Question: When the body corporate manager’s contract is due for renewal, are they required to provide the committee with an alternative quote at the AGM?
Answer: It’s a question of spending limits as body corporate managers are contractors like any other.
It’s a question of spending limits as body corporate managers are contractors like any other. If the price of the management proposal is below the major spending limit for a scheme only one quote is required. If the major spending limit is exceeded an alternative is required.
The body corporate can set the major spending limit at a general meeting but otherwise the default amount is the lesser of either:
$1,100 multiplied by the number of lots in the scheme
or
$10,000.
It’s worth noting that the spending limit is GST inclusive where most body corporate agreements list GST exclusive figures.
There can also be some debate about the value of a body corporate contract as most include a range of fees for services that may or may not be used. There is no exact answer as to what total should be listed, but as a standard you might look at the value of the contract as being the total for management and disbursements to cover the agreed services.
So, if you have a 30-lot body corporate building and a management agreement that lists fees of $130 for management per lot per annum and $40 for disbursements per lot per annum the value of that contract could be considered to be:
30 lots x ($130 + $40) = $5100.00 ex GST or $5610.00 inc GST.
In a building of that size the default spending limit would be $10,000 so only one agreement would be required to be considered although others can be added if you wish.
Check the BCCM website for more details on spending limits: QLD Government: Body corporate spending
William Marquand
Tower Body Corporate
E: willmarquand@towerbodycorporate.com.au
P: 07 5609 4924
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