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Owners’ Corporation Law - November 2016

25 Oct 2016

How to communicate with OC managers

The owners’ corporation management industry is well overdue for a shake-up. Even the very best managers that I deal with agree that the cowboy managers out there in strata-land (and there are a few of them) are spoiling the industry.

Consumer Affairs Victoria 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 two years. 

The current government has seen fit to delay the introduction of these reforms until at least 2018 when the Owners Corporation Act reforms are introduced. 

It remains to be seen as to whether these reforms will even be introduced prior to or after the next election, and if the current government is returned by the people of Victoria. 

In the meantime, owners’ corporations will just have to continue muddling through.

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

These three “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 your 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 managers’ contracts (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 FAGMs and any early committee meetings where the developer controlled the committee, as 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 AGM 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 has not been before at least a dozen other buildings before. 

Having said that, nothing surprises me in the strata industry these days …

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