Question: We are lot owners in a small 8 lot commercial strata building. What is the procedure for appointing a new strata manager? What happens if this procedure is not followed?
Answer: It is critical that the termination of the current manager be effected strictly in accordance with the strata management agency agreement which is a legally binding contract.
The procedure for appointing a new strata manager
While the termination of the current and appointment a new strata manager must be done by ordinary resolution at a duly convened general meeting of the Owners Corporation, it is critical that the termination be effected strictly in accordance with the strata management agency agreement which is a legally binding contract.
Usually contracts can be terminated by mutual agreement and otherwise, only in case of breach of contract by that strata manager and in case of breach, usually a period of time to permit the strata manager to rectify its breach must be given prior to taking the step of termination.
Take care to ensure the procedure for termination of the current agent under the existing contract is adhered to strictly and it is recommended you seek legal advice in this regard. If this procedure is not followed, the Owners Corporation might expose itself to a lawsuit for damages for the wrongfully terminated agreement.
In addition, the owners corporation may restrict the strata committee’s power and determine that such restricted matters be determined only by the owners corporation in general meeting.
Please note that this article is provided for information purposes only and is not a substitute for professional legal advice.