Three things to know when you receive a breach notice:
Remedial Action Notices cannot be ignored and require urgent attention
There are set timeframes in which to respond, or it could count against you
Seek legal advice immediately or risk costly outcomes
A Remedial Action Notice – also referred to as a breach notice – from a body corporate is effectively a declaration of war against you as the manager.
These documents need to be dealt with urgently – so what are your next steps?
The BCCM Act lays down a specific timeframe in which you must respond. If you don’t respond to the allegations, it’s not necessarily deemed acceptance, but it’s certainly not helpful in terms of defending the accusations that you are in breach of your management rights agreement.
Bring in your strongest defence
If you get a Remedial Action Notice, seek legal advice immediately.
The Remedial Action Notice must detail what it is alleged that you haven’t done and perhaps even what you are required to do to fix the situation.
One of the difficulties with dealing with these types of disputes is that there is a multitude of cases involving Remedial Action Notices throughout QCAT and the courts over the years, and some of them are inconsistent in terms of what needs to happen – both in terms of the drafting of them and the response to them.
Part of the art of dealing with these is then making sure that any response is approached in the right way.
Form a battle strategy
From our perspective as lawyers, when we have a client who is served with a breach notice, we start a process.
For example, you may have a Remedial Action Notice that has nine complaints.
If there are some breaches that are arguable but easily fixed, we recommend you just go and fix them. That crosses those issues off the list of things you need to deal with.
If there are some breaches that aren’t a duty under the management rights agreements or related to the Code of Conduct, then those can be knocked away on the basis that you’re not obliged to deal with them. These are generally not even remotely arguable on the part of the body corporate. They stand out as being nonsensical.
The third type of breach are the difficult ones: those that are arguable and potentially grey. Those are the ones where we need to spend most of our time, making sure that the response is appropriate.
When the war rages on
No matter how you respond to each item, all of the issues raised in the breach notice need to be dealt with. Then the body corporate (usually the committee) will decide whether it’s appropriate to call a general meeting to terminate the agreements or to accept the responses.
If the body corporate resolves to try to terminate the agreements, you can apply to QCAT for an order preventing any resolution to terminate being acted on until such time as the dispute about the validity of the Remedial Action Notices or the duties that the body corporate are alleging weren’t performed are dealt with.
That is a proper court process.
Respond with force
So if you get something that looks like a breach notice or a Remedial Action Notice – which will usually be something formally on letterhead saying that you’re not doing your job – make sure you get legal advice straight away. The clock is ticking regarding your timeframe to respond.
It’s vital that you respond in the right way, and rather forcefully if needed, to make sure the body corporate knows your position.
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