This article discusses resident unit manager remuneration review, exploring fair review models, conflict-of-interest risks, and practical approaches for bodies corporate to negotiate informed outcomes.
Question: What is the best way to run a resident unit manager’s remuneration and duties review to avoid conflicts of interest?
My take-out is that any alteration to any existing resident unit manager’s contract requires negotiated consent from both sides, regardless of the merits of the proposed alterations. In this previous question, the ‘suitably qualified professional’ was engaged – and presumably sourced – by the body corporate to do the review.
I have seen several reviews initiated by resident unit managers who sourced and nominated their own reviewers. I’ve even seen reviews where the resident unit manager required the body corporate to agree, in principle, with the recommendations by their reviewer before they would commit to incurring any expense for the review.
Without commenting on the professionalism and independence of the reviewers – whether the body corporate’s or the resident unit manager’s – both models raise questions of conflict of interest.
Is there an alternative model, eg, where each party engages their own reviewer and then explains and justifies their processes to each other?
Answer: These discussions often come down to money, and there is often a reluctance to spend more than necessary.
As far as I know, there is no official or set process for remuneration reviews. It comes down to what the parties agree. So, yes, you could have two separate reviews, then negotiate on that basis. However, these discussions often come down to money, and there is often reluctance to spend more than necessary. Still, the review costs are relatively low compared to the long-term costs of the contracts. I’d encourage owners to get the information they need to negotiate.
William Marquand Tower Body Corporate E: willmarquand@towerbodycorporate.com.au P: 07 5609 4924
This post appears in Strata News #774.
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