Published: 16 August 2010.

Contributed by Frank Higginson of Hynes Lawyers

No matter what you do, it is almost impossible to have a management rights agreement (or in fact any agreement) that covers every single contingency or circumstance.

One issue we see quite regularly in a management rights context arises out of a body corporate commencing a significant project involving substantial capital expenditure.

This could be the repainting of the building, replacement of lifts, foyer and porte cochere upgrade and so on. As buildings get older, there is more and more need for these major projects.

The essential nature of most caretaking agreements is that of repair and maintenance. This means doing the little jobs around the building that come your way in terms of repair, and then providing ongoing maintenance services for the building (ie gardens, lawns etc).

A resident manager will usually have an obligation to obtain quotes for the body corporate on matters as instructed and then supervise the performance of the works in those quotes. This would normally only extend to matters that require the services of a skilled tradesperson for those basic repair and maintenance works.

So what happens if your building is about to commence a major project?

Without a doubt, you will have a significantly increased workload by virtue of the project. Subject to what your agreement provides, supervising and being involved like this is something that would not ordinarily form part of your obligations as a resident manager under a caretaking agreement. This means that if you are providing services relating to a major project that you should be paid for them in addition to your salary.

Having said that, dealing with your body corporate on the issue needs to be done sensitively and handled carefully. The issue of payment needs to be raised when the project is being costed and considered. It is generally too late to ask for payment when you are half way through and realise what the additional workload is.

As always, the starting point is understanding what your legal obligations are, and from there you can set a strategy that is most suitable to your circumstances.

For further information and any management rights enquiries, please contact Frank Higginson on (07) 5504 9999.

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