Delegated Powers – A Privilege or a Poison Pill?

The delegated powers of strata managers are one of the great mysteries of the profession. The power to make decisions as if one were the owner of a corporation or committee exists in various parts of the country in different ways. Yet such powers are seldom used except for facilitating a strata manager chairing a meeting in place of an elected chair.

In NSW the power is wide. An owners corporation can delegate all its powers to a strata manager along with the powers of the committee and the executive officers. Queensland is more circumspect. A body corporate is prohibited from making delegations, but there is a workaround – elect no committee and appoint the body corporate manager to make all the decisions. Victoria is similar. In WA, while the word delegation is not used, a strata manager can be authorised to perform the functions of a strata company. There are various qualifications and protections for owners in each of these places, but the point is, if there’s a will by the owners to outsource their decision-making role, there’s a way.  

In the common standard form management agreements in use around the country, strata managers ubiquitously take on these powers, but to what end? They aren’t used, or if they are, they aren’t properly used because a record or minute of using a delegated power is a rare sighting. In fact, save for a scheme under compulsory administration, I have never seen one. It’s as if the only time the power is ever spoken of is if the chairperson at a general meeting needs a hand and the strata manager steps in to run the show.

The paucity of the use of delegated powers on strata lies to the conventional wisdom that to use the power is to assume liability for the decision. That may be right, but if that’s of concern, then don’t take it on. As Stan Lees 1960’s Spiderman would say – ‘with great power comes great responsibility’. Put another way, if you accept delegated powers, you don’t get the luxury of turning them on and off like hot water.

The recent work health and safety conviction of a strata manager for the death of a worker on common property is all the proof we need of this reality. The strata manager, in that case, had full delegated authority under their agreement to affect the repairs and maintenance of common property, and engage such contractors necessary to do so. The problem was they didn’t send someone out immediately to make a safety assessment of the damaged gate that ultimately fell and killed the worker.

This is an area that needs some deep thinking. Is it worth taking delegated power for things other than the acts of the chairperson, secretary, and treasurer? If you do, are you being paid enough for the risk?

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