# Terminating Contract with Managment Agency



## ptha (15 Jul 2014)

I'm a director for a Owner Management Company (OMC) for an apartment block. We want to terminate with our Management agency and have given 30 days notice in writing. However they are now saying the contract runs till 2016. Here are the relevant clauses from the contract:_6. Duration of Agreement_
_ 6.1. The Agreement shall commence on January l' 2013 and shall continue in force until _
_   December 31' 2015 ("the Contract Period"), and in any event shall not be greater than 3 _
_   years._

_ 7. Termination of the Agreement_
_ 7.1. The Agreement may be terminated (without penalty) at any time with the mutual _
_    consent of the parties._

_ 7.2. This Agreement may be terminated, without notice, by:_
_     (a) the OMC where:_
_       (i) the Agent is in material breach of the Agreement and fails to remedy _
_       the breach within 30 days after the OMC serves a written notice on the _
_       Agent specifying the particulars of the breach; or_
_       (ii) the Agent is an individual who is declared bankrupt; or_
_       (iii) the Agent is a body corporate which is wound up or liquidated; or_
_       (iv) the Agent is a partnership and any one of the partners is declared _
_       bankrupt; or_
_       (v) the Agent's licence is suspended, not renewed or revoked by the _
_       Property Services Regulatory Authority; or_
_       (vi) the Agent has a conflict of interest in relation to this Agreement and _
_       the OMC does not consent, in writing, to the Agent continuing to act for _
_       the OMC._
_     or_
_     (b) the Agent where:_
_       (i) the OMC fails to pay any amount owing to the Agent under this _
_       Agreement within 30 days after the Agent serves a written notice on the _
_       OMC specifying particulars of the payment due; or_
_       (ii) the OMC acts or fails to act so as to prevent the Agent from properly _
_       carrying out his obligations under this Agreement, for 30 days after the _
_       Agent serves a written notice on the OMC specifying particulars of the _
_       act or failure to act.
_
8. Effect of Termination of Agreement  8.1 Whether the Agreement is terminated by virtue of clause 6 or 7, 
the OMC shall be liable to pay all fees and charges, due under this Agreement, within 7 days of receiving the 
final invoice from the Agent. ​This seems like standard boiler plate stuff, we as directors assumed it meant we could terminate the agency with 30 days notice. If we cannot get "mutual" consent or prove they are in material breach, is there no way to terminate before the 3 years are up? Are there any property laws (MUD etc.) that supersede this contract? Any answers/suggestions appreciated.


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## mathepac (15 Jul 2014)

IANAL but 

"7.2. This Agreement may be terminated, without notice, by:
(a) the OMC where:
(i) the Agent is in material breach of the Agreement and fails to remedy 
the breach within 30 days after the OMC serves a written notice on the 
Agent specifying the particulars of the breach; or
(ii) the Agent is an individual who is declared bankrupt; or
(iii) the Agent is a body corporate which is wound up or liquidated; or
(iv) the Agent is a partnership and any one of the partners is declared 
bankrupt; or
(v) the Agent's licence is suspended, not renewed or revoked by the 
Property Services Regulatory Authority; or
(vi) the Agent has a conflict of interest in relation to this Agreement and 
the OMC does not consent, in writing, to the Agent continuing to act for 
the OMC.”

unless you can substantiate breaches of any of these clauses then you are snookered.

Hoist by your own petard unfortunately IMHO.


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## ptha (16 Jul 2014)

mathepac said:


> IANAL but
> 
> "7.2. This Agreement may be terminated, without notice, by:
> (a) the OMC where:
> ...



Thanks for the reply, you may be right, unfortunately this agreement was signed before I came on as a director and even worse it's for a duration of 3 years.

Maybe I'm not reading this right, but even if we fulfill any of the conditions of clause 7.2, from clause 8, we are required to pay in full the fees and charges due under the agreement. Why have all the allowable conditions for termination, if the OMC is due all fees regardless?


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## Sue Ellen (16 Jul 2014)

Hi ptha,

Welcome to AAM.

I have moved your thread to this forum 'Management companies, apartments, etc.' as I feel you may get more replies here.  A copy will remain for one month in the previous forum so this should help also.


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## mathepac (16 Jul 2014)

ptha said:


> Thanks for the reply, you may be right, unfortunately this agreement was signed before I came on as a director and even worse it's for a duration of 3 years.
> 
> Maybe I'm not reading this right, but even if we fulfill any of the conditions of clause 7.2, from clause 8, we are required to pay in full the fees and charges due under the agreement. Why have all the allowable conditions for termination, if the OMC is due all fees regardless?


I can't answer your question I'm afraid other than to comment that in my layman's opinion the agreement seems biased in favour of the agent


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## Tea and Toast (3 Feb 2015)

To boost this thread up.

How should one get rid of a management company, assuming their agreement has 1 year or 3 years to run.

I assume its not a simple matter of getting quotes from alternative companies and they will do the files handover/transfer etc etc?


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## lantus (3 Feb 2015)

ptha, I would imagine that the agent 'helped' write this contract. As far as I can see unless they breach the contract (and you would need to review the rest in its entirety) then there is no real way dismiss the agent.

IMHO contracts for agents should run for 12 month periods and be renewed each year subject to market appraisal. The MUD act 3 year limit is still a long time!


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