Management Rights - Continuing the theme of who is responsible for what…
14 Jan 2013
Happy new year to all of our readers.
We regularly have clients who get caught up in confusion about what their responsibilities extend to in a management rights situation.
Most resident managers will have a caretaking role and a letting agent role. They are two completely different responsibilities, with totally separate reporting lines.
Click here for previous commentary on a situation we wrote about with termite inspections. This article expands on that situation.
In your caretaking role, you are a contractor to the body corporate. This does not create any individual relationship with unit owners. Most caretaking agreements contain a clause in which a formal nominee on the part of the body corporate is appointed to liaise with you. This is usually the chairperson but can be anyone. That appointee should be the only person you communicate with so far as your relationship with the body corporate goes. The strata / body corporate manager usually gets involved in here as well – and managed the right way, that is a good thing.
It is important that you do not get caught up taking instructions from the range of people that you will encounter in your caretaking role. You are not accountable to anyone but the body corporate. Taking instructions from, or communicating with a range of people will only lead to confusion. As a result of that something will fall between the cracks. If it does, you know who gets the blame, don’t you?
Some committees just don’t get how it should work. We can help manage and streamline communication processes for those with vocal body corporate members.
As letting agent…
When it comes to your role as a letting agent, you are only responsible to the owners who engage you as letting agent. You are not responsible to the body corporate if your tenants do not perform what is required of them. That said, if a tenant breaches a by-law, then the way to resolve that from the body corporate’s perspective is to issue a contravention notice against the tenant. A copy also has to be sent to the owner, who will then turn to you as their letting agent to deal with it.
So when one of your tenants does not comply with the by-laws, you need to deal with it under the terms of the tenancy agreement (as opposed to under the by-laws itself). This is you being accountable to the lot owner as letting agent. It is not you enforcing the by-laws as caretaker. This is one of the benefits for a body corporate in having a resident manager. Outside agents usually don't care about tenancy issues.
Click here to revisit an article on whether a resident manager can enforce by-laws.
A body corporate itself should never have anything to do with letting functions beyond authorising their delivery under a formal letting agreement. Your relationship as letting agent is with individual owners who let through you.
Remember the distinctions
It is very important to remember these distinctions. You have a number of roles as a resident manager and it is important you always remember where they start and finish.
All the best for 2013.