Failed attempt to use move-on provision

Published: 31 January 2008.

By Frank Higginson, partner, Hynes Lawyers

Section 140 of the BCCMA provides that a body corporate can force a letting agent to sell its business and ‘move on’ if there has been a failure to comply with a code contravention notice. The code is located at Schedule 2 of the Act.

Obviously there are enormous consequences for a letting agent if it is forced to ‘move on’. Therefore the Act requires strict compliance with its provisions, as recently discovered by yet another over-enthusiastic committee found to be seeking to get rid of a letting agent rather than seeking to genuinely notify the letting agent of issues with its performance for the purposes of having the letting agent rectify them.

In a recent case the specialist adjudicator found that the body corporate had failed to serve a valid breach notice. It had unlawfully demanded that: the letting agent use buckets to water the gardens due to the restrictions on using hoses - despite anything about buckets in the agreement; a demand that it remove irrigation systems; and a demand to trim hedges that required specialist services due to their height.

The body corporate had also failed to have the transfer notice approved by the owners in the manner set out in the Act.

The specialist adjudicator’s costs were ordered to be paid by the body corporate, with mention being made of its failure to act reasonably. Costs orders are increasingly being awarded against over zealous bodies corporate.

The letting agent had made a mistake in using the chairman’s uncomplimentary nickname in communications with him, but this was remedied by an undertaking to refrain from using the nickname again. This point is a good reminder that all your correspondence to committees must be written respectfully and factually to avoid later problems.

The case demonstrates again that many committees are obsessed with the removal of the letting agent or resident manager rather than on improving the services provided to the body corporate. Fortunately, for the letting agent involved in this case, the committee were again incompetent in their efforts, but this pattern cannot continue forever. Accordingly, we reiterate our warning that you must contact us immediately on receipt of a breach notice so that your business can be protected.

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