Owners Corporations and the facilities they manage are potentially complex and demanding of both time and responsibility – often involving large amounts of stakeholder money and with severe consequences associated with legislative breaches.
Beyond that – a poorly performing OCM leads to an unhappy community with disgruntled residents, disappointed owners and reduced interest from potential buyers.
Regular auditing of the performance of an incumbent OCM should be considered a major part of the OC executive management committee’s responsibility – ensuring that costs of the services provided are competitive and represent good value.
On occasion, the result is a decision by the OC Executive Committee to replace the current provider.
This is a summary of the process and should not be considered legal advice – that said, let’s assume that the OC executive committee has, as a result of ongoing concerns explored through open discussion and documented consultation and mediation with the manager, determined that the relationship is terminal.
Review the contract of appointment – Confirm that it is consistent with s.119 of the Owners Corporations Act 2006. It will specify that it cannot be terminated before expiry date unless mutually agreed by both parties- subject to the conditions of termination.
It will state that you need to give at least 28 days’ notice of your intention to terminate the contract and that the minimum notice of 28 days must be before the expiry date of the contract. (This is important – failure to notify in time will mean the contract will automatically roll over for a further 12 months!)
Next – The chairperson (or secretary) must issue a notice to all members of the Owners Corporation outlining the motion to terminate the existing Contract of Appointment with the current manager and convene a Special General Meeting (SGM).
The outgoing manager must return all records and funds of the Owners Corporation held or controlled by the manager to the OC Executive committee within 28 days of termination.
Well, with the support of an incoming professional OC Manager it is!
Before embarking on any course of action, do your homework and ask lots of questions about which OC Management group is likely to best suit your needs.
In making an assessment, we’d strongly recommend you focus on the 3 key “P” questions.
Again – Congratulations on turning around the situation and taking an important step towards creating a stronger community that is a solid investment for owners, is enjoyed by residents and appeals to potential purchasers.
* This is a summary and should not be taken as legal advice. For a comprehensive explanation of roles & responsibilities we recommend you visit: https://www.consumer.vic.gov.au/housing-and-accommodation/owners-corporations