Responsibility for Strata Management

ARE THERE SITUATIONS WHERE A COUNCIL IS NOT RESPONSIBLE FOR STRATA MANAGEMENT?

In another article we described that the term strata management is not comprehensively defined and is very broad. The Strata Property Act presumes is that the strata council is responsible for strata management (sections 4 and 26 of the Act). It is important to understand that being responsible for strata management does not require that the strata council members perform all the tasks required for strata management. The strata council can delegate authority, but it ultimately is responsible for the actions of the person that they delegate to.

There are two situations where a strata council is not responsible for strata management – when the owners direct the strata council and when an administrator has been appointed.

HOW CAN OWNERS TAKE RESPONSIBILITY FOR STRATA MANAGEMENT?

Owners can take responsibility for strata management by their power to direct or restrict the Council in its performance of its duties. This direction is done by a resolution passed with a majority vote at a general meeting (subject to the limitations in section 27(2) of the Strata Property Act).

It is important to understand that a direction of the Council by a majority vote cannot apply to something that requires a resolution passed by a ¾ vote. As an example, the resolution could not direct the Council to make a significant change to the use of Common Property because a significant change in the use of Common Property requires a resolution passed by a ¾ vote.

IF AN ADMINISTRATOR IS APPOINTED IS THE COUNCIL STILL RESPONSIBLE FOR STRATA MANAGEMENT?

When the Supreme Court has appointed an administrator and ordered the administrator to exercise all the powers and duties of the strata corporation (as provided under section 174 of the Act) the Council is no longer responsible for strata management.

The situations in which an administrator may be appointed are beyond the scope of this article, but the court must have the opinion that the appointment of an administrator is in the best interests of the Strata.

CAN A COUNCIL AVOID RESPONSIBILITY BY DELEGATING STRATA MANAGEMENT TASKS?

It is important to understand that the Council remains responsible for strata management even if the Council resolves to delegate some or all of that responsibility to another person or persons, including a person licensed to provide strata management services for a fee.

For example, if a strata council delegates to someone the authority to sign a contract the strata council remains responsible to ensure that the Strata has the authority to enter into that contract.

As another example, if a strata council delegates to someone the authority to warn an owner that they owe a debt to the Strata the strata council remains responsible to ensure that owner does owe a debt.

ONLY IN VERY LIMITED CIRCUMSTANCES CAN A COUNCIL AVOID BEING RESPONSIBLE FOR STRATA MANAGEMENT

Except in very limited circumstances, the Council is responsible for strata management. It is important that the Council understand that delegation of their authority does not remove responsibility.