A body corporate can engage service contractors and caretaking service contractors. They can also authorise letting agents.
These people perform specific duties that help a body corporate meet its legal obligations.
This guide explains the kinds of services these people may perform and the codes of conduct they must follow.
It also explains how a body corporate can engage a service contractor (or letting agent), or amend, transfer or terminate an existing engagement.
Service contractors supply services that benefit the common property or the lots included in the scheme.
A service contractor is someone engaged by a body corporate to supply services (other than administrative services) for at least a year. They are not an employee.
Examples of the services they provide are:
Body corporate managers are not service contractors. They are contracted by the body corporate to supply administrative services.
A caretaking service contractor is a service contractor for a community titles scheme who is usually also authorised as a letting agent for the scheme (or an associate of a letting agent for a scheme).
The caretaking service contractor generally owns or leases a lot, and runs the letting agent business from that lot.
If they own their lot they can vote at general meetings. They are automatically a non-voting member of the committee and ineligible to be a voting member.
Schemes registered under the Small Schemes or Specified Two-lot modules cannot engage a caretaking service contractor.
A letting agent is authorised by the body corporate to let out lots and collect rent for investor-owners. They must be licensed under the Property Occupations Act 2014 .
You can check licence requirements and check a property licence .
There is no need for a letting agent to give the body corporate details of letting arrangements. However, they may have to give the body corporate some information for the body corporate roll , such the name and address of the tenants for leases of 6 months or more.
Owners do not have to use the authorised letting agent to let their lots. They can choose to let their lots privately or use a real estate agent.
Schemes registered under the Small Schemes or Specified Two-lot modules cannot authorise a letting agent for their scheme.
A caretaking service contractor must comply with the code of conduct for body corporate managers and caretaking service contractors, as well as the code of conduct for letting agents.
The code of conduct is automatically included in the terms of their engagement. If there is a difference between the code of conduct and their engagement, then you should always refer to the code of conduct.
Under the code, a caretaking service contractor must:
Find the codes of conduct in the Body Corporate and Community Management Act 1997 for:
The Act does not include a code of conduct for a service contractor.
Service contractors and caretaking service contractors are engaged by the body corporate. They are not employees.
The original owner (developer) may initially engage a service contractor (or authorise a letting agent). The developer sets the initial salary, which should relate to the work done.
If the developer does not engage any service contractors, or the original term of engagement expires, the body corporate may decide on a new engagement by ordinary resolution at a general meeting.
The body corporate cannot sell the letting or caretaking rights.
The general meeting notice where a new engagement (for a service contractor) or authorisation (for a letting agent) is to be voted on must include the terms of the contract, as well as any options for extension or renewal.
The new engagement or authorisation must:
An engagement or authorisation cannot be in the form of a by-law.
Schemes registered under the Small Schemes or Specified Two-Lot Schemes modules can’t engage caretaking service contractors or authorise letting agents. They can only engage service contractors.
The minimum term of engagement of a service contractor is a year.
The maximum term of engagement of a service contractor and a caretaker service contractor depends on the regulation module that applies to the scheme.
The Standard Module allows for a maximum term of 10 years.
The Accommodation and Commercial modules allow for a maximum term of 25 years.
Schemes registered under the Small Schemes or Specified Two-Lot Scheme modules can only engage a service contractor for a maximum term of a year.
The term of engagement includes any rights or options to extend or renew the contract—whether provided in the first engagement or agreed to later.
The body corporate can agree to amend the current engagement with a service contractor or caretaking service contractor by ordinary resolution at a general meeting.
A motion to amend a service contractor engagement can be decided by open ballot.
However, an amendment to the caretaking service contract must be decided by secret ballot if the amendment includes an option for extension or renewal.
In either case, no votes can be cast by proxy.
A motion about a service contractor or letting agent can only be considered once in a financial year if it is about:
The general meeting notice must include an explanatory note (in the approved form) explaining the amendment.
The amendment must:
For schemes registered under the Two-lot Schemes Module, an amendment can be made by lot owner agreement. This is when the owner or a representative from each lot negotiates and reaches a written agreement on the matter.
A person’s right under an engagement as a service contractor, or under an authorisation as a letting agent, may be transferred.
However, engagements cannot be transferred under the Small Schemes, Specified Two-lot Schemes or Commercial modules.
If they have body corporate approval, a service contractor can sell their business.
A transfer can be approved by resolution of the committee. Find out how the committee makes decisions at a committee meeting or by vote outside a committee meeting.
The committee can consider the following:
After being given the information necessary to decide on a transfer, the committee has 30 days to decide.
The committee:
If the engagement is transferred within 2 years of the initial contract date, the person transferring their business may be asked to pay a fee.
The transfer fee will be either:
The person transferring may ask the body corporate to waive the transfer fee if they are transferring because of genuine hardship. Information to support this claim should be given to the committee.
An engagement of a service contractor or caretaking service contractor, or an authorisation of a letting agent, can be terminated:
A body corporate can terminate their engagement with a service contractor, or authorisation of a letting agent, if:
The body corporate must agree to the termination by ordinary resolution at a general meeting.
A body corporate can terminate their engagement with a service contractor, or authorisation of a letting agent, if the person (or director, if a company):
The body corporate must approve the termination by ordinary resolution by secret ballot.
A body corporate can terminate an engagement with a service contractor, or authorisation of a letting agent, for:
Before they can terminate the agreement, the body corporate must issue a remedial action notice. The decision to issue the notice can be made by the committee.
The remedial action notice must state:
The termination must be by ordinary resolution at a general meeting.
If the engagement is terminated, the service contractor and/or letting agent cannot transfer their business with the body corporate to someone else.
Instead of terminating an engagement or authorisation the body corporate may make the service contractor and/or letting agent transfer it (i.e. sell it to someone else with approval of the body corporate).
They may be able to leave the scheme with some financial return if the engagement is transferred.
Read more about transferring an engagement —the process leading up to the transfer or termination of an engagement is complex.
Note: The body corporate should consider getting private legal advice before it seeks to enter into, terminate, amend or transfer a legal contract.
The Office of the Commissioner for Body Corporate and Community Management has limited jurisdiction to resolve disputes involving service contractors and caretaking service contractors.
The legislation only recognises these disputes as between the body corporate and the contractor. A lot owner cannot lodge a dispute resolution application against a service contractor or a caretaking service contractor.
We can’t help you resolve complex disputes.
A dispute is defined as a complex dispute if it is about a contractual matter relating to
Complex disputes may be determined by the Queensland Civil and Administrative Tribunal or by a specialist adjudicator appointed by the Commissioner.
An application for specialist adjudication must nominate someone to act as the specialist adjudicator.
A specialist adjudicator can only be appointed if all parties to the dispute agree in writing on:
The Commissioner must be satisfied that the nominated person has appropriate qualifications, experience and standing to perform the role.
Refer to the Body Corporate and Community Management Act 1997 for more information about:
Service contractors, 15 Feb 2023, [https://www.qld.gov.au/law/housing-and-neighbours/body-corporate/maintenance/service-contractors]
This document is uncontrolled when printed. Before using the information in this document you should verify the current content on https://www.qld.gov.au/law/housing-and-neighbours/body-corporate/maintenance/service-contractors.