Question: Can a Principal Body Corporate supply security services to subsidiary schemes?
Answer: Any existing unlawful agreement should cease, and the subsidiary scheme should enter into a security contract directly with the security provider in respect of its common property.
The Body Corporate and Community Management Act and the regulations permit a Principal Body Corporate (‘PBC’) to provide a range of services to subsidiary schemes. These services are specifically stated in the regulations to include maintenance, communication, and domestic services. Examples are provided for each category of services.
What usually happens is that the PBC signs an agreement with a service contractor and then signs agreements with the subsidiary schemes for the costs of those services, just as a normal body corporate does when providing a service to an owner (such as mowing their private property).
However, the regulations do not refer to the provision of security services, but those services are sometimes supplied by a PBC to a subsidiary scheme. In a recent adjudication, it was held that a PBC cannot provide security services to a subsidiary scheme. The result of this case means that any existing unlawful agreement should cease, and the subsidiary scheme should enter into a security contract directly with the security provider in respect of its common property.
This post appears in Strata News #614.
Peter Hunt Mathews Hunt Legal E: peter.hunt@mathewshuntlegal.com.au