strata managing agent prior to the expiry of their appointment; and

• a compulsory strata managing agent has no power to revoke their own appointment for the duration of their compulsory appointment.

Under the new strata laws, which are expected to commence in September/October 2016, there will be the following significant changes:

• the Tribunal will be given the power to revoke or vary the appointment of a compulsory strata managing agent during their term whether or not a lot owner made an application for the appointment or an Adjudicator made the appointment on their own motion; and

• an appointed compulsory strata managing agent must cause a general meeting of the owners corporation to be held not later than 14 days before the end of the compulsory strata managing agent’s appointment and must on or before that meeting make arrangements to return to the owners corporation all documents and other records of the owners corporation held by the compulsory strata managing agent.

The above significant changes will create the potential for lot owners who are unhappy with the performance of their existing compulsory strata managing agent to seek to have their appointment revoked prior to their expiry leaving the owners corporation self-managed.

Compulsory strata managers need to give proper consideration to the above proposed significant changes and should seek legal advice if met with a revocation application.

This article has been prepared by specialist strata lawyer Michael Pobi of Pobi Lawyers.

The information contained in this article is general information only and not legal advice. The accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.