Transferring an engagement
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 or Specified Two-lot Schemes 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:
- the character of the transferee
- the financial standing of the transferee
- the terms of the transfer
- the competence, qualifications and experience of the transferee
- any training the transferee has completed or is likely to complete.
After being given the information necessary to decide on a transfer, the committee has 30 days to decide.
- cannot unreasonably withhold approval
- can ask to be reimbursed for reasonable costs incurred during the approval process
- cannot receive or ask for any other fee or reward for considering the transfer.
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:
- 3% of the fair market value of the transfer if it is approved in the first year after the initial contract date
- 2% of the fair market value of the transfer if is approved after the first year but before the end of the second year after the initial contract.
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.