Strata managers' aversion to contact with tenants can leave strata managers exposed to personal liability

 by Ganesh Sahathevan 

   Advice for living in, or buying into, a strata community

Strata managers are employed to manage strata schemes which are often home to renters as well as owners. However, in evasion of that which they are paid to do there are instances where strata managers have attempted to evade their duties by refusing to  deal with tenants.  Even this writer can recall an instance where the strata manager warned that it was against the law for tenants to contact him directly. 

The instances where strata managers have refused to deal with tenants occur when the issues raised concern fairly pedestrian maintenance issues, for example blocked plumbing and the like. Having said that, tenants do actually have a legal right to a great many things, including being informed (and presumably make representations) when strata schemes consider re-development.

Strata managers who seek to stand in place of strata committees  are even more exposed to liability for the loss and and damage from denying tenants their rights, for as explained below, they take on the responsibilities of owners when they do so. 

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 by Ganesh Sahathevan

The ABC's investigation into strata management industry misdeeds and the reforms the NSW Government has promised  is also interesting for it reveals how strata managers by  assuming  either directly or indirectly control of the management of the strata schemes they are hired to manage, assume the liabilities that come with that power. 

Strata managers may under ordinary circumstances be fiduciaries vis-a-vis strata unit owners and that alone can expose them personally to liability for any loss or damage suffered in or at the buildings under their schemes. While the rules with regards who may or may not be considered a fiduciary are complex Bugden Allan Graham Lawyers has published on its website an easy to read and informative summary of the law in the area.  

However, in the cases reported by ABC's Linton Besser and Ninah Kopel there is evidence of strata managers acting   as if they were themselves the strata committee, deciding what may or may not be in the best interest of the scheme. The ABC has reported these as instances of conflicts of interest, but underlying such conduct is an assumption that what is best for the strata manager, the fiduciary, is also in the best interest of the scheme.

Assuming such power is not without costs, for by doing so the strata manager becomes, in effect, the scheme, and assumes all the liabilities that the scheme is exposed to. That can include liability for damage to the building, or even persons injured on the premises as for example the caretaker in Borg v The Owners – Strata Plan 64425 [2010] NSWDC 203 discovered. Strata managers say and do things in the course of their dealings with scheme unit owners and thus the liability may not be limited to anything that may be in any written contract for services. Besser and Kopel report that strata managers are preying on the ignorance of unit owners, but the real ignorance may well be in the  ignorance of owners and managers of  the strata managers' liability. 

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