Think Nicholsons

Jan 09

Body Corporate Tips – Review of Service Contracts


I am easily satisfied with the very best – Winston Churchill.

Are you satisfied with your caretaking agreement?

1. If not, you may be able to review it under section 130 of the Body Corporate and Community Management
    Act 1997 (Qld) (BCCM Act).

Eligibility

2.  To be eligible for a review:

a)    the agreement must have been entered into during the original owner control period
(i.e. when the developer controlled the voting of the body corporate); 

b)    the original owner control period must have ended; 

c)     there must not have been an assignment of the agreement; and

d)    the agreement must not have been previously reviewed under this provision.

Timing

3.  The review must be finished within the review period. For an agreement that runs for more than 3 years, 
 the review period ends on the later of:

a)     3 years after its commencement; or

b)    1 year after the annual general meeting held after the original owner control period ends (note: where a
developer had difficulties selling the development, the review period might not end until years after the
agreement commenced).

Purpose

4. The purpose of the review is to help the parties decide:

a)     if the functions and powers of, or the remuneration payable to, the caretaker are currently fair and
reasonable; and

b)    if they are not, how they should be changed to ensure they are fair and reasonable.

Review Advice

5. Within 2 months after requesting the review, the party requesting it must obtain independent written advice
based on those matters identified at paragraph 4 above and the review criteria set out at section 134
of the BCCM Act and give that to the other party.

What if the parties can’t agree?

6. Either of the parties can apply for an order of the Queensland Civil and Administrative Tribunal (or a specialist
adjudicator) to resolve any dispute about the review.

If you would like to discuss this article, or body corporate issues more generally, please telephone Bronwyn Ablett on (07) 3226 3938.

Bronwyn Ablett

Senior Associate
Bronwyn has experience in the litigation and resolution of disputes predominantly in the Supreme and District Courts and also in the Magistrates Court . Those disputes have included complex commercial disputes, including proceedings against the State.