It is not unusual for an association and its managing agent to disagree as to whether or not the association the right to terminate their management contract.
In terms of section 39 (5) (b) of the CSOS Act, an application may be for:
“an order declaring that the association does or does not have the right to terminate the appointment of a managing agent, and that the appointment is or is not terminated”
Examples of issues
When the association gives formal notice of cancellation is given, the managing agent will often dispute its validity.
The managing agent may refuse to accept a cancellation by the the association because she or he believes that the association has not followed the procedure that the contract requires for a cancellation.
The cancellation may be based on an executive committee or a member resolution, and the managing agent may believe that this was not properly taken.
The association and the managing agent may disagree as to whether the managing agent has breached a term of the management contract and, if it has, whether or not this entitles the association to cancel that agreement.
In all these cases and in any others where there is disagreement on the point, the association or the managing agent can apply to the CSOS for an adjudicator’s order confirming the position.
Example of order
An example of the type of order the CSOS could give is:
1. On the basis of the evidence before me, ACE Management Company has not been shown to have been in breach of its management contract with the Ruiterplaats Share Block scheme;
2. Accordingly, the Ruiterplaats Share Block scheme does not on this ground have the right to terminate that management contract.
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