Manager Challenges Lot Owners and Owners Corporation’s Desire to Terminate Management Agreement

1.
A Sneak Peek at the Latest VCAT Strata Decisions
Manager Challenges Lot Owners and Owners Corporation’s Desire to Terminate
Management Agreement
A 5-lot scheme was managed by a lot-owner who allegedly failed to properly account for trust
money, concealed the fact that legal proceedings had been commenced against the owners
corporation and settled proceedings on behalf of the owners corporation without authority.
Two lot owners and the owners corporation commenced VCAT proceedings to require the
removal of the lot-owner manager after the manager refuses to accept his termination and
hand over the owners corporation’s records.
VCAT made a number of findings in this case including:
1. The manager’s conduct in this case repudiated the written management agreement;
2. The Owners Corporation were entitled to pass an ordinary resolution to terminate the
management agreement.
The manager’s misconduct in this case was very serious.
An owners corporation seeking to terminate a written management agreement should be
careful to take independent legal advice first. Terminating a contract incorrectly could expose
the owners corporation to a potential legal claim for damages by the manager for breach of
contract.
Case Reference: Owners Corporation No 1759 v Giurina (Owners Corporation) [2012] VCAT
643
1 October 2013
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Nicole Wilde, Senior Solicitor, TEYS Lawyers Melbourne (03) 9600 1128
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