Service contractors

Terminating an engagement

An engagement of a service contractor or caretaking service contractor, or an authorisation of a letting agent, can be terminated:

• by agreement
• under the terms of the contract or authorisation
• if the service contractor or letting agent is convicted of an indictable offence involving dishonesty, fraud or assault
• if the service contractor or letting agent does not comply with a remedial action notice.

Terminating by agreement

A body corporate can terminate their engagement with a service contractor, or authorisation of a letting agent, if:

• it is agreed with that person
• the terms of the contract allow for termination of the engagement or authorisation.

The body corporate must agree to the termination by ordinary resolution at a general meeting.

Terminating for conviction of offences

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):

• is convicted   of an indictable offence involving fraud or dishonesty (whether or not a conviction is recorded)
• runs a business (involving the supply of services to the body corporate, or to owners or occupiers of lots) that is against the law
• is convicted on indictment of an assault or an offence involving assault (whether or not a conviction is recorded)
• transfers an interest in the engagement or authorisation without the body corporate’s approval.

The body corporate must approve the termination by ordinary resolution by secret ballot.

Remedial action notice

A body corporate can terminate an engagement with a service contractor, or authorisation of a letting agent, for:

• engaging in misconduct
• being grossly negligent (i.e. extremely careless) in carrying out their functions under the engagement
• failing to perform duties as required under the engagement
• failing to comply with the code of conduct
• failing to comply with disclosure requirements.

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:

• that the person has not met their obligation in a way mentioned above
• specific details that identify the issue (e.g. the duties not carried out)
• a notice period (no less than 14 days) during which they must remedy the issue
• that if they do not comply with the notice within the notice period, the body corporate can terminate the engagement.

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.

Transferring the engagement

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.

Resolving disputes

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

• an engagement
• the transfer of an engagement
• the terms of an engagement.

Complex disputes may be determined by the Queensland Civil and Administrative Tribunal or by a specialist adjudicator appointed by the Commissioner.

Specialist adjudication

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 person nominated
• how much the adjudicator will be paid
• how the amount will be paid and who by, or an agreement that how the amount will be paid will be decided by the specialist adjudicator

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:

• disputes from contract reviews (section 133)
• specialist adjudication or QCAT jurisdiction (section 149B).

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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• Previous ( https://www.qld.gov.au/law/housing-and-neighbours/body-corporate/maintenance/service-contractors/transfer )