Service contractors

Engaging 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:

  • be in writing
  • state the term (length) of the engagement
  • state the duties
  • include the payment arrangements.

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.

Terms of engagements

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.

In this guide:

  1. Role of a service contractor and letting agent
  2. Engaging a service contractor
  3. Amending an engagement
  4. Transferring an engagement
  5. Terminating an engagement

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