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A Royal Commission into industry scandals

Owners’ Corporation Law - Dec 18 - Jan 19

05 Dec 2018

Happy with your OC manager? Most are

The owners’ corporation (OC) management industry is well overdue for a shake-up.

Certainly, there are some excellent OC managers out there in the marketplace who do a terrific job, and those excellent managers are well-incentivised (as is the case in any industry).

However, there are some poorly-performing OC managers who simply shouldn’t be in the industry and are bringing the rest of the profession down a notch or two at least in the eyes of the committees they serve.

Consumer Affairs Victoria (CAV) has legislation all drawn up to clean up the industry to introduce much-needed regulations and reforms.

However, this legislation has been collecting dust on the bookshelf at Exhibition St for the past four years. The current government has seen fit to delay the introduction of these reforms until at least mid-2019 when the Owners Corporation Act reforms are introduced.

In the meantime, OCs will just have to continue muddling through.

I advise my clients that a building is only as good as its building manager and OC manager.

These two “run” the building’s daily operations, and should leave the committee to simply administer the building by approving quotations, periodically checking expenditure to ensure the budgets are being adhered to and to provide further instructions to the manager. Pretty simple stuff really, huh?

Committees that don’t have the above management model flourishing in their buildings need to look very carefully at the roles their managers are playing and what their expectations are. A good place to start will be the source documents and the standing delegations to the manager that would have been provided by the developer at the first annual general meeting (FAGM) or by an earlier committee decision.

The OC manager’s contract (which should be in the approved form) will contain the schedule of duties that the OC manager must perform to earn the base fee. The contract will also contain the duties that manager shall perform for an additional hourly rate.

Committees should also take care to review the minutes of the FAGM and any early committee meetings where the developer controlled the committee because the minutes of these meetings will likely specify the standing delegations (if any) that have been provided to the OC manager.

If those delegations stretch too far (or not far enough, as the case may be) then these can be reviewed at the next annual general meeting for the building.

The terms of appointment and the procedure for automatic rollovers and extensions should also be well understood by the committee. Moving from one OC management company to another can be a very stressful and laborious process. It is best practice to start this process early and with strong communication to the current OC manager about performance expectations.

Finally, communication is a two-way street. OC managers have a lot of experience in acting for hundreds of buildings and they are best-placed to provide case studies and help to solve problems for committees by suggesting solutions that have worked for other buildings.

Remember, there is hardly ever a unique situation that a manager has not seen before in at least a dozen other buildings.

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