18 Feb 2014 Terminating your Owners Corporation manager.
Most Owners Corporation committee members are unaware of the requirements to legally terminate their Contract of Appointment with their Owners Corporation manager. Here at Iconic Strata Management we provide you some insights into the legal requirements and timeline that you can work with to achieve a satisfactory outcome for your Owners Corporation.
The Legal Stuff;
Your Contract of Appointment with your current manager will specify that you need to give at least 28 days’ notice of your intention to terminate their contract. The minimum notice of 28 days must be before the expiry date of the contract.
A contract is a legal binding document between two parties and cannot be terminated before expiry date unless mutually agreed by both parties. All contracts will outline conditions of termination.
If you do not give notice to terminate the Contract of Appointment in sufficient time, your Contract of Appointment will automatically roll over for a further 12 months at the expiry date.
The decision to terminate your manager’s Contract of Appointment is a decision of the Owners Corporation and not a decision of an individual member or committee. Generally the elected committee decide that a change of management is required. The chair person and/or secretary can convene a Special General Meeting (SGM), and issue a notice to all members of the Owners Corporation outlining the motion to terminate the current Contract of Appointment with the current manager. The Owners Corporation by ordinary resolution can terminate the Contract of Appointment. An ordinary resolution requires at least 50% of all lot entitlements voting in favour. Most Contracts of Appointment coincide with the date of the AGM, so action is required well before attendance at the Annual General Meeting (AGM). Action can be via an SGM or postal ballot.
Because most AGM’s and SGM’s held by Owners Corporations fail to achieve a quorum (50% of owners) either physically attending or giving their proxy, any decision made to terminate the current manager will only be an interim decision and a period of 28 days must pass with not less than 25% of owners objecting to the decision for the decision to become final.
Notices of an AGM or SGM must be sent to all owners at least 14 days prior to the meeting date. An AGM or SGM may be called by the Owners Corporation Chairperson or Secretary. An SGM may also be called by any lot owner whose lot entitlements total at least 25% of all lot entitlements.
It’s All About Timing:
The most important first thing is to know when your current Contract of Appointment with your current manager expires. Once you have this detail you will be able to start planning your own timeline for divorce. Not allowing sufficient time to take all the legal steps necessary could mean you are locked in with your underperforming manager for a further 12 months.
Want to know more?
We at Iconic Strata Management have produced an Owners Corporation “Manager Divorce Kit” that gives you all the information necessary to lawfully part company with your underperforming Owners Corporation manager. Either drop us an email at email@example.com or call (03) 9982-1300 and we will happily send you a free copy of this handy guide.