This page outlines the responsibilities and obligations of managing agents of community, precinct or neighbourhood schemes.
On this page:
Managing agent responsibilities
Managing agents must be licensed as strata managers under the Property and Stock Agents Act 2002. The Community Land Management Act 2021 allows an association to delegate some of or all of its functions to a managing agent.
The association determines the responsibilities that will be delegated to the appointed managing agent. These responsibilities should be established while finalising the managing agency agreement with the agent.
What does the managing agent need to report?
The managing agent has a responsibility to keep the association regularly informed of all aspects of their duties for the association.
They are required to provide an annual report, detailing all tasks performed by them on behalf of the association within the previous 12 months. The agent must also provide trust account and transaction information when requested by the association.
What responsibilities can’t managing agents undertake?
Managing agents can't:
- delegate the association’s powers, authorities, duties, or functions to others
- determine the contributions to be paid by members or set levies
- decide on a matter that requires a special or unanimous resolution, or which the association has decided can only be considered at a general meeting.
Appointing a managing agent
The association should perform due diligence when selecting a managing agent by requesting quotes from multiple agencies. Information regarding the services that the agent proposes to provide as part of their standard agency agreement should also be requested.
A decision can be made at the association’s first annual general meeting (AGM) as to whether to appoint a managing agent, and what functions they should exercise should they be appointed.
A managing agent can be appointed by vote at an association general meeting.
Agent’s term of appointment, expiry and termination
What is the maximum term of appointment?
Generally, a managing agent’s maximum term of appointment is three years, with renewals allowed. However, if a managing agent is appointed before the first AGM their contract expires at the conclusion of the first AGM. The maximum term of a managing agent appointed at the first AGM is 12 months.
If an agent is appointed for the maximum allowed period of three years, their contract will automatically include an option to extend their appointment for a further three months. The extension will not be activated should the association give the agent at least three months’ written notice before the end of the contract that it will not be renewed.
Managing agents must give notice of the expiry of their agreement between three to six months before the expiry date.
What happens when a term expires?
Once the managing agent’s term has expired the association can extend the appointment for successive blocks of up to three months or until the next scheduled association AGM. A strata manager must give at least one months’ notice before the end of the extension term.
If the association decides to terminate the appointment of a managing agent following one of these extensions, the association must give them at least one month’s notice of that decision.
How can I terminate an agreement?
When an agency agreement is due to end, a managing agent can be dismissed by a majority vote at a meeting of the members.
An association may at any time resolve at a meeting to terminate the agreement based on its terms, or apply to the NSW Civil and Administrative Tribunal (Tribunal) for an order to:
- terminate the agreement
- require compensation to be paid
- vary the term or a condition of the agreement, or declare a term of appointment void
- require a particular action to be taken, or not taken, by a party to the agreement.
Gifts, benefits and commissions reporting requirements
Section 53F of the Property and Stock Agents Act 2002 establishes a general prohibition on managing agents receiving or requesting gifts or benefits for themselves or for another person in circumstances that could reasonably be considered to give rise to a conflict of interest.
The Supervision Guidelines under the Property and Stock Agents Act also require principal licensees of managing agencies to maintain a register of gifts and benefits received by agents employed in the agency.
Failure to adequately disclose a gift or benefit may result in a fine of up to $2,200, or other disciplinary action could be taken.
Any exceptions?
This does not apply to:
- anything provided by the agent’s employer
- anything provided as part of an agency agreement or as a gift of thanks from a client for services provided under the agency agreement, or
- anything less than $60 in value.
At the AGM, managing agents must report whether any commissions or training services have been:
- provided, or paid for, in the past 12 months, or
- likely to be provided or paid for in the next 12 months.
Proxy voting
Managing agents can be appointed to act as a proxy for a lot owner by completing the approved form and providing the completed form to the association secretary. The approved form is available on the NSW Fair Trading website. This must be done prior to a general meeting.
A managing agent cannot use a proxy vote in the following circumstances:
- to obtain a financial or material benefit
- in a decision regarding legal proceedings involving the proxy.
More information on the regulation of managing agents
Further information regarding the regulation of strata and community managing agents can be found on the Property professionals page.