Question: What happens when a caretaker agreement includes vague wording like “or as required” and the caretaker and body corporate can’t agree on a definition?
We are in year 2 of a poorly executed 10-year Caretaker Agreement that was originally made between the scheme’s developer and the caretaker. The developer held power of attorney over the body corporate for the first 12 months.
The agreement includes a Schedule of Caretaking Services, which contains vague wording such as “Monthly Service (or as required).” The issue we’re facing is the interpretation of “or as required.”
The caretaker claims this means the service should be delivered at most once a month — only when necessary — and that their interpretation is “industry standard.” However, they cannot provide any written evidence to support this.
The body corporate believes the phrase means the service should occur at least monthly — and more often if required — as the standard minimum frequency.
There is no definition of “or as required” in the agreement, and we are now at a stalemate. Can anyone clarify which interpretation is more accurate or accepted in practice?
Answer: It can be difficult when different interpretations come into play.
We would need to review the whole contract to properly advise on this issue, because contracts do need to be read as a whole. However, we agree it can be difficult when different interpretations come into play.
In the absence of defined terms in an agreement, decision makers will often come back to the ordinary meaning of words or phrases. You’re possibly both a bit right and a bit wrong here. To us, “or as required” gives flexibility. The duty may need to be performed once a month, but it may require more or less frequent attention.
It depends on what the duty is and what the need is – really, there’s no need to do something that doesn’t need to be done. Let’s say, for example, pruning of trees was a duty to be performed “monthly (or as required)” – there is no utility in pruning a tree when it doesn’t need it just because you are required to prune it monthly. It could do more harm than good. However, in a different season, growth may be more rapid, and pruning may be required more frequently than once a month. Different trees might have different needs.
Ultimately, it is up to the caretaker to perform the duties required by the agreement; it’s not for the body corporate to dictate how. However, if the body corporate isn’t satisfied that those duties are being performed as required by the agreement, there are steps it can take.
As to the standard to be followed, the thing to remember is that it all comes back to what the terms of the agreement are.
If the stalemate can’t be overcome, and it’s affecting the common property, legal advice might be the next step.
This post appears in the August 2025 edition of The QLD Strata Magazine.
Jodie Graham
Redchip Lawyers & Hynes Legal
E: jodie.graham@hyneslegal.com.au
P: 07 3193 0500
Hi ,our caretaker brought $17000 of equipment to do mowing ect
They did this as part of there contract,,then after about 2 years of doing this ,they found in there contract they didn’t have to do it ,so they then started to charge us extra for doing these duties,,,i believe a caretaker can’t use body corporate assets to make a personal profit?
Is this true and what should we do please
Our caretaker management rights contract stipulates gardening and cleaning duties, daily, monthly etc which is up to them to plan around. However, they have now stopped doing the above 2 mentioned as an example. In this years budget, rather than their agreed 3% CPI increase in their salary (ATO annual CPI was 2.4% – lower than the signed agreement) the current committee decided to give them about 5% increase for them – apparently to cover the caretaker paying for cleaning and gardening duties which they are not performing.
Can the current committee decide on that without asking all the owners?
Should the caretakers pay for the gardening and cleaning out of their pocket since they are not performing the duties per their contract?
Is this considered a variation to the terms in the original management rights contract?
If it is a variation from their duties as stipulated per their contract, would all owners need to vote on it?
Would it not be better that the current committee use the extra 2% for the caretaker to engage gardening and cleaning companies in the market?
Hi Sheng
The following response has been provided by Frank Higginson, Hynes Legal:
I must say it would be the first management rights arrangement I have seen where there was (in effect) a bonus paid where the core caretaking work was not performed. Ultimately, the committee can agree to payments within their spending limit but to me there has to be more to this one as to why they have paid more than what they are apparently contractually obliged to. I think these questions are best addressed to the committee in the first instance to get their answers as to why they have done what they have allegedly done and then those answers assessed against the contract.
What type of motion is required to extend the caretaking agreement, it it a a Special Resolution, if not can it be requested to be a ‘Special Resolution’?
Hi Kathy
The following response has been provided by Frank Higginson, Hynes Legal:
The BCCM Act says that it is an ordinary resolution. It cannot be changed to special (or anything else)
The owners in our complex in Southeast Qld voted to terminate the caretaking agreement.
The caretaker than suggested a price that the Body Corp could buy out the agreement.
The committee has been negotiating an agreeable price.
The contract would be obviously subject to owners’ approval.
Can the committee be going down that path without the prior approval of owners.
Hi Margaret,
Tough one to understand. Owners will need to approve! YES
Text and research from Accom Module 2020.
Committee can’t seek owners’ consent without first having a proposal to accept. Negotiation of terms and conditions that may be acceptable is like getting quotes for owners’ consideration.
Part 3 Restricted issues—Act,
section 100
44 Restricted issues for committee [SM, s 52]
(1) A decision is a decision on a restricted issue for the committee
if it is a decision—
v29
[s 44]
Body Corporate and Community Management (Accommodation Module) Regulation 2020
Chapter 3 Committee for body corporate
2020 SL No. 229 Page 43
Authorised by the Parliamentary Counsel
(a) fixing or changing a contribution to be levied by the
body corporate; or
(b) changing rights, privileges or obligations of the owners
of lots included in the community titles scheme; or
(c) on an issue reserved, by ordinary resolution of the body
corporate, for decision by ordinary resolution of the
body corporate; or
Note—
Issues reserved, by ordinary resolution of the body corporate, for
decision by ordinary resolution of the body corporate, must be
recorded in a register—see section 219.
(d) that may only be made by resolution without dissent,
special resolution, majority resolution or ordinary
resolution of the body corporate;
Also review entirely,Part 4 Transferring engagements and
authorisations
Question: How often should a review of the MLR caretaking agreement be done?
I have a unit in a 100+ apartment complex and I have become aware that including extensions approved at various AGM’s our existing agreement will still be in effect for over 30 years without a review.
Surely there must be some legislation that would protect owners with something like this.
Thank You in anticipation of your reply.
Hi Gregory
The following information has been provided by Katya Prideaux, Mahoneys:
The legislation does not contain a provision for a scheduled review of the management rights agreements after they have been in place for more than 3 years. Before that time either party can have the remuneration or duties reviewed.
Sometimes the agreement itself will have a contractual review mechanism built in to take place at certain timeframes across the agreement.
Otherwise, if the caretaking service contractor requests that the body corporate to agree to a change to the management rights agreements (for example, a top up of the term of the agreement), the committee has the ability to negotiate other changes to the agreement.
In saying that, the caretaking service contractor does not have any obligations to agree to what the committee asks, although the caretaking service contractor may agree if the changes are reasonable in an effort to reach a compromise with the body corporate in return for the original change being requested.
The body corporate could also approach the caretaking service contractor to seek their agreement to any variations of the management rights agreements in the first instance.
Any variations of the management rights agreements are required to be considered at general meeting and owners have the opportunity to vote against the motion.
The agreement clause said “the caretaker must reside in the Manager’s Unit.” The agreement does not explicitly state “…at all times”. Would it be considered a breach of the agreement if the caretaker took a 2-month leave, ensured all duties were delegated and managed appropriately, and remained contactable throughout the leave period, while still maintaining the Manager’s Unit as their sole place of residence?
Hi
This recent Q&A should help:
Question: Our management rights agreement says we are to reside onsite, however, we wonder if this is negotiable.
The UOAQ has recently published results of Owners Survey, where 36% of owners reported living in toxic communities.
I submit that the long term MRs contributes to more than 99% of such toxicity.
1. Owners are locked into long-term unaccountable contracts that they cannot change or practically enforced but are obliged to pay for.
2. Lobbying for extensions from caretakers can be intensive and confronting to many owners. A lot of money, time, energy and effort is wasted on such political battles within the scheme that divide owners.
3. Top up requests come usually from the solicitor of caretaker – and the body corporate, acting reasonably, should engage its own solicitor to be able to present to the owners the best information about the proposed motion.
Take the UOAQ’s proposed scenario – max 3 year contract, no extensions, opened to tendering (i.e. market forces) at renewal.
– Body corporate gets a chance to update the terms according to their needs – a win for owners.
– Tendering service contracts (of any kind) reflects the market forces and adjusts the fair value for both contractual parties.
– If the relationship between caretaker and body corporate is not ideal, there is a realistic chance for owners to change the provider – no need for lengthy expensive battles in QCAT, that ends with huge bills from legal professionals – the true winners of such conflicts.
– The caretaker is incentivised to perform to the best of their ability. If they want the next contract, the incumbent has a home advantage in bidding for next appointment.
– New caretakers that may be excellent service providers but are not able to source the financing of overpriced MRs are now available for schemes to be considered.
– No need to finance the MR means that caretakers are not beholden to the financiers that force them into the top up requests. There is also no need to service such loan, that may reflect necessary bottom line for caretaker.
The current MR regime simply does not balance the rights of owners and their ability to flexibly manage the scheme as they see fit. The protection of developer profiting from sale of MRs, the long-term tenure of MR that is not reversible once established, and an ease of achieving extension are grave deficiencies of the current legislation that pits caretakers against owners and creates toxic environment in people’s homes.
It is high time that the government listened, and all stakeholders supported the positive change that delivers balanced outcome for owners and allows them to achieve all established Secondary Objects of the legislation for managing their schemes.
After all, we must not forget that it is a collective of owners who underwrites the entire strata industry, by investing in units, and paying levies that in turn pay for all the service providers and support the tourism industry. A time has come to afford them the consumer protection they deserve.
RE William Marquand’s Q&A re Long-Term Mngt Rights.
Finally… finally… the other professionals in our strata industry are starting to speak out against the sheer lunacy that we know as long-term contracts for caretakers and the like. When we’ve talked to them in the past in private, most agreed that things have to change but were reluctant to go public because it would affect their business. William (Tower Body Corporate) is echoing the UOAQ position…why should caretakers be allowed to hold contracts for 25 years when our other significant service provider, ie the BCM, is expressly limited to 3 years. There is no way the QLD govt is going to legislate to penalise the existing rights of current caretakers; this would be wrong and unreasonable. But there would be nothing wrong on insisting they cannot extend on their current contracts until close to expiration date, NOT 20 or so years in advance. There also would be nothing wrong insisting that all NEW developments cannot sell 25-year contracts, but are restricted to 3 years. What is fair and reasonable for the BCMs is also fair and reasonable for future caretakers.
Re Todd Garsden and the Q&A re purchase of management rights.
There is a backstory here., ie the cancer we call long-term management rights in QLD, often extending out to 25-years. If you want to identify the one problem which causes the most grief and disharmony in our complexes, it is this one. There is an inherent conflict between the interests of the owners and those of the caretakers who so often are driven by those two big corruptibles, THEIR PROFIT and THEIR POWER. The sooner the QLD Govt intervenes and sorts out this mess the better. One solution would be to introduce a measure of reciprocal treatment, treating the Caretakers in the same way as the Body Corporate Managers (BCM). The BCMs are limited to a maximum term of 3 years, and at the end of the term the Body Corporate is allowed to go to tender for the next BCM of their own choosing. Who in their right mind, other than a self-interested Caretaker, would consider it sensible to allow the owners in 2021 to lock in the owners in 2045 to a caretaking agreement, most of which is about janitorial services which could be easily sourced at more competitive prices on the open market. History shows that most of the owners today will have either moved on, or died by the time the last few years of the never-ending 25-year agreement arrive.
I agree is respect of a pure residential body corporate.
Where the body corporate is part of a business operation eg a resort, the commercial side changes the picture.
Investment in a business where the agreements underlying the business (ie caretaking, letting, leases) are short-term, and at the mercy of a potentially dysfunctional or apathetic owner group, is unattractive. In such circumstances, longer periods are required to attract proper investment for the future.
We are selling our investment property due to our Strata managers, who are unprofessional and broke all legislation and laws.
We spend money through lawyers and BCCM and they, the strata managers lost the case, but ignored the outcome and still do what they want. They befriend committee members and do whatever they want.
This is very sad that nobody can do anything against them without spending money, and it is not good for strata properties.
I’m afraid I must disagree with Mr Higginson. The people advocating for change, in the main, are not wanting to “unscramble the egg” what people want is to prohibit developers from selling caretaking and letting contracts – if this happened all the major problems for owners would evaporate, Can ANYONE honestly say that developers do not ALWAYS inflate the cost of the caretaking agreement (which the poor owner is then left to service for 25 years) just so they can sell for an obscene profit at the conclusion of the development. This unscrambling the egg argument is an absolute irrelevance. If the Queensland Government had the moral courage to ban developers from selling caretaking contracts immediately no current contract would be in dispute so banks, current caretakers and their contracts are simply not affected only future contracts. So enough of the furphy and come down on the side of the long suffering owners who are left to pay a bill which, if they were to put it out to tender they could reduce their costs by 50% to 80%.
Hi Peter
The following response has been provided by Frank Higginson, Hynes Legal:
The joy of our democracy is that we are entitled to different opinions. I would like to see the objective evidence that getting rid of a caretaking salary could reduce owner costs by 80% though.
Hi Frank,
OK here is a bit of factual evidence. Carmel by the Sea on the Gold Coast. with the support of unitholders, declined all top up requests until they got to zero and then put the Caretaking and letting Agreement to tender. They received 50 expressions of interest shortlisted to 6 serious tenderers (the current caretaker was invited to tender). Four of the tenderers were happy to undertake the (expanded) Caretakers duties for nil consideration as they were happy with the income from the Letting Agreement. The new contract is for 3 years and Carmel by the Sea owners are saving $217,000 pa and escalating. Now that is a bit better than even 50% – 80% wouldn’t you say. Anyone can access these facts as I have.
I would like a simple answer to a question. Our caretaking cost is $270,000 pa, 25 year term and 3% minimum annual increase. The Body Corporate recognises the rip off and wishes to decline all future requests for additional 5 year extensions to the caretaking contract. Any problems in doing this ?
Hi Deborah And Peter Bayliss
The following response has been provided by Frank Higginson, Hynes Legal:
The simple answer is ‘no’.
What I would suggest is that the author of the question is not the body corporate. He or she is almost certainly a lot owner and perhaps even a committee member. But one individual cannot ever speak for the body corporate. The legislation allows a body corporate to agree (or refuse) to extend management rights agreements at general meeting. If a motion to add term to the management rights agreements is put to a general meeting the body corporate (as opposed to individual owners) will decide that as often as asked. That is the nature of a strata democracy and the legislation that regulates it.
The policy of denying all future requests for top ups until expiry was denied by QCAT. The UOAQ has some suggestions in this area, since we are helping many schemes in their way to achieve self-management.
However, the body corporate should consider each request on its merit, ie when it is submitted. To do so, the committee should seek independent expert advice that should then be distributed to all owners that will give the owners a bit broader outlook on all aspects of the proposed motion than required Form 20.
I encourage all to look at Secondary Objects of the BCCM Act. Quarter of a century long contracts, that can be extended by 5 years constantly – this is unreasonable. It provides body corporate with so limited means of managing its scheme,
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Carmel’s model is certainly a great example. It may not be suitable for all schemes, but one size does not fit all – nor it should. UOAQ identified another half a dozen options at least – what to do when MR expire. To even consider them, your current MR needs to expire though. That is the reason why you should say ‘no’ to extension.
Re extending caretaker agreements. The legislation appears to me to always favour the rights of the developer and caretaker over the rights of the Body Corporate, being the owners. The legislation in 1997 allowed for the introduction of the Accommodation Module with massive advantage to developers and those caretakers who obtained a change of module from uninformed owners. Buildings post 1997 are now 23 years old. However, many older buildings were also trapped into making a change to the accommodation module. Those buildings are now far too old to keep extending agreements. The “use by dates” of those buildings is approaching. Does legislation protect owners in older buildings from being “pushed” to extend agreements past their “use by date”? Absolutely not. Owners must fight to inform their fellow owners of the danger of extending agreements in older buildings in opposition to caretakers whose sole concerns is to sell at maximum price and profit and who will make any promise or use any emotional blackmail you could imagine in order to obtain extensions in search of the mighty dollar.
When can a BC review the caretaking remuneration of the onsite manager. Our was reviewed in 2017 but since that review the care of the pools was (4) taken out of the caretakers list of duties. So the caretaker now basically cares for the garden and keeps the common areas clean and reads the electricity meters for $160k per year.
That is tongue in cheek but i am hard pressed to determine his other duties that don’t relate to letting.
Hi Janice
We’ve received this response from Frank Higginson, Hynes Legal:
Tongue in cheek or not it all comes down to the contract. There is a very limited right to review new agreements entered into off the plan but I suspect that window has closed for you. Absent a specific provision, there are no rights to unilaterally review a management rights contract with respect to remuneration or anything else – it is then a matter of commercial negotiation.
Frank’s very true response should be the very reason why bodies corporate need to let their current MR expire – so that they can enter into commercial negotiation. Unless the body corporate has no equal place at such negotiation table, its options are severely limited.
Good stuff Frank. I guess whatever happens in Management Rights Business often becomes adversarial.
BC. BC Lawyers vs Caretaker vs BC Managers. The individual owners who seek out committee positions to further their own ambitions or personal whims.
I don’t believe any system is perfect and unfortunately as people seek their own pathways, often it not always to the benefit of lebara owners.
Overall I believe if people commit to the contract it can be of benefit to all owners.
Agree David. However, the neutral framework for all to work within, that is not skewed towards some party/parties at the expense of others would help immensely.
Dear LookUpStrata,
Thank you for publishing Todd and Frank’s (Hynes Legal) Answers to a LookUpStrata member’s questions on Caretaker Assignments (Top-ups), Management Rights and Committee Options.
The comment on Frank’s views you received from an un-named member commencing “The single biggest problem with 25 year caretaking contracts is……” and ending “….. particular interest as it raises serious issues and proposes possible solutions”.
Would you please forward the un-named member’s proposed 3 year contract solution to Todd and Frank for their considered comments….Would you please publish their reply, as many in strata-land would like to read their objective views on this proposed solution.
Thanking you,
Regards,
Kim Seng
Hi Kim Seng
We have received the following response from Frank Higginson, Hynes Legal:
For me, the issues that come with long term agreements – and before anyone asks that is 3 years or 25 years – is how to incentivise performance and the lack of control.
Bear with me, because I don’t think anyone will have made this analogy, but management rights agreements can be compared to RBA interest rates. They can be a very blunt tool that is applied to the whole of a sector (or country) without any regard for what the prevailing circumstances might be. As we sit here today the Brisbane property market seems to be holding up. Melbourne and Sydney are falling. But we are going to have the same rate setting applied to them regardless of their individual circumstances.
Management rights agreements are the same. If you have a big, investor owned, short term complex, management rights works brilliantly. Absentee owners need onsite management and the consolidation of caretaking and tenancy management (the often forgotten part of the management rights equation) is much better than any alternative management structure. If you have a small, owner occupied, high end complex with lots of active owners, then maybe management rights are not so brilliant – especially if those owners want control over what goes on day to day. The other unfortunate thing that can happen in smaller complexes is the occupants change over time. So what might have started with all absentee owners turns into an owner occupied complex and they are stuck with the same agreement they had from the start.
But, and here is where I differ from the anti-management rights brigade, and even some crusader lawyers, what I think should happen with term is academic. My job is to play with the cards we have been dealt and navigate that to the best of my ability no matter who I am acting for. What we have is a system that has been created over nearly 50 years and is now supported by a unique set of laws for Australia. We have thousands of people who have invested in it. We have the concentrated banking sector of this country owning (in effect – through debt) probably at least half of it, if not more. And that is a very large egg to try to unscramble, because if there is any change that affects values (such as retrospective term limitation) then financial carnage will ensue. And while the government may not care as much about the individual owners of management rights as I might, they will care about affecting the banks, especially in this post Royal Commission / APRA environment.
And while management rights could possibly be ‘ubered’ it is not the monopolistic situation that the taxi industry had. Owners do have choice. Their choice just may be delayed until existing agreements expire.
But with long term security does come the potential for laziness. If you offered me 10 or 25 years’ worth of guaranteed income for doing my day job, I could drop my rates, maybe not work as hard (such as typing this email at 5:30 am on a Tuesday morning) and play more golf. The security I have for any instruction I get is zero. Clients can terminate us with immediate effect with a phone call or email. Hence I need to continue to strive and impress. That keeps my business running.
Despite what some naysayers may say, management rights agreements do get terminated for cause / default. I have seen it quite a few times. Only the people in the buildings involved see that happen because these contractual arrangements are not public. What the public sees are the contested terminations, and in those disputes, the bodies corporate are almost always the losers. Why? The reasons are many and far too large for this forum and quite often specific to the individual matter. Sometimes it is the legal advice, and sometimes it is the cause. Sometimes it is because the committee comes across in evidence (be that in writing or in person) as crazy, and as much as that should not influence the consideration of a decision maker, it can.
What could happen is more active ‘move on’ provisions. If a service provider is not providing the services they have been contracted to offer, then having the ability to wedge that provider out and get a new one through some form of move on would have to be preferable to a termination dispute. But that then starts with the body corporate acknowledging that there are management rights agreements, people have invested in them, and termination is something that will be strenuously resisted because of the substantial loss. Obviously, there is a bit of devil in that detail, but that is what I think could be an alternative to QCAT being littered with the carcasses of bodies corporate.
The other one, and this is also a difficult thing to draft, is some form of payment tied to performance. KPI’s in any system are going to be subjective, and this is no different. I have flirted with this a few times over the years and at this stage, it gets too hard very quickly.
But the one thing we can all be sure of is that if there is a horse in the race called self-interest, you have to back it every time because it will be trying its hardest. The difficulty is aligning the interests of bodies corporate and managers with respect to that self-interest.
Interesting that only 2 negative responses.
I have committees who continuously bully the caretaker, committee people who represent only their own interests, including pushing their family businesses to do BC jobs. I have seen corrupt BC Management Companies who (despite being on 1 to 3 year contracts punch owners with fees. Staff of these companies rewarded for milking more fees from the buildings they look after. The issues are complicated and it seems to me neither the law nor government can get it right.
There are problems with:
Caretakers contracts,
BC Managers contracts,
committees
caretakers
owners and
lawyers (milk the system and charge exorbitant amounts to both caretakers and BC’s)
We need to get all parties to work together
The legislation must be amended to disallow caretakers in any way lobbying or influencing the election of committee members. When elected by the caretakers contrivance at each AGM, the lot owner occupiers are without any voice whatsoever in relation to non performance of caretaking duties. and other management issues. At our complex, no committee meetings have physically been held for over 1 year, no correspondence is responded to from lot owners, and the caretaker continues to organise through its landlords the continual extension of the 25 year contracts.
The government doesn’t care either. It is a fraud on Lot owners that such actions are still permitted by the out of date legislation.
This needs to stop. There is no recourse for owners stuck with these bland caretaking contracts and it is costing owners financially. Future potential owners are not aware of these 25 year agreements which the caretakers constantly require top-ups when their term reduces down. There is lack of performance management clauses in these agreements. The Qld legislation needs to change…..3 year agreements is the way to go.