25 Sep 2025
Words
Matthew Manz Informer
A Short Legal History of Management Rights in Queensland
As we celebrate ResortBrokers’ significant milestone I thought it might be an interesting exercise to look at the legislative journey management rights has undertaken over that time.
It is common knowledge that management rights originated in Queensland in the 1970s. It was driven by the rise in strata-titled developments, particularly on the Gold Coast. As these communities grew, there was a need for onsite caretaking and letting services to maintain common property and facilitate short-term letting, especially for tourist accommodation.
Early management rights agreements were relatively informal and unregulated with arrangements negotiated directly between developers and resident managers. However, as the industry grew in both size and complexity, a clearer regulatory framework became necessary to protect the interests of both lot owners and resident managers.
1. Key legislative developments
(a) Building Units and Group Titles
Act 1980 (BUGTA)
One of the first pieces of consolidated legislation to address unit developments was the BUGTA which replaced the Building Units Titles Act 1965 (which dealt with multi-level strata schemes) and the Group Titles Act 1973 (which dealt with strata-titled land and townhouse schemes). BUGTA provided a framework for the creation and governance of both types of strata schemes. BUGTA offered limited provisions on caretaking or letting agreements and the concept of management rights were not explicitly addressed.
This lack of regulation left many early resident managers without clear guidance or legal protections and disputes over responsibilities and remuneration were not uncommon.
(b) Body Corporate and Community Management Act 1997 (BCCMA)
The most significant legislative reform came when the BCCMA created a comprehensive legal framework for community title schemes in Queensland. The Act formally recognised caretaking and letting agreements as part of the management rights business model. In my view, this piece of legislation, along with its associated regulation modules, is the best and most comprehensive strata legislation in Australia.
Key features of the BCCMA included:
(i) Regulation of caretaking service contracts and letting authorisations;
(ii) Maximum term limits for agreements (10 years for complexes in the Standard Module and 25 years for complexes in the Accommodation Module);
(iii) The requirement for body corporate approval (at committee level) for any assignment or transfer of management rights; and
(iv) The establishment of the Office of the Commissioner for Body Corporate and Community Management to provide dispute resolution and oversight.
The BCCMA aimed to balance the interests of resident managers, lot owners, and bodies corporate by clearly defining rights and responsibilities.
2. Managed investment provisions of the Corporations Act
While separate to the strata legislation, certain letting arrangements were caught by the 2001 amendments to the Corporations Act regarding management rights schemes considered to be managed investment schemes, particularly those schemes which involved short-term letting and pooled income arrangements. Schemes caught by these provisions are required to provide disclosure statements to owners of lots in the letting pool along with what is commonly known as ‘forced sale’ provisions.
3. Amendments over time
(a) 2003 Amendments
These amendments affected the management rights industry in a number of ways, in particular, by including more comprehensive provisions in regard to the following:
(i) Confirmation that an existing agreement could be amended to include a further option;
(ii) Removal of the need for a financier’s Deed of Consent;
(iii) Extension of the salary review provisions to include the review of terms of agreements put in place by the developer;
(iv) Forced sale provisions in permanent complexes, similar to those in place for holiday complexes; and
(v) Code of Conduct for resident managers.
(b) 2008 Amendments
The 2008 amendments brought in a change to the ‘transfer fee’ provisions. Prior to the 2008 changes, a fee was payable to the body corporate if a manager sold their business within three years after new caretaking and letting agreements were obtained. It was a fee valued at 3, 2 and 1% of the value of the business.
This was changed so that:
(i) The fee would expire after two years (not three);
(ii) The transfer fee would be compulsory except in cases of proven hardship;
(iii) Long-term managers who obtain new agreements would no longer be subject to the transfer fee
“re-starting”; and
(iv) The committee would not be able to waive the fee. However, they could make a finding of “hardship.” That finding would have to stand up to legal interpretations of the meaning of that term.
(b) 2014 Discussion and 2017 Clarifications
In 2014, the Queensland government commenced a major review of the BCCMA, culminating in the 2017 legislative package. These reforms did not drastically alter the core of the management rights industry.
4. Challenges and Future Outlook
The industry continues to face scrutiny and debate, particularly concerning:
(a) The length of management rights agreements;
(b) The power dynamics between managers and bodies corporate (particularly committees);
(c) The impact of short-term letting platforms like Airbnb;
(d) The increase in the value of managers’ units; and
(e) Issues regarding poor management.
5. Conclusion
The history of management rights in Queensland is a story of legal evolution, industry innovation and social adaptation. From ad hoc beginnings to a tightly regulated industry, the industry has become an integral part of Queensland’s property and tourism economy.
As legislative reforms continue to shape the landscape, the challenge will be to preserve the balance between managerial efficiency and community control. END.
