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Transfer of Body Corporate Management Rights

The devil is in the detail when it comes to body corporate management rights agreements, and it is essential that all parties carefully consider the terms of the specific agreements.

Such agreements usually include contracts for the provision of caretaking duties and authorisation to act as letting agents, and may be extremely valuable assets.

Before a manager can transfer its management rights to a new manager, the approval of the body corporate is required.

The body corporate must:

1.    consider the proposal for assignment (taking into account a number of factors including the new manager’s character, financial standing, competence, the proposed term of the                    transfer and any other relevant matters);

2.    decide whether to approve the proposed transfer by ordinary resolution of a general meeting (or by ordinary or resolution of the committee if a general meeting has not made such            decision a restricted issue) within 30 days after receiving all necessary information;

and if approval is granted, an appropriate Deed of Covenant and Guarantee should be executed.

The body corporate may not unreasonably refuse to grant approval for the transfer, and may only require that it receive a transfer fee (or any other benefit except reimbursement for reasonable costs incurred) if such fee is expressly authorised by the Body Corporate and Community Management (BCCM) Regulations.

The relevant Regulations Module provides for the transfer fees which may be chargeable by the body corporate if:-

  • the body corporate approves the transfer more than 2 years from the initial contract date; or
  • the transferee is a financier; or
  • the transfer is due to unforeseeable genuine hardship.

Since the Vie Management decision by the Queensland Civil and Administrative Tribunal (QCAT) in 2015, most financiers require management rights agreements to limit the body corporate’s ability to terminate due to insolvency related events of default.  Accordingly, if a transferee is obtaining funding from a financier, a condition of finance may be that the management rights agreement is varied to provide protection to the financier.

We strongly recommend parties proposing to enter into, or assign a management rights agreements to obtain legal advice to avoid including terms that unreasonably limit a body corporate’s right to terminate the agreement, or alternatively, ensure the agreement contains sufficient protection for an incoming financier to ensure the asset is saleable in the future.

If you or someone you know wants more information or needs help or advice, please contact us on (07) 5443 4866 or email


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