Unapproved contract could be a breach of agreement

Dear Tony: Our strata council is having a power struggle with our strata manager. We have had the same manager for six years and have been pleased with her service, but we have discovered a number of contracts that the manager has signed where the terms and conditions of the contracts were different than what we approved.

The council approved elevatorservice contracts and wasteremoval contracts at fixed prices for no longer than three years. Our strata decided to change waste-removal contractors and find we are locked into a sevenyear contract.

Now we are spending money on legal advice to terminate the agreement.

The manager told us that it’s normal for them to sign contracts on behalf of their clients, but if we don’t sign and approve our own contracts, how can we guarantee we are getting what we approve?

Ryan A., Surrey

The strata manager and management company are the agents of the strata corporation. In an agency agreement, the manager/management company has the authority to act on behalf of the strata corporation under the terms of the agency agreement, which is your written contract, and the instructions that are given to the strata manager by the strata council.

There is no “normal” with respect to the strata manager signing contracts. That varies in every strata agreement. The instructions that your council gives are decisions that are recorded in your minutes in the same manner as any other decision of council.

While a single council member, such as the president, can give directions to the manager, even those decisions are often not what the strata council had agreed to.

The best solution is for your strata council to review all decisions, ratify them by majority vote at a council meeting, and record the decisions and the instructions in the minutes.

Your strata council can also instruct your manager that all agreements and contracts must be reviewed and signed by the strata council. It is very easy to overlook a change in a contract, and depending on the nature of the contract, a small amount of funds spent on legal advice before the contract is signed is in your strata corporation’s best interest.

If your strata corporation has given an instruction to the strata manager, and your manager has acted contrary to that instruction, that could be a breach of the agency agreement and of the Real Estate Services Act, the regulations and rules of the Real Estate Council of B.C.

Your strata council should start with a discussion with the strata manager and the broker of the company. If you have not reached a satisfactory solution, contact the Real Estate Council (recbc.ca) to file a complaint.