Who can decide to change a manager? It is the owners corporation that can make this decision. Therefore, a majority resolution of the OC members can terminate a current manager and/or appoint a new manager.
Many contracts have roll over clauses, so it would be prudent to find out the current contract term and the termination clauses within your current contract.
An industry misunderstanding is that if you are in a current agreement with a management company, you are unable to change management. This is not the case.
The Owners Corporation Act dictates that “An owners corporation may revoke the appointment of a manager” (s.119). VCAT has also determined that the OC can resolve to terminate the manager. This includes a committee with the appropriate delegations.
However, although the OC can resolve to terminate the manager within a contract period, the OC may still have financial ‘obligations’ under the contract. Thus contract law may dictate that there would be an appropriate payment to the current manager paying out the term of the contract. This is usually not 100% of the Fees due, but is usually based on the profit from the Fees (commonly around 20%-30%).
Please note, this is general information and not legal advice. Each circumstance should be looked at individually.
Therefore, if you are adamant a change is required, regardless of your contractual position, a frank and open discussion with the current and proposed mangers may provide a suitable solution for the OC.
