It seems to us that disputes between Bodies Corporate and Caretakers are on the rise.
Without doubt there are Caretakers out there, that are simply refusing to perform their duties to the standard required by the Caretaking Agreement (“the Agreement”) – however sometimes there is some misunderstanding as to what the Caretaker is in fact obliged to do under the Agreement– often brought about because the Agreement was poorly prepared by the Developer of the Scheme.
So what are the options for a Committee, which has concerns about the performance of a Caretaker?
In our experience the most effective approach is a three-step process, rather than taking the fight to the Caretaker from the outset. The process is as follows:
Step One – Check the Agreement
Invariably in discussions with Committees about their concerns, it turns out for at least some of those concerns, that the Caretaker is not obliged to do the task.
Unfortunately, sometimes that particular task is what has caused the “rot to set in” in the relationship in the first place and it can be very hard to move back to a workable relationship.
It is important that Committees do their homework as to what the Agreement requires the Caretaker to do. Sometimes, this can be a more difficult exercise than expected and it involves a consideration of whether:
- there is a specific duty on the Caretaker under the Agreement or whether the duties under the Agreement are of a more vague/general nature – if the duties are of a more vague/general nature, then it may become necessary to identify the implied/inferred duties;
- the Agreement specifies the standard to which the duty is to be carried out (that is, is the standard to which the Caretaker is required to carry out the duty a “high standard” or simply for the Caretaker to use its “reasonable endeavours” to do the duty –the differing requirements may have substantial effect on the Body Corporate’s position);
- the duty is a “specialist skill”, thereby excusing the Caretaker from having to perform the duty – this may even be the case in respect of supervision of some works, such as supervision of works being performed at height.
If there is any uncertainty about whether the Caretaker is obliged to do the duty or not, the Committee might be better off seeking clarification about the duty before going to war with the Caretaker based on a suspicion.
Step Two – Consider the Intervention of a Third-Party Consultant or Training for the Committee and/or Caretaker
A 3rd party assessment of the Caretaker’s performance does not need to be an acrimonious exercise, indeed it can be beneficial to both sides.
Approached in the correct manner, the assessment can in fact help to repair the relationship between a Caretaker and the Committee as:
- the Committee finds out where it is expecting more than the body corporate is entitled to receive; and
- the Caretaker finds out where it needs to pull its socks up in terms of the standard to which the duty is being done.
The parties could also consider training for both the Caretaker and the Committee (particularly where the Committee members are interested in serving on the Committee for any lengthy period). The ABMA (Australian Building Management Accreditation) has access to some extremely helpful courses for both the Committee and the Caretaker – see https://www.abma.com.au/training-programs.php).
The parties might also benefit greatly from negotiating a variation of the duties in the Agreement, to replace the current (possibly quite vague) duties with a properly detailed schedule of duties – there are a number of consultants whom can prepare such a schedule for the parties.
The benefit to both parties is that there is then some certainty about the nature and the frequency of the duties to be performed – which might help to prevent unnecessary (and often costly) skirmishes between the parties.
Step Three – the Remedial Action Notice Process
When negotiations have been exhausted, the Body Corporate may have to issue a Remedial Action Notice. Unfortunately, some recalcitrant Caretakers do not take any notice until a Remedial Action Notice is issued against them.
So, what is a Remedial Action Notice? Put simply:
- it is a glorified Notice to Remedy Breach, setting out details of the manner in which the duties have not been performed to the standard required under the Agreement;
- it is a legislative prerequisite to terminating a caretaking agreement for inadequate performance of duties; and
- the Notice must STRICTLY comply with the requirements of the regulating module, otherwise the Notice is invalid.
No matter how well prepared the Remedial Action Notice is, it is quite likely that at least some aspects of the Notice will be disputed by the Caretaker, and that can be a complicated and messy process, however unfortunately:
- if the Caretaker will not otherwise satisfactorily perform the duties; and
- given the strict legislative duty on the Body Corporate to repair and maintain its common property (and some other elements of the scheme),
the Body Corporate has little option but to undertake that process.
Often this dispute process leads to a negotiated move-on of the Caretaker, which is a good outcome for both parties – however, parties need to accept that outcome can take time.
The cases are littered with examples of where Remedial Action Notices in the past have been determined to be invalid. It is certainly not an exercise that Committees or Body Corporate Managers themselves should take on, without the benefit of advice from a highly experienced body corporate lawyer (that is, the team at Active Law….).
Put simply, the more particular and detailed the Remedial Action Notice, the more pressure there is on the Caretaker to address the complaints in the Notice – and conversely, a weak/dubious Remedial Action Notice is likely to have no real effect on a Caretaker.
At Active Law we are regularly asked to advise Committees on their concerns about the performance of Caretakers and to prepare Remedial Action Notices. If you have any concerns about the performance of the Caretaker for your scheme, please don’t hesitate to contact us for assistance.
Reliance on content the material distributed is general information only. The information supplied is not and is not intended to be, legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.