Management Agreements you can exit
Most Body Corporate Management contracts allow the Body Corporate Manager (BCM) to terminate the contract without cause, but, very few BCMs provide a contract that gives their client Body Corporate an equal right. Fair? We think not.
Don’t be fooled into thinking termination rights in your contract will be easy to invoke - they likely won’t be. Under the BCCM legislation, there are provisions and procedures that a Body Corporate can embark upon to terminate their contract with the BCM, but the procedure rigmarole will likely not be an easy, or nice journey.
We think, and have always thought, that these things need to be fair - if the BCM can terminate without cause, then that same right should lie with the client Body Corporate. And the contract we have always used provides for this - albeit that no Body Corporate we have ever managed has invoked this clause.
Here is the relevant clause from our contract (the important part is in bold!):
The Body Corporate may terminate this Agreement on any grounds specified under the Act or the Regulation Module applying to the Scheme; or by giving 90 days prior notice to the Manager; or if the Manager:
(1) ceases to hold any licence required by law for the Manager to conduct the Manager's business; or
(2) is a company and is liquidated or is subject to the appointment of a provisional liquidator or an administrator is appointed; or
(3) has a receiver appointed to any of its assets.
So, notionally a management contract may be for one, two, or three years, but if, part way along the road the selected BCM simply isn’t performing as was advertised and promised, and the Body Corporate Committee isn’t hopeful the situation can be significantly improved, then they should be able to exit the contract easily and painlessly.
A Body Corporate doesn’t have to just accept the proposed Agreement Contract without challenging it, and requesting amendments - like the termination clauses we’re focusing on here. If the BCM declines a request to modify their Agreement terms then the Body Corporate needs to consider whether that company is the one they want to look after them.
