How changes to the Act will impact on Owners Corporation Managers

The recent passing of the Owners Corporations and Other Acts Amendment Act 2021 (the Act), will introduce additional protections for lot owners (discussed in our article 'Owners Corporation Act Changes - additional protections for lot owners', March 2021, and steps to improve the quality of owners corporation managers; ultimately enhancing protections and providing greater transparency for owners corporations. The changes will take effect from 1 December 2021.

How will the Act affect the duties and obligations of owners corporation managers?

The Act has introduced the following key amendments in respect to owners corporation managers:

1. Allowing a manager to pass some interim resolutions on matters where there are no lot owners present at a general meeting of the owners corporation
2. limiting the term of a manager’s contract of appointment to a maximum of three years
3. restricting the circumstances in which a person with a criminal record may be registered as the manager of an owner's corporation, unless permission is granted by the Business Licensing Authority
4. a manager must be covered by professional indemnity insurance
5. prohibition of certain prescribed terms in contracts of appointment such as:
   • a term requiring the owners corporation before revoking the appointment of the manager to:
     • convene a general meeting of the owners corporation; and
     • pass a special resolution, unanimous resolution or any other resolution requiring more than a simple majority of votes.
   • the automatic renewal of the contract of appointment
   • restricting the ability of the owners corporation to refuse consent to an assignment of the contract of appointment to a person appointed as the manager, other than a requirement that such consent must not be unreasonably withheld by the owners corporation; and
   • a term requiring tier one owners (more than 100 lots) or tier two owners (51 to 100 lots) to give three months or more notice of its intention to revoke the manager's appointment, and for tier three (10 to 50 lots), tier four (3 to 9 lots) or tier five owners (2 lots or services only the OC), one month or more of its intention.

The Act has also introduced additional duties on owners corporation managers including:

1. To take reasonable steps to ensure that any goods or services procured by the manager on behalf of the owners corporation are procured at competitive prices and on competitive terms
2. not to exert pressure on any member of the owners corporation in order to influence the outcome of a vote or election held by the owners corporation
3. to provide copies of financial statements and bank accounts upon request by the owners corporation
4. to disclose any commission, payment, or benefit to be received by a manager before a contract for the supply of good or services is entered. A manager must give written notice to the chairperson of the owners corporation, disclosing the commission, payment or other benefit; and
5. to disclose any beneficial relationship a manager has with a supplier.

Should you require advice on how this might impact your owners corporation, or if you are an owners corporation manager, how the Act will impact your responsibilities, please contact Chris Philactides on 03 9629 7411.