Dispute with Managers - One of the Side Effects of COVID-19?

03 November 20

DISPUTE WITH MANAGERS – ONE OF THE SIDE EFFECTS OF COVID-19?


Building Managers and COVID-19


Community living can be challenging at the best of times, but since COVID-19 started to impact our lives, I have seen an increase in disputes between Building Managers and Strata Committees in NSW.

I have no doubt that this has come about because of the increase in the number of owners that have been unit bound and who seem to have nothing better to do with their time than to watch their Building Manager perform their daily duties. Things that might ordinarily be dismissed or not even noticed at all, are now under scrutiny on a daily basis.

Managing these disputes can be tricky, as Managers are usually balancing the benefit of doing everything they are asked to do to make the issue go away, versus the time and resources required to do so (which no doubt Managers would rather be using elsewhere). Managers don’t want to find themselves in a situation where some small and previously insignificant issue results in the Owners Corporation serving a default notice for a breach of the Building Manager's duties.

Many disputes can be resolved quickly if they are discussed openly. This is the ideal approach and should be your first strategy to avoid matters escalating beyond a simple misunderstanding.

If this doesn’t work however (and before words like “see you in court” or “I’m going to sue you for all you’ve got” get thrown around), participating in a mediation should be your next step.

Mediation

Mediation is an informal negotiation process which is aided by the presence of a neutral mediator who helps the parties come to an agreed settlement. The intention of mediation is to give both sides the opportunity to sort issues out in a way that works for everyone.

Disputes between Building Managers and Owners Corporations are well suited to mediation. The NSW Office of Fair Trading provides a free mediation service that can be used by Building Managers.

The mediator’s role is to:
 help identify the issues in dispute; and
 assist the parties to raise and consider options and strategies by which the issues may be addressed.

Professional mediators are skilled facilitators who will assist in ensuring both sides are heard. The mediators' job is to be impartial and their primary role is to encourage open communication that is both respectful and productive.

At mediation, issues can be considered, decided and actioned by both the Owners Corporation and the Building Manager.

All the relevant people involved in a dispute should attend the mediation session. This includes the Building Manager’s representatives and the key Strata Committee members.

Solicitors are only present at a mediation if the other parties approve.

Preparing for Mediation

You should be fully prepared when you go into a mediation session and bring any relevant documents or photographs you might need.
Before entering mediation you can also get your own legal or other advice, and this is recommended for complex matters or matters that relate to your rights and obligations under a contract.

The Mediation

At a standard mediation, each party will have an opportunity to briefly describe the dispute and state what they are hoping to achieve from mediation. The mediator will then help the parties discuss and explore the issues, identify options and negotiate possible settlements.

When an agreement is reached during the mediation, the mediator can help draft a written agreement that reflects what has been agreed. Agreements made during a mediation can also be made into an enforceable order if both parties consent.

There is no fee charged by NSW Fair Trading for the mediation services they provide. Everyone is responsible for their own costs incurred in the lead up to, and during, mediation, unless it is agreed otherwise during the mediation.

Where to if Mediation Doesn’t Work?

For a dispute between a Building Manager and an Owners Corporation, if the issue is not resolved by mediation, an application can be made to the NSW Civil and Administrative Tribunal. Most disputes between a Building Manager and an Owners Corporation will need to go through the mediation process before the matter will be looked at by the Tribunal.

As with mediation, it is in your interest to attend the Tribunal when your matter is being heard. If you’re unable to attend in person, you can request a telephone hearing or present your case in written form.
You can appoint a solicitor to represent you at the Tribunal, however, whether you win or lose, each party will generally have to bear their own legal costs as the Tribunal, in most circumstances, does not have the ability to have the loser pay the winner’s costs.

Things to remember

If you are a Building Manager and you find yourself in a situation where the Owners Corporation are looking closely at the performance of your caretaking duties, don’t ignore their emails and phone calls and instead, proactively address their concerns. If you take action sooner, rather than later, you will save yourself stress and money in the long run.

Note, however, that all is not lost just because the Owners Corporation issue a termination notice. Remember that:
 The Strata Committee alone cannot terminate a Building Manager’s agreement.
 The termination of a Building Manager’s agreement must first be authorised by a majority resolution of the Owners Corporation at a general meeting.
 Any termination process set out in the Building Manager’s Agreement (eg issuing a notice to remedy) must be followed exactly to be effective.
 If the Owners Corporation fails to correctly follow the termination process set out in the agreement, it may, itself, be in breach of the agreement.
 

Article Written by Col Myers of Small Myers Hughes Lawyers
Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice. 

Additional Documents

Click here to download: 2020_11_Nov___Dispute_with_Managers___One_of_the_Side_Effects_of_Covid_19.pdf

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