Shortcutting the assignment process

Different states have different requirements when it comes to obtaining body corporate consent to the assignment of caretaking and letting agreements.

Obviously, approval at committee level should be dealt with much quicker than an approval required at a general meeting of the body corporate. The table below indicates whether the body corporate committee in each state shown has the authority to approve the assignment of caretaking and letting agreements without going to a general meeting.

When notifying a body corporate of a sale, I believe that you can shortcut the process by ensuring that you provide the committee upfront with everything they will possibly require to consider and grant that consent. All caretaking and letting agreements (and the Queensland legislation) require that the body corporate act reasonably when deciding whether to approve or not approve a buyer. Generally, this comes with a requirement that the incoming manager must be respectable, responsible, financial and capable of performing the duties.

An increasing number of bodies corporate are now fully investigating the background of proposed incoming managers. They want detailed information and checks done before they grant consent. Consequently, you can save yourself a lot of time and money by providing everything in one go to the committee.

I believe that the following will satisfy 99 per cent of a body corporate’s requirements:

• a résumé for each purchaser (or each director of a purchaser company), detailing their respective competency, qualification and experience;
• evidence of financial standing of the purchaser (or each director of the purchaser company) – (eg. asset and liability statement and a copy of the incoming bank’s letter of offer of finance setting out the terms of the loan);
• at least two character references for each purchaser/director;
• at least two business references for each purchaser/director (preferably one of which should be from the purchaser’s banker, accountant or finance broker);
• a detailed business plan/written submission from the purchaser, explaining how it proposes to manage the scheme on a day-to-day basis (for example, its structure, management style/approach, staffing, who will be responsible for the day-to-day operation and management of the caretaking and letting business, who are or who will be licensed for conduct of the letting business, etc);
• a copy of the purchaser’s real estate or letting licence or evidence of completed modules required to obtain the  licence;
• a police check for each purchaser/director.

For many agreements this list is more than enough to meet your obligations to the body corporate but it should be noted to also check your agreements for any other peculiar requirements.

Richard McGill