Unit owners in Queensland are being advised to avoid the state’s tribunal system and just pay private contractors to cover their caretakers’ shortcomings, after a series of cases against poorly performing residential managers have been dismissed on grounds described as “contrived to favour the caretaker.”
And it has been alleged that the Tribunal avoids finding caretakers have failed in their duties, despite clear evidence supporting the allegations, becasue that could lead to them losing their contracts
“It would appear that the Queensland judiciary, or at least the members in the Queensland Civil and Administrative Tribunal (QCAT), have decided that they will not terminate a Management Rights caretaker’s contract under the Body Corporate and Community Management (BCCM) Act dispute resolution process,” Bradley von Xanten, President of the Unit Owners Association of Queensland, has written to members.
He is now urging unit owners in Queensland to write to the state’s Premier to highlight the difficulties apartment owners have in establishing any kind of basic consumer protection in what is, to the outside observer, a fundamentally and profoundly distorted system.
In a strongly worded newsletter sent to UOAQ members, he is also advising them not to waste their time taking disputes to the Tribunal, and instead to just pay private contractors to do the work that their caretaker managers have failed to undertake, because that is cheaper and less stressful than fighting to have contracts upheld at the tribunal where they are doomed to fail.
Iif caretaker managers fail to perform their duties, and are issued with a Remedial Action Notice (RAN), that can be grounds for cancelling a contract. According to UOAQ, the tribunal will bend over backwards to avoid that possibility, meaning apartment owners have no recourse against under-performing caretakers.
“A body corporate is unlikely to construct an RAN that will not be dismissed in QCAT,” writes Mr von Xanten. “It is far cheaper to pay an external contractor to perform the contracted duties, such as maintaining the garden, than seek any form of legal review in QCAT. The attitude seems to be that strata owners should just pay up and shut up.”
Queensland, uniquely in Australia, allows developers to pre-sell caretaker management rights, on terms that they negotiate with the managers and over which the owners of apartments have no say and find impossible to rescind, even on grounds contained in the contracts.
The owners have to accept the managers appointed by the developers, on the terms negotiated by those parties, and with little or no chance of changing them, even when the caretakers fail to meet the basic standards in the contracts.
Even worse, some are bullied by the managers to increase the terms of the contract – which are for 10 or 25 years – to make them easier to on-sell to new managers, once again over whom the owners have no choice.
Although there are doubtless some on-site caretaker managers who are much-loved, essential parts of their communities, there are many who ruthlessly exploit their positions within their blocks, granting favours to residents who support them, and making life difficult for anyone who complains.
This “legalised corruption” of the pre-sale of management rights has little benefit to apartment owners, but is a lucrative business, pouring extra money into developers’ coffers at zero cost to them. It can’t happen in NSW or Victoria where, by law, owners must agree or otherwise to any contracts that they have to service financially.
The problem appears to be that Remedial Action Notices can be used as grounds for terminating contracts so, to avoid termination, the presiding tribunal member must invalidate any body corporate RANs.
“The reasoning presented is often (but not always) contrived to favour the caretaker,” writes Mr von Xanten, giving examples of where RANs have been rejected on flimsy grounds.
In one, the action failed because of a definition of whether “within 14 days” meant at one minute to midnight on the 14th day, or at midnight at the start of the 15th day.
In another, a consultant’s view that it would be impossible to clean 70 light fittings within 21 days was accepted despite the Body Corporate pointing out that this could easily be achieved in two weeks, or 14 working days, if the caretaker just cleaned five fittings each day.
A claim that the caretaker had failed to keep maintenance records, as required in the contract, was dismissed because no evidence was presented to show that the previous incumbent had done so.
“If a body corporate goes to a QCAT hearing expecting that the relevant facts will be considered in the resolution of these disputes, history shows that they will be disappointed,” says Mr von Xanten. “The legal bills can be in the hundreds of thousands for no result.
“The Crime and Corruption Commission conducted a review of these aspects presented in various QCAT case studies and concluded that there was no detriment to any party. You can make up your own mind,” says Mr von Xanten, adding “in a meeting, the Attorney General stated, “I am unaware of any problems…”.