This article discusses the management rights extension benefits for lot owners.
Question: Our Caretaker has requested a 5 year extension to the management agreement. What would be the advantage for the lot owners?
I have a question about a manager asking for an extension to the “management agreement”. This would give them another 5 years lease for nothing. Would there be any advantage for the owners?
I have searched past AGM minutes and found this has happened before. The manager has applied to the AGM for approval of their option as per the agreement but added in the same motion a request for extension. Here we have two different motions in one, is this correct? One motion is just a formality unless there are issues, the other requires proper consideration before a definite vote. This looks to be a method of hiding something in plain sight. What can we do about this?
Answer: One thing to keep in mind is that the legislation specifically prohibits the body corporate from receiving a benefit in relation to any extension.
One thing to keep in mind is that the legislation specifically prohibits the body corporate from receiving a benefit in relation to any extension. However, the ARAMA website lists out a number of advantages of management rights. Commonly extensions are also required by the manager’s financiers.
This is a regular occurrence and it is likely that this has happened a number of times. It would be difficult to say that the process is hiding something as the legislation also requires specified forms to be circulated in the agenda to act as disclosure to owners. This is called the BCCM Form 20. There are also additional requirements on the motion to include the terms and effect of the change.
If there are concerns about what has been submitted, the body corporate and any owners are entitled to seek legal advice on the documents.
This post appears in Strata News #477.
Todd Garsden
Mahoneys
E: tgarsden@mahoneys.com.au
P: 07 3007 3753
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