An article of Strata Community Australia (Qld) reproduced with permission.
Effective from today, 1 December 2014, the Property Agents and Motor Dealers Act 2000 (PAMDA) has been replaced by new legislation. This may impact schemes where the building manager conducts a letting business. The conduct of that letting business will now be regulated by new legislation called the Property Occupations Act 2014.One of the reasons for this change was to simplify and reduce the level of red tape and regulation the PAMDA imposed on the conduct of letting businesses. The Property Occupations Act will relax a few rules, such as:
- When a resident letting agent applies for a licence, they will no longer have to show evidence of body corporate approval.
- A resident letting agent can now conduct a letting business for more than one scheme.
- A resident letting agent is no longer required to reside on-site as a condition of the licence.
Will the building manager still require body corporate approval to conduct a letting business?
This will depend on each scheme’s circumstances. Ultimately, an exclusive authority to conduct a letting business from scheme land will remain valuable to building managers, so this should not cause any material change to how management rights operate.
Management of more than one complex
Under the PAMDA, building managers could do this if they had an open real estate agent’s licence (rather than a resident letting agent’s licence), so the relaxation should not cause any material change to how management rights operate.
In any event, the letting agreement between the body corporate and the building manager will continue to govern how a letting business may be conducted from the scheme. Some agreements restrict the building manager from conducting a letting business from other schemes, some permit them to conduct a business from other schemes, and others are silent on this issue.
Ultimately, the building manager remains contractually bound to perform their obligations under the letting agreement and must continue to provide the letting services to a standard consistent with the codes of conduct irrespective of the number of complexes they manage.
Requirement to reside on-site
This has been removed to provide greater flexibility for the business practices of building managers who hold a resident letting agent’s licence. It will not change what the letting agreement with the body corporate requires.
Many letting agreements require the building manager to reside on-site and conduct the letting agent business from the management unit or a reception area. Unless the body corporate agrees to vary the letting agreement to remove these types of requirements, they will continue to apply.
Suggestions for members
Members should inform their committees these legislative changes will not affect the contractual arrangements they have with the building manager. As each letting agreement is different, you should encourage any concerned committees to seek independent legal advice so their particular circumstances can be considered.
This information is intended to provide a general summary only and should not be relied on as a substitute for legal advice.