This article discusses whether a body corporate can refuse caretaking agreement extension requests, explaining the decision-making process and owners’ voting rights under strata legislation.
Question: The body corporate wishes to decline all future requests for additional 5 year extensions to the caretaking contract. Are there any problems in doing this?
Our caretaking cost is $270,000 pa for a 25 year term with a 3% minimum annual increase.
The Body Corporate recognises the rip off and wishes to decline all future requests for additional 5 year extensions to the caretaking contract. Are there any problems in doing this?
Answer: One individual cannot ever speak for the body corporate.
The simple answer is ‘no’.
What I would suggest is that the author of the question is not the body corporate. They are almost certainly a lot owner and perhaps even a committee member. But one individual cannot ever speak for the body corporate.
The legislation allows a body corporate to agree (or refuse) to extend management rights agreements at a general meeting. If a motion to add a term to the management rights agreements is put to a general meeting the body corporate (as opposed to individual owners) will decide that as often as asked. That is the nature of a strata democracy and the legislation that regulates it.
This post appears in Strata News #458.
Frank Higginson
Redchip Strata Law
E: FrankH@redchip.com.au
P: 07 3193 0500
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