Administration
If your owners corporation is dysfunctional or cannot pay its debts, you may need an Administrator to temporarily step in.
Owners corporations can become dysfunctional for a number of reasons but often it is due to in-fighting between owners or deadlocked votes preventing decisions being made.
Administrators can only be appointed by VCAT on the application of an owner, a creditor or person with an interest in the land affected by the owners corporation.
Once appointed, the Administrator will act in accordance with any orders made by VCAT. They must always act in good faith and with due care and diligence. The Administrator can otherwise make any decisions and do any things that the owners corporation could potentially do.
The appointment of an Administrator is a matter that must be disclosed to prospective purchasers and is generally accepted to have a negative impact on property values. Ideally the Administrator should complete its tasks as soon as possible and then be removed so that the normal democratic operation of the owners corporation can be restored.
If your owners corporation’s problems can be resolved without the appointment of an administrator then we strongly recommend that those avenues be explored first before moving to the administration option. This is reflected in VCAT decisions which refer to administration being a serious matter and a last resort.
VCAT will generally require an administration proposal to demonstrate detailed consideration and plans, more than just a price. The Tribunal’s orders will usually contain words to the effect that the administration proposal must be prepared by a suitably qualified administrator willing to undertake the appointment, setting out that person’s qualifications, their terms and conditions of appointment, and their proposed course of action and estimated timelines for the administration.
The nature of the Tribunal’s orders requiring a proposed course of action and estimated timelines for the administration means that a detailed review of the owners corporation and its alleged dysfunction is required before a proposal can be prepared. As such, Stratablox does charge a fee for administration proposals reflecting the time required of approximately 4 hours of work. This allows for a phone/video consultation, review of points of claim & defence, understanding the plan of subdivision and other documentation relevant to the dispute and dysfunction, and the time required to draft our proposed course of action and estimated timelines to the satisfaction of the Tribunal.
Administration is a service offered by Stratablox subject to careful review and consideration of your situation and current capacity of our team. If an Administrator is being considered at your owners corporation we encourage you to get in touch with us.