Body Corp Blog
In Queensland, the Codes of Conduct under the Body Corporate and Community Management Act 1997 (Act) are often cited amongst lawyers, body corporate managers, committees, owners and other stakeholders, but it is worth examining what they entail and what rights the legislation gives rise to if a provision of the Codes is breached.
There are three Codes under the Act as follows:
- Code of Conduct for Committee Voting Members;
- Code of Conduct for Body Corporate Managers and Caretaking Service Contractors; and
- Code of Conduct for Letting Agents.
The provisions of each Code are set out in Schedules 1A, 2, and 3 of the Act, respectively, and include similar requirements to:
- Act honestly, fairly and professionally;
- Act with skill, care and diligence;
- Not engage in unconscionable conduct;
- Not engage in fraudulent or misleading conduct.
There are various other provisions of each Code which deal with particular duties and obligations on committee members, body corporate managers, caretakers and letting agents and perhaps they are often cited against due to their generality.
For committee members, a breach of the Code renders the member susceptible to the issue of a notice by the Body Corporate alleging the breach and inviting the member to respond to the allegation. The Body Corporate must then consider a motion at the next general meeting to remove the member from office. The issue of the notice must be approved by the Body Corporate by ordinary resolution at general meeting as must the member’s removal. The committee or any owner can put forward the motion for the issue of the notice.
In relation to body corporate managers and caretakers, the Code is taken to form part of the person’s engagement and a breach of the Code can lead to termination of the person’s engagement under the applicable regulation module. Caretakers should be aware that a breach of the Code for letting agents (if they are also a letting agent for the scheme) also enlivens the possibility of a termination of the person’s caretaking agreement. There are steps that the Body Corporate must take before any such termination, including the issue of a remedial action notice (RAN) to the person identifying the breach and affording them an opportunity to remedy it. Whilst the committee can authorise a RAN, the termination (if the RAN is not complied with) must be approved by ordinary resolution at a general meeting.
For letting agents, a breach of the Code (or the Code for caretakers if they are also a caretaker) affords the Body Corporate the right to issue a contravention notice to the letting agent and non-compliance with the notice or further breaches of the Code enables the Body Corporate to invoke the ‘forced-sale provisions’ to require a transfer of the letting agent’s management rights (which includes any caretaking rights). The issue of the notice must be approved by an ordinary resolution at general meeting and the transfer obligation requires a majority resolution at general meeting.
Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.
Posted in: Body Corp Blog at 09 March 17
Body Corp Blog
Author: Jarad Maher
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