Appoint New Body Corporate

What is a body corporate manager? A body corporate manager is engaged by an owners corporation to manage the units plan and assist the Executive Committee.

Who can be a body corporate manager?

The appointment of a manager is highly regulated within the ACT by legislation that is specifically designed to safeguard the interests of unit owners in this respect.

Generally a manager must hold a licence as a real estate agent.

The manager is required to comply with:

  • the Rules of Conduct as an agent and
  • the Managers — Code of Conduct.

If a manager engages in conduct in breach of the Rules of Conduct, the unit owners can notify the ACT Commissioner for Fair Trading and request that the Commissioner apply to the ACT Civil and Administrative Tribunal for an occupational discipline order. If made, the order can be very serious, including the cancellation of the manager’s real estate agent licence.

There are other avenues available to the unit owners if they are of the opinion that a manager has committed a ‘remedial breach’. Also, the unit owners can terminate the manager’s contract if the manager is not performing, becomes insolvent, or engages in criminal activity.

Appointing a new body corporate manager

In some instances, unit owners are simply dissatisfied or have had a request to transfer the engagement of the manger due to the sale of the manager’s business. In such cases, the management rights under a management contract can be transferred with the agreement of the unit owners, but only if the transfer is approved by ordinary resolution in a general meeting of the unit owners. An Executive Committee does not have the power to appoint a new manager.

The Executive Committee must hold a general meeting if it receives a meeting request from unit owners who are entitled to vote and who hold a combined unit entitlement of 25% or more. A failure to do so would be a breach of the Executive Committee members’ code of conduct.

An attempt to appoint a new manager without following the procedure outlined above could be declared by the ACT Civil and Administrative Tribunal to be void for irregularity upon an application by an aggrieved unit owner.

What should you do?

If you are considering changing the manager who manages your units plan, you should:

  1. investigate that the right licences are held by the proposed new manager
  2. obtain references regarding the proposed new manager’s industry experience and
  3. ensure that the owners corporation and Executive Committee complies with the requirements of the Unit Titles (Management) Act 2011, to ensure that the appointment of the new manager is valid at law and cannot be overturned by the Tribunal.

For more information contact the Property Commercial & Finance Team:

Christine Murray — Partner
(02) 6279 4444