Get Strata Management Contracts Checked by Legal Professionals

There should always be two sides to any agreement for it to be effective and fair to both parties. This is true regardless of whether it is a written agreement or a verbal one. In the world of strata management, a written contract or agreement is essential, given the complexity of the legislation and the differing roles involved in strata title management.

When a person buys into a strata scheme for the first time, s/he may not fully understand the various roles people undertake to ensure the sound management of the complex. The Act recognises that in large schemes with many lots, it is not practical for every owner to become involved in the day-to-day management. It therefore allows for the strata company to be operated by a council of the owners.

Council May Arrange a Service Contract for Strata Management

The Council in itself may not be able to run the complex effectively, and may decide to engage a strata manager to act for them. Strata management can be performed by a company or an individual, and the role of the Council is then to instruct and monitor the strata manager. The arrangements are formalised in a service contract or agreement, with the responsibilities of both parties clearly defined.

It is important that all owners are advised of the appointment, and also given a clear brief of the role itself and the services to be provided by the strata manager. Statistics show that many disputes in strata schemes arise because individual owners try to give instructions and direction to the strata manager that are in conflict with the services agreed in the contract by the Council.

Council to Instruct and Monitor Strata Manager

It is the responsibility of the strata Council to monitor the performance of the strata manager, and to undertake those responsibilities which it retained and are not part of the service contract or agreement. Contracts with strata managers are often short-term, that is, twelve months. This is so the contract can be easily terminated if strata managers do not live up to their end of the agreement.

An objective examination of the performance of the strata manager may find that a poor score card is just a perception, and cannot be backed up by evidence. Before taking this step, the Council should check the contract first to see what services should be performed by the strata manager. They may find that either these were not part of the contract, or that the nominated Council representative did not inform the strata manager of the need to carry out certain duties.

Much of this unpleasantness could be avoided if, at the outset, the parties to the agreement had it checked by their legal representatives. It is essentially a contract of employment and as such, it is a valid legal document. If a dispute should go to court, the way the contract is worded could be an issue if it has not been reviewed by a trained legal person.

The strata title laws and regulations are very complex and, for this reason, Councils are increasingly using professional strata managers who have been trained for the role. A large complex can’t be effectively managed if individual owners are taking up the time of the strata manager by expecting certain tasks to be performed for them. They should be referred back to the Council and the service contract.