Duty Bound or Duty Free - Do you know what Your Duties Are?

23 September 13

The day-to-day care and maintenance of your resort facilities and communal areas is essential to its ongoing performance and success. The general presentation of your resort and its upkeep will leave a lasting impression on each of your guests. And although a high standard of maintenance may be mentioned in a glowing appraisal of your resort, it is human nature that a low standard of maintenance will be shouted from the roof tops.


When a resort is owned by the one entity, it is clearly that owner’s responsibility to maintain the resort to a high standard and any failure to meet that standard falls solely on their shoulders. In contrast, when a resort is strata titled it is the responsibility of the Owners Corporation to maintain the communal areas of the resort to a high standard on behalf of each of the owners.


With large investments and in many instances life savings on the line, there is a lot of pressure on the Owners Corporation to make sure the maintenance of the resort is appropriately managed at all times. This usually results in the Owners Corporation appointing a caretaker to supervise and or undertake the maintenance of the common property in order to meet the required standards of the resort and the unit owners and occupiers. A caretaker is usually appointed by an agreement which passes the duties of the Owners Corporation on to the caretaker.


A caretaking agreement should clearly explain the duties of the caretaker and what is required of the caretaker by the Owners Corporation. The agreement should include all the “who’s”, “what’s”, “where’s”, “when’s” and “how’s” necessary for the successful upkeep of the resort. Unfortunately, often this is not the case.


I am regularly involved in matters between caretakers and Owners Corporations where the crux of the issue is the wording of the caretaker’s duties in the caretaking agreement. Some of the most common disputes I see between caretakers and Owners Corporations are:


(a) disputes over the caretaker not performing its duties;
(b) disputes over the Owners Corporation requiring the caretaker to perform tasks that are not duties under the caretaking agreement;
(c) disputes over when and/or how often a duty is to be performed;
(d) disputes over who is liable for the costs associated with the performance of a duty; and
(e) disputes over how much the caretaker should be paid to perform their duties.


In most cases, had the duties been more accurately worded in the caretaking agreement in the first place or the remuneration set at a fair level, many of these disputes could have been avoided.


Caretaking agreements are not set in stone and they can be regularly reviewed and revised by agreement, and this happens in many buildings. When there is tension growing between the caretaker and the Owners Corporation, it is likely that the issue relates to the caretaker’s duties within the caretaking agreement. Rather than letting the issue grow to unmanageable proportions or putting your head in the sand and hoping the issues will go away, it is beneficial to confront the issues directly by undertaking a review of the caretaking duties.


Each duty within the caretaking agreement should clearly identify the following points:


• Who the duty applies to;
• What the duty is;
• Where the duty is performed;
• When the duty is to be performed; and
• How the duty is to be performed, including at who and what cost.


If a review of the duties in your agreement cannot answer all of these questions then it is likely that there will be more than one opinion on how those duties should be performed. This lack of certainty when people’s life savings are on the line can quickly escalate a small issue with the caretaker into a business ending debacle.


In my experience when the caretaker and the Owners Corporation cannot agree on the duties of the caretaker, it becomes unlikely that the appointment of the caretaker will be extended and it leaves the caretaker with an unsaleable asset. If you operate under a caretaking agreement or similar, don’t let the grey in your agreement put you in the red.
 

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