Our caretakers has requested a 5 year extension on the management rights agreement. Can we charge the market value of granting the extension.
I am an owner of a unit in a Qld Resort in Noosaville. Our body corporate agrees to extend the caretaking agreement and the letting agreement for another 5 years if the owners vote yes to the motion. Am I missing something here? The caretakers had a (free) 5 year extension a few years ago - to help sell the management rights, which never actually happened. The asset value of the caretaking (resort management) rights would increase when the 5 year option was granted.
In my financial world, you would sell such an option, not just give it away. Should not the committee seek external professional advice to ascertain the true market value of granting the extension? This cost would then be charged to the caretakers and paid to the body corporate for the benefit of all unit holders.
The body corporate cannot receive any payment for the granting of what is known as a ‘top up.’
The BCCM legislation actually prevents a body corporate from charging a fine, premium or consideration in relation to the granting of, or variation to, a management rights agreement. That means the body corporate cannot receive any payment for the granting of what is known as a ‘top up.’
You can find the section here: BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997 - SECT 113.
Log in to your existing Lookupstrata Account to download the printable file.
With more than 30 years’ experience in property, management rights and body corporate law, Frank is a beacon of knowledge and a renowned strata-industry expert. Known for his straight-shooting style and commercially driven advice, Frank cuts through the most challenging legal problems to deliver real-world solutions.
An active member of the strata community, Frank generously shares his time and experience to help educate the broader industry on all things strata law. He embraces his role as an industry leader and is committed to continued industry innovation and ensuring everyone in the strata sector has access to practical resources and solutions as they navigate through the strata maze.
He regularly presents to all industry segments and also speaks at Queensland Law Society events on strata law issues to other lawyers. Frank is a regular contributor to LookUpStrata.
Lookupstrata Directory
Looking for QLD Strata Specialist in your area? Search within our LookUpStrata Directory for the best list of contacts available
Search the directory
Comments
Log in to leave a comment