Publications

The Tribunal & Reviews of New South Wales Caretaker Agreements
Author: Col Myers
Date: January,2010

Section 183A of the Strata Schemes Management Act 1996 allows the Consumer, Trader and Tenancy Tribunal to make orders relating to caretaker agreements for:

A.      Terminating the agreement; or

B.      Requiring the payment of compensation by a party to the agreement; or

C.     Varying the term or declaring   void any of the conditions of the agreement; or

D.     Confirming the term or any of the conditions of the agreement; or

E.      Dismissing the application.

Significantly, the Tribunal can only make an order under this section on an application made by the Owners Corporation   on one or more of the following grounds:

A.            That the caretaker has refused or failed to perform the agreement or has performed it unsatisfactory;

B.            That charges payable by the Owners Corporation under the agreement for the services of the caretaker are unfair;

C.            That the agreement is, in the circumstances of the case, otherwise harsh, oppressive, unconscionable or unreasonable. 

There are a couple of interesting points to note in respect to this section:

1.            It is quite clear that the application can only be made by an Owners Corporation and not by an individual owner in the strata complex.  As the Minister for Land and Water Conservation and Minister for Fair Trading (Ms Aquilina) said in the second reading speech when introducing this bill into parliament:

“Applications to the Tribunal will only be able to be made by the Owners Corporation concerned and individual lot owners in the scheme will not be able to launch such an application.  This is in recognition of the fact that one disgruntled owner should not be able to sue a personal beef against an on site caretaker manager and that an application should only arise when it is clear that a majority of owners are dissatisfied.”

2.            Based on the words above, I believe that an Owners Corporation would need to resolve at a general meeting to commence any action against a caretaker under this section of the legislation.  I do not believe that the Executive Committee of the Owners Corporation can commence this action without reference to a general meeting. 

3.            It is important to note that one of the exceptions to this section is that an Owners Corporation cannot challenge any existing caretaking agreement entered into before 10 February 2003 on the basis that the term (ie duration) of the agreement is excessive.  A 25 year agreement existing prior to 10^th February 2003 cannot be challenged on the basis that the term is to long or the term is otherwise harsh , oppressive, unconscionable or unreasonable.

4.            It is important when buying an existing or new management rights that you check to ensure that the remuneration being paid by the Owners Corporation for the performance of the caretaking duties is not excessive, otherwise the Owners Corporation can challenge the amount under this clause.