UOAQ Newsflash #08 - Body Corporate Mangers: caveat emptor
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Dear Subscriber,

I wish to bring to your attention an issue highlighted in a recent Adjudication Decision, i.e. the absence of independent, regulatory oversight of Body Corporate Managers (BCM) in Queensland.

The UOAQ has for many years raised concerns about this with the Queensland government, as have other key players in our strata community.  It is hoped this particular Adjudication Decision is the catalyst which finally prompts our government to provide all owners with the necessary protection from those (thankfully few) recalcitrant BCMs in our midst.

Wayne Stevens
Unit Owners Association of Queensland Inc.

Body Corporate Managers: let the buyer beware, because there is little else to protect you.

A recent Adjudication Decision[i] highlights a systemic problem in Queensland’s Strata World i.e. the absence of regulatory oversight of Body Corporate Managers (BCM).

For those who are interested in reading this decision, it has just been published[ii] by the Australasian Legal Information Institute (AustLII).[iii]

The reported conduct covers both professional competence and integrity.  It also covers conduct as both a Body Corporate Manager and as the Authorised Representative of the largest strata insurer[iv] in Australia.

Everyone is entitled to draw their own conclusions about the implications of this decision. The feedback we’ve received from those who have a professional interest in strata matters is that it contains probably the harshest comments they’ve yet seen about a BCM.

At the micro level, what the owners at this particular complex do with this decision is really their call.  This is inherent in the self-management model favoured in Queensland, and which is recognised in the order given by the Adjudicator thatthe Body Corporate … is authorised to reconsider the subject matter of Motion 5 and 6 at a general meeting.”[v]

At the macro level, there are broader issues in play.  Without leaping to any conclusions about the BCM’s overall conduct, it would be reasonable for anyone to ask:
  1. What about the BCM’s other clients…do they know about this decision?
  2. What about other complexes in the Sunshine Coast precinct who may be looking for a new BCM…how do they find out about this decision?
  3. Is there any regulatory agency, like the Body Corporate Commissioner’s Office or even Strata Community Australia (SCA)[vi], which can investigate and apply appropriate sanctions if necessary?
The answers, all in the negative, provide little comfort.

In Queensland, Body Corporate Managers are pretty much free agents.  Anyone can start a business as a BCM, regardless of paucity of formal qualifications or relevant experience.  All you need is unsuspecting unit owners with big bags of body corporate funds.

It has been many years since our Strata World morphed out of what was once a quaint little cottage industry.  There are huge amounts of money involved now, and it continues to grow at an ever accelerating rate…and right at the heart of it are the BCMs.  They are key players, and mostly offer a professional and valuable service. 

Their role is formally recognised, and even protected, in the Body Corporate and Community Management legislation. 

But for years now, the Queensland government has refused to introduce, for the unit owners, any corresponding protection from recalcitrant BCMs.  There simply is no regulatory agency in place to oversee the BCM industry.

We find ourselves in a position now which is not only extremely embarrassing for the many good BCMs in our community, but which also puts our unit owners at considerable financial risk.  Owners deserve something better from our government than their glib disclaimer of caveat emptor.[vii]

We trust this Adjudication Decision may be the catalyst which finally persuades the QLD government that something needs to be done.  The sooner this issue gets included in the current law reform process, with a High Priority stamp on it, the better for everyone.
[i] Northcliffe [2016] QBCCMCmr 211 (11 May 2016)
[iii] AustLII is a valuable reference source, providing free internet access to Australasian legal materials, including legislation and decisions of courts and tribunals  http://www.austlii.edu.au/
[iv] At least there are strong regulatory controls in the ASIC-regulated insurance industry.
[v] Northcliffe: Order 3 of Adjudicator’s Orders, supra
[vi] SCA is the representative association for BCMs  www.stratacommunity.org.au
[vii] Let the buyer beware
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