This article discusses whether a body corporate buy back management rights arrangement is possible in Queensland, and outlines the key legal, financial, and practical considerations involved.
Question: In Queensland, can the Body Corporate buy it’s own Building Management rights?
In Queensland, can the Body Corporate buy it’s own Building Management rights?
We could then employ a caretaker. I have heard there is an issue that might tangle us up relating to the use of the apartment that comes bundled with those rights. What are the considerations please?
Answer: In short – yes. However, the rights aren’t necessarily purchased, they are terminated in return for a settlement sum.
In short – yes. However, the rights aren’t necessarily purchased, they are terminated in return for a settlement sum.
There are a number of different considerations as to how to implement such an arrangement (and whether it would be worthwhile to do so) depending on the specific circumstances of the building.
This would include a consideration of, for example:
- How the purchase is funded (as this would not have been budgeted previously);
- Whether owners would approve the arrangements;
- The terms of the management rights agreements;
- What type of letting licence the manager has;
- Whether the manager (or a related entity) owns a lot in the scheme;
- Whether the by-laws give the manager’s lot any specific rights or privileges;
Without reviewing these details it is not really possible to give any specific guidance but if the committee were considering going down this path it should ensure that it receives proper advice on at least these issues.
This post appears in Strata News #509.
Todd Garsden
Mahoneys
E: tgarsden@mahoneys.com.au
P: 07 3007 3753
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