This Q&A the anniversary of the annual general meeting held after the original owner control period ends has been supplied by Ben Seccombe, Mahoneys.
Question: Can you please clarify the anniversary of the annual general meeting held after the original owner control period ends?
Can you please clarify the anniversary of the annual general meeting held after the original owner control period ends?
Our scheme’s first AGM was held on 30 January 2020, whereby the body corporate’s first committee was voted in. Therefore, the anniversary of the annual general meeting held after the original owner control period ends would be 30 January 2021. Is this correct?
Answer: Your query relates to when the ‘review period’ ends for service contracts which are longer than 3 years.
Apologies in advance for the lengthy answer, it is a complicated question.
A review under the review provisions cannot be commenced until such time as the ‘Original Owner Control Period’ (OOCP) has ended.
The ‘original owner’ for a community titles scheme means the person who, immediately before the establishment of the scheme, is a registered owner of a lot that, on establishment of the scheme, becomes scheme land. In practice, the original owner is usually the developer.
The BCCMA defines the OOCP to mean that period when either:
- the body corporate is constituted solely by the original owner; or
- the original owner owns, or has an interest in, the majority of lots in the scheme or, in any other way, controls the voting of the body corporate.
Accordingly, in order to establish that the OOCP has ended it needs to be established that the developer does not either:
- own or have an interest in a majority of lots in the Scheme (i.e. more than 50%); or
- otherwise control the voting of the Body Corporate (e.g. by retaining voting rights under a contract of sale).
If either of those circumstances still prevail, then the OOCP continues and a review cannot be commenced.
In order to get an indication of whether the OOCP has ended, some practical enquiries you can make are to:
- request a copy of the body corporate roll to see who the owners are; and
- review the minutes of the most recent general meeting to see how votes were exercised (i.e. was the developer still exercising votes for a majority, some or no lots).
In practice, it can be very difficult to ascertain the precise point in time when either the number of lots owned by the developer fell below 50%, or the developers control over the Body Corporate (by voting rights) ended.
This in turn creates difficulties for you in relation to your query.
Your query relates to when the ‘review period’ ends for service contracts which are longer than 3 years (which would cover the majority of caretaking services contracts).
The relevance of the Review Period is that it marks the period within which the review must be completed and is a trigger to allow the parties to escalate the matter to QCAT if they haven’t been able to resolve it between themselves.
The Review Period (for agreements entered into after the commencement of the section, and which are for a term of longer than 3 years) ends on the later of:
- 3 years after the term of agreement starts; or
- 12 months after the annual general meeting next held after the OOCP ends.
The first date is easy to calculate – you look at the commencement date of the agreement, and then add three years.
The second date is harder.
You need to:
- work out the date the OOCP ends;
- review the Body Corporate records to see the date of the next AGM held after (a); and
- add 12 months to the date of on which the AGM in (b) was held.
I hope that assists.
This post appears in Strata News #381.
Have a question about changes to your caretaking agreement or something to add to the article? Leave a comment below.
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