Owners corporations

A manager of an owners corporationA body corporate created by regis­tration of a plan of subdivision or a plan of strata or cluster subdivision. See also prescribed owners corporation. who receives a fee or reward must be registered (s 119). The penalty for non-compliance is 60 penalty units (pu) (from 1 July 2020 to 30 June 2021, the value of one pu is $165.22) (s 178). A registered manager must:

• pay an annual registration fee to the Business Licensing Authority (s 183);
• actA written law made by parliament. Also called an ‘Act of parliament’, ‘statute’ or legislation. honestly and in good faith in the performance of the manager’s functions;
• exercise due care and diligence; and
• not make improper use to gain an advantage personally or for any other person (s 122(1)).

A volunteer manager has similar immunity to a committee member (s 123). Such immunity may be viewed as alleviating the need to have office bearers’ liabilityLegal responsibility, enforced by civil or criminal courts. insurance, although the prospect of funding a legal defence(1) A defendant’s response to the legal claims made against them in court by a prosecutor or plaintiff. (2) A lawful excuse for conduct: for example, causing minor injuries to someone while saving them from certain death. (3) ‘The defence’ is also a way of referring to the defendant and their legal team. is a considerationSomething of value, such as money, given by one person to another person as part of a contract..

The manager of an owners corporation must submit a report of the manager’s activities to each AGM, including details of professional indemnity insuranceA type of insurance that covers a person against a claim that they did not take enough care in doing their job. Lawyers and prescribed owners corporations, for example, are required by law to take out professional indemnity insurance. held (currently $2 million) (s 126). Records must be returned, not merely made available for collection, within 28 days of the manager’s appointment being terminated (s 127) even though fees to the manager may remain outstanding.

If the manager does not comply with section 127, the owners corporation must commence legal proceedings against the manager. To do this, 75 per cent of the owners corporation members must agree to a special resolution (s 18). Achieving this may be difficult considering the manager holds the records of the names, addresses and contact numbers of the owners corporation members. Therefore, in such circumstances, VCAT allows a single member to make an application on behalf of an owners corporation under section 165(1)(b).

Under section 119(6), an owners corporation can dismiss a manager. Once the manager’s appointment is revoked – even if the term of employment has not ended – there is an absolute obligation under section 127 for the manager to return funds and records within 28 days. A committee may dismiss a manager unless the owners corporation decides that the manager can only be dismissed at a general meeting (see s 82). Any term in the manager’s employment contractAn agreement that the law will enforce. stating that the decision to dismiss a manager can only be made at a general meeting is invalidNot valid; with no legal effect and not enforceable at law. For example a legal provision or document may be invalid because it is not in proper legal form. under section 202 because it excludes, modifies or restricts the operation of the OC Act.

When a manager is dismissed before the end of the term of their employment, the manager may be able to sueTo take legal action in a civil case. the owners corporation for breach of contractbreach of contract Failing to do what was agreed in a contract.. In such circumstances, damagesA court order for money to be paid to someone to compensate them for a loss suffered as a result of a civil wrong or breach of contract. For example, a person who caused a serious permanent injury to another person can be ordered by the court to pay damages that compensate the injured person for their loss of income from being unable to work. See also aggravated damages; compensatory damages; general damages; liquidated damages; nominal damages; special damages. are limited to the loss of profits for the unexpired term and not the agreed fee for that period.