The body corporate statutory regime can be complex for people to follow. It is expected that, from time to time, certain issues of noncompliance may arise. However, one particular area where strict compliance is necessary is in relation to the requirements for caretaking contracts (that is, service contractors and letting agent authorisations) and body corporate management agreements. These agreements must comply with legislation strictly. Any noncompliance with statutory requirements will render these agreements void and unenforceable.
All these agreements must:
· be in writing;
· state the term of the agreement, including when it begins and ends, and when any right or option of extension begins or ends;
· what functions will be carried out by a body corporate manager or caretaker;
· what the basis of payment for their services are; and
· if it is a body corporate manager, what executive committee member powers the body corporate is authorised to exercise.
Term limits also apply. In the Standard Module, this is 10 years. If an agreement purports to be over 10 years, it is taken to be 10 years only. Once it expires, it is gone – totally. If the person wants to be re-engaged, a new agreement must be entered into.
These requirements are absolutely strict and must be complied with 100%. Anything less and the agreement will be void: there is no room for argument, and there is no way to wave away any defect.
This is because these requirements are strict consumer protection provisions. If any little thing is not strictly complied with, the agreement will be void. Even if something is assumed or implied, such as the start date of the agreement, that will be enough to make it void. As was said in Tang v Body Corporate for Greenly Gardens [2019] QCAT 207 at paragraphs [41] and [42]:
[41] I conclude the provisions are highly prescriptive consumer protection provisions and strict compliance is necessary. Strict compliance required either a calendar date for the beginning or end of the term of the agreements be stated or the mechanism for calculating the beginning and end be clearly set out in the actual body of the documents. If a term has to be implied to achieve that, the agreement is void under ss 114 or 115.
[42] Though the sanction for breach of the provisions is severe I conclude that is the intention of the legislation.
Because these agreements can be for so long, including up to 25 years under the Accommodation Module, these agreements must strictly comply with legislation. A body corporate should seek legal advice before entering into any agreement as dealing with the fallout of an invalid agreement may be more costly than the advice to begin with.
This article is intended as general information only and should not be relied upon as legal advice. For specific legal advice please contact us here.