Looking after your interests!

In NSW, other than in a manner set out in the agreement itself, an owners corporation can only take steps to terminate a caretaker agreement in one of two ways.

First, by applying to the courts to have the agreement terminated because the caretaker has (allegedly) failed to perform a material duty after a default notice has been served on the caretaker in accordance with the terms of the agreement and the material default has not been remedied within the time referred to in the notice.

Second, by making an application to the NSW Civil and Administrative Tribunal (NCAT) for an order under Section 183A of the Strata Schemes Management Act 1996.

If an owners corporation wants to terminate a caretaker agreement, it is very likely that the owners corporation will do so by way of an NCAT application. An application to NCAT under Section 183A can only be made by an owners corporation on one or more of the following grounds:

  • that the caretaker has refused or failed to perform an obligation under the caretaker agreement or has performed it unsatisfactorily,
  • that charges payable by the owners corporation under the caretaker agreement for the services of the caretaker are unfair,
  • that the caretaker agreement is, in the circumstances of the case, otherwise harsh, oppressive, unconscionable or unreasonable.

In response to an application, NCAT can make an order with respect to a caretaker agreement:

  1. terminating the agreement, or
  2. requiring the payment of compensation by a party to the agreement, or
  3. varying the term or declaring void any of the conditions of the agreement, or
  4. confirming the term of any of the conditions of the agreement, or
  5. dismissing the application.

It is important to understand that an individual owner cannot make an application to NCAT for any of the above orders. An NCAT application may be made by the owners corporation only after the owners corporation has voted at a general meeting to do so.

Reducing the risk

To avoid an application being raised against your caretaker agreement you should consider the following tips and how they may apply to you. Never underestimate how a small or insignificant dispute with an owners corporation executive committee or member can quickly escalate into a full on dispute.

Do your absolute best to clear up a pending problem before it becomes a festering sore.

Isolate the agitator

If you have one or more committee members who are being unfair or unrealistic in their demands and you cannot resolve the matters with them, ensure that you make the rest of the committee and/or the owners aware of how unreasonable these people are being. Many a motion is decided on only a handful of votes at meetings with only a handful of attendees.

If the matter just won’t go away, get your lawyer involved and try and have the dispute mediated. In many instances, mediation works and is relatively inexpensive.

Litigation must only ever be an absolute last resort  

It is expensive, debilitating to your business and personally distressing.


Col Myers

Col Myers is Principal and Accredited Property Law Specialist at Small Myers Hughes

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