ARCHERS - connecting strata communities

Managing your onsite manager

The relationship between the committee and the onsite manager is often a torrid affair - beginning with passionate mutual high-expectations and ending in a bitter protracted row. Having captured your attention with that seditious prologue, I concede that my observations are predisposed to the extent that, not surprisingly, "happily ever after" relationships rarely find their way to my desk. 

The concept of the onsite manager (the correct terminology is "caretaking service contractor") is generally sound. Traditionally, a husband-and-wife team purchase the manager's unit along with the caretaking and letting agreements with a view to working together from home. Because they own and live in a unit in the complex, they are motivated to keep the buildings and grounds maintained and repaired to a high standard and to ensure that the behaviour of other occupiers is acceptable and appropriate. They are also in a better position to provide a high level of personalised service to investor owners who choose to use the onsite manager's letting services.

However, as with (almost) everything, the system becomes fallible when you add human nature - a sprinkle of personality here and a dash of attitude there can throw the system into irreparable turmoil. Of course, there are other factors that can undermine the effectiveness of the system (e.g. the adequacy of the agreements, the involvement of employed representatives of management rights companies and franchises, the mix of investor and resident owners, etc) but I'll save discussion on those for another day.

It is my emphatic view that the biggest cause of disputes between onsite managers and bodies corporate is simply that the manager and the committee can't get along. What might start out as one person not acknowledging the other as they pass in the foyer can end up as an almighty battle between the onsite manager and the body corporate through the increasingly familiar processes of conciliation, adjudication and litigation. It's not surprising that disputes tend to be exacerbated in a community titles environment, where neighbours live (and, in the case of the onsite manager, work) in such close proximity to one another and share common facilities and services.

A couple of recent decisions in Queensland and New South Wales have a few commentators jumping for joy with claims that the process for termination of management rights agreements by bodies corporate just got a whole lot easier - in my view, that is not the case. In fact, it wouldn't surprise me if committee members who enthusiastically espouse that view end up on the wrong side of a decision in the not too distant future. But again, I'll save further commentary on this for another day.

Before discussing management issues further, let's have a quick look at the parties with whom we're dealing.

The Committee:

• is generally a group of between 3 and 7 owners with no particular qualifications or experience who volunteer their services to assist in the day-to-day operation of the body corporate.
• has an obligation to act reasonably in carrying out its functions and to act in the best interest of the body corporate and the owners.
• comprises members who are bound by a code of conduct.
• has the capacity to change dynamic and composition regularly.
• generally appoints one committee member to liaise with the onsite manager.

The onsite manager:

• is a service contractor (not an employee) of the body corporate.
• is generally represented by one or two people who have been authorised by the body corporate to perform the caretaking duties.
• is paid by the body corporate to perform the caretaking duties.
• is also authorised to conduct a letting business from the complex to provide letting services to owners who wish to avail themselves of those services.
• is bound by the relevant codes of conduct.
• is (or a related party is) a lot owner, a member of the body corporate and a non-voting member of the committee.

Good management starts with each party understanding exactly what they are required to do under the terms of the agreements. Some agreements are very specific about the duties that the onsite manager is required to carry out on a daily basis and others are very general. Although you might expect the non-specific agreements to generate more disputes, in my experience, there is no correlation between the type of agreement and the frequency of disputes.

The better-managed complexes use the duties in the agreement only as a guide - not as an excuse for the onsite manager to avoid performing a particular duty that wasn't specifically mentioned in the agreement, nor for the committee to serve a remedial action notice because a duty wasn't performed to the prescribed standard on a particular day. The committee and the onsite manager should define their respective roles and expectations under the agreements at the beginning of their relationship and update those roles regularly to ensure transparency.

Communication is vital for good management. Usually, the committee appoints a representative to liaise with the onsite manager to avoid the need to convene a committee meeting each time an issue arises. However, the appointed representative should only act in accordance with the authority given to it by the committee. Neither the committee's representative nor the onsite manager is empowered to make decisions that would ordinarily require the approval of the committee or the body corporate.

Where the relationship between the onsite manager and the committee representative deteriorates for whatever reason, the committee should consider appointing a replacement representative in lieu of forcing an unnecessary impasse in communication.

In far too many instances, the communication between the onsite manager and the committee has deteriorated to such an extent that the only communication between them is through their lawyers. As much as lawyers are always happy to take instructions, surely many of these disputes could have and should have been resolved internally.

Are we at the point that we need to amend our standard agreements to include the appointment of a mediator to resolve disputes about communication breakdowns between parties? I certainly hope not, but I have seen many disputes recently that, although they purport to be concerning the provisions of the applicable agreement, are really personality disputes. A psychologist may be just as useful in those circumstances.

As with any dispute, committees should take positive and swift steps to resolve any conflicts that arise between them or their members and the onsite manager. Committees should always keep in mind that, if proceedings are commenced, a committee's success may be determined, amongst other things, on the "reasonableness" of its conduct. 

Good luck and remember the immortal words of Benjamin Franklin - we must all hang together, or, most assuredly, we shall all hang separately. 

For further information or advice please do not hesitate to contact Andrew Suttie on (07) 3226 3944 and to find out more about him please visit>  http://www.nicholsons.com.au/andrewsuttie.htm.

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