www.teyslawyers.com.au © Copyright TEYS Lawyers 2013 Nicole Wilde, Senior Solicitor, TEYS Lawyers Melbourne (03) 9600 1128

A Sneak Peek at the Latest VCAT Strata Decisions

Manager Challenges Lot Owners and Owners Corporation’s Desire to Terminate Management Agreement

A 5-lot scheme was managed by a lot-owner who allegedly failed to properly account for trust money, concealed the fact that legal proceedings had been commenced against the owners corporation and settled proceedings on behalf of the owners corporation without authority.

Two lot owners and the owners corporation commenced VCAT proceedings to require the removal of the lot-owner manager after the manager refuses to accept his termination and hand over the owners corporation’s records.

VCAT made a number of findings in this case including:

1. The manager’s conduct in this case repudiated the written management agreement;

2. The Owners Corporation were entitled to pass an ordinary resolution to terminate the management agreement.

The manager’s misconduct in this case was very serious.

An owners corporation seeking to terminate a written management agreement should be careful to take independent legal advice first. Terminating a contract incorrectly could expose the owners corporation to a potential legal claim for damages by the manager for breach of contract.

Case Reference: Owners Corporation No 1759 v Giurina (Owners Corporation) [2012] VCAT 643

1 October 2013