This article discusses when and how a body corporate can pursue a management rights agreement variation.
Question: When does the body corporate have an opportunity to vary a management agreement with the onsite manager? Surely the onsite manager is not going to agree to any proposal without compensation.
When does the body corporate ever have an opportunity to vary a management agreement with the onsite manager? Our agreement has many clauses which appear to be favourable to the manager, notably, the annual salary increase of over 4%, which is bleeding the Body Corporate dry.
How can we vary the agreement when, obviously, the manager is not going to agree to any proposal without compensation?
Answer: What needs to be remembered is that the caretaking agreement is a contract so generally, one party cannot unilaterally change the agreement without the other party agreeing to the change.
What needs to be remembered is that the caretaking agreement is a contract so generally, one party cannot unilaterally change the agreement without the other party agreeing to the change.
The only real options available to the body corporate (absent the caretaker agreeing to the change) are:
- If the agreement includes a review right; or
- The statutory review mechanism, which is discussed in more detail here: QLD: Statutory Reviews – A Process To Change Your Caretaking Agreement
On occasion a caretaker will ask the body corporate to agree to an extension of the caretaking agreement. That request can sometimes provide a good opportunity to discuss (and agree on) other changes to the agreement at the same time, such as a fixed 5% remuneration increase being removed.
This post appears in the February 2021 edition of The QLD Strata Magazine.
Todd Garsden
Mahoneys
E: tgarsden@mahoneys.com.au
P: 07 3007 3753
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