by John Mahoney - Mahoneys
05th July, 2019
Schedule of duties – good or bad?
For as long as I can recall there have been conflicting views in the management rights industry as to whether specific duties schedules in caretaking agreements are a help or a hindrance.
While I was for many years, ambivalent about them, over time I have come to a strong view that a well drafted schedule of duties can offer more benefits than disadvantages. Note the qualification that it must be a “well drafted” schedule.
I am well aware that some difficult committees will come up with their own amateurish schedule of duties that goes way beyond what might be considered reasonable. My experience however, is that this is the exception rather than the rule and I would always oppose such defective schedules.
Where a committee engages a qualified and genuinely independent professional person to prepare a schedule of duties, it is invariably the case that the duties will be specific to the complex and fair and reasonable to both the body corporate and the manager.
Such a schedule sets out clearly and concisely what specific duties are required under the agreement and the frequency with which they should be carried out. The duties are generally broken down into daily, weekly, monthly, quarterly, six-monthly and annual intervals. A sensible manager will use the schedule to prepare a checklist to follow to ensure that there is compliance with the agreement.
Those who have read previous articles I have written about disputes will be aware of my view that a principal cause of disputes is the gap between the expectations of the body corporate and the manager. A well drafted schedule ensures that the body corporate and the manager have the same expectations. Many of the “grey areas” that arise from generic agreements without such a schedule can be overcome. Tasks that require specialist contractors, such as high-pressure cleaning or spreading of mulch, can be properly identified eliminating two of the most common arguments we see.
Some managers fear that such a schedule increases their workload, makes them too accountable and gives the body corporate the opportunity to breach them for missing the simplest of tasks. In reality, if the schedule is properly drafted, it gives the body corporate little, if any, greater rights than it would otherwise have.
A detailed schedule of duties does not expand the manager’s duties – it merely sets out in an orderly and specific way all of the duties that the general wording of the caretaking agreement requires the manager to perform. The requirement in the schedule to perform a particular duty, at certain intervals, is simply clarifying that to fulfil the general obligation in the agreement relevant, the particular duty should be performed at the specified frequency.
Even without the detailed schedule, if a manager is in breach of the general obligation (which is likely where the particular duty is not being carried out as frequently as a schedule might specify), the body corporate can issue a breach notice in relation to the relevant item.
It is also important to remember that just because a manager does not perform a duty – general or specific – the issuing of a breach notice does not of itself have any serious adverse consequences. It is only if the manager does not comply with the breach notice within a reasonable time (at least 14 days must be allowed) that the body corporate might then be able to take any further action. Even then there are many further steps to be taken before the agreement could ever be terminated.
On the other hand, if a manger uses the schedule as a checklist of what has to be done at the specified intervals, and actively ensures that the checklist is followed, it is virtually impossible to get into a situation where a breach notice could be issued.
The reality is that many new managers struggle to comprehend the various duties they have to perform to meet their general obligations under the caretaking agreement. It is generally not the case that they do not want to perform the duties, it is more the case that they do not know what the specific duties are, or the frequency the general obligations require.
Demonstrated compliance with the specific schedule also allows a manager to deflect any criticism from the committee about failure to meet the general obligations in the caretaking agreement. For example, if the schedule specifies that the pool must be vacuumed daily, and the manager attends to that each morning, the committee cannot complain that at the end of the day leaves or other debris have blown into the pool.
Usually the preparation of a detailed schedule of duties is also accompanied by a review of the remuneration to make sure that the two match. It is common for the incorporation of a schedule of duties in a caretaking agreement to lead to an increase in the manager’s remuneration. If that is the case then a manager can hardly complain that the schedule is too onerous or imposes too much accountability. After all, the body corporate is paying for particular services and is entitled to expect that they be provided.
The inclusion of such schedules in caretaking agreements is a trend that I predicted some years ago would continue to the point where it very much becomes the norm. That prediction has proved to be correct, and as I commented back then, if that leads to less disputes then the industry is better off.