QLD: Who ‘manages’ our Queensland Body Corporate Managers? Let the buyer beware, because there is little else to protect you
This article about Queensland Body Corporate Managers has been supplied by Wayne Stevens, Unit Owners Association of Queensland.
A recent Adjudication Decisioni highlights a systemic problem in Queensland’s StrataWorld ie the absence of regulatory oversight of Queensland Body Corporate Managers.
For those who are interested in reading this decisionii, it has just been published by the Australasian Legal Information Institute (AustLII)iii.
The reported conduct covers both professional competence and integrity. It also covers conduct as both a Body Corporate Manager and as the Authorised Representative of the largest strata insureriv in Australia.
Everyone is entitled to draw their own conclusions about the implications of this decision. The feedback we’ve received from those who have a professional interest in strata matters is that it contains probably the harshest comments they’ve yet seen about a BCM.
At the micro level, what the owners at this particular complex do with this decision is really their call. This is inherent in the self-management model favoured in Queensland, and which is recognised in the order given by the Adjudicator that “the Body Corporate … is authorised to reconsider the subject matter of Motion 5 and 6 at a general meeting.”v
At the macro level, there are broader issues in play. Without leaping to any conclusions about the Queensland Body Corporate Managers overall conduct, it would be reasonable for anyone to ask:
- What about the BCM’s other clients… is there any process in place which will alert them to this decision?
- What about other complexes in the Sunshine Coast precinct which may be looking for a new BCM…how do they find out about this decision?
- Is there any regulatory agency, like the Body Corporate Commissioner’s Office or even Strata Community Association (SCA)vi, which can investigate and apply sanctions etc if appropriate?
The answers, all in the negative, provide little comfort.
In Queensland Body Corporate Managers are pretty much free agents. Anyone can start a business as a Queensland Body Corporate Managers, regardless of the paucity of formal qualifications, relevant experience or good character. All you need is unsuspecting unit owners with big bags of body corporate funds.
It has been many years since our StrataWorld morphed out of what was once a quaint little cottage industry. There are huge amounts of money involved now, and it continues to grow at an ever accelerating rate…and right at the heart of it are the BCMs. They are key players and mostly offer a professional and valuable service.
Their role is formally recognised and even protected in the Body Corporate and Community Management legislation.
But for years now, the Queensland government has refused to introduce, for the unit owners, any corresponding protection from those recalcitrant Queensland Body Corporate Managers in our midst. There simply is no regulatory agency in place to oversee the BCM industry.
We find ourselves in a position now which can be extremely frustrating and embarrassing for the many good Queensland Body Corporate Managers doing the right thing by their clients. But, it also leaves our 400,000 (or so) unit owners in QLD at potential risk eg:
- Financial Management: it is industry practice for BCMs to ‘park’ large amounts of their Body Corporates funds in transaction accounts owned by the BCMs ie owners are not allowed to be signatories on those accounts.
Also, these accounts generally pay little or no interest to the owners.
It is our experience that most owners are not aware of this, and their Queensland Body Corporate Managers are allowed to operate these accounts with little oversight by the owners.
- Strata Insurance: it is industry practice for most BCMs to source and place the strata insurance. This generally involves large premiums paid by the owners with proportionately large commissions flowing to the BCMs, but with little-informed oversight by the owners.
It is our experience that when a BC is persuaded to source their strata insurance through a truly independent insurance broker, the broker generally is able to find a far more competitive cover and premium.
- Ancillary Services: it is industry practice for many Queensland Body Corporate Managers to source ancillary services eg painting, fire protection, insurance valuations, lift maintenance etc.
Once again, it is our experience that BCs who directly source their own contractors generally find they get a better deal for the owners.
- BCCM Legislation Compliance: the reported case here is not an isolated instance of non-compliance with fundamental, and important, legislative requirementsvii.
This problem is reflected in the number of substantive complaints and enquiries which make their way to the BCCM Commissioner’s Office.
How many strata professionals would disagree there is widespread non-compliance with the law in QLD?
Owners deserve something better than a governance process which is founded on little more than caveat emptorviii.
We trust this Adjudication Decision may be the catalyst which finally persuades the QLD government that something needs to be done. The sooner this issue gets included in the current law reform process, with a High Priority stamp on it, the better for everyone.
- Why are Strata Managers so difficult to get along with?
- QLD: How To Find Who Manages The Body Corporate Records
[Disclaimer: Ross Anderson was the Applicant in both cases reported below ie Northcliffe and Waves. Ross is an Executive Member of the UOAQ and he contributed significantly to this particular article submitted for publication in LookUpStrata.]
i Northcliffe  QBCCMCmr 211 (11 May 2016)
iii AustLII is a valuable reference source, providing free internet access to Australasian legal materials, including legislation and decisions of courts and tribunals https://www.austlii.edu.au/
iv There are strong regulatory controls in the ASIC-regulated insurance industry; these may provide a useful model for any future BCM regulatory process in QLD.
v Northcliffe: Order 3 of Adjudicator’s Orders, supra
vi SCA is the representative association for BCMs https://www.strata.community/
vii eg Waves  QBCCMCmr 132 (31 March 2016)
viii Let the buyer beware
The photo associated with this post has been supplied by Flickr: Cliffano Subagio – Alexandria Beach.