Management of strata or community title land
Agency agreement terms
1. Identification of property
The agreement must specify the address of the property to which the agreement applies or must contain a description of the property sufficient to clearly identify it.
2. Names of parties to agreement
The agreement must specify the names of each of the parties to the agreement, including the licensee.
3. Information identifying the parties
The agreement must specify the principal’s address, the licensee’s licence number and any business name under which the licensee conducts business.
4. Principal’s authority to enter into agreement
The agreement must contain a statement to the effect that the principal warrants that the principal has authority to enter into the agreement.
5. Authorisation for licensee to act on behalf of principal
The agreement must include a term containing particulars of the extent of the licensee’s authority to act as agent on behalf of the principal in providing services under the agreement.
6. Period of duration of the agreement
The agreement must contain a term indicating the period for which the agreement remains in force or indicating that the agreement remains in force until terminated.
7. Termination of the agreement
If the agreement provides for its termination by a party to the agreement, the agreement must indicate how and when it can be terminated.
8. Reimbursement of licensee
If the licensee is to be entitled to any sum or reimbursement for expenses or charges incurred by the licensee in connection with services provided under the agency agreement, the agreement must include a term that:
(a) states that the licensee is so entitled
(b) describes those services
(c) specifies the amount that the licensee is so entitled to and when it is payable.
The agreement must include a term specifying:
(a) the circumstances in which the licensee is entitled to remuneration (by way of commission or otherwise) for services performed under the agreement, and
(b) the amount of the remuneration or the way in which it is to be calculated, and
(c) when the remuneration is payable.
10. Authorisation for the licensee to undertake certain duties relating to management of strata or community title land
The agreement must include any written confirmation prepared for the purposes of clause 6 of the rules of conduct for strata and community managing agents, of the extent of the agent’s authority to undertake the following duties in connection with the exercise of the functions of a strata managing agent or community managing agent and any limitations on the agent’s authority to undertake those duties:
(a) undertaking the financial management of funds and books of account
(b) holding documents and maintaining records relating to the scheme (for example, the strata roll, notices and minutes of meetings)
(c) arranging building inspections and reports
(d) effecting repairs to and maintaining common property or engaging tradespersons to do so and limitations on expenditure that may be incurred by the agent without obtaining the principal’s approval
(e) paying disbursements and expenses incurred in connection with the agent’s management of the scheme
(f) arranging insurance cover for the scheme
(g) serving notices to comply with a by-law
(h) managing the sinking fund and the administrative fund
(i) undertaking steps necessary to recover any money owing in relation to levies
(j) representing the principal in tribunal or court proceedings
(k) paying accounts in relation to the scheme (for example, accounts for water charges, council rates and maintenance)
(l) arranging and undertaking administrative duties in relation to annual general meetings and any other general meetings.
11. Effect of statutory appointment of managing agent
The agreement must include a term or terms to the effect of:
(a) The agent does not have and may not exercise any of the powers, authorities, duties or functions of the owners corporation, association or strata corporation that are conferred on another strata managing agent or managing agent appointed for the owners corporation, association or strata corporation for the time being under section 162 of the Strata Schemes Management Act 1996 or section 85 of the Community Land Management Act 1989.
(b) The agency agreement is terminated on the appointment of a strata managing agent or managing agent under section 162 of the Strata Schemes Management Act 1996 or section 85 of the Community Land Management Act 1989 to exercise or perform all the functions of the owners corporation, association or strata corporation.
(c) The agent is not entitled to any remuneration by way of commission or otherwise in respect of any period after termination of the agency agreement as referred to in paragraph (b).
(d) The agent is not entitled to any payment (in the nature of a penalty or otherwise) by reason of the early termination of the agency agreement as referred to in paragraph (b).
(e) It is prohibited to have a term in an agency agreement with a strata manager which indemnifies the agent against any liability to pay a fine that arises under section 30 of the Strata Schemes Management Act 1996 (Breach of duty by strata managing agent).
12. Renewal of agreement for fixed term
If the agreement is for a fixed term, it must not contain a provision that operates (without the further agreement in writing of the principal) to renew the agreement for a subsequent fixed term of more than 3 months unless the agreement also provides for the principal to be able to terminate the agreement (without penalty) by giving 3 months’ notice of termination at any time during that subsequent fixed term.
Note. This does not prevent the principal from agreeing in writing to the renewal of the agreement for a further fixed term.
13. Accounting to the principal in respect of money received
The agreement must specify the manner in which and the frequency with which the agent is required to account to the principal in respect of money received by the agent on behalf of the principal.
14. Disclosure of rebates, discounts or commissions
The agreement must include provision for the licensee to identify the source and amount or estimated amount of all rebates, discounts or commissions the licensee will or may receive in respect of expenses payable by the client for the services to be provided by the agent.