This article discusses when caretaking agreement tender requirements apply, and whether a body corporate must go to tender when assigning an existing agreement versus granting a new one.
Question: Does a Body Corporate have to go to tender to assign a caretaking contract or can we just get two quotes? Is there a legal requirement to go to tender?
Answer: I suspect when the body corporate is referring to a tender, it is referencing the grant of a new agreement.
Only a party with an existing agreement in place can assign an agreement. Accordingly, I suspect when the body corporate is referring to a tender, it is referencing the grant of a new agreement. If that is the case, there is no requirement to go to a tender. However, the regulation module will require:
- A general meeting considering the motion by ordinary resolution without the use of proxies (assuming the term of the agreement is more than 12 months);
- A secret ballot (if a letting authorisation forms part of the tender proposal); and
- Two quotations to be considered (assuming the cost of the proposal is more than the major spending limit).
This post appears in Strata News #602.
Todd Garsden Mahoneys E: tgarsden@mahoneys.com.au P: 07 3007 3753