Apartment owners in Queensland are gearing up for a fight against entrenched vested interests for the simple basic right to choose who manages their apartment buildings and under what terms.

The Unit Owners Association of Queensland has published what amounts to a manifesto and a call to action in an effort to sway the state government which has hinted that it is ready to examine possible reforms to the management rights system.

That system, which Flat Chat has long described as legalised corruption, strips apartment owners of their basic consumer rights in order to firstly funnel money to developers and secondly to protect and enrich those who invest in the contracts.

The result is a system that locks apartment owners into 25-year contracts over which they have no say, with managers whom they may not choose nor dismiss, while these “rights” are traded between corporations in a business now worth an estimated $5 billion.

This is how it works

A developer nearing completion of a new block offers the legal right to manage the building for sale to the highest bidder.

The new owners then find out they have been locked into ten or 25-year contracts that they can’t get out of.

As the contracts near their end dates, owners are bullied into extending the contract, including being threatened with legal action for restraint of trade if they don’t. Often the extension of the contract is demanded so that it can be sold to another manager.

Meanwhile, the apartment owners are paying inflated fees (levies) in order to cover the managers’ costs in buying the contract. In effect, they are paying for the sticks used to beat them.

Management modules

There are five kinds of strata modules in Queensland when it comes to management contracts, with two designed for large strata schemes.

The Standard Module, mainly for schemes where most owners live in their own apartments, allows management contracts of up to 10 years.

The Accommodation Module, which is less regulated, is designed for schemes where most owners run their units as holiday lets, and allows contracts for up to 25 years.

However, there are increasing reports of developers who identify their schemes as predominantly residential developments when they apply for planning permission, because those are looked on more favourably by local councils.

Then, before completion, the developers concoct reasons to reposition them as Accommodation Module blocks so that they can sell much more lucrative 25-year contracts. Meanwhile managers in blocks with Standard module contracts are being advised on how to convert them to 25-year accommodation contracts

This should come as no surprise to anyone. Any system that is so stacked against the people it exploits – apartment owners and buyers – is likely to become more corrupted over time, rather than less.

Strata Community Association (Qld), the state’s strata managers’ and service providers’ peak body, is in no doubt that a system originally designed for the management of holiday apartments, needs reform.

“The role of a caretaking service contractor, and indeed any service contractor, is important for helping a body corporate discharge its duty to maintain common property in good condition,” says its position paper on the issue.

“But SCA (Qld) does not see the need for that role to be secured by an engagement that is decades-long and on terms imposed upon that strata community by a person who will profit from the arrangement.”

SCA (Qld) suggests that the total term of new service contracts, including for management rights, should be limited to three years, in line with the term limit for the engagement of a body corporate (strata) manager.

Ten-year limit

Alternatively, caretaker contracts should be limited to 10 years, in line with the approach in other jurisdictions, such as NSW (although that may be about to change to three years too).

Also, says SCA (Qld), developers should not be permitted to put in place long-term contractual arrangements that would bind the future body corporates. Meanwhile  there should be checks on blocks designated as Accommodation, limiting them only to schemes where more than 75 per cent of units are holiday lets.

To be clear, NSW and Victoria don’t allow the presale of management contracts, although these are creeping in in areas where, like embedded networks, developers can push unfavourable contracts past unsuspecting buyers and then reap their reward when the contracts are approved at the first AGM.

Predictably, property managers’ lobby groups are vehemently opposed to any changes to the Qld laws and would actually like to see the system spread to other states. With a thriving $5billion industry at stake, why wouldn’t they?

But the state’s apartment owners aren’t giving up the fight and are now calling on apartment owners to support their efforts to have the law changed.

The UOAQ Call to Action

The following is the Queensland unit owners’ position on management rights and their outline for the reforms that it is taking to the state government. It is unedited and posted without further comment.

The Attorney General has recently written to the UOAQ stating among other items that the state government will be considering “reform options relating to management rights”. The UOAQ requests consideration of key principles that must guide any changes. These principles include “the price competitive market, fair contracts, informed consent, fiduciary duty, building safety and a fair legal process”.

The recently released seller disclosure statement underscores the shortcomings of a reform process that has been heavily shaped by industry lobbying, resulting in outcomes that fall short of delivering the transparency and consumer protections originally intended.

Has the BCCM’s Act social licence expired? We think YES. Social Licence requires trust, ethics, responsibility, legitimacy, and public acceptance which are terms not often associated with the current delivery of building management services in Queensland.

Over the past several years, the UOAQ has established these problems with the outcomes of the Body Corporate and Community Management Act (BCCM Act). They include.

• The suppression of price competition
• 25 year contracts are not fair or normal commercial practice
• Lack of informed consent
• Fiduciary duty
• Building safety
• A fair legal process

The UOAQ needs your support to communicate your owner experience directly to the Attorney General and your state member of parliament. Instructions are at the end of the newsletter.  So please read on.

Where did the BCCM Act go wrong for owners?

The BCCM Act starts well. Chapter 1 Part 2 Section 2 Primary Object reads ….provide for flexible and contemporary communally based arrangements…. Lofty ambitions, noble intent perhaps. Flexible, contemporary, communal all sounds great so let’s do it. Unfortunately, almost everything in the BCCM Act after that first section seems to undermine the goals of flexibility and contemporary communally based arrangements for building management service delivery.

The UOAQ Owner Survey reports:

• “Over 60% of all respondents record interpersonal conflict including bullying, defamation and intimidation in their buildings”
• “36% of respondents recording that they lived in a disharmonious or “toxic” community.”

It appears “something is rotten in the state of” Queensland, as Shakespeare might observe.

The original intent of this type of Act since the 1980s may have been to favour the development industry to promote building projects in Queensland. Sometimes well-designed legislation has “unintended consequences”, but the BCCM Act has deliberate elements designed to entrench management rights holders without owner consent. The outcomes are not good for many owners.

The world has moved on since then, through various corruption scandals and into a fully developed housing crisis. Queensland can no longer afford the financial or societal excesses of the vested interests in the property and management rights industry.

The following is a summary of the principles that the UOAQ has communicated to government via the CTLWG and various meetings. Owners need to understand these conclusions and participate with the UOAQ to ensure that their experiences are considered together with the industry lobbyist views.

Read on and then tell the Attorney General your story. Get involved with your experiences.

The principles requiring review include:

Suppression of price competition

The suppression of a price competitive market for building management services is an intended outcome of this Act. When an owner moves into a new building, there is the building manager all ready to go with a 25 year contract. The contract has been awarded by the developer without the knowledge or consent of the new owners.

There has been no open market review of the competency of the contractor, or the required duties. Often the contractor is a Hotel Operator in a residential building. The only tender was to determine who will pay the highest price for the contract. This practice was ceased in NSW 20 years ago by legislative change, but not here in Queensland.

The UOAQ Financial Analysis review has shown

• the percentage of the building maintenance expense without price competition in long term contracts varies between 17% and 85%.
• The study estimates this building service sector via management rights contracts is a $1b+ industry.

The access to competitive pricing is determined by the developer, not the owners. Many disputes in communities have their origin in the inability of owners to engage with the competitive market for building services.

It is often argued that Queensland requires unique conditions to support developer profitability. Yet, developers appear able to operate successfully under more balanced regulatory frameworks in other jurisdictions.

If Queensland developers were instead required to offer purchasers a genuine choice—such as a modest 3–4% increase in the purchase price in exchange for truly “flexible and contemporary arrangements” for building management—many owners might prefer this option over the alternative: decades of disputes, escalating costs, and substandard service from an often heavily indebted management rights operator. Notably, more than a third of schemes surveyed by the UOAQ report such adverse outcomes.

25 year contracts are not fair or normal commercial practice

There are no other infrastructure maintenance or facilities management contract that have a 25 year contract term and allowance for endless extensions. This practice does not happen anywhere else in the civilized word, or in Australia, it is just Queensland.

The UOAQ has recommended that the Accommodation module together with the endlessly renewed 25 year contracts be abolished. There is no oversight of the application of the accommodation module. There are housing and townhouse estates with 25 year contracts. How can this contract term be justified in the residential housing sector?

The UOAQ Financial Analysis review found:

• that 84% of schemes (40+ lots) are registered under the accommodation module with 25 year contracts over the last 12 years.
• Various owners have reported that the module was applied without meeting the requirements in the BCCM Act (which is just “fraud”).

The UOAQ Owner Survey reports:

• 65% of all respondent support three year (or less) contract terms with open competitive tenders for cleaning and general services, rather than the current 25 year/perpetual terms.

25-year cleaning contracts are imposed on Queensland Body Corporates that do not keep their common property clean. No where else in the world does a cleaning contractor turn up without cleaning tools, such as soap, a bucket or a mop or a broom, and decide which cleaning task they are going perform and what is a “specialist task”. Similarly garden maintenance contracts are imposed that do not maintain the garden.

The fraudulent “Market Review” to increase contract fees is not a common aspect of other facilities management contracts. Other industries solve this problem with short term contracts with regular open tendering review. If this was public money, there would be outrage.

These lengthy contracts enabled by the BCCM Act are not normal commercial practice.

• Maintenance or Facilities Management contracts for the Queensland Government buildings such as hospitals, schools and office buildings are 3-5 years.
• Railways and transport infrastructure are generally 5-10 years.
• The longest contract according to Google in Queensland which is to build and maintain the new electric bus fleet is just 20 years.
• Major industrial complexes such as the huge Northwest Gas Plant recently in the news have a 5 year maintenance contract.

Commercial facilities management contracts are not for sale; they are awarded to the most capable contractor who has the best price. The BCCM Act denies owners that outcome.

The BCCM contracts hold a significant debt to operate their business.  Owners pay for this for decades with increased levies, their buildings deteriorate and only the industry vested interests benefit. Other States do not have these contracts that extend for the life of the building.

Lack of informed consent

Informed consent is usually gained by comparing requirements, offers, pricing and contractor capabilities in the marketplace, and making a choice. Australian consumer law has several provisions to ensure informed consent. Denying informed consent is a direct intention of the BCCM Act such that management rights holders are entrenched into our buildings. Why?

Owners are asked to approve huge contracts with little information. Could it be misleading by omission, which is contrary to the consumer law? The BCCM Act has a variety of consent hurdles for owners approving proposals from an ordinary motion to a motion without dissent.

The same level of owner approval is required to approve a $90,000 expenditure on rooftop solar panels as is required to approve or extend a 25-year management contract worth $12.5 million—or more, if extended to 2050 at an unspecified cost, and without any declaration of benefit to the management rights contractor. However, in the case of the solar panels, owners are required to receive multiple quotes to enable an informed decision. In contrast, for management contracts that may span the life of the building, owners are presented with only a single proposal, effectively denying them informed consent. This deception is an intended outcome of the BCCM Act.

The higher consent level special resolution requiring two thirds of owner approval is required to approve a change to or for an additional by-law to for instance ban smoking on balconies to prevent smoke drift to preserve owner’s health and peaceful enjoyment of their lot.

The difference in owner approval levels and ability to cast an informed vote favours the industry vested interests to entrench management rights holders. Committee members are not required to disclose their interests in the letting pool and letting managers tend to favour committee members who make favourable decisions for their interests. Owners are often unaware their committee representatives are conflicted.

Fiduciary duty

A fiduciary duty is a legal obligation to act in the best interests of another party, placing their interests above one’s own. It requires honesty, loyalty, and full disclosure in all dealings. There has been a lot of chatter in the industry about fiduciary duty for Body Corporate Managers and Management Rights Holders including the ABC 4Corners program.

The NSW Government has altered their Strata Law from 1st July 2025 to bring strata contracts under the Australian Consumer Law and the Unfair Contract provisions. Owners need to contact the Attorney General’s Office to ensure this direction of change is not ignored in Queensland for 20 years.

Undisclosed commissions and transactions fees for BCMs are often three to four times the contract price that is disclosed to owners in AGM motions requesting approval. The government has failed to act on ACCC recommendations regarding building insurance commissions.

The Body Corporate Managers have three year terms, yet owner committees do not regularly tender their requirements to the open market. Normal commercial business practice would demand a regular review. Owners who tender the BCM contracts have reported the BCM halving their fee structure to be competitive.

The Body Corporate Manager industry remains unregulated. Anyone can set up as a BCM firm and control $millions of owner’s funds. Other industries such as Real Estate Agents have at least some controls and supervision, ironically managed by the same public servant group that reviews the BCCM Act.

The sale of management rights contracts by developers has been banned in NSW for 20 years due to concerns regarding fiduciary duty of the developers. The UOAQ hears some horrendous stories of financial and personal abuse from owners. Why is it allowed?

Building safety

What happens if the building you are in is burning down? In a single or double story building hopefully with smoke detectors, you wake up and run outside.

Recently there have been four fires in high rise residential buildings on the Gold Coast. Luckily no one has been killed as yet. What happens if you are on the 20^th floor of an unfamiliar building in the middle of the night, the lights are out, smoke is filling the room. Your first thought probably is not “Thank you” to the National Construction Codes people for designing and approving the building for transient use (i.e. people who are not familiar with the fire exit system). These Codes are designed to assist the occupant to find the escapes and survive this potentially life-threatening event. These extra safety provisions cost more, so developers deceive potential owners. Council enforcement is lacking.

Unfortunately, the BCCM Act enables management rights holders to run short term accommodation businesses in residential buildings to promote tourism and allow the developer to make increased profit. This deception is an intended outcome of the BCCM Act. The Codes that guide the design of high-rise residential buildings assumes the residential occupants are more familiar with the escape routes. Buildings approved for transient use assume occupants are not familiar with the escape routes.

What did Judge Everson from the P&E Court mean in a recent judgement when he used the words (apparently unlawful) to describe the short term accommodation business operations in a residential building? Why did the Brisbane City Council approve development exemption certificates (without the owner’s knowledge or permission as required by the Planning Act) to provide approval for short term accommodation businesses to operate in residential buildings in South Brisbane when Council officers had assured the UOAQ representatives that such approvals were unnecessary?

Owners disregard the Planning Act and the Building Act at your peril. These legislations are there for a reason – to protect occupant safety. Your building insurance is voided for non-compliance with these Acts. Ultimately it is the owners who will pay.

Owners can contact the UOAQ for guidance to establish your building’s legal position.

The misuse of residential apartment buildings costs their owners Big $’s. The findings of the recent UOAQ study of the Brisbane CBD and South Brisbane (available at uoaq.org.au) are stark and shocking:

• In buildings run as hotels (9,603 lots), property values have grown 44% less over the 10 years compared to residential-only buildings.
• This amounts to a $740 million loss in property value from 2014 to 2023 — just in two suburbs.

Owners are responsible but have no ability to select who will manage their building and how the building is used. Compliance requests from owners for these laws are obfuscated.  Is the government waiting for a coroner’s report before it will act?

A fair legal process

The BCCM Act restricts body corporates to a very narrow legal path to resolve disputes. Some difficult negotiations regarding manager’s contract performance are often met with attack dog lawyers. Committees are volunteers who should not have to negotiate this path to determine simple building maintenance issues constrained by vague contracts.

The UOAQ recommends that owners do not go to QCAT. The owners have a better chance of winning the lottery and will require a similar $amount for the legal fees. The QCAT presiding members are barristers who earn their living from the property industry, they are supposed to be impartial.

Some owners have appealed disputes to the District Court and won. However, the Management Rights Industry now has insurance for legal costs. They have taken one matter for a small housing estate to the Court of Appeal of the Supreme Court. Committees are volunteers, why should they be subject to such a process. The BCCM Act should contain a simple set of guidelines for disputes. The current circumstances are a stain on our Justice system.

The Australian College of Strata Lawyers have written a report on QCAT Cases concerning the BCCM Act, but to the knowledge of the UOAQ that report is yet to be released to the government. The UOAQ remains unaware of the contents, as does the government.

The managers are defending the money they must pay to buy their business. Who benefits from that over the decades of these contracts? There is an easy way to stop the resultant societal damage if the government will act to stop the sale of management rights.

The recently published report from the UOAQ helpline shows:

• a 50% portion of help requests, all rated as “high severity” concern poor outcomes from caretakers and “captured” owner committees.

UOAQ Newsletter #178  presents an analysis of issues raised by owners with the helpline.

If an owner wants assistance to resolve a problem within their body corporate, the BCCM Conciliation process is an excellent process to uncover the issues and find a path to resolution. Unfortunately, the outcomes agreed are not enforceable, and those matters require Adjudication. The BCCM Dispute Adjudication process is over complicated with legal process with some outcomes seemingly dependant on the mood of the Adjudicator on the day. A combination of the two processes might produce better results.

There is no such formal conciliation process for disputes with the caretaker, there is too much money at stake and disputes end with expensive lawyers. To protect their self interest, the development industry legal firms were involved in writing the BCCM Act. They know where they have placed the booby traps. There are big dollars at stake. Inexperienced volunteer committee members are intimidated and exploited. Often the owner community are betrayed by those owners seeking beneficial treatment in the letting pool.

We need to get rid of these booby traps by changing the legislation.

UOAQ Recommendations for Change for the BCCM Act

The UOAQ has an established set of recommendations for change which were republished in 2022 as a submission to the CTLWG. These are:

The key request is the introduction of open market competitive tendering processes establishing open market fair value and higher performance standards for all building services contracts, thus reforming the caretaking business model by:

• Stop developers selling management rights agreements. Caretakers are not required to buy a contract, only provide fair value, no up-front payments, no long term debt.
• Limit all Body Corporate contracts to a maximum three year term.
• All Body Corporate contracts, including the initial contracts, via a triennial tender process in the open competitive market, yielding multiple quotes for owner approval.
• No contract extensions are permitted.
• Introduce reciprocal termination provisions into all contracts to avoid disputes being resolved by QCAT.
• A five year transition plan to establish fair value contracts for all schemes.
• Observe and enforce the Planning Act, Building Act, and Local Government Act, by ensuring that all letting contracts are operating lawfully in compliance with the provisions of the development approval and certificate of classification.
• Reform the committee provisions to avoid undue influence from contractors.

If owners do nothing, nothing will change.

The UOAQ has been informed by the current Attorney General in a letter dated 25^th July 2025 that “I will be considering the views of members of the Working Group and reform options relating to management rights issues shortly”. The working group is the Community Titles Legislation Working Group that the UOAQ has been participating in since 2020. This newsletter is designed to inform owners of what we have learnt.

Legislative change is the best option for change in this industry. The initial changes made by the previous government were disappointing, but it is encouraging to see that this new government will proceed with as yet undisclosed change.

So how can you help:

1. Send an email with your experience to the Attorney-General.
   1. Email to at******@*****************ov.au  with a copy to he**@******rg.au
   2. If you wish, send this newsletter with your experience.
2. Send an email to your local State MP
   1. Communicate your experience with strata.
   2. Email addresses are at:
      www.qld.gov.au/about/contact-government/contacts/local-mp
   3. Send them your experiences regarding the issues raised by this newsletter plus a copy of this newsletter.
   4. Go and meet with them, let them know your concern – that is what they are there for.
3. Make a submission to the Australian Competition and Consumer Commission (ACCC)
   1. The ACCC is apparently an independent body that decides what they will investigate based on community feedback.
   2. Community feedback is submitted via a consumer report.
   3. Please report your management rights holder’s company. You will need to locate their ABN via the search facility in the form and complain about any or all of the items mentioned in this newsletter. If you get anything back from the ACCC please share it with us at he**@******rg.au
   4. Upload your complaint together with this newsletter via the ACCC’s online portal: 
      acccportal.accc.gov.au/forms/info-form/consumer-report/
4. Make a submission to the QCAT inquiry by Justice Thomas
   1. If you or your body corporate received a poor outcome in a QCAT dispute with your building manager, tell them about your case.
   2. Details at www.justice.qld.gov.au/community-engagement/community-consultation/current/qcat-act-2009-review
   3. Send your submission to QC***********@*************ov.au
5. Participate in the UOAQ research programs
   1. Send the UOAQ your AGM financial statement to he**@******rg.au
   2. The information we need and an example of the new analysis report is at: uoaq.org.au/2023/03/we-need-your-help-for-the-uoaq-strata-scheme-comparative-financial-study/
6. Join the UOAQ. – Help us Help you.
   1. We are a volunteer organisation:
      uoaq.org.au/shop2/individual-membership/
   2. Options for building membership are available at uoaq.org.au/wp-content/uploads/2024/10/BM-Motion.pdf
   3. The UOAQ helpline and knowledge bank are here to help.
   4. The UOAQ Insurance Quote and Body Corporate Tendering programs can save your body corporate $1000s.
   5. UOAQ research programs require expertise and funds, so please help us to support you via membership.