Strata Manager’s Duties under the Strata Title Act Amendments

16 Aug 2019

Owners of strata-titled properties can expect changes to strata management when the amendments* to the Strata Titles Act 1985 (WA) (the Act) become law. One of the major changes to the legislation is the introduction of statutory duties for strata managers.

This article will look at some of the new standards imposed on strata managers, and what this means for strata council members.

Why the reforms?

The previous legislation did not acknowledge the role of strata managers, nor were there any regulations in place to govern strata managers.

Until now, good strata management has been the result of diligent work by strata managers who happened to subscribe to high standards. There were no minimum standards for strata managers to be held to, nor were they held accountable by any statutory obligations. As a result, the rights and duties of strata managers and lot owners were not always clear.

The reforms will make strata managers more accountable and require them to deliver high standards of professional services to strata companies.

What are the new duties for strata managers?

The new statutory duties will establish a set of standards that will contribute to the effective management of a strata company.

The new duties for strata managers will include:

  • minimum education requirements (which will be set out in the regulations);
  • an obligation to have a strata management contract signed with the strata company. These contracts must contain requirements outlined in the amendments;
  • holding the strata company’s funds in a trust account that can be audited;
  • disclosing any conflicts of interest or commissions received;
  • obtaining policy clearance and professional indemnity insurance;
  • avoiding improper use of information or their position as a strata manager; and
  • having a substantial working knowledge of the Act.

“The reforms will make strata managers more accountable and will require them to deliver high standards of professional services to strata companies.”

*Strata Titles Amendment Act 2018 (WA)

Why is this important for strata council members?

To best fulfil their role, council members should be aware of the statutory duties owed by the strata manager to the strata company. This will enable the council to select a suitable strata manager. Furthermore, if the strata manager does not comply with their statutory duties, the council can resolve to take legal action against the strata manager.

For lot owners, the reforms will provide a higher level of protection, as well as greater clarity as to what the duties and obligations of a strata manager actually are.

 

Key points

  • Strata managers will be subject to new statutory duties
  • If breached, their contract with the strata company may be terminated
  • The reforms aim to clarify strata managers’ duties and provide a higher level of protection for lot owners

What can be done if strata managers are not fulfilling their duties?

Once the amendments are in place, the strata company will be able to terminate the strata management contract if a strata manager breaches any of their statutory duties. This is in addition to the rights they should have under the strata management contract.

The strata company will also have the right to seek remedies from the State Administrative Tribunal if there has been any wrongdoing by the strata manager. Those remedies may include obtaining orders that the strata manager pay damages to the strata company. This could apply where the strata company has suffered a financial loss resulting from a breach by the strata manager.

 

When do the strata reforms come into effect?

The amendments are expected to come into effect at the end of 2019. These amendments will be accompanied by a range of regulations to assist in the operation of the legislation as a whole.

 

Conclusion

In order to make the most of the reforms, strata councils should make themselves aware of the new standards and statutory duties of strata managers.

This will enable strata councils to be better equipped to oversee strata managers and protect the interests of lot owners.

 

Contact

For more information please contact: Anthony Quahe

 

Disclaimer: This article contains references to and general summaries of the relevant law and does not constitute legal advice. The law may change and circumstances may differ from reader to reader. Therefore, you should seek legal advice for your specific circumstances. The law referred to in this publication is understood by Civic Legal as of publication date.