Email 24 Jan 23
Hi Ken,
I think we seek legal advice. I have a friend who has recently purchased Management Rights in Currumbin they are going for an extension on the Manager’s Agreement. The Chairman and his wife who are both on the Committee are Lawyers and are fighting this.
In Qld Managers can submit a Motion every five years ( this would have to be checked) but if that is correct and the original contract was the 1st February 2006
then the following would be:
2011- 5 years
2016 – 5 years
2021 – 5 years
2026 – 5 years
If this is correct then a motion for an extension can’t be put forward by R2 Management until February 2026.
If Qld bring in the same law as Vic or NSW have implemented then they only can get a 10 year contract.
This is why I think we need a lawyer.
A lot of thought and time has gone into your email.
Everything you wrote I agree with, thank you.
Robyne
Sent from my iPhone
Robyne Cotterill
Mob 0417 622 605
On 14 Jan 2023, at 9:51 pm, Ken_Culpitt@bigpond.com wrote:
Committee Members will recall that, late on the afternoon of 20 December, R2 Management advised the Body Corporate Members that they ‘will be seeking to extend our agreement by 5 years at the next general meeting’
The advice includes a business rational of industry-recognised agreements of 20 years that preserve the capital value and a related finance component.
R2 Management lists 4 Benefits and anticipates success of the motion will be based on ‘the majority of owners being happy with our services’.
StrataCare subsequently advised Body Corporate Members of the R2 Management Motion detail including the Motion, Deed of Variation and the relevant Body Corporate and Community Management Act 1997 form – Form 20.
Initial observations by Body Corporate Members were that the motion simply favoured R2 Management and that the business case about preservation of capital value did not make sense.
Summary
R2 Mgt are seeking to extend the CMS by 5 years from 31 Jan 2036 to 2041
R2 Management did not discuss the contract extension with the Body Corporate Committee on the basis that the majority of owners are happy with their services
There was no negotiation on the proposed extension only an R2 Management offer which favours R2 Mgt and makes no offer to owners.
The contract extension is worth almost certainly over $4m.
R2 Management by passing the Body Corporate leaves each owner to undertake Due diligence of the offer, clearly won’t happen.
StrataCare advises that the Body Corporate should seek legal opinion about the proposed extension which is supported by Body Corporate members who have commented
Benefits described by R2 Management
• Preserves the value of the agreement and therefore the quality of people managing the complex
Preservation of the agreement value favours R2 Management. It is difficult to see the ‘therefore’ quality of management, a long agreement is more likely to generate complacency
• Having quality managers preserves the value of individual properties due to:
Well maintained buildings and common areas, Attractive gardens and grounds, Maximum rental return for investment properties
This is a cornerstone principal and there is no suggestion implied or otherwise that R2 Management are the only providers of this owner benefit. At the last R2 Management contract extension in 2020 R2 Management agreed to provide Caretaker Duties and Responsibilities Reports by 28th of each month. These Reports are inconsistently provided and of dubious quality. Caretaker reports are provided for each Body Corporate Meeting and recently monthly.
• Retains knowledge of the building (service locations, operation of equipment, abilities to address issues etc)
The retention of building knowledge is of particular advantage to owners. For ROTS, the long serving on-site managers are a critical component of this benefit while they continue to manage. Any new building managers, R2 Management or other would be reliant of the documentation trail left by the current managers. If there is an opportunity to discuss benefits for owners, The Body Corporate should seek assurance that critical and working building knowledge is retained when the current caretakers depart as likely / certain in the next 15 – 20 years of the agreement.
• Provides the Community with the stability of long-term managers
This is another cornerstone principal but needs to be underpinned with information / practice / procedure recording and not dependant on individuals. The Body Corporate is trying to progress these matters with both R2 Mgt and StrataCare.
Body Corporate Members need to decide what we should do
1 DO NOTHING – leave it to owners
2 Seek legal opinion about the proposed extension as suggested by StrataCare
3 Seek legal opinion about the process of changing building caretakers
4 Advise owners of the proactive approach being taken by the Body Corporate Committee, if approach 1 is not taken.
I do not favour the DO NOTHING option but will support the Body Corporate majority view.
Look forward to Committee Member thoughts.
Ken
Email to StrataCare – 26 Jan 23
Stratacare: Notice of intention to terminate contract.
Dear Sarah
The Committee notes that the current administration agreement between the Body Corporate for Reflection on the Sea CTS 34963 and Stratacare expires on 7 March 2023. The Body Corporate wishes to give notice of its intention to terminate at the end of the contract term.
Please acknowledge receipt of the above by return email.
Thank you
Regards
Robyne Cotterill
Secretary
On behalf of the Committee for Reflection on the Sea CTS 34963
Email – 26 Jan 23
Hi Ken,
The Committee has a majority of 5 “yes” votes for the Committee to advise StrataCare of the intention to terminate their contract which expires on 7 March 2023. I have forwarded StrataCare the letter today.
I agree with you that owners need a honest and better understanding of why Committee’s make decisions.
An honest and detailed account of the reason the Committee have added the Motion for QBS as the choice for the Body Corporate and why the Committee sent the intention to terminate StrataCare’s contract will be be supplied to all Lot Owners in the AGM voting papers, your input is always appreciated by all Committee members.
Cheers
Robyne
On 26 Jan 2023, at 12:19 am, Ken_Culpitt@bigpond.com Ken_Culpitt@Bigpond.com wrote:
Hi Graham
Thanks for making this point.
I have been in the building since November 2018 and on the Committee in 2021 & 2022 so cannot comment beyond that.
My experience is that, prior to this year, the Chair provided direction and Committee members were asked to agree. Dissenting opinion was not particularly appreciated and little was offered.
The fact that owners elected the Committee never seemed significant and only selective consultation with owners occurred.
AGM and EGM motions were largely successful based on lowest cost not value of money.
If the Committee wants better quality decisions by owners then we need to make sure they understand issues.
The Committee needs owner agreement to progress matters that we see as a priority; spends over Committee limit, extending Committee spend limit and matters about contracts with StrataCare and R2 Management.
None of the matters can be significantly progressed without owner support.
Cheers
Ken
From: Graham Stritzke graham@geminihomes.com.au
Sent: Wednesday, 25 January 2023 10:07 AM
To: Deana McClintock deana@theconveyancingleaders.com.au; Robyne Cotterill robynecotterill@gmail.com; ken_culpitt Ken_Culpitt@Bigpond.com; Robyne Cotterill robyne.cotterill@gmail.com
Cc: Eric Lewis ericlewise@gmail.com; Carolyn Raymond #303 carolyn.raymond@bigpond.com; alicia wilson bwatresidences@yahoo.com.au
Subject: Re: Change of Strata Manager Vote.
Up until now it has not happened before with former Committees . Are starting something new?
Get Outlook for iOS
From: Deana McClintock deana@theconveyancingleaders.com.au
Sent: Wednesday, January 25, 2023 8:59:32 AM
To: Robyne Cotterill robynecotterill@gmail.com; Graham Stritzke graham@geminihomes.com.au; ken_culpitt Ken_Culpitt@Bigpond.com; Robyne Cotterill robyne.cotterill@gmail.com
Cc: Eric Lewis ericlewise@gmail.com; Carolyn Raymond #303 carolyn.raymond@bigpond.com; alicia wilson bwatresidences@yahoo.com.au
Subject: RE: Change of Strata Manager Vote.
That is a great just remembering we are the voice of the owners and want them to be a part of the important decisions
Kind Regards,
Deana
From: Robyne Cotterill robynecotterill@gmail.com
Sent: Wednesday, 25 January 2023 9:23 AM
To: Graham Stritize graham@geminihomes.com.au; ken_culpitt Ken_Culpitt@Bigpond.com; Robyne Cotterill robyne.cotterill@gmail.com
Cc: Eric Lewis ericlewise@gmail.com; Deana McClintock deana@theconveyancingleaders.com.au; Carolyn Raymond #303 carolyn.raymond@bigpond.com; alicia wilson bwatresidences@yahoo.com.au
Subject: Change of Strata Manager Vote.
[External Email] This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe.Good morning everyone,
I have messaged Casey this morning asking for her to put something together why we should be changing to QBS for the Committee to present to the owners at the AGM. Casey has replied and has meetings today, she will sen, something tonight or tomorrow at the latest which I will forward to the Committee for comments and any changes going forward.
Ken thank you for your comments especially with the time difference they are always appreciated. Hope you and Denise are having an enjoyable time away.
Cheers
Robyne
On 24 Jan 2023, at 4:27 pm, Ken_Culpitt@bigpond.com Ken_Culpitt@Bigpond.com wrote:
Looking forward to an AGM motion – I think owners will be looking for a statement about why change and a financial comparison is an obvious component.
If QBS are more expensive that StrataCare, the case will need to be value for money.
I suggest we do not go to StrataCare until we have a good case for owners to agree. Not sure how pleasant things will be if we flag change and owners don’t support us.
QBS will need to help with detail.
Cheers
Ken
Email 30 Jan 23
Good Morning,
Thank you for your email, contents noted.
Kind Regards,
Sarah Pearson
Gold Coast Branch Manager
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