This article is about engaging a body corporate manager in place of a committee or a ‘Chapter 3, part 5 engagement’.
Table of Contents:
- 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.
- ARTICLE: Engaging a body corporate manager in place of a committee
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.
Steps to Engaging a Good Body Corporate Manager
Life is busy. It can be hard enough managing your own affairs without being elected to a committee of a body corporate and being expected to manage the affairs of a community titles scheme. Even so, it is considered best practice to have your body corporate represented by those who have an emotional and/or financial interest in the scheme. Sometimes, however, it is not always possible.
A committee under the Standard and Accommodation Modules must contain a minimum of three eligible individuals. The three executive member positions of chairperson, secretary and treasurer must also be filled. Non-voting members of the committee are not counted to make up the minimum of three members.
If your body corporate is not able to find enough people to fill the executive positions on the committee or enough people to fill to the required number of three, the body corporate must consider engaging a body corporate manager in place of the committee. This is often referred to as a ‘Chapter 3, part 5 engagement’.
This means that even if you have been able to fill two executive member positions or a number of people are willing to be ordinary members of the committee, your body corporate has not fulfilled the minimum requirements under the legislation (Standard and Accommodation Modules) and a body corporate manager must be engaged.
A body corporate manager engaged under these circumstances is authorised to carry out all the functions of a committee and exercise all committee powers. This means the body corporate manager makes all the decisions that your committee normally would, including things such as pet approvals and spending up to the committee’s spending limit.
The body corporate has three different opportunities to engage a body corporate manager under these circumstances.
Firstly, at an annual general meeting (AGM) if at least one executive member position on the committee is not filled or the total number of voting members of the committee elected is less than three. Bodies corporate often choose to include a motion about a Chapter 3, Part 5 engagement on the agenda at the AGM when year after year they fail to achieve three individuals on the committee. Lot owners also may have made it clear that they do not intend to nominate so a motion is put on the agenda at the AGM just in case. This is more common for smaller schemes.
If the motion passes at the AGM to engage a body corporate manager under Chapter 3, Part 5, it will save the body corporate the expense of calling another general meeting.
Secondly, at an extraordinary general meeting (EGM) called after an annual general meeting where at least one executive member position on the committee is not filled or the total number of voting members of the committee elected is less than three. Sometimes it is not always obvious that the body corporate will not be able to fill the committee positions to the required number at the AGM. If that is the case, the body corporate must call an EGM within a month to make a last attempt to fill the committee and also propose a motion to consider engaging a body corporate manager in place of the committee.
While there is added expense to the body corporate to do it this way, it can be a good idea to allow lot owners another chance to nominate for the committee. Often when owners receive the minutes and realise that not enough people have been elected to the committee they may change their mind once they weigh up the expense of a body corporate manager engaged under Chapter 3, Part 5 and the added responsibility of being a committee member.
Thirdly, at an EGM called to fill a casual vacancy on the committee and at least one executive member position on the committee is not filled or the total number of voting members of the committee is less than three.
Sometimes committee members resign or sell their lots and are no longer eligible to be on the committee. If this happens, the body corporate must call an EGM within two months of the vacancy occurring to attempt to fill the vacancy. If, because of the vacancy, the numbers on the committee have fallen below three or one of the executive positions remains unfilled the body corporate must consider a motion to appoint a body corporate manager under Chapter 3, Part 5.
Regardless of the type of general meeting at which a motion to appoint a body corporate manager is considered, it must always be the last item of business on the agenda. This allows the body corporate to make all attempts to fill the committee positions.
Engagement of a body corporate manager under these provisions must always be in writing and state that the body corporate manager is authorised with the powers of the committee and each of the executive members of the committee. It must also state the basis for how the payment for the body corporate manager’s services is worked out, for example an hourly rate, a rate per lot or a rate for each service provided.
This type of engagement ends 12 months after the engagement begins or at the end of the body corporate’s next AGM held after the general meeting where the engagement was approved. The engagement may be terminated in the same manner as other service contractors – by mutual agreement, conviction of offences such as fraud or assault and failure to comply with a remedial action.
During the period of the Chapter 3, Part 5 engagement the body corporate is not able to elect a committee. A report is provided to the members of the body corporate to keep them up to date with the decisions and spending of the body corporate manager.
Being a committee member is often a thankless task with a lot of responsibility. Outsourcing that responsibility to an external party is tempting; however, it is not a decision that the body corporate should make lightly. It might be a good idea for the body corporate to question why there is a lack of interest in committee membership. Are there some underlying issues for the body corporate to resolve?
If the majority of those interested live offsite, for example, the body corporate could encourage the use of electronic attendance at meetings. If the problem is being inundated with owner requests, the body corporate could consider implementing a by-law to manage owner communications. It may be just a feeling of committee members of not being valued and perhaps the body corporate could consider paying a small remuneration to its committee members. Body corporate legislation sets out what remuneration is permissible. Our Office can provide information about all of these circumstances on 1800 060 119 (freecall).
This post appears in Strata News #294.
Have a question about a Chapter 3, part 5 engagement 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
This article has been republished with permission from the author and first appeared in the BCCM Common Ground newsletter.
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