WA: Q&A Who instructs the building manager?

This article is about who in WA strata instructs the building manager.

Table of Contents:

• QUESTION: We are not happy with our building management company. Can we employ our own building manager?
• QUESTION: Our building has an on-site caretaker. Some owners are concerned about the legality of this engagement.
• QUESTION: Can Council of Owner members instruct the Building Manager to undertake duties or must instruction come through the Chairperson?

Question: We are not happy with our building management company. Can we employ our own building manager?

I’m on the Council of Owners for a 200+ apartment complex. We employed a building management company that is not meeting expectations. Their staff do not appear to be experienced and they are causing a host of issues.

An owner has suggested we employ our own building manager directly. How hard is this and is this something that other strata companies have done? Is employing our own building manager a viable option?

Answer: You would be wise to seek advice from an accountant as to what basis you may employ a building manager.

The standard Schedule 1 Governance By law 8 (2) (b) states the Council may employ or engage, on behalf of the strata company, any person it thinks is necessary to provide any goods, amenity or service to the strata company.

So, in essence, the answer would be yes, however, you would be wise to seek advice from an accountant as to what basis you may employ a building manager. If they are engaged as a direct employee, the Strata Company would become an employer and have to meet all the legal obligations such as tax, superannuation and ensure the reporting met the ATO standards.

You would also need to check your own scheme by laws and AGM minutes for any restrictions that may be imposed regarding employment and ensure that your budget allows for the expense.

Andrew Chambers
Chambers Franklyn Strata Management
E: [email protected]
P: 08 9200 4200

This post appears in the December 2022 edition of The WA Strata Magazine.

Question: Our building has an on-site caretaker. Some owners are concerned about the legality of this engagement.

Our building has an on-site caretaker. Some owners are concerned about the legality of this engagement. There is a concern about the possibility that the Strata may be in contravention of superannuation laws and may become liable for long-service leave and back payment of other leave should the contract be terminated.

The caretaker is employed on a contract and has an ABN. He is paid bi-weekly on the submission of an invoice.

He does not work for any other entity.

He provides his own equipment to perform his tasks but is reimbursed for costs incurred, e.g., garden items, maintenance items, etc.

He lives on-site in an apartment provided for him by the strata. He is not required to be on-site personally and is permitted to employ a replacement person to be available.

He must work four and a half hours per day, Monday – Friday and two and a half hours on Saturday. The hours are not specified.

The contract provides for a 90 day notice period.

He is paid a fixed annual amount. From this, the monthly market-related rental is deducted for the apartment in which he resides.

1. He is paid no superannuation contributions
2. He is given no annual leave or sick leave
3. He accrues no long service leave

Are there any irregularities with this arrangement?

Answer: I strongly encourage the owners in this scheme to refer to the Fair Work Act and actually seek legal advice around this matter.

I strongly encourage the owners in this scheme to refer to the Fair Work Act and actually seek legal advice around this matter. I’m not an employment lawyer or specialist in that field, but, the warning bells that are going off for me is that he doesn’t work for another entity and that he has fixed hours on site. I’m not gonna say any more than that, but I would really encourage the owners to quickly seek some advice on this. There could be some significant ramifications and liabilities that they may incur.

It’s always a difficult one. I don’t think owners appreciate what it means when they employ a caretaker or an employee for the strata company, but effectively, they become an employee of all the owners and the owners have an obligation as an employer to adhere to the Fair Work Act, particularly around how they’re managed and any concerns or breaches that may come up. It’s not a simple matter to decide you’re going to terminate him. You can’t do that to your staff, you actually have to go through workplace management requirements and you have to handle it very carefully.

Scott Bellerby
B Strata
E: [email protected]
P: 08 9382 7700

This post appears in Strata News #507.

Question: Can Council of Owner members instruct the Building Manager to undertake duties or must instruction come through the Chairperson?

Answer: A building manager is engaged by the Strata Company to carry out duties and tasks on their behalf.

I note that we are only able to provide some comments on the query below, noting that we have no specific information on this particular Strata Company, the contract with the Building Manager and any intimacies of that contractual arrangement.

A building manager is engaged by the Strata Company to carry out duties and tasks on their behalf.

The contractual arrangement with the Strata Company should provide specific details of those duties, tasks, hours of operation, reporting requirements etc.

In most cases, the Building Manager would be providing regular reporting to the Strata Company on any matters requiring their attention, however, there is normally a requirement for a specific person to be the liaison or the one point of contact for the building manager. To be effective, the building manager has to have one point of communication/instruction. The Strata Company can put specific instructions around that liaison, including expenditure or time limitations.

The liaison person does not have to be the Chairperson of the Strata Company, it can be another member or any other person that the Council delegates that responsibility to. This person would normally have strong communication skills, maybe some professional background in areas of building maintenance or management, skills in employee relationships and obligations, and time availability.

There are still many items that may need to be referred back to the Council of Owners at different intervals, such as large expenditure items that require additional approval, any changes/upgrades to common property, new installations, etc

The council of owners can consist of 3 to 9, or more members. As a contractor or employee of the Strata Company, the Strata Company has an obligation to ensure the Building Manager has a direct line of communication and responsibility.

Shelley Fitzgerald
Emerson Raine
E: [email protected]
P: 9330 3959

This post appears in the May 2021 edition of The WA Strata Magazine.

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