$3,226 fine: Unit managers warned over kickbacks from tradies

A commissioner overseeing bodies corporate has warned property managers to declare any kickbacks they get off contracts for services from tradies, gardeners and cleaners.

Queensland’s body corporate commissioner has warned managers to declare any kickbacks they receive off the awarding of property maintenance contracts.

Queensland’s booming population has not only resulted in a steady increase in the number of body corporate complexes, but also an increase in demand for body corporate managers and caretaking service contactors.

Body corporate managers and caretaking service contractors often assist the body corporate to engage service providers such as pool cleaners, gardeners and tradies as well as obtaining insurance quotes.

BCCM Commissioner Jane Wilson says managers often assist the body corporate with engaging services required.

They may also lawfully receive commissions or benefits from service providers they recommend to a body corporate. However, where ANY benefit is received – be it cash or in-kind – it must, by law, be disclosed to the body corporate.

Caretaking service contractors and body corporate managers must disclose to the body corporate the benefit they will receive before the contract is presented for consideration.

Their behaviour is also governed under the ‘code of conduct’ in the Body Corporate and Community Management Act 1997 and it requires them to:

– act honestly, fairly and professionally

– act in the best interests of the body corporate (if lawful to do so)

– not unfairly influence the outcome of a motion or election

– not be fraudulent or misleading

– goods and services to be supplied at competitive prices.

An array of contracts can be linked to apartment complexes from pool cleaning to regular maintenance and emergency fixes.

Be mindful that a benefit does not need to involve money. It can be anything from a box of doughnuts, to a bottle of wine or free accommodation or theatre tickets.

Body corporate managers or caretaking service contractors are engaged to assist a body corporate and are not decision-makers. They only act on the instructions of a body corporate or a committee.

A body corporate does not have to accept any recommendation and can obtain its own quotes, engage its own tradespeople, or enter its own contracts.

In the instance of insurance premiums, any commissions body corporate managers or caretaking service contactors receive must be disclosed at an annual general meeting (AGM).

This is important, as many body corporate managers receive commissions for insurance contracts.

Members of a body corporate should be looking closely at the minutes of their AGM because it is a compulsory requirement that any disclosure should be attached to the minutes.

Better still, a body corporate could write to the body corporate manager and ask outright if they have received, or will receive, a monetary commission or any benefit for an insurance premium.

Any benefit or commission property managers are in line for must be declared at the time that they make the recommendation to the body corporate.

As for recommending a contractor for maintenance work, gardening or debt collection, any benefit or commission must be declared at the time of making the recommendation.

Having said this, commissions and benefits in-kind are not always bad, especially when they are reasonable and are of notable benefit to the body corporate.

Tradies may even pay the service contractor an annual fee to be one of their preferred maintenance workers of choice. It can mean that whenever an issue arises, the preferred maintenance workers will attend to the problem in a prompt manner or provide their services at a reduced rate.

If the body corporate manager, or caretaker, fails to disclose a commission or benefit, or that they are an associate to a provider or contract that is being considered, the body corporate can take action in the Magistrates Court, which may result in fines up to 20 penalty units (or, currently, $3,226).

Those who don’t declare kickbacks could be fined up to $3,226.

Separate to pursuing a fine, if a body corporate manager or caretaker for a scheme fails to perform its duties, disclose a commission, comply with the Act or code of conduct, the body corporate can choose to issue a remedial action notice.

For further information on the obligations of body corporate managers and caretaking service contractors declaring benefits, visit www.qld.gov.au/bodycorporate.

To learn more about the disputes process, running a body corporate, or to subscribe to the BCCM newsletter, visit https://www.qld.gov.au/law/housing-and-neighbours/body-corporate/bccm.

* Jane Wilson is the Queensland Commissioner for Body Corporate and Community Management.

Originally published as $3,226 fine: Unit managers warned over kickbacks from tradies