This article is about appointing a body corporate manager in Queensland.
Table of Contents:
- QUESTION: Our body corporate manager’s contract expires a month earlier than the AGM. How do we deal with the gap between ending the 3 year engagement and our AGM date?
- QUESTION: As appointing a body corporate manager is a substantial expense, should a tendering process be entered into prior to renewal or appointment?
- QUESTION: Our body corporate manager’s contract is due for renewal. They want to submit a three year contract, which we would consider, but do we have to list an alternative for owners to look at?
- ARTICLE: Key questions when looking for a new strata manager
- QUESTION: If we are looking at replacing our Strata Managers at the upcoming AGM, should this be held at the office of the current managers?
- QUESTION: It would be great for committee’s to be able to ‘rate’ their body corporate managers and for these ratings to be available to potential clients.
Question: Our body corporate manager’s contract expires a month earlier than the AGM. How do we deal with the gap between ending the 3 year engagement and our AGM date?
Our 3 years Engagement of the Body Corporate Manager is going to finish towards the end of July. Our AGM should be held at the end of August. There will be approximately 1 month after ending the 3 year engagement where the BC Manager should not provide any work for the BC. How do we deal with a situation like this?
Answer: Technically, an EGM should be called in advance of the contract expiry to agree on a new contract or a new managing agency.
Unless the contract has any specific rollover clauses, it will end on the day it ends. That can create some difficulties for body corporates and managing agencies.
Technically, an EGM should be called in advance of the contract expiry to agree on a new contract or a new managing agency. If that hasn’t happened and the body corporate manager continues to act as a managing agent after the contract end date, they may be challenged on their capacity to act as managers or raise any fees for works done.
NSW legislation has taken steps to tidy this situation up – committees can agree a three month extension of a contract to allow time for a meeting to be held – but I’m not aware of similar provisions in Queensland. If your body corporate has any concerns about this it should probably seek legal advice.
This post appears in Strata News #495.
Question: As appointing a body corporate manager is a substantial expense, should a tendering process be entered into prior to renewal or appointment?
I am a residential unit (lot) owner in a large body corporate complex in Brisbane, of which 63 floors are up-market residential units and 12 operated by an international hotel chain. At the recent AGM, the existing body corporate manager was again approved in that role for the coming year. It appears, however, that the body corporate committee may not have engaged in any formal pre-tendering process prior to proposing that manager as the sole candidate at the meeting. As the cost of body corporate management is a substantial sum of expenditure in our yearly accounts, should not an authentic tendering method be employed by the body corporate prior to the AGM and disclosed to owners as a matter of proper practice?
Answer: There is no requirement to carry out a tender prior to engaging a body corporate manager (or any other contractor).
There is no requirement to carry out a tender prior to engaging a body corporate manager (or any other contractor). Relevantly, any lot owner is entitled to submit an alternate proposal that could have been considered at the general meeting along with the committee’s recommendation. If a lot owner did not take up this opportunity then it appears the process has been properly followed provided all relevant spending limits have been complied with.
This post appears in Strata News #486.
Question: Our body corporate manager’s contract is due for renewal. They want to submit a three year contract, which we would consider, but do we have to list an alternative for owners to look at?
Answer: You will need to get at least 2 quotes if the value of the proposed engagement is greater than the major spending limit.
You will need to get at least 2 quotes if the value of the proposed engagement is greater than the major spending limit. The major spending limit is the lesser of either $1,100 multiplied by the number of lots in the scheme, of $10,000. You’re not obliged to list an alternative otherwise, although it is open to an owner to get a quote from another management firm if they wish.
This post appears in Strata News #463.
Article: Key questions when looking for a new strata manager
What should you ask and what warning signs should you look out for when choosing a new strata manager?
What do we want from the manager?
Maybe the most critical question but often skipped over. If you want to change managers, start by defining the reasons why and what you expect from your next manager. Then ask managing agents if and how they can deliver on those expectations. Be realistic. If you say to a new agency that you are a low fuss scheme and want to keep costs down that’s fine, but if you then spend the next twelve months mailing the manager every day, it’s not going to work out. If your plan needs help no problem but make sure the next company can manage that.
What are the costs?
Focusing on the annual fee per lot and costs for disbursements only tells part of the story. Most strata contracts are structured to have a set of agreed services that include general secretarial services in the annual fees, and a range of extra costs applied on a user pays basis. Some companies offer cheap annual fees, but they have to make money somehow, and that usually means deriving revenue from extra services. Check the contract carefully and make sure you understand what is included and what’s extra. Think about what your plan actually asks the manager to do and check this against the agreed services. If you require work outside of those services, you can reasonably expect to see additional costs.
How do we access our records?
You should be able to access general records to your plan such as details about the financials, minutes, insurance and by-laws quickly, easily and without cost. Online portals help provide transparency and if they can’t hold all documentation, check how long it will take a manager to respond to information requests and if there are any fees for giving access to your records.
What’s the term of the agreement?
Most agreements are one, two or three years. Longer terms may be encouraged by offering lower fees or incentives such as a cap on annual increases. Shorter terms give you the flexibility to renegotiate or move on at the end of the deal. Get a length you feel comfortable with.
Who’s the manager?
Your next company may be able to nominate the manager for your site in advance – ask and see. Why not have a chat with them and see if you think they will suit your building? Do they have the knowledge and experience you need? A good connection with the manager makes a big difference so make sure you get the right fit.
Does it matter if the company is big or small?
Larger strata firms tend to be more structured and process-driven while the smaller usually offer more tailored flexible services. In and of itself size probably doesn’t matter much but experience can and the capacity of the individual manager can.
What red flags should we look out for?
- Online reviews: They don’t tell the whole picture, but online reviews give an idea of what to expect. In isolation, a couple of bad reviews might not be significant, but if there are a lot of complaints about the same thing that’s a warning sign.
- Staff turnover: Even if you find a good manager, it’s no good if they are gone in six months. High turnover can be a sign of an unhappy company. Check how long staff stick around.
- Overworked managers: How many buildings does a manager have? How many lots? How many people assist them? Your manager might be great, but they are not much use to you if they are burned out. Unfortunately, many are.
- Conflicts of interest: many strata companies diversify into areas such as working with developers or property and building management. Synergy can be a good thing, but it’s not always easy to keep a balance. Make sure your strata company is focused on your needs as a strata plan.
This post appears in the March 2021 edition of The QLD Strata Magazine.
Question: If we are looking at replacing our Strata Managers at the upcoming AGM, should this be held at the office of the current managers?
We are having our AGM at the end of October. One of the Motions is to possibly replace the Strata Management Company. Is there a conflict of Interest if the AGM is held in the Office of the Strata Management company and there are no observers to ensure the count of votes are correct and proper. Shouldn’t this be held in a community building with observers (Lot owners) to ensure validity?
Answer: I don’t see an issue with the location of the meeting provided it was approved by the strata committee and is accessible to owners.
I don’t see an issue with the location of the meeting provided it was approved by the strata committee and is accessible to owners.
Votes cast (not in a secret ballot) are part of the body corporate records so any declared vote can be checked if required and challenged if incorrect.
Owners, including yourself, should attend the meeting to vote and help ensure a transparent process is followed.
This post appears in Strata News #416.
Question: It would be great for committee’s to be able to ‘rate’ their body corporate managers and for these ratings to be available to potential clients.
I would like to see an ability for users of the services of body corporate managers to be able to ‘rate’ the managers, and that these ratings are able to be viewed by potential clients. Somebody corporate managers are not very competent, and some are very competent. Why reward the less competent?
Answer: Consider a short term agreement to enable you to assess whether you and the body corporate manager are a good fit for each other.
Selecting a Body Corporate Manager
A body corporate can engage a body corporate manager to supply administrative services to the body corporate.
In Queensland body corporate managers are not required to be licensed and there are no formal training requirements or qualifications needed to be a body corporate manager.
Would you buy an apartment without the usual pre-purchase enquiries; would you employ someone without requesting references? So why engage a body corporate manager without making proper enquiries?
It’s all about ‘due diligence’. It’s not just about price. Decide what you want from a body corporate manager; establish a criteria (call it a tender specification if you like); invite interested parties to quote against the criteria (so you are comparing like with like); and request the names and contact details in at least two bodies corporate which the tenderer has provided body corporate services. Then conduct your background enquiries.
Beware of committing to a long term agreement. Consider a short term agreement to enable you to assess whether you and the body corporate manager are a good fit for each other.
Shamelessly . . . at Tower Body Corporate believe we will be the perfect fit for you. Visit our website for information about us and check out our article on how to change body corporate managers.
Please refer to: Body corporate manager – Queensland Government
This post appears in Strata News #400.
Have a question about engaging a body corporate manager in Queensland or something to add to the article? Leave a comment below.
- QLD: Q&A What Power Does a Subcommittee Have to Make Decisions?
- QLD: Q&A Body corporate voting rules – What you can and can’t do
- Standard Module elections
- QLD: Q&A AGMs, Motions in Strata and the Obligation to Act
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