QLD: Does Changing Regulation Modules Affect Existing Management Rights Agreements?

This article discusses how a management rights regulation module change affects existing agreements.

Question: If we change from the Accommodation Module to the Standard Module, does this have any effect on our management rights agreement?

We are a 100+ lot complex and our CMS is registered under the Accommodation Module. A motion for our next AGM is proposing to change to the Standard Module. Our complex meets all the criteria for this.

However, the current Caretaking & Letting agreements are 5 years into their 25 year terms. I understand that these agreements will carry over as is under the Standard Module.

If the Caretaker wishes to seek an extension (after we have changed to the Standard Module) will this be governed by the 10 year limit of the Standard Module or will the old maximum term of 25 years still be applicable?

Answer: Even if you may now be governed by the Standard Module, management rights agreements remain governed by the Accommodation Module.

This is specifically covered by the BCCM Act in s 128 which provides that:

‘The provisions of the existing regulation module applying to the engagement or authorisation continue to apply to the engagement or authorisation until the engagement or authorisation, including any renewal or extension of the engagement or authorisation, comes to an end.’

This means that even though the body corporate may now be governed by the Standard Module the management rights agreements (including the right to extend them) remain governed by the Accommodation Module.

This post appears in the April 2021 edition of The QLD Strata Magazine.

Frank Higginson
Redchip Strata Law
E: FrankH@redchip.com.au
P: 07 3193 0500