The process to appoint a Managing agent
Before proceeding further, there are two scenarios which require different attention.
Your Management Corporation has not appointed a managing agent or the contract is expiring soon and you are looking at options. In this case, we offer the following advice:
- To appoint a managing agent, an ordinary resolution needs to be passed at a general meeting (either at the AGM or an EGM) of the Management Corporation.
- Any owner may submit a motion to appoint a managing agent, but it needs to be submitted prior to the issue of notice of the AGM, which is normally around eleven months after the previous AGM.
The motion must include specifically the name(s) of managing agent to be proposed, the fees payable and the terms and conditions of the appointment. This is necessary as the owner will need to present his findings and convince the other owners present on the merits of the appointment.
If more than one name is proposed, a voting by an ordinary resolution is required to decide on the managing agent to be appointed.
- Alternatively, the outgoing council may submit a motion to appoint a managing agent.
The council would do its due diligence by obtaining quotations from various strata management firms and interviewing them on their suitability. The council may then propose one name for voting or may present several names for the owners to decide at the AGM.
- Another alternative would be to empower the incoming council to decide on the appointment of the new managing agent and to decide on the fees and expenses payable.
The process to terminate a Managing Agent
- If your Management Corporation is currently under contract with another managing agent and that contract has some time to run, but some owners and/or the council, are unhappy with the managing agent, then we offer the following advice:
- Always try and 'work things out' with your current managing agent before making moves to change to someone new. We recommend the council formally sit down with them and talk through the issues which they find unsatisfactory.
- Do you have expectations of your managing agent which are unreasonable? Are you asking or expecting them to perform functions which are not in their contract?
- If the Council have considered the points made above, and have made clear to the managing agent what aspects of their performance they are unhappy about, then we recommend that the Council write to the managing agent and formally document their complaints and 'put them on notice'. This serves to properly document the grievances and is an important step should the Management Corporation subsequently move to terminate the contract prior to its normal expiry.
- If the Management Corporation has gone through the process of talking with the managing agent, documenting their grievances, waiting for a period for some improvement, and they have now come to the decision that they wish to proceed to terminate the manager, then the Building Maintenance and Strata Management Act details the necessary procedures:
- Under Sect 66(6)(a) of the Building Maintenance and Strata Management Act 2004, a managing agent may have their contract terminated if the Management Corporation passes an Ordinary Resolution at an EOGM to do so.
- Alternatively, the incumbent managing agent may just release the Management Corporation from the contract without having to go through the formal termination process above - obviously by this stage there is likely to be some ill will between the parties and such a release from the contract would be the easiest way to settle matters.
- In the event of a standoff, then any owner or council may call for an EGM to propose the termination of the managing agent and the appointment of a new managing agent.
The motion may read as follows: ”To empower the council to terminate the appointment of [name of managing agent] as managing agent and to appoint a new managing agent as the council deems fit and to determine the fees and expenses of the managing agent.”
- Under Sect 66(6)(b) of the Building Maintenance and Strata Management Act 2004, a managing agent may have their contract terminated by the council if the council has been empowered at the AGM to do so at the last AGM. The motion for such an appointment may read as follows: ”To empower the council to appoint a managing agent and to determine such fees and expenses of the managing agent”. Such a motion gives the incoming council the authority to appoint any managing agent and presumably to terminate if necessary since no specific directive has been given by the owners.