Happy New Year

Welcome to the first edition of Activated for 2017.

Active Law welcomes 2 new lawyers to its team this year.

Paul Hick is an experienced construction lawyer who looks forward to assisting bodies corporate with preparing and advising on building contracts and the like and assisting schemes with building defect issues.

Melanie Steele will assist bodies corporate with front end legal matters.

There will be more on Paul and Melanie in future issues.

Over the Christmas break I dusted off my crystal ball to see what 2017 might hold for bodies corporate.

This is what I saw:

1.        Increased activity in the sale of management rights.

The last quarter of 2017 saw a marked upswing in management rights assignments. I expect this was largely due to financier’s opening the purse strings perhaps a little more than
immediately after the Gallery Vie decision.

2017 should see a steady stream of assignments of management rights, meaning committees will need to be mindful of a body corporate’s rights and obligations in that process.

Bodies corporate should remember they are not required to consent to whoever the manager puts before it as the prospective replacement caretaker/letting agent. It is not a case of a
committee simply rubber stamping a manager’s request for consent to an assignment of management rights.

2.        Extensions to Management Agreements

Often increased activity in the sale and purchase of management rights is accompanied by a request for a body corporate to agree to extend the term of management agreements.

The greater the term of the agreement, the more valuable it is of course.

Bodies corporate aren’t required to agree to extend the term of agreements. I’m not suggesting bodies corporate should not agree to extend a term, but there needs to be something in it for             the body corporate as well.

The old adage of “something for something” comes to mind.

3.        Gallery Vie variations

Whilst not as frequent as just after the QCAT decision, 2016 saw a steady stream of requests for Gallery Vie variations to management agreements.

I expect the requests will continue.

I wrote about Gallery Vie in the September 2016 edition of Activated. Click on the link here to review that article.

Active Law has developed a Gallery Vie provision for insertion into management agreements which financier’s have readily accepted.

4.        Remedial Action Notices

2017 will see a greater willingness for committees to institute remedial action notices to managers who are simply not performing the duties required of them under their management
agreements.

Over the last 2 years there has been a reluctance (and rightfully so) for committees to accept the caretaking duties being undertaken to a standard inconsistent with the requirements of the             agreement.

Active Law has been steadfastly advising committees that where a manager is not performing, then the body corporate should issue a remedial action notice to the manager. That is after all             the statutory right of a body corporate in those circumstances and regrettably often all a recalcitrant manager will respond to.

5.        Bylaw Contravention Notices

Like remedial action notices I have seen an upswing in committee’s issuing contravention notices to recalcitrant owners. This trend will continue.

If occupiers play by the rules (that is to say, abide with the bylaws) , the advantages of community living will be there for all to enjoy.

Active Law looks forward to assisting you all again in 2017.

Warm regards,

Mark