Strata management reforms: An eye to the future

Term of appointment as strata manager

24 November 2020

This article is part of the Strata management reforms series.

On 30 November 2016, landmark reforms to the strata management framework came into force in New South Wales. Now, with the five-year review of the Strata Schemes Management Act 2015 and the Strata Schemes Development Act 2015 imminent, the REINSW Strata Management Chapter Committee has harnessed the collective knowledge and experience of members to craft a case for further essential reforms. The articles in the Strata management reforms series outline the proposals REINSW has presented to the NSW Government.

You can access all the articles in the Strata management reforms series here.

The term of appointment for a strata manager appointed at the first Annual General Meeting of the Owners’ Corporation should be extended from 12 months to 15 months.

Section 50(1)(a) of the Strata Schemes Management Act 2015 (NSW) sets out that where a strata manager is appointed at the first Annual General Meeting of the Owners’ Corporation, the term of appointment is 12 months.

Gary Adamson, Managing Director of Strata Management Services NSW and Chair of the REINSW Strata Management Chapter Committee, explained that this limitation on the term of appointment poses practical problems.

“Twelve months is a very short period of time, particularly in the early stages of a building’s lifecycle,” he said. “It takes time to get the records for a strata scheme up and running, and start to understand any issues that may be impacting the building.

“The reality is that the second Annual General Meeting will likely be held outside the 12-month term of appointment. Therefore, in order to have the authority to do things like prepare the annual accounts and other documentation, issue meeting notices, and then convene and run that second AGM, the strata manager’s appointment needs to be extended.

“Successive three-month extensions to the strata manager’s term of appointment are possible by virtue of section 50(4), however, in each case, there must be a meeting of the Strata Committee to do so. Having to convene these meetings at such short intervals for the sole purpose of extending the strata manager’s term of appointment imposes an unnecessary administrative burden. It also results in more management fees being charged to the lot owners.”

REINSW recommendation

REINSW recommends that section 50(1)(a) of the Strata Schemes Management Act be amended to extend the term for a strata manager appointed at the first Annual General Meeting to 15 months.

“Doing so will overcome some practical difficulties, including the onerous step of convening a Strata Committee meeting for the sole purpose of extending the strata manager’s term of appointment by three months,” Gary said. “It will remove the unnecessary administrative burden, reduce unwarranted management fees and provide the strata manager with sufficient time to prepare for the second Annual General Meeting.

“Importantly, there’s no downside for lot owners in making this amendment, as it will allow for more efficient and effective management of the strata scheme.”

If you would like to provide feedback about any aspect of the strata management framework, please email your comments to chapters@reinsw.com.au.

For answers to your strata management questions, please contact the REINSW Helpline by calling (02) 9264 2343 or emailing helpline@reinsw.com.au.

Useful links

Want more?

Related articles