Owners Corp / Strata manager and Developer

After some research, I have come to known that the developers are responsible for setting up owners corp at the beginning when the units are built (the developers are basically the one owners at the beginning). What I am wondering is whether the developer could appoint themselves as the owners corp manager for the first year before we settle on the property? I'm saying this for the first year as I'm assuming, after all the purchasers buy out all the remaining units, the owners / purchasers could opt to appoint a different manager if required at the next annual general meeting.

 

The laws vary in each state. In some states the strata Manager is appointed once 50% of the units have settled and the first meeting of the body corporate is held. In Qld the developer often sells the management rights so the BC has no say in the matter.

 

These days, particularly with larger developers in Victoria, it's common for the developer to appoint an OC manager for an initial term of three to five years. This occurs at the first AGM of the OC, when only the developer is present because they still own all the lots. The rules of the OC also commonly lock in a number of benefits for the developer, while they still own any lots in the building.

 

The new legislation in NSW (Strata Schemes Management Act 2015) has a number of new sections to try to stop this nonsense. Limiting term of the managing agent to 1 year at First Annual General Meeting and 3 years for each appointment thereafter. Can't appoint related party to be agent until 10 years after the Plan is registered. A few other bits and pieces.

Sorry, not sure about Vic but what you identify is acknowledged as an issue and our recent strata law reform is trying to address it.

 

I'm in NSW. We have appointed a new strata manager to replace the previous one appointed by the developer. The process was fairly easy. The new agent will help facilitate the whole process and of course, you need to convince other owners to achieve quorum.

Now other question is if the developer has an office or unit in the building, then can still be part of the executive committee or body corporate which can still influence the decision making process.
Is there a regulation to not allow developer in the body corporate as this may be a conflict of interest?

 

Russ, one would hope that the NSW legislation addresses any conflict of interest issues and should be considered by all the other states...

 

Sorry for the late reply. I just posted about the issues of conflict of interest, who can be your agent, and who can be on your committee at Who said Owners Corp meetings are boring?.

Ted, these protections are well-intentioned but far from perfect. The emerging joke with strata lawyers is how thick the amendment bill will be, once the new legislation commences and we start to see how many gaps need to be plugged.

I'd like to think that the states will borrow successful concepts off each other. Once challenge to that is the 'Australia problem' - separate states and evolution of laws in each, so things can't always cross-over easily. Like train tracks!

 

Thanks for your advice Russ.

I'm sure a number of strata residents will find your comments very helpful (and also avoid staying off the tracks if any trains are coming the other way...)

 

It's a jungle out there! Hope I can help

 

I hear that the new NSW strata laws are now being held back until September.

The wheels of change seem to move very slowly...

 

You are well informed Ted!

September at least, but with the regulations due for (deferred) release in March, there's still time for it all to slip further