Residing off-site

Published: 31 January 2008.

By Frank Higginson, partner, Hynes Lawyers

We are often asked what is required to allow a resident caretaker to reside off site. The main issues for consideration are the licensing situation and the management rights agreements.

Licence

A resident letting agents licence is called that because the agent resides on site. At law, if the licence holder does not reside on site, then this licence cannot be held. The key thing is that the licence holder resides on site – not the night manager or other employee. The licence holder is the one that is responsible for the trust account and the like, and ultimately accountable to the OFT in the event of any dispute over trust funds. If you hold a resident letting agents licence and don’t reside on site you are more than likely in breach of one of the licence conditions.

If you own the management rights in a company name, it is possible to have employees obtain a resident letting agents licence, provided that they meet the requirements of the PAMDA.

There is an easy solution to this if you do not want to engage licensed employees. It is to get a full licence. With a full licence you can provide all real estate agency functions, including sales, and there is no obligation to operate from a lot in the scheme to which you may own the management rights. With a full licence you have an absolute ability to let units from off site and you can then let units elsewhere other than in your management rights.

Agreements

The management rights agreements are probably the biggest variable in any decision to move off site. Each agreement is individual and some impose obligations to reside on site. These can be drafted in a number of ways, in terms of imposing obligations on directors of the manager company to reside on site to directly obliging majority shareholders to reside on site.

It is a matter of carefully reading it to make sure you know what your obligations are.

Sometimes the committee may be able to give a waiver of the obligation to reside on site but otherwise, the removal of an obligation in a management rights agreement to reside on site can only be approved at a general meeting of the body corporate by ordinary resolution.

Leaving the legalities aside, it is also very much worthwhile in letting your body corporate know what you are trying to achieve and keeping your committee and owners in the loop. It is all well and good to say that you can reside off site at law, but not much good if you put the body corporate offside in the process.

Naturally, we are always ready to assist if you require an interpretation of your agreement.

Contact

For further information and any management rights enquiries please contact Frank Higginson, partner on 07 5504 9994 or email Hynes Lawyers by clicking here