Conflicts of Interest

It is our view that a Body Corporate Secretary needs to free of every possible conflict in order to be able to act in a truly impartial manner when it comes to matters affecting the interests of the various Unit Owners. Broadly speaking, Unit Owners fall into two categories - they are either Owner/Occupiers or Investor/Owners. The objectives of these two categories of Unit Owners are, for the most part, significantly different.

If a Body Corporate Secretary owns or works in a Real Estate/Property Management company that also handles either the selling or the letting of any of the Units, there will always be a conflict of interest.

This conflict is inevitable because of the different objectives of Investor/Owners wanting to keep up their rental income flows and Owner/Occupiers wanting a peaceful existence. A Body Corporate Secretary who has to worry about keeping some of the Units tenanted always faces difficulties (especially when tenants are hard to find) and will be hard pressed to act impartially in the best interests of all Unit Owners due to the temptation to put any available Tenants into an empty Rental Unit as a first priority, irrespective of the possible disruptions to other Owners and/or Occupiers.

In the same way, there will usually be pressures on a Body Corporate Secretary who, at the same time as having to carry out his secretarial duties impartially, is trying to sell one or more of the Units. Some issues are bound to exist or arise which necessitate a choice between pleasing the Vendors of the Units that are for sale and pleasing the Owners of all of the other Units.

Our views about conflict of interest in the Body Corporate field are, understandably, not popular with many companies that operate in the Real Estate and Property Management sectors. We have been told by some of the bigger operators that they have taken steps to avoid these conflicts by keeping the sales, lettings and Body Corporate Secretarial divisions completely separated within their company. Readers can judge for themselves. We feel this makes little difference. The separate "divisions" all come under the umbrella of a single company organisation.

Please contact us for further information.

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