The UOAQ has a long history of challenging Queensland’s management rights system including – especially including – management contracts locking in owners for up to 25 years.
The current system is bad and broken, yet somehow it has been allowed to survive to the detriment of all stakeholders in our strata world – except the management rights industry.
The good news is that more and more owners have had enough; they are holding their caretakers to account for non-performance of their contracts, and also are saying NO to the inevitable requests for 5-year extensions. .
The other good news is that more and more people – although not directly involved in our strata world – are starting to comprehend just how bad the system is, and are doing something about it. Rather than walking past it, they are speaking up, adding informed and damning commentary to the debate.
A distinguished academic, Dr. Melissa Pocock, in the Victorian Monash University Law Review, has just published the results of her investigation into Queensland’s management and letting rights system. Unsurprisingly, her conclusions are less than favourable to the system. But they go further than just question certain aspects; Dr Pocock concludes the problems are systemic and it goes to the BCCM Act itself:
“Arguably, the BCCM Act has failed in its secondary consumer protection objective when bodies corporate are bound in the long-term by a statutory system designed to protect others.”
‘What About Me? It Isn’t Fair’: The Mantra of Queensland Bodies Corporate in the Management and Letting Rights Sphere — an Investigation into the Limited Statutory Termination Rights
by MELISSA POCOCK
Multi-owned properties are an increasingly popular housing product in Australia. With the growth, a supporting industry has flourished,
particularly in Queensland. Management and letting rights (‘MLR’), as the arrangement is colloquially known, facilitates the provision of caretaking services to the community titles scheme (‘CTS’) and letting services for investment owners. With the growth of MLR, the Body Corporate and Community Management Act 1997 (Qld) (‘BCCM Act’) and regulation modules have been progressively amended to increase protections for MLR contractors and their financiers. This article reviews the MLR-related literature and concludes that the interests of both lot owners and the CTS governing body (the body corporate) have been subjugated to the commercial imperatives of the original owner, the MLR contractor and financiers. Key court and tribunal decisions are analysed to demonstrate a high threshold before the body corporate may validly terminate MLR arrangements. Consequently, the embedded statutory protections may trap a body corporate into inappropriate or undesirable contractual arrangements created and sold by the original owner before its establishment. Arguably, the BCCM Act has failed in its secondary consumer protection objective when bodies corporate are bound in the long-term by a statutory system designed to protect others.