When a body corporate manager is offering themselves as your new contractor, very few (none to our knowledge) impose a setup fee. They waive setup fees to be competitive and win your business. We do this too. However, there is substantial work for the body corporate manager to be done at the time of setting up a new client in their systems. Body corporate managers absorb the unpaid effort on the basis of retaining the client for a number of years.
Some body corporate managers will try to recover their effort expended at setup, by charging a fee when a client leaves. The amount of effort required from a body corporate manager at time of exit is considerably less than when the client was setup. Some body corporate manager contracts explicitly state exit fees if and when a client leaves. However, this can again lead to being compared as being uncompetitive and in many cases no exit fee is stated in a contract.
So, it can be a surprise to see substantial charges by a body corporate manager around termination time when the committee collects their financial records. If no exit fee has been stated in the contract, the body corporate manager will have difficulty justifying the expense. The tasks that must be completed by the body corporate manager at handover are prescribed by the Act. They are not additional duties that the body corporate has engaged them to perform. Consequently, there should be no additional charges at handover.
A committee will often choose to ‘let it go’ as they have had other issues with the prior body corporate manager and further effort to engage with them can be frustrating. It is also not the job of the new body corporate manager to pursue this issue (or at least not without being remunerated). If their is willingness on the committee, we can recommend writing to the former body corporate manager a letter similar to this attachment. You may find that the body corporate manager will remit your monies. However, if they do not, you will need to lodge an adjudication application with the BCCM commissioner. The exact process is beyond the scope of this post.
Tracsafe charges no exit fee and does not extract unjust expenses at handover when one of our client leave.