Say you live in a body corporate, an apartment building like the one pictured here.
Who do you think vacuums the carpet? Who cleans the pool? Who changes the light bulbs?
There are hundreds of small tasks involved in maintaining the common property of a building and all those tasks are the responsibility of the body corporate.
Some body corporates will hire cleaners and gardeners and pool people to take care of these tasks with the Committee or Body Corporate Manager overseeing each task.
Others simply elect to enter into a Caretaking Agreement and appoint one person, typically called the building manager or onsite manager, to take care of all those tasks.
In addition to the caretaking agreement some body corporates enter into a Letting Agreement with the same contractor. This gives the entity named in the agreement the exclusive right to run a letting business on the body corporate common property.
Collectively the Caretaking and Letting agreements are called Management Rights.
So We’ve Hired A Contractor?
Essentially, yes, a contractor has been hired for a specific term to carry out specific tasks for which a specific remuneration will be paid. Caretaking agreements though are a bit more complex than a standard, “we’ve hired you” gig.
Firstly the term can be anything from one to 25 years, depending on the regulation module of the body corporate.
Secondly the remuneration can be substantial. I have seen annual fees as low as $12,000 but most are quite a bit more. Very large buildings may pay up to a $1 million per annum to their building manager.
It’s a considerable amount of money to guarantee for a long span of years.
And that doesn’t even take into consideration the fees that can be made directly from lot owners through the letting business.
Management rights, in Queensland particularly, are very valuable and consequently the Caretaking and Letting contracts under which they operate tend to be very complex.
Lot Owners & Management Rights
Although the building manager is technically a body corporate “employee” it’s important to keep a few things in mind in dealing with them. Here a few frequently asked questions about the building manager that will help you get along.
Can I tell the building manager what to do?
Although the building manager is a contractor they work directly for the committee. In fact they are non-voting committee members. Unless you’re on the committee you cannot instruct the building manager at all, and if you are, you will need to work within the scope of the written agreements and legislation.
Can the building manager tell me what to do?
Most building managers will be responsible for ensuring that all residents adhere to the by-laws of the body corporate. In fact they are the first line of resolution when a breach happens. Don’t be surprised if you get asked to rectify a situation by the building manager.
Can they enter my lot?
The body corporate has very limited right of entry to lots, and these will be spelled out in the by-laws. For the most part the building manager, r committee for that matter, may only enter your lot in very particular set of circumstances, such as imminent threat, or to address a repair issue. Even then notice should have been given.
Different rights of entry may occur if the building manager is hired as your letting agent and the contract appointing them should state those rights.
Do all buildings have Management Rights?
No, not all buildings have Management Rights. Caretaking and Letting Agreements are typically entered into by the developer when a building is first registered as it creates another valuable asset for them to sell. If the body corporate later decides that they no longer wish to have a building manager they may either wait for the contract to expire or negotiate a surrender.
Do I pay more levies if we do have Management Rights?
Yes, definitely. In those body corporates with building managers the largest expenditure will likely be to the manager.
Which is not to suggest that getting rid of the manager would automatically reduce the levies. Someone does need to vacuum the lift lobbies or stairwells, maintain the pool and grounds and so on. Individual contracts can often add up to as much, if not more than a building manager.
Does the remuneration change?
Most contracts have a anniversary date where the amount payable is increased usually by CPI or a set amount. Each year on the anniversary the fee payable will be increased.
Further disputes do arise regarding levels of remuneration and can be pursued through the court system.
If I let my unit, do I have to use the on-site manager as letting agent?
No. The body corporate cannot make any arrangements between a lot owner and another party. Every lot owner is free to contract with whomever they choose to undertake letting services. The Letting Agreement is a right to operate a letting/real estate business from within the body corporate only.
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Do you have a question about management rights? If so, I’d love to hear it. Leave a comment below.
Unless stated otherwise all the information on this website relates to Queensland legislation.
Hi I’m a tenant in a new complex trying to get information re. the caretaker/letting agent. My property manager is an exterior rental agent and I have had a few incidents with the building manager that lead me to believe he is descriminating against other tenants such as myself, supposedly for not using his services (makes a lot of sense right), the most recent being when he refused to let me into my apartment with his master key after I was locked out (this was during office hours and after he had previously let me into the apartment to inspect it). I’m currently requesting a copy of the caretaking agreement, however i doubt there is any direct recognition of this being one of his duties. What I’m wondering is how does a tenant go about making complaints about the build managers conduct? Being that he is not my letting agent I cannot breach him, but I want to make sure the body corporate committee is at least aware of the issue. Thanks
Hi Olivia
Ah … that happens quite a lot – discrimination against tenants not managed by the building manager. As you say though, it’s unlikely that a requirement to grant access is part of the agreement.
Complaining about the building manager, or anyone else for that matter, should be done via your agent.
You have a contract with the lot owner to lease the premises but although you must abide by the by laws don’t have any direct relationship with the body corporate. The lot owner, or those appointed to act in the lot owners stead, are in a position to complain on your behalf. For complaints to be forwarded to the committee they must be in writing (email is fine) and come from a lot owner / lot owners agent.
I wouldn’t expect too much immediate action; unless it forms part of a wider ongoing problem with the building manager. It can be hard to see action. Keep a diary of dates and things said or done and keep complaining if the problems continue. Persistence will likely be your best asset.
I own a residential apartment with Mantra , which is a corporate holiday chain . My concern is this , They take about 40 percent of the holiday leting fee for themselves and you pay for cleaning . So your return is just over 50 percent . Where most of the other residential holiday building in the area of the same capacity where management rights are indevidualy owned by residents only , charge 12 percent and you pay for cleaning . I know that by law they can only charge 40 percent st they are at max. Also with Mantra they subcontract out managers who dont live in the building. My problem is some apartment owners have suffered terrible financial losses due to the commision paid to Mantra , and in some cases went bankrupt. Many people have decided to permanently rent there apartments as the return is the same or better than the so called lucrative holiday letting . Everyone would be much better of if the body corp baught back the management rights and scraped it altogether and simply hire a manager , as thats all Mantra does , and then do holiday leting at 12 percent like the other buildings .
Thank you so much for commenting Grant.
You’ve touched on a subject that’s pretty common here on the Gold Coast. Holiday letting can indeed be very lucrative for investors, but it also has a lot more risk. The lets themselves can be irregular which compromises cash flow (for both lot owners and the body corporate – lot owners who’re not receiving steady income from their investment find it hard to make levy payments) and then the letting fee on top of that is so much higher.
Permanent rental is, as you say, an option that offers a more stable, though lower, return. The problem is some of these buildings are zoned as temporary accommodation by the local Council which means that permanent rentals are not allowed.
Ironically in the holiday letting pools Mantra does do a bit better than other managers. Its a question of marketing budget. Because Mantra own so many different Management Rights (necessitating hiring of managers to actually do the job) their main focus, as a corporation, is selling holiday accommodation. Other Building Managers might not have the same expertise and deep pockets when it comes to attracting and converting holidaymakers.
Its an interesting issue you’ve raised, thank you. Those who’re thinking of jumping on the holiday letting roundabout should do their research as it is a riskier form of real estate letting than permanent rental.
Can a body corporate buy back the management rights? I live in a building where we’ve had successive caretakers and very poor service given the amount of money paid to them. We have a lot of support to buy back the management rights but some lawyers are saying that it’s not possible citing the fact that bodies corporate cannot run a business. We don’t want to run a business. We just want to pay the caretakers to leave. We would then employ staff to do cleaning etc. Any ideas?
Hi David
Thanks for your question. What you’re talking about is terminating the Caretaking Agreement (and the Letting Agreement if your scheme chooses to). And yes, there are body corporate’s who’ve done this.
I’d speak with a Solicitor who deals with Management Rights – some ideas are Hynes Lawyers, Mahoneys or Matthew Hunt Legal. You need to negotiate a settlement with the current holder of the Agreements whereby the agreement is terminated in exchange for a sum of money.
The Solicitors you’ve spoken with are correct that a body corporate may not run a business so the agreement must be ended. And because they’re contracts it really will be a negotiation. You must get the Building Manager’s agreement.
If the caretaker agrees on a settlement price, would it require a resolution without dissent? Do you have any suggestions as to how a body corporate would finance such a move given that not all owners would be able to contribute immediately but perhaps split payments over 3 or 4 years? Any thoughts?
Hi David
I’d check with your solicitor but I think it would only require an ordinary resolution, possibly by secret ballot. Making changes, such as extending the Caretaking contract are done by ordinary resolution by secret ballot (no proxies) so I suspect terminating the agreement would be the same.
Options for financing, other than special levies payable immediately, would be to borrow the money. Body corporates are entities same as you and me and can enter into credit contracts. Assuming you can find a lender to offer finance (paying out a contract might not suit their lending requirements) a motion by special resolution at general meeting would be required to enter into the contract.
Again, check with your Solicitor though. Sounds like a complex process.
Hi
I am looking at the purchase of a Holliday Letting Management Rights and would like to know what happens when you sell the Management Rights at end of term or within the term?
So if the ‘ Business ‘ has grown and is worth more, would that money / gain be mine ?
Hi Greg
Yes certainly. The value of the management rights is calculated by a “multiplier” which is usually something like 3 times the turnover. So increase the turnover and you increase the value. This article gives more detail.
Other factors that will vary the value of the rights are the length of term of the agreement. It’s very common to see motions to extend caretaking and letting agreements. Its essential to do well to get your scheme on board with extending.
Hi Lisa,
Can the local council zone areas or buildings where Standard modules can have holiday rentals?
Hi Janice
Yes, local council controls the zoning of areas. Regardless of a buildings regulation module the council zoning applies.
Hi Lisa
Can you advise on the renewal process of a mgt agreement
Does a renewal of agreement require a vote by owners or can it simply be signed off by the committee or even by a sole member of the committee
Ron
Hi Ron
Thanks for your comment. I’m not sure what you mean by renewal. If the manager has an option they can exercise said option by simply writing to the Committee, or however the contract says the option must be exercised.
If you’re talking about extending the agreement then a motion at general meeting by secret motion. Any variation requires a general meeting motion.
Good morning Lisa,
Our incompetent Caretaker has had his management rights for sale for 6 years. The committee are hopeful of a sale in the coming weeks. Can you tell me where I can find a list of questions the committee can ask the new caretakers. The present caretaker although being paid $1000 a day has got away with neglecting our building for the past 7 years despite the committee having an external audit of his duties. Would appreciate your suggestions.
Hi Janice
Well that is good news. I confess I’ve never really paid much attention to the questions asked at the interview meeting. For the most part I would think it’s much like any job interview. Ask about the things that concern you.
Questions I’d ask:
1. What experience do you have?
2. Do you understand the tasks as set out in the agreement?
3. Do you understand how body corporates work?
4. Do you have the appropriate insurance?
5. Have you ever been convicted of an offence? (though maybe check with your solicitor on this one)
6. What skills do you bring?
7. Do you have any plans for the scheme in your roll?
That’s all I can think of off the top of my head. Let me know how you get on, I’ll be interested in hearing.
Thank you Lisa
Regards Jan
Hello Lisa
I live in South Australia and own 2 single storey strata units connected to the two other units via a flat top carport roof. The owner of unit one has a 6foot high fence surrounding her unit to the strata boundary. Is the land within the fence still regarded as common property if she has established restricted access?
The question really is? Lawn maintenance? Is the strata responsible to mow her lawn in front and behind her fence if the fence has been established on common property?
Hi Chris
I’m afraid I don’t know anything about South Australian strata legislation – QLD is my forte. I can tell you here in QLD it would depend on whether the area is exclusive use or part of the lot.
If it’s exclusive use refer to the by-laws. Most by-laws say that an exclusive use grant is made subject to the lot owner maintaining the area. If that’s the case its the lot owner responsibility to maintain, ie lawns, but the body corporates to rectify any underlying issues.
If it’s part of the lot its all her responsibility. The fence would be a 50/50 responsibility between her and the common property or owners corp.
That’s how it work in QLD. I’d refer to your by-laws and plan.
Hello Lisa
We have new Management and our body corp has been asked to extend their length of contract from 15 to 21 years for financing purposes. Why should this be necessary and is it a good idea to commit for this length of time? The new managers seem to be performing well but it is early days and as a member of the BC I feel I do not know enough about the matter to vote on the issue.
Deb
Hi Deb
Management rights are contracts where the body corporate agrees to pay an employee to perform tasks for a specific length of time. The length of time increases the value of the contract.
Its a weird sort of situation for banks; they lend on an asset that immediately starts depreciating in value, which is why they pressure lenders to have the length of the contract extended; to increase the value again and secure the banks holding.
From the body corporates perspective though is it a good idea to extend the value of the contract? That increase in value is directly financed by the body corporate, not immediately of course, but at some stage in the future. If you extend then you are increasing the commitments on the scheme and if you do not then the caretaker may suffer. Some schemes choose to change their regulation module from accommodation to standard to cap the number of years the caretaker has the contract at 10. Others are happy to keep the term always somewhere around the maximum 25.
Its a dichotomy; balancing the needs of the body corporate against those of the caretaking contractor. I wish I could tell you what to do but it’s a difficult decision.
Hi Lisa
We live in a 10 storey apartment complex, is it correct that the Owners Corp have master keys to all apartments? There are 3 of them that do, I don’t like this idea
Hi Sharon
The Owner’s Corporation will most likely have master keys to all apartments. Check you by-laws to see when they are legally allowed to use them without your permission.
Hi, I just brought an appartment & the building manager said when he brought the rights he was also given the common area. For his use only. can this be done?
Also he has blocked the visitors parking area, he said it is to be used for emergency vehicles only such as Police or Ambulances. Can he do this?
Also he turns off the lift every night which means you have to use the stairs to come & go from your appartment. can he legally do this. As I have a bad back & find it hard to walk up the stairs.
Cheers, Tanya
Hi Tanya
The short answer is probably not, check your by-laws and no.
The common property is and always will be owned jointly by all the owners. It is possible that a building manager is allocated a part, usually an office or a shed, under an authorisation agreement. It will only be a small part though and the balance of the common property is not his. Then it wouldn’t be “common” property it would be his. He needs to learn a little about body corporates.
Check your by-laws as to what visitor parks are for. If it doesn’t say then visitor parks are for visitors. Some body corporates have made house rules about their visitor car parks but given the way this manager is acting then don’t take anything on face value.
No he definitely cannot shut off the lift. No one has the right to deny any lot owner access to common property which is what a lift is and what he is doing.
I would tell the manager he is exceeding his remit (necessary if you need to seek Adjudication later) and make a record of responses. Do it in writing if you can and keep a record. If no change write to your body corporate committee for help. If they do not, or cannot show you in minutes or by-laws where he can act this way seek Adjudication.
Hi Lisa,
Last year our caretaker/letting agent renewed his contract for 10 years without alterations being sought. A new Treasurer discovered that in the past financial year he had been given sole right to authorise payments for services. In this time he paid his father and various other firms for doing work easily recognisable in his contract. Also included was double charging for cyclone clean-up, once to those in the letting pool and then twice to all unit owners. The caretaker/letting agent had the opportunity to respond to the allegations. The excuses offered centred on health and safety reasons for him not doing the work (although his elderly father could) and erroneous interpretations of his contract. The health and safety reasons ignored the fact that he is a contractor, not an employee of the BC. A majority of the committee voted to do nothing about this.At this year’s AGM there are motions from the caretaker/letting agent for the body corporate to pay for an examination of his work in relation to health and safety (the BC managers already do this for the BC) and for a time in motion study of his work, also to be paid for by the BC. This is plainly wrong and unfair. Unfortunately at present a slim majority on the committee support anything the caretaker does irrespective of compliance with contracts or BC law. What can be done?
Hi Lesley
This is quite the tangled web.
There are a couple of things. The time and motion study: if the motions get passed immediately write a letter of objection to the body corporate noting that they do not have responsibility to pay for something that relates to one lot, in this case the Caretaker. That relates to the health and safety report, but not necessarily the time and motion study. Usually they are done when a claim re the remuneration is going to be made (usually an increase).
If the committee do not stop the action you may lodge an application for Adjudication including an interim order that they not proceed. From there it’s hoped adjudication will go your way and the matter will be stopped.
The problems with the agreement are more difficult since they are not body corporate issues so much as breach of contract issues and will need to be pursued through small claims (QCAT) assuming you could get the committee onside to support a claim of breach against the caretaker. A good place to start is to write to them about your concerns.
Hi Lisa,
Thank you for a great site! Lots of quality information to be found here. I have a quick question for you:
We own a unit, which is in the body corporate letting pool (managed by the property managers). We are planning to occupy the unit ourselves in the not too distant future. This unit was purchased 20 years ago and I can find no paperwork or contract that ties us to a letting agreement.
How much notice should we give and to whom, the body corporate or the building manager?
Cheers
Poul
Hi Poul
I’m glad you found something useful on the site. Keep us in mind if you’re buying or selling!
The Manager should have a copy of the agreement (it being fairly crucial that they do). You could ask for a copy and see if they can produce it.
Most contracts will have a 90 day exit clause though it is possible for either side to negotiate different terms. With our management agreement on rental property I have a 30 day exit clause. If there’s a long term tenant in the unit then you may end the tenancy without grounds by giving two months notice. You can find more details here.
I own a unit in a small building – It used to be part of a 3 building / 3 body corp resort, but are now 3 separate buildings.
In 2001 the body corp signed an agreement with the then resident
caretaker valid for up to 25 years.
After 15 years the current caretaker has quoted a clause demanding a dramatic increase in fees.
He has hired a company to report looking at his duties and fees
The report uses an American company who estimates his hourly rate.
If equated to a 38 hour week, it is more than what a 4 year trained teacher after 9 years service earn. We believe his skill are equivalent to those of a gardner/pool cleaner/house keeper/ handyman/ bookkeeper – clerk and should be paid less.
If we elect for an ARAMA review and loose – their is no appeal.
The body corp are basically a bunch of retired amateurs and don’t know where to start questioning the American company’s findings.
1/ do you have any suggestions?
2/ what do you consider to be an average caretaker hourly rate
Regards
John
Hi John
That does not sound good. I can see why you’re worried.
Unfortunately I’m not the best person to speak to on this matter because I’m not that involved in Management Rights. I do suggest, before you commit to the ARAMA review that you see a solicitor specialising in body corporate. It looks like ARAMA are a manager initiative and you need to have independent information before proceeding.
I’d also recommend talking to the Unit Owners Association of Queensland. They are very much pro owners and take an interest in Management Rights issues among others. They may have additional resources to help or know of those who’ve gone through the same process.
As to the average caretaker hourly rate: it’s all over the shop. And its hard to compare apples to apples without reviewing the tasks included in the contracts.
I’m sorry I couldn’t be more help. I wish you the best and please do drop back and let me know what happens.
Helpful analysis , BTW , if someone was looking for a AU QCAT Form 9 , my colleague came across a fillable version here http://goo.gl/BAuMQO
I am in a Body Corporate where the development is about 50% complete. The Developer entered into the Caretaker and Letting Agreement during the “control period” and the Body Corporate believe, the Developer has locked the Body Corporate into an overly expensive 25 year white elephant. If left as it is the cost of this travesty will cost the owners heavily over coming years. This, in our view, is merely to give the developer an inflated sale price for the rights when put up for sale. We believe we could contract out this work for around 15% – 20% of what we seem to be locked into paying the caretaker.
Is there any action we can take to remedy this rip off.
Hi Peter
Unfortunately the Developer, or the Original Owner, as holder of all the lots is able to act on behalf of the body corporate and enter into these agreements. Its a travesty as you say but completely legal at this point in time.
You might want to have a chat to the Unit Owners Association of Queensland. They may be able to give you up to date information regarding submissions made to the Govt to amend this legislation to give owners some protection.
Hi we live in a complex and our onsite managers have recently sold the management rights. We have been given documentation to sign and there is a new clause that gives the bank authority to appoint a manager if the new owner goes bankrupt. Do you know if this is standard practice as I’m wondering if that was to happen could they then increase our body corp levies ?? Thanks
Hi Leanne
I’m assuming you’re talking about a deed of assignment or consent to mortgage or the like. The contract will likely be for the protection of the bank. They are offering a mortgage over the management rights and, should the management company fail it’s to their best interests to try and carry on the business until it can be sold and they can recoup their costs.
Remuneration payable under the management rights contract will not be altered. Indeed it cannot be altered other than via passing an ordinary resolution at general meeting to enter into a Deed of Variation.
Hi, I have a unit I purchased last with a care taker that was voted back in for 15 years despite people being unhappy, it appears they have changed committee members . The current caretaker if you are in their letting pool is very sweet to you but if you are not they are constantly rude. Also when you rent from them their statements are not correct and often charges are put that are not true or says’ I need to put money in your bank still despite there is no mention in a statement that the unit owner was to be paid more during this period.
1. How can we regulate that they are being transparent with their letting agreement with the money they earn from the let than give us ?
2. How can we vote them out or make them meet objectives that are for the whole building instead of those who vote them in on the committee ?
Hi Joy
The committee does not vote in the Caretaker. If the contract has been renewed for 15 years then its because the lot owners voted to do so. If it was only the committee who voted your solution would have been to get others to vote. Since the deed is already done there isn’t anything you can do about it for the next 15 years.
If the committee is having problems with he building manager there are things they can do to encourage the Caretaker to sell to someone new, and hopefully better.
The letting part is nothing to do with the body corporate. Its covered under real estate law. They need to be licensed and act in a certain way. Contact the REIQ or Fair Trading to discuss your complaints. It does sound like things are not as transparent as they should be.
We live in a complex that is also holiday rentals. It is has 24 hour reception and at 10pm if we are out on the balcony they let themselves into our apartment to tell us to go inside and close the balcony doors. Are they allowed to enter our apartment with their own swipe card?
Hi Melissa
The by-laws state when the body corporate, or its agents, may enter the lots. I’m not sure what your scheme by-laws say but I’m confident its something like only in an emergency where action must be taken (like an overflowing bath or something).
To come into an apartment to tell you off is not acceptable. Complain to your owner or rental agent. Ask them to complain to the body corporate.
Hi Lisa
The caretaker at our complex has had a time and motion study done to increase his fee. The hours determined for this we do not disagree with greatly, but the hourly rate we do. He is claiming $39 per hour and will not budge.
He is also refusing to tell us who will do these extra hours as at present there are not enough bodies to complete these tasks. He is elderly and is unable to do physical tasks himself and has only one other person that does.
He does not complete items in the current contract and the BC pays for an external operator/s to clean the pools and to clean the paths. We would like to take the gardening out of his contract and hire someone else to do that as the hourly rate would be much less and we would have control over someone to work a set number of hours and get a much better result than we are at present.
He has said that we cannot alter the contract but it has already been altered with the tasks that he refuses to do being done externally.
On another matter, he has lobbied and put in a place a BC committee that are all part of his letting pool – therefore there is a vested interest in complying with him and the “promise” of favoured treatment for bookings. What are our options?
Hi John
If you’re not on the committee your options are going to be limited to voting on whether or not to approve the (presumably) amended or new contract when the motion is put forward to a general meeting.
Have you made your objections known to the committee? Discussing matters with them may be an avenue to have your issues addressed.
There are other options if you disagree with the committee but they require you have the support of other owners. You may object to and have overturned a committee motion but that requires 50% of owners and swift action. You could object to the body corporate paying extra to have tasks required to be done by the Caretaker. The committee should be following the terms of the contract(s).
You could try to replace the committee. That would require a general meeting. 25% of owners may call a general meeting at any time by submitting motions to be voted on. Can you pass an enforceable motion to get some action on the issues?
The core problem in your scheme sounds like differing opinions of owners. If those in the letting pool are in a position to vote for the changes and they are the majority then they will have their way. Its frustrating but such is joint ownership. Majority rules.
Thanks Lisa
I do understand that majority rules and certainly agree with that..
In answer to my first question can we take the gardening out of his contract and have these tasks done externally.
The onsite manager is saying that we can’t but he is happy for the cleaning of the pools be done externally.
cheers
John
Hi Lisa
Is there an answer to my above query please.
kind regards
John
Do you mean the gardening?
The only time that gardening could be ‘forcibly’ removed from the contract is if the body corporate was never in a position to contract on the issue in the first place, say for instance if the scheme was a SFP and the lawns and gardens contracted for are lot owner property.
Otherwise you have an existing contract and any change will be made by negotiation between the contract parties. Body corporate legislation controls terms and way the contracts / changes are made but other than that it’s a contract law question. Seek legal advice.
Hi John
I purchased a unit in a complex that has a live in Manager as it is mixed holiday and owner occupiers. Apparently the locks, normal and deadlock were changed by the previous owner and the manager was not able to enter my apartment when the fire alarm was activated. He said these would need to be changed and proceeded to contact a locksmith and then sent me the bill. Shouldn’t the body corporate be covering this account? I didn’t know the locks had been changed or that he didn’t have the right keys. Aren’t front doors common property? Look forward to your reply. Christine
If I purchase a unit in a holiday complex with live in managers (in NSW) am I compelled to enter a management agreement with the managers and be part of the rental pool or can I choose to have exclusive use of my own appartment? Are there differences in the rules between states?.
Hi Ian
The Letting Authorisation gives the manager exclusive permission to run a business on the site and that is all. The body corporate can enter contracts re common property only.
To enter the rental pool you would need to enter a contract with the onsite manager. You are free to do so, or not, as you please.
If you do not then you are free to rent your property as you see fit though, of course, any tenants will be required to observe the by-laws.
Yes there are differences between the legislation state to state. This however is a concept: the body corporate, or owners corporation, as the case may be, has no right to make directives as relates your private property.
Our Management Rights company has put in a Deed of Variation. Our committee want to reject this proposal but have been advised that if we do the Management company will invoke an S130.
Could you advise what that means please.
Hi Phil
Section 130 applies to a review of the terms of agreements. Essentially the remuneration and terms are reviewed, though no direction is made that matters must then be amended. It is a complex issue though and, if the Managers enact the clause, the scheme should engage a Strata Solicitor to act on their behalf.
If you Management Rights company is a lot owner then they may submit a motion to general meeting, including entry into a Deed of Variation. The committee does not have the power to reject this proposal. Most matters to do with the Management Rights, including Variations, are restricted issues, meaning they must be decided by ordinary resolution at general meeting, sometimes by secret ballot.
If the Management Rights company is not a lot owner then they may not submit a motion. Another owner or committee will need to do it for them.
As an owner occupier in a strata scheme im wondering about my rights. Altho i feel i have none. Pegging clothes on line in my underwear privately and pest control just walks in gate un announced? Can i put a lock on my gate? Shouldnt they knock first at front door? Resident manager insists he and contractors have access to our yard anytime they like and dont have to let us know or knock? He also said he can enter our home anytime if needs be using his master key. Front door is common property? Ok but the inside isnt. Is this trespassing? He said he would give us notice (pest inspection) but if we were unavailable he could enter anyway. Seriously…do we have any rights against this meglomaniac drama queen. Also can i install cctv cameras at my front door and back yard. I feel really worried living here and im the owner. Thanks
Hi Kim
That’s a terrible story and it makes me so mad.
First of all, no, the Resident Manager does not have the right to let himself into the unit any time he feels like it. Or the yard for that matter.
He is right that there are certain times that the body corporate may enter the premises though. Refer to your by-laws for wording of the applicable clauses. If there aren’t any legislation gives the body corporate right to enter.
Reasons when they may action this right are few and far between. Adequate notice in writing will be required first unless the matter is of life threatening or dangerous – so for instance if your unit was on fire and you were out.
The pest control is problematic. There is no circumstance that allows bodies corporate to make decisions about your lot. Pest control / inspection for all lots, paid and arranged by the body corporate, is not in accordance with legislation. At all. Ever. The body corporate may not make decisions that affect your property; the interior of your lot and exclusive use. Its the same with lawn mowing of exclusive use: Its not body corporate business.
That doesn’t stop schemes from doing it though and a lot of owners are happy to have it done for them. At least the motions are proposed and passed at general meeting and the Resident Manager is expected to organise and carry it out. So they do, and that includes entering the property. I’d write to the body corporate and opt out but then you’d have to pay for your own pest inspections whilst everyone else had them paid for. Your best be there would be to object to the whole practice.
As to the CCTV cameras. The back yard should be OK – its into your area. The front door is as you say common area, or at least the side into the complex is common area, so no. There are also issues with privacy around cameras that you might want to check out.
I feel for your Kim. Its something I hear a lot from women: how unsafe they feel with Caretaker Managers. Its frustrating as hell and I wish I had a better solution for you. I will keep looking.
Can I changed the lock on my front door so the manager doesn’t have access when I’m not around. It’s a 3 storey walk up in QLD.
Hi Peter
Check your by-laws. If its not specifically excluded then the there isn’t anything in the legislation that requires you to have master keyed locks.
Hi Lisa, I have two questions.
First if the onsite caretakers employ someone to carry out their duties and pay them out out of their own salary do they need the committees approval. The contract is not changing just who will be on site doing the work. Our current committee have a personal vendetta against the caretakers and have been making their lives miserable. They would like to have someone come in and handle the day to day activity while they try to sell their business.
Secondly the caretakers have been under contract for more than twenty years with the contract being renewed and extended throughout that time. The committee is saying that they owe a transfer fee regardless when they sell. When reading the Act Accommodation module it’s only two years from the initial contract date. Is the date used the inception date twenty years ago or the date of the most recent renewal?
Thanks
Hi Robert
It will depend on the terms of the agreement as to whether or not the manager’s can replace themselves and when committee approval is needed. I’d suggest even without the contracted need it would still be polite to discuss with the committee first. In this case, when the committee might be hostile, I can see why they wouldn’t if they don’t need to.
Yes the transfer fee only applies in the first two years of the contract. Its intended to penalise Caretakers who sell the rights quickly. There is considerable cost to the body corporate, usually legal fees and meetings, so if its within the two year window the Caretaker is penalised.
Is it 2 years from the last renewal or 2 years from the original contract date?
Thanks
Hi Robert
Its two years from when the current holder of the rights purchased. See here for more details.
Can a body corporate refuse to give an owner extra fobs to their own property. The body corporate of a building I own an apartment in has recently decided that they will only issue 4 fobs per apartment. I have four tenants (2 couples) and my property manager is being refused a fob making it very difficult to manage. What are my rights as an owner how can they refuse my reasonable request?
Hi Blayde
That is an excellent question and I don’t have an answer. It’s a question for an Adjudicator.
I personally think you have a good case for arguing that it is not reasonable to limit total fobs. Its not like you’re loosing them. They are being used. But, as I said, it would need to be considered by a judge.
At least ask the body corporate what their reasoning is.
Hello Lisa
I want to enter into the business of management rights but i want to ask why do i need to buy the management rights when there is always a body corporate salary for the manager.
Please explain.
Thanks Gurpinder
Hi Gurpinder
Management Rights is a business. The Caretaking Agreement offers a salary, yes, though you need to have purchased the right to that salary. With Management Rights the Letting Agreement is the vehicle through which most onsite managers make the bulk of their income – property managing lots for owners in the scheme.
You can be employed by a body corporate as a Caretaker under an employment agreement. You’d be an employee like any other. If you thinking of going into business this is not it. It would be a job.
Most bodies corporate do not choose to be employers. They appoint a contractor with specific duties for specific remuneration. That value is what makes the Management Rights tradeable.
Hi Lisa,
I am an onsite manager just purchased this management rights business 5 month ago. When I started this business in my first month I was told by residents that I have to mow their individual backyards. I was very surprised about that. I am very sure their backyards are within the boundary of their individual Lots. Definately not common area.
I reviewed caretaker agreement, in one section it says “Mow all lawns and trim edges in common areas of the complex, backyards and adjoining footpaths (fortnightly)”.
I also reviewed By-Laws in CMS, in one section it says “To ensure compliance with by-law 13(c), the Body Corporate is appointed agent of the Owners to effect the mowing and edging of all lawns, excluding weeding, watering and fertilising lawns within Lots.”
From your experience and knowledge can you please advise me whether I am responsible to mow backyards at individual’s Lot or it is an argue point that I should appoint it to body corporate?
Kind regards
Raymond
Hi Raymond
The body corporate has no right to make directions regarding a lot. It is quite simply not their business. The body corporate can make directions about common property only. The by-law seeking to appoint the body corporate as agent of owners is, I believe, not enforceable.
That doesn’t help you navigate this situation though because obviously your body corporate has been working this way for some time. To challenge the ruling you’ll possibly need to seek Adjudication.
Hi Lisa,
Thanks for your advice.
I got it now. So even By-Laws says body corporate is appointed as agent to do individual’s backyard mowing. The body corporate (or caretaker) can refuse to do so because it is not enforceable, right?
I am also seeking legal advice from a solicitor.
Many thanks.
Regards
Raymond
Hi Raymond
What’s more likely to happen is that the committee insist that you have to do it. There are two prongs that you need to fight: 1) the Caretaking contract and 2) the by-law. The by-law can be challenged as unenforceable, though you might need an Adjudicators Order to force the issue.
The Agreement is a different matter altogether. It says you do need to do the backyards. Contract law is not my area of expertise I’m afraid, so legal advice is the way to go.
Check me out: I’m being so cynical. Discuss the matter with your committee. Maybe you can reach an amicable solution for both parties.
Thanks Lisa. Appreciate your suggestion.
Should the manager attend to flooding into units after-hours? A unit owner and a neighbouring unit tenant reported flooding coming from the floor above to the Security number provided on every unit door. Security advised they could do nothing more than text the manager who no longer lives on site (50 plus unit, 15 storey complex). The manager did not respond to the emergency until the next day by which time water had been flooding for more than 12 hours causing considerable damage to unit contents. Aside for the untimely response resulting in an unnecessary amount of damage and stress to elderly occupants overnight whose responsibility then is the cost of damages … the manager who failed to manage the emergency, the Body Corporate insurance or the individual unit owners?
Hi Bev
You’d need to check the terms of the Caretaking contract for what it says about emergency situations, if anything. The Caretaker is just an contractor. You wouldn’t be expected to be available 24 hours at your job, and its the same for the Caretaker. Unless they’ve specifically agreed to be available all hours then they are not. The body corporate usually has emergency contact details for a plumber or various other tradesmen via their strata manager.
Responsibility for costs rests with the owner of the property from whence the leak came. If it was a lot, say a burst water pipe inside the lot, then the lot owner is responsible. If its from body corporate common property then the body corporate is responsible. Claims will need to be made on the lot owners contents insurance for damaged contents, and body corporate insurance for any damage to the structure and fixtures.
If you have Management Rights and have apartments in the building looked after by other agents or Airbnb, can Body Corp instruct you to give access to the apartment for trades people?
Hi Penny
Management Rights are two separate hats: Letting Agent and Caretaker. They are two different businesses.
As the Caretaker you’re to work with committee, per terms of the agreement, to carry out instructions related to maintenance. If that includes opening an apartment for a body corporate trades person it seems to me as part of your job. The fact that the apartment is managed by someone else is irrelevant.
Thanks Lisa, I don’t think I worded it correctly. If an apartment that is not in our letting pool has arranged for a tradesperson, eg: Foxtel, plumber or whoever it may be they have engaged, is it our responsibility to give them access if it is not an emergency?
Hi Penny
If the matter isn’t related to the body corporate (ie Caretaker duties) and not one of your pool (ie Letting Agent duties) then I’d suggest your only roll is monitoring behaviour that breaches by-laws (eg parking in wrong space, rubbish on common property). You work for the body corporate, as directed by the committee, within parameters of your agreements. You don’t work for the owners.
Which doesn’t mean to say you couldn’t offer a service to those owners: at a mutually agreed cost.
There is a clause in our Letting Agreement that states if a unit in the letting pool is sold, the seller must obtain agreement from the buyer that the buyer will honour the letting contract for 12 months. The Manager says this is because units can be booked up to 12 months in advance and it is a legal contract with the holiday renters that they have access to the unit.
Is this legal?
Sandra
Hi Sandra
This is a contract law question I’m afraid, best directed to strata solicitor. I don’t know if the body corporate is able to enter a contract that binds the lot owner in relation to the lot. They can in relation to the common property. You might be able to challenge on that grounds, but as I say talk to a Solicitor.
Hi Lisa,
I’m looking into management rights as a business opportunity/lifestyle change and I just wanted to say that your contribution to peoples questions here is absolutely amazing. I have found it difficult to find current, real experiences I can read about in order to gauge the types of challenges that may arise. I can see you have provided a genuine service for many years in this forum and sharing that information is very much appreciated.
Thanks Crystal
I have a natural advantage in that I get to read about how people are dealing with the issues that arise every day as part of my job.
Hi Lisa
Can the Secretary/treasurer have her own CCTV system covering common areas installed in her office in the building at the cost of the Body Corp? Does she have the right to do this, even though there is already CCTV in the building within the Building Managers office?
Hi Penny
There is no reason why an owner cannot have their own CCTV, though it should point at their own property.
The body corporate should not be involved in paying for it unless there is a compelling reason.
Hi Lisa
Can you tell me if the Body Corporate have any say over the letting pool or if they can even discuss these issues at meetings
Hi Janice
The body corporate may discuss the terms of the letting agreement. Relationships between owners and the letting agent however are between those parties.
Hi Lisa
What do you mean “discuss terms of the letting arrangement” – charges etc?
Hi Janice
I’m not sure what you mean.
Any agreement between the Letting Agent and an owner is different to the Letting Agreement with the body corporate. The Letting Agreement essentially ensures that the Letting Agent will be the only party who may run a real estate rental service onsite. The clients of that service are usually the owners within the scheme though there is no requirement to use the onsite Letting Agent as an owner’s letting agent.
The terms of the rental service are between the Letting Agent and the client (owner) and nothing to do with the body corporate. Its up to each party to negotiate.
The onsite manger at our complex has just put up the fees/commission etc for those people in the letting pool but I understand that the BC are unable to interfere with this or even ask questions about it. His attitude is if you don’t like it leave.
He also wants the BC to assist him in ensuring that owners do not rent out their apartments themselves with rolling 3 mth letting arrangements. I was under the impression that the BC in Qld has no say on this type of thing and cannot insist of each owners right to do as they wish.
Are these statements correct?
Also on another issue, it has come to our notice that the onsite manager has been instructing owners how to vote at the AGM. Sending then a copy of his voting paper to copy and denigrating nominees if they do not suit him and also commenting on motions and why they are not suitable. Is this allowed?
Hi Janice
Yes that is correct: owners are free to rent their lots as they choose, bearing in mind they must comply with local council zoning.
Campaigning for votes is allowed yes. All parties are welcome to carry out a campaign assuming no one uses body corporate resources and the code of conduct is not breached.
Hi – we have 15 apartments in our complex – the Caretaker lives offsite
And is paid $55,000 PA
How many hours a week should we expect Caretaker on site
Hi Max
You need to refer to your Management Rights documents. Each agreement will have different requirements. You need to review your agreement.
Hi, the building manager in my body corporate wants the committee to buy a lawnmower so he can do the lawns which is part of his duties. I think he should supply the tools of the trade who’s right?
Hi Cooper
You need to refer to the Agreement. It might specifically state that the body corporate is required to provide tools. Most do. Each contract is different though, so do check.
The lawnmower then becomes a body corporate asset and remains with the body corporate when the Management Rights are sold.
Lisa, this is a fabulous service you are providing and have done so for a number of years that I can see. I am on the body corporate commitee of a large estate in SE Qld. We have had new caretakers come in approx 6-8 months ago. We are finding them to be very hostile and aggressive towards various committee members and undertaking work without prior approval by the committee. They are presenting limited to no information on invoices but expect them to be paid without further explanation or changes as ‘that requires additional work’. They seem to think the committee is irrelevant and they can work independently of us and our Body Corporate Manager and basically do what they like. Before they took on the management rights as a committee we met with them as part of the screening process and outlined our expectations around working together; budget management; processes we have in place etc however all of this is being ignored. Would love some thoughts as to how we can get the relationships back onto an even keel for the sake of all who live in his community.
Hi Ellen
I wish I had a method that would bring a difficult Caretaker into line: Alas I do not.
This is a dispute, or at least it will be if the behaviour continues. You need to refer to the dispute resolution provisions within the Caretaker and Letting Agreements. Its likely a good idea to review the entirety of the agreements to see what tasks are required and when.
The committee will need to make clear direction to the Caretaker regarding the issues you want addressed. This will be the first step. Making it clear that the behaviour is not acceptable and having clear minutes of having done so. It would be ideal if you could couch it in terms of tasks required and timeframes.
Have a read of this article which talks about resolving disputes. With reference to the Agreements the dispute resolution process is usually issuing of Remedial Action Notices (RAN). In all cases its going to be essential to make sure the body corporate / committee have acted reasonably and with restraint. So committee will need to be clear and firm in your instructions, preferably as a unanimous group. Ideally one person should be appointed to give instruction / receive information to / from the Caretaker.
If things are not getting better I suggest getting legal advice as early in the process as you’re comfortable with.
I’m not suggesting you start throwing around legal threats or RAN: indeed in all circumstances its going to be a better solution for all if you can negotiate a way to get along. I’m suggesting you approach the resolution of this problem from a place of acknowledging it could lead to legal action and the committee have proceeded carefully with a full understanding of their rights and responsibilities.
Its a challenging situation Ellen. I wish you all the best with it.
Hi Lisa
This is a terrific service. We own a unit with a live in manager who has management rights to the 6 units.
Can you please advise what costs the owner of those rights can pass on to us. For example, phone Eftpos, credit card commission and advertising. Not all charges appear on our statement every month but some do. Also should be be paying for the booking system used by the live in manager?
Hi Denise
The letting of the unit is a private agreement between the Manager and the owner of the lot. You will have an agreement with them regarding costs they can charge re letting fees and additional costs. The costs you’ve mentioned would all come under that agreement.
The body corporate has no influence over that agreement. You’d need to review your agreement then discuss with your Manager.
We have a caretaker from hell.
The committee has offered to buy out the contact, but not the unit, and run the complex ourselves, as this is what we have been doing for a while now anyway.
Most of the complex is now resident owners so there is no holiday rentals so projected income is only the remuneration.
With no unit and low income will the committee/owners ever be able to sell the management rights.
A few owners maybe able to take on managing some outside contractors to do the work, but the next committee may not be in a position to do this.
Is buying the management rights/caretaker agreement a good idea.
Hi Christine
This is really a question of what you hope to get out of the process. Getting rid of your “Caretaker from Hell” is a big draw. Especially if the contracts still have some time to run. Usually, in a case where you’re at a stale mate with the current contractor it will work out better to get rid of them, but as you say, it always depends on committee and having someone take point.
There are other options for carrying out tasks around the scheme. Many bodies corporate engage companies / individuals on a yearly or two-yearly basis to carry out the tasks they require, usually with the proviso the agreements cannot be assigned. This allows committees to be responsive to the needs of the scheme and adjust works reasonably easily. Others simply employ someone. Others engage a gardener who also does odd jobs and a cleaner and don’t need a Caretaker at all. Much will depend on the needs of your scheme and how much the committee / owners wish to be involved.
Alternatively there will be the option to create another management rights agreement. You’d need to check with a Solicitor as to whether the body corporate can sell them.
Hey
Our caretaker agreement is finally expiring after 25 years the committee don’t want to extend the agreement. Can the committee approve the use of contractors to provide the individual services eg gardener or a pool guy or does it have to go to a full vote cost is under the committee’s spending limit
Hi Karl
If any appointment is a contract for less than 364 days and under committee spending limit then, yes absolutely committee can approve. Anything over a year goes to general meeting.
Hi,
I live in a 20 year old residential complex that also has 8 holiday lets. We have a very capable on site manager whose salary increases annually with CPI increases and a tri annual review is also conducted. Despite never having been claimed previously, the current manager wants loadings to the standard rate of
125% for Saturday
225% for Sunday
125% for public holidays.
This is not in the contract he signed, are we obliged to pay it?
Regards
Maree
Hi Maree
No. If it’s not in the contract you’re not required to pay it. The Caretaker will need to seek an amendment to the agreement to be able to charge that amount.
I am an owner in a development in Queensland. We have a CMS. Can the caretaker take a holiday away from the complex without appointing a replacement caretaker?
Hi Alan
You need to refer to the terms of the Caretaker’s appointment contract. That should set out the terms for leave.