UOAQ Newsflash #15 - Body Corporate Mangers: caveat emptor II
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Dear Subscriber,

Earlier this year, I brought to your attention a matter of concern both to the UOAQ  and to other key players in our strata community, i.e. the absence of regulatory oversight of Body Corporate Managers (BCM) in Queensland.

Our concern had been recently highlighted by a recent Adjudication Decision.  A member now has drawn our attention to another, similarly adverse,  Adjudication Decision, involving another BCM.

The UOAQ can only repeat its previous call on the Queensland government to provide all owners with the necessary protection from those (thankfully few) recalcitrant BCMs in our midst.

Wayne Stevens
President
Unit Owners Association of Queensland Inc.

WHO KNEW?  Some Insights into Body Corporate Managers

1.3:  WHO MANAGES OUR BODY CORPORATE MANAGERS?  CAVEAT EMPTOR II

 

Q: Is there a problem that needs fixing?
A: Many suspect so, but no one really knows for sure.


There is an abundance of anecdotal information, supported by formal evidence like reported Adjudications, which informs us that there are many owners, and even strata professionals, who are concerned about the professional conduct of some Body Corporate Managers (BCM) in Queensland.

Anyone can operate as a BCM in Queensland, regardless of qualifications, or experience, or integrity… or lack thereof.  But, how do you sort the good from the bad?  Whom do you go to for assurance about the competency and integrity of any BCM, whether incumbent or prospective?

Not to the Adjudicators.  Adjudicators adjudicate: they deal only with specific issues arising in specific cases properly before them.  They have no investigatory power, or reporting responsibility, beyond the immediate case.

Even if a case may alert an Adjudicator to possible systemic issues requiring broader investigation of a BCM, there is no one to whom they can refer these concerns for any such follow-up action.

Not even to the Body Corporate Commissioner’s Office.  The Body Corporate Commissioner has often reminded the UOAQ that his Office has no investigatory powers regarding the BCM industry.

But if not the Adjudicators, and not the Commissioner’s Office, then who?

The answer is ‘No one’.

 

UOAQ’s response:  NewsFlash #08 ‘BCMs: Let the buyer beware…there is little else to protect you


The UOAQ issued Newsflash #08[i] earlier this year, warning our members about this lack of regulatory oversight of BCMs in QLD. 

The Newsflash itself was prompted by a reported Adjudication containing quite harsh comments about the professional conduct and integrity of a Sunshine Coast BCM, Select Strata Management:  see Northcliffe [2016] QBCCMCmr 211.

Notwithstanding the authority and significance of the Adjudicator’s comments in that case, the UOAQ’s main focus is on any broader, systemic issues which may emerge from it, or similar cases.

The trouble is, there simply is no investigatory process in place to determine whether Select’s reported conduct was a one-off aberration, or symptomatic of more deep-seated problems.

We called on the Queensland government to include regulatory oversight of BCMs in their current strata law reform process, as a matter of urgency.

So far, there has been no response from the government. 

However, the UOAQ did receive numerous calls from our members.

All expressed support for some form of regulatory oversight of BCMs, with particular emphasis on:
  1. Mandatory registration;
  2. On-going prudential audits of the BCMs’ competence and compliance; and
  3. A formal ‘complaint’ process with real sanctions, including compensation, fines and even de-registration.
One member even alerted us to another Adjudication containing harsh comments about the professional conduct and integrity of a Gold Coast BCM ie Complete Body Corporate Services (CPBS):  see Springfields Gold Coast [2015] QBCCMCmr 552.
 

SELECT & COMPLETE: one-off aberrations, or symptoms of deeper problems?
A: Who knows?


The UOAQ had no intention of sparking a ‘That’s not a knife…this is a knife’ competition between Adjudications containing harsh words about BCMs.  However, the similarities between Northcliffe and Springfields provide interesting reading:  very similar issues; very similar comments.

Without leaping to any conclusions about the BCMs’ overall conduct, the UOAQ considers it would be reasonable for any owner to ask of both BCMs:
  1. What about their other clients? Is there any process in place to alert them to the Adjudication?
  2. What about other complexes looking for a new BCM?  Is there any process in place to alert them to these Adjudications, other than trawling through all of the reported Adjudications?
  3. Is there any regulatory agency, like the Body Corporate Commissioner’s Office or even Strata Community Australia (SCA)[ii], which can investigate and apply appropriate sanctions if necessary?
The answers, all in the negative, provide little comfort to unit owners in Queensland.
 

We are not alone.


Jimmy Thomson, a NSW columnist, recently published an article calling for the reining in of ‘strata management cowboys’ (his words, not ours).

JimmyT (his professional pseudonym) noted:

“The Fair Trading Office in NSW received 800 inquiries about strata managers, and 48 official complaints, during the past financial year - a rise of 50% on 2014-15…..

Strata management is going through a transition. Increasingly, the best companies are highly professional and look after their clients properly as a means of enhancing their reputation and expanding their businesses.

However, there are still cowboys who don’t know what they’re doing and don’t really care. They operate with the same ethics as cattle rustlers, rounding up the maximum number of clients with the promise of super-cheap rates, knowing that there is no way they can deliver a reasonable service at those prices.

Strata schemes can be cash cows where, often, investors vote for the lowest cost option while the residents – owners and tenants – pay the price in poor service.”

Strong words indeed.  Do they apply in Queensland?  You decide…

One caveat though:  Quality of service does not necessarily follow cost.  It is our experience that many of the lower-priced BCMs provide exemplary service.  And as for some of the ‘top-end of town’ BCMs… it can be a case of paying more, but getting less. 

We need more reliable, evidence-based markers than hoary old adages like:
  1. They must be good…they charge so much’; or
  2. ‘Never mind the quality….feel the width’.

Where to from here?


All we can do is call on the Queensland government, once again, to demonstrate some real leadership and do something about what seems to be a systemic, and endemic problem in our strata world.

The sooner this issue gets included in the current law reform process, with a High Priority stamp on it, the better it will be for everyone…including the many good BCMs in Queensland who are being painted with the same brush as their recalcitrant ‘colleagues’.
 
[i] Also published in LookUp Strata #100
[ii] SCA is the BCMs’ professional association. Membership is voluntary. Whether Select or Complete are SCA Members can be checked on SCA’s website.
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