Statutory Remuneration Review Process

20 February 2020

We are constantly surprised by how few people are aware that the Body Corporate and Community Management Act (BCCMA) contains a right to review either:

(a) the duties to be carried out under a caretaking services contract; or

(b) the salary paid to the caretaker under such a contract.

This right exists regardless of whether or not there is a similar contractual provision in the contract.

The review mechanism is aimed at (and confined to) new agreements (i.e. the first caretaker appointed by a body corporate) and must be commenced within a strict timeframe stipulated by the BCCMA.

It is often the case that caretaking services contracts are drafted by developers and have little regard to the actual needs of the scheme. This can result in a disconnect between what is really needed for the scheme and what the agreement requires. In those circumstances, a duties review can be a good option for bodies corporate and caretakers alike, in that it will align the duties in the agreement with the needs of the Scheme.

Similarly, there is often a disparity between the salary paid to a caretaker and the duties under the agreement. This is where a salary review is useful.

Mahoneys has assisted many caretakers to take advantage of this mechanism where they are significantly underpaid by reference to the duties required of them. In Drift Palm Cove Mahoneys secured a salary increase of over $85,000.00 per annum for the caretaker – which is still the largest increase ever obtained for a caretaker under this review mechanism.

The review process is complex and there is a particular set of conditions to be satisfied before either party can request a review. If the process is not followed strictly, the right to review can be irretrievably lost.

Caretakers of newly established schemes are encouraged to consider this option, especially if their agreement does not contain a regular market review mechanism. The statutory right of review could be your only chance to procure a salary increase for the life of the agreement.