When changing body corporate managers [BCM], most bodies corporate arrange for their incoming BCM’s start-date to coincide with their departing BCM’s end-date. Smooth and professional handovers are the norm during the transition period – even though the departing BCM’s contractual responsibilities may technically cease immediately upon expiration of their contract.
It is not that uncommon however for a body corporate to find itself without a BCM for an interim period between one BCM and the next. What to do?
One option is for the body corporate committee to make do without a BCM for the time being. This is perfectly legal: a body corporate is not obliged to engage a BCM. Legal, yes, but not very attractive to many committees.
Another option – the one normally chosen – involves an informal interim arrangement between the committee and a BCM, who may be either the departing BCM or the prospective BCM.
These informal engagements are technically not in accordance with the BCCM legislation – only a body corporate in general meeting can engage a BCM.
Notwithstanding this technicality, most interim arrangements proceed on an amicable, or at least professional, basis. But what if it doesn’t, particularly if the committee wants to end the arrangement?
One option is for both parties to agree to disagree, settle the account for work performed, return all body corporate property – including records, the body corporate seal, and funds – to the body corporate, shake hands, then go their separate ways.
Another option sees the BCM defending the (seemingly) indefensible, ending up in an adjudication – and losing. This invariably leads to publication of the decision, including the identity of both the body corporate and the BCM. Not a good look.
Baffling Behaviour by Departing BCM – Park Breeze + BCHQ
In March 2019 the UOAQ published Newsflash #63 “BCM’s Baffling Behaviour”. It involved an adjudication brought against Park Breeze Luxury Apartments [Park Breeze] by their former BCM, Body Corporate Headquarters [BCHQ].
BCHQ had been engaged by Park Breeze for a one-year term which ended 1st May 2018.
In September 2018, Park Breeze wished to engage Strata-Jem Pty Ltd [Strata-Jem] for a term of one year.
BCHQ sought interim orders opposing this, claiming to be the BCM on the basis of a roll-over provision in their now-expired contract.
Park Breeze responded they had received legal advice BCHQ’s engagement ended 1st May 2018 and the roll-over provision was invalid.
Adjudicator Schmidt agreed.
You can read the adjudication order in full here.
Baffling Behaviour by Prospective BCM – Paradise Towers + Strata-Jem
A UOAQ member has recently alerted us to a similar adjudication, coincidentally also involving Strata-Jem.
This adjudication was brought by the body corporate [Paradise Towers] against Strata-Jem. Both are on the Gold Coast.
Paradise Towers’ previous BCM’s engagement had terminated in the three-month period between the end of their financial year (late-2017) and their scheduled AGM (early-2018).
Strata-Jem was engaged by the committee to provide “secretarial services” in the interim until the “next General Meeting” ie the 2018 AGM. Paradise Towers then transferred its accounts, records and soft-ware to Strata-Jem.
Conflicts arose: the AGM was delayed; an adjudicator’s order to extend the deadline to 31st March 2018 was obtained; conflict continued regarding calling of the delayed AGM.
Paradise Towers went to adjudication seeking:
- orders for the return of all body corporate records etc; and
- declarations Paradise Towers be allowed to conduct its 2018 AGM without interference from Strata-Jem.
Adjudicator Rosemann concluded that while the committee had engaged Strata-Jem, they had no authority to do so. Accordingly, the committee’s resolution was invalid.
Comments by the adjudicator about Strata-Jem include, at para.:
“…I am at a loss to understand why Strata-Jem seems to have believed it was entitled to act other than in accordance with express directions of the Committee. It certainly was not. The apparent conduct of Strata-Jem in purporting to send materials to owners contrary to Committee directions, or to include a motion (for its own engagement) on the AGM agenda without Committee agreement, are unacceptable.”
Given that Strata-Jem’s legal position was seemingly so tenuous, it is difficult to understand – in the face of opposition from the committee – why they did not cut their losses much earlier and avoid adjudication.
You can find the adjudication order in full here.