I always find it interesting when I attend a budget committee meeting and the committee expresses to me their disappointment when it receives (through the Body Corporate Manager (BCM)) a number of motions proposed by a lot owner (who is also the Caretaker, Letting Agent or Building Manager).
The content of the motions is often dealing with matters such as:
- an increase in the term of the agreement – more commonly known as a “top up”;
- a Gallery Vie variation dealing with the concerns of financiers; or
- other amendments to the agreement which are for the benefit of the Caretaker.
Typically, such motions are sent to the BCM office from the solicitor acting on behalf of the Caretaker.
The motions are usually considered by the committee at the budget meeting. It is at such meeting the committee members find themselves discouraged with the Caretaker because whilst they thought they had a good, open and communicative relationship with the Caretaker, there was no communication or discussion by the Caretaker regarding the proposal of the motions.
Receipt of an email from another person’s lawyer is rarely something well received. The same applies in this situation.
Unfortunately, when this occurs the whole “negotiation” process can start off on the wrong foot. From the prospective of the committee, when considering amendments to an agreement, the discussion they would (usually) like to have with their Caretaker would occur over some months before the proposing of such motions (jointly) to a general meeting.
In circumstances where such discussions have taken place, it is often the case that the motion is adopted and supported by the committee. However, 9 times out of 10, a motion is simply proposed (through a law firm) without any prior discussion or notification with the committee. It is this action (or non action) that creates a conflict between the committee and its Caretaker.
So, what are the recommended strategies and options that may be implemented by the Caretaker in avoiding this type of conflict?
Obviously, communication (and early communication) is the best way to achieve a harmonious result. Particularly in circumstances where a good and solid relationship exists between the current committee and the Caretaker, there really is no reason why the Caretaker should feel unable to approach the committee (to sit down on an informal basis) and have a discussion as to why such motions are being proposed at the Annual General Meeting.
This is also an ideal time for the committee to raise any concerns they may have with respect to the agreement.
As all stakeholders are aware, some of the agreements are very old and there are terms which may need adjustment and amendment (or a complete re-writing). This is not a watering down or disposing of anybody’s rights rather, an opportunity to achieve a balanced agreement. From the committee’s prospective, the common type of amendments sought to such agreements usually raises the following questions which the committee would like to discuss:
- With a Gallery Vie amendment – the committee often raises with me its concerns about it waiving the rights of the Body Corporate;
- With respect to a top up – the committee is often concerned about the value of the agreement and whether the Caretaker is meeting the performance standard as required under the agreement.
- Further, there is concern regarding the increasing salary in accordance with CPI. Lot owners seek the committee’s advice on whether they ought to support extending the agreement for a further five (5) years and increasing the salary in accordance with CPI if the performance of the Caretaker is not up to standard.
So, what are the best practical tips that are available for Caretakers and the committee:
- Firstly, open communication. If there is an amendment which needs to occur to the agreement between the parties, then raise this matter early, raise it on an informal basis and have an open but specific discussion about what each party would like to achieve.
- If there are issues or concerns with respect to what is being requested (ie, it may be that the committee has concerns with extending the agreement for a further five (5) years) then identify what are the committee’s concerns and how these may be addressed within the agreement.
In a nutshell, the message is open communication with the Committee.