Discover The Steps To Change Body Corporate Managers In Victoria
We aren’t surprised that owners are confused about how to change body corporate managers. Some websites say you can only change managers at an annual general meeting, some say you need to follow the steps in the contract of appointment, some say you need 75% of all owners to agree.
Put simply, an ordinary resolution is required to appoint a new manager. There are four ways to pass ordinary resolutions and change body corporate managers in Victoria:
- Special general meeting
- Annual general meeting
The best option will depend on the specifics of your property and your position, such as whether you’re an owner or committee member, how many owners there are and how many owners are supportive of changing body corporate managers.
Whichever option you proceed with, the decisions must be noted in writing (either ballot results or meeting minutes) and this must be provided to the terminated manager.
How can the committee change body corporate managers?
As a starting point, the committee is delegated the authority at each annual general meeting to make decisions and pass ordinary resolutions on behalf of the owners corporation.
Just like any other decision made by the committee, there are two ways for the committee to change strata managers:
Option 1: Committee meeting
The chairperson can call a meeting (in person, teleconference, video meeting) where all committee members are invited. At least 50% of committee members must be present at the meeting, and the majority vote will decide.
Option 2: Committee ballot
The chairperson can call a ballot by email or post and circulate the resolutions to change managers. Again, at least 50% of committee members must respond to the ballot for it to be successful, and the majority vote will decide.
It’s important to note that many managers nowadays restrict the committee from making the decision to change body corporate managers. You can double check this by reading the ‘committee delegations’ in the annual general meeting minutes. In these circumstances, the committee (through the chairperson) will need to call a special general meeting to change or wait until the next annual general meeting to remove the restriction.
How can you call a special general meeting to change owners corporation managers?
A special general meeting sounds fancy (and special!) but really, it’s just a regular meeting in addition to the annual general meeting. All owners are invited and the agenda will be circulated to all owners. The majority of those who attend the meeting will decide on who to appoint as the new body corporate manager.
Similar to an annual general meeting, if the meeting doesn’t achieve quorum (in other words, less than 50% of owners are present in person or via proxy), any decisions made to change body corporate managers is interim and become final after 29 days. Minutes of the meeting must be distributed to all owners.
As an example, you could have 5 out of 50 owners attend a meeting held on 1 March. If 3 owners voted to change managers then those decisions would be interim until 29 March, assuming there are no petitions against the resolutions.
A special general meeting can be called by:
- The chairperson or secretary
- An owner nominated by 25% of owners
- The (current) manager acting on authority from the committee or 25% of owners
How do I get the contact details for all the owners?
There’s a document called ‘the owner register’, which is a list of the names and postal addresses for all owners. As per section 150(2) of the Owners Corporations Act, a copy of this document must be provided if an owner requests this.
This information isn’t subject to any privacy laws as it’s publicly available upon conducting a title search (which any person can do, regardless of whether they’re an owner or not). However, phone numbers and email addresses are highly unlikely to be included in the register and are subject to laws relating to privacy.
How do you run a ballot to change strata managers?
A ballot (also referred to as a postal ballot) doesn’t necessarily need to be done by post. Nowadays it can all be done over email if you have the emails for owners.
After obtaining the owner register, the ballot with the resolutions to be voted on will be sent to all owners. The ballot must be open for 14 days, and at least 50% of owners must respond for the ballot to be valid. The majority of responses will decide on whether to appoint a new owners corporation manager.
How do you change body corporate managers at the annual general meeting?
The easiest way to change strata managers at the annual general meeting is for the first discussion point at the meeting to be about terminating the current body corporate manager. After all, you don’t want to sit through 30 minutes of a meeting if you know you’re appointing someone else, right?
An owner can request that a resolution is included to vote to appoint a new body corporate manager. The outcome of the vote will be based on the majority of votes from owners present at the meeting in person or via proxy. Like the resolutions made at special general meetings, if the meeting doesn’t achieve a quorum, then they will become final after 29 days of the meeting.
While the benefit of changing managers at the annual general meeting is that you don’t need to get the owner register, there is the risk that you may catch other attendees off guard if you haven’t consulted them about whether they would also be supportive of changing body corporate managers. In our experience, the best way is to approach owners beforehand and ensure that those who are supportive of changing will attend either in person or via proxy.
What are some incorrect myths about the process of changing body corporate managers?
Management companies sometimes, unfortunately, like to use some of these lines to either prevent owners from changing managers or make it more difficult. We want you to have the certainty that all these ‘excuses’ are invalid.
- The contract of appointment says you can only change managers at an annual general meeting (or the contract imposes a higher threshold of owners who need to agree).
- If you change managers, you have to pay out the rest of the management fees (or annual body corporate fees) until the end of the contract
- You have to give the manager the reasons you want to change in order for the change to be valid
- If a meeting or ballot is called, it’s only valid if the manager is notified and attends
Which option of changing owners corporation managers is best for me?
As you might have gathered, different options may be best depending on your circumstance.
The committee option is best for committees (obviously).
The special general meeting option is best if you’re on the committee but restricted in making the decision to change body corporate managers or you’ve reached out to enough owners who are also supportive of the change.
The ballot option works best if there are a small number of owners at the estate as you need at least 50% to respond for the ballot to pass. It’s also probably better if you have most owners’ email addresses as sometimes owners don’t tell their body corporate manager of their new postal address.
Changing at the annual general meeting may be best if you already have one coming up and you have the support from other owners who are also coming to the meeting. It also helps if you feel comfortable telling a manager to their face that you want to terminate their services.
How Resi can help you proactively through the process (no matter what option you decide to go with)
Our specialised team at Resi can guide you through every step of the way. We can provide the resolutions for you to circulate, and circulate them on your behalf where it’s in line with the legislation. We can also attend any formal or informal meetings to explain the process to owners and demonstrate that it doesn’t have to be difficult to change body corporate managers.
If you’re ready to take the next steps, contact us on 03 9017 5395 for a confidential discussion about how we can help you improve your townhouse estate.