What the engagement legally is
A body corporate manager (what most people call the strata manager) is engaged by the body corporate under the BCCM Act and the scheme's regulation module. The engagement must be in writing, and must state the term, the functions the manager is authorised to carry out, and the basis for working out the manager's payment. A handshake arrangement, or an engagement buried in a by-law, doesn't meet the requirements.
The three-year cap
Under the Standard Module, the term of a body corporate manager's engagement — after allowing for any rights or options of extension or renewal, whether in the original engagement or agreed later — must not be longer than three years. If a term purports to be longer, it is taken to be three years.
Two things follow from the words in bold:
- Options count toward the cap. A "two-year term plus a two-year option" is not a lawful four-year arrangement — the whole package is capped at three.
- Every scheme faces a genuine renewal decision at least every three years. That renewal is the committee's leverage point, and it should be treated as one — diarised well in advance, not discovered when the renewal motion appears in the AGM agenda someone else drafted.
(This is the cap for body corporate managers — administrative managers. Caretaking service contractors under management rights arrangements are governed by different, much longer term limits, and are a different topic entirely.)
The money: three separate streams
Management agreements almost never contain one fee. Read for three:
1. The base management fee — the fixed annual amount covering the "agreed services": convening meetings, issuing levy notices, keeping the roll and records, and the other scheduled administrative functions.
2. The additional services schedule — the rate card for everything outside the agreed services: extra meetings, dispute correspondence, project coordination, and often the sourcing of quotes for maintenance work. This schedule is where the real annual cost lives, and where quotes between competing firms diverge most. A low base fee with an aggressive schedule routinely costs more than a higher base fee with a generous inclusions list.
3. Disbursements — postage, printing, communication charges and similar recoveries, either at cost or at scheduled rates.
The question that cuts through it: "On our scheme's actual activity last year — meetings held, jobs quoted, correspondence volume — what would the total annual cost have been under this agreement?" Ask every firm quoting to answer the same question, and the comparison becomes real.
Commissions and benefits are a fourth stream, and Queensland requires them to be disclosed. The module requires a body corporate manager to disclose associate relationships with suppliers the body corporate is engaging, and disclosure obligations around commissions and other benefits connected with contracts have tightened over recent years. If insurance is arranged through the manager, ask for the commission arrangement in writing, in dollars — and treat reluctance as an answer in itself.
The questions to ask before the vote
- What is the end date, and is it in the committee's calendar? With a hard three-year ceiling, the renewal date is known from day one. A committee that starts comparing the market three or four months before expiry negotiates; a committee that notices the expiry afterwards accepts.
- What exactly is in the agreed services — and is quote sourcing in or out? If sourcing maintenance quotes sits in the additional services schedule, every job the building does carries a per-quote or per-hour charge on top of the work itself. For a scheme with real maintenance activity, that line alone can rival the base fee.
- What does the additional services schedule price, and at what units? Per hour, per item, per page — units matter as much as rates.
- What commissions or benefits will the manager receive from anyone? Insurance is the headline, but the disclosure question should be asked generally.
- How does the engagement end? Check the notice requirements for non-renewal and the mechanics for termination, and diarise the notice deadline, not just the expiry date.
The record is what protects the decision
The choice of manager is one of the larger recurring financial decisions a body corporate makes, and it is made by volunteers, on documents drafted by the other side. The committees that do it well treat it like any other major procurement: comparable proposals, questions asked in writing, answers kept, and the reasoning recorded — so that when an owner asks at the AGM why this firm at this price, the answer is on file.
That habit — structured comparison, questions and answers in writing, a permanent record against the building — is exactly the discipline StrataTrade applies to the scheme's maintenance procurement, where the same dynamic plays out job after job: the committee decides, the money is the owners', and the record is what stands behind the decision years later.
This article is general information about Queensland body corporate law, not legal advice. Engagement requirements and term limits are set by your scheme's regulation module — most schemes are under the Standard or Accommodation Module, but confirm your own before relying on any figure, and obtain advice before signing or terminating a management engagement.