A Guide to Change Strata Managers
Tired of your strata manager not getting back to you, getting back to you with unhelpful responses, or (worst still) not even knowing who your appointed strata manager is from week to week? It might be time to review your strata management arrangements to ensure that your most important investment is being well looked after by a team of dedicated professionals who take your property needs as seriously as you do.
If you have taken the time to review your strata management needs and determined that it is time to make a change, you need to take work through the process of doing so. While the steps involved might seem daunting, we are here to help make the process as seamless as possible for you. Read on for a step-by-step guide to changing your strata managers and, if you have any questions, give us a call.
*Yes:
Consider earliest date/time to hold General Meeting to appoint new Strata Managers.
•No:
Consider seeking legal advice if you do not wish to pay exit fees for early termination.
*Yes:
If no EGM or AGM is approaching, you must call a Strata Committee Meeting to resolve to convene an EGM. Strata Sense can provide the motions upon requests.
•No:
If an EGM or AGM is approaching, motions should be able to be added to the Agenda for consideration.
*Yes:
3 motions to be added to the agenda including: termination of current SM, appointment of Strata Sense and change address for service of notices. Strata Sense can provide the motions upon requests
•No:
If the current SM offers to draft and include motions in the general meeting, Strata Sense is happy to assist the Committee to review before the agenda is distributed to all Owners.
*Yes:
Our recommendation is to send out brief letter to owners to explain the motions. The Committee should gather as many proxies as possible from the Owners that support the motions.
•No:
It is important that the Strata Committee is in full support of the idea to change Strata Managers
IS THE CURRENT AGENCY AGREEMENT EXPIRED?
Only under exceptional circumstances can a strata managing agency agreement be terminated midway through the contract without any exit fees. If you wish to terminate a current agreement early without paying exit fees, you need to carefully read your current management agreement and consider seeking legal advice. The other option to consider, which may or may not be commercial depending on the term of the current agreement will end, is to pay out the remaining contract term. You could also consider negotiating a mutual termination of the agreement with your current managing agent, who may be agreeable to terminate the contract early rather than staying in an unhappy partnership.
DOES THE AGENCY AGREEMENT REQUIRE to call a strata meeting?
It is important that the committee is in full support of the idea to change strata managers. Whilst the strata committee does not have the authority to terminate your existing strata manager, we often find that owners accept the strata committee’s recommendation.
Requisition of Motions to the Strata Manager for General Meeting
Prior to receiving the Notice of the Extraordinary or Annual General Meeting, your Secretary (on behalf of the Strata Committee) will need to ask the current strata managing agent to put motions on the agenda to terminate the current provider services and to appoint Strata Sense.
Strata Sense can provide, upon request, a Requisition of Motions letter which contains the specific motions for inclusion in the Extraordinary or Annual General Meeting Agenda. To meet the requirements of the Strata Schemes Management Act 2015 (NSW), the letter will need to be completed by at least one owner within the scheme. It is our recommendation that the Secretary of the scheme submit the letter, and if possible, have it signed by all the current committee members. Having the letter with the full support from the committee will demonstrate to the existing managing agent the consensus of the committee to make a change.
Our Recommendation
Our recommendation is to send out a brief letter to owners to explain the motions, the reasons for terminating the Strata Managing Agency Agreement and the process completed by the Strata Committee which led to the recommendation of a provider.
It is worthwhile trying to have the motions added to an upcoming Annual General Meeting as opposed to calling an Extraordinary General Meeting to avoid additional printing and distribution costs borne on the scheme to hold an additional meeting
Do the Committee Need to Collect Proxies Forms?
It is recommended that the Strata Committee gather as much support from owners well in advance of the meeting. This is to ensure you have a quorum at the meeting to pass the motions.
The Secretary is empowered to request contact details of the Owners Corporation from the current Strata Managing Agent at any time. Such information may allow the Strata Committee to contact owners in relation to the upcoming decision to terminate the current Strata Managing Agent or advise of an informal meeting to be held to discuss the matter. Please note that it may take the outgoing Strata Manager up to 10 days to provide this information and enough time should be allowed for this.
Please note that there are a number of requirements and/or restrictions when it comes to proxy forms including, but not limited to, the following:
1. For schemes comprising of 100 lots of more, you must provide completed proxy forms to the Secretary at least 24 hours prior to the Extraordinary or Annual General Meeting. In the absence of a Secretary, such proxies must be provided directly to the current Strata Managing Agent.
2. The total number of proxies that may be held by a person (other than proxies held by the person as the co-owner of a lot) voting on a resolution are as follows:
if the strata scheme has 20 lots or less, one, if the strata scheme has more than 20 lots, a number that is equal to not more than 5% of the total number of lots. Please note that, if a person owns more than one lot within a strata scheme, they may appoint one proxy for all lots owned despite the above restriction.
Gather Support – Our Recommendation
Our recommendation is to send out a brief letter to owners to explain the motions and recommendations being made. The Committee should also take steps to gather as many proxies as possible from the Owners that support the motions from those who may not be able to attend the General Meeting.
Your existing strata managing agent will be able to provide you a blank proxy form, however the standard one provided by Fair Trading can be viewed by clicking here. A proxy form is a legal document, it is important that the wording is not altered and that the proxy is legible, dated, and has all fields within it fully completed.
Collect Company Nominee Forms
In some instances, lots may be owned by company entities. It is important that Company Nominee Forms are completed and recommended to be handed into the Secretary at least 24 hours prior to the meeting so that the representative is eligible to vote on behalf of the company. You cannot vote on behalf of a lot owned by a company without a completed Company Nominee Form.
Your existing strata managing agent will be able to provide you a blank Company Nominee Form.
Attend the Extraordinary or Annual General Meeting and Pass the Motions
An Extraordinary or Annual General Meeting can only be held if there is a quorum. Therefore, the motions can only be considered if there is a quorum. A quorum is a minimum of 25% of lot owners (or those that are entitled to vote) in attendance at the EGM or AGM (either in person or by proxy) and that they are also financial (they do not have levies outstanding).
If a quorum is achieved, the meeting will progress. If the quorum is not achieved, then after 30 minutes the chairperson can declare those present to constitute a quorum and the meeting can proceed. Proxies collected for this meeting will be recognised in the adjourned meeting.
This motions to terminate your current managing agent and appoint Strata Sense is considered an ‘ordinary resolution ‘. What this means is that for the motion of terminating the existing manager and appointing Strata Sense, all that is required is a majority vote from those that are in entitled to vote (that is more than 50% of lot owners entitled to submit a vote- either personally or by proxy). An owner may alternatively request a poll vote immediately before or after an ordinary resolution motion is considered. If this occurs, the votes are counted based on unit entitlements, with larger lots typically having higher voting entitlements. In some instances of very close votes, a poll vote will produce a different outcome to an ordinary resolution.
SIGN STRATA SENSE STRATA MANAGING AGENT AGREEMENT
Get in touch with us so we can provide you with our appointment and termination motions.