Termination of M R’s | Queensland Community Living Handbook

Termination of Management Rights

The Management Rights owner’s Caretaker Agreement may be terminated under the terms of the contract or under the BCCM Act.
BUT, it is an expensive, drawn-out legal exercise which has largely been unsuccessful in many attempts at court since 1997 when the BCCM Act commenced.
If the Body Corporate believes the Management Rights owner is not honoring the contractual obligation detailed in the Caretaker Agreement they can serve a “Remedial Action Notice” or RAN on the manager. If the Management Rights owner refuses or is incapable of remedying the same breach on multiple occasions then theoretically there are grounds to legally terminate the Caretaker Agreement.

However, under the BCCM Act, the Body Corporate must act and be seen to act REASONABLY.

For the Body Corporate to “Act reasonably” the serving of any and every “Remedial Action Notice” MUST be a LAST RESORT action. Only issued after the Body Corporate has tried everything they possibly can to ASSIST the Management Rights owner to remedy all items of concern relating to their contractual obligations outlined in the Caretaker Agreement.

The Caretaker Agreement between Management Rights owners and Body Corporate is an important part of the Management Rights business whose value is partly determined by the stable Body Corporate salary received for honoring the Caretaker Agreement. Any threat to this will be defended intensely by MR Owners, some of them will be fighting for survival.

Terminating, or even attempting to terminate, these agreements has a widely felt effect that mostly creates a loose-loose situation, except for the lawyers who always win-win.

Is it REASONABLE to terminate a Caretaker Agreement?
Ask the following question:
“What has the Management Rights owner done that is bad enough for you to ruin their business and/or their life?”

Frank Higginson’s (from Hynes Legal) recent newsletter about bodies corporates attempting to terminate management rights is here below. Thank you Frank.
This body corporate’s attempted termination of their management rights agreements ended up costing owners about $750,000 in legal fees to get nowhere.

Read on.

Queensland Community Living Handbook

The information supplied on this website is general information only and as such any individual or company must seek their own professional advice, in relation to their own particular set of circumstances.

Copyright 2022. All rights reserved. Reproduction, distribution, or transmission, in any form, or by any means, of any of the contents of this publication without the written permission of the publisher Steve Reynolds is strictly prohibited.

Steve Reynolds e: qldclh@gmail.com PO Box 394 Surfers Paradise.4217