We helped a Tier 1 Owners Corporation negotiate a new agreement with their existing manager that offered a reduced term and cost-saving of $91,950 annually.
In February 2022, a committee member contacted us about what they believed to be an unfair and overpriced contractual agreement.
- The multi-Owners Corporation was being managed by a large Owners Corporation management company and was Developer appointed.
- The existing Contracts of Appointment included periods of time that exceeded the recently legislated maximum term for Owners Corporation agreements.
- The fee to prepare records for transfer was excessive and would be considered a poison pill* when wanting to end the agreement.
- A range of additional fees also appeared well above current market trends.
*(A poison pill is where the financial penalty for ending management is considered untenable).
- The committee engaged The OCguide to review all management agreements for a multi-OC and prepare a report to clarify how the contractual terms compared to other agreements for similar sized Owners Corporations.
- The OCguide’s report enabled the committee to confirm how their fees compared to the market average and how the terms agreed aligned with the legislation.
- Using our industry expertise and market insights, The OCguide developed a contract amendment proposal and mediated with the existing manager to successfully negotiate amendments to the existing contracts.
- The Owners Corporation were offered new terms and reduced management fees with a cost saving of $91,750 annually, including a large range of additional services at no cost. They were also offered a substantial reduction in the number of years the contract was originally agreed to by the Developer.
- The OCguide managed the process from start to finish, including preparing all paperwork, convening and chairing meetings and assisting and educating committee members regarding their rights and obligations.