The Legend of Atlantis – Management Rights Agreements can only be topped up once…

The Legend of Atlantis – Management Rights Agreements can only be topped up once…

Just as Plato’s Atlantis sank beneath the waves, so too did an anti-management rights (legal) theory sink, albeit a lot more quietly, on 12 January 2026.

Those ‘in the know’ had seen a paper in circulation over the last few years containing a theory that, in essence, the ‘right’ way to read the Body Corporate and Community Management Act 1997 and associated modules, leads to the conclusions that:

• under the Accommodation Module, the maximum term of managements rights agreements is 25 years, with one extension of 5 years only, so that after 30 years the agreements come to an end – they are not able to be further renewed or extended; and
• under the Standard Module, the maximum term is 10 years, with only one extension of 5 years, so all agreements must end at 15 years.

The argument was supported by references to all the right sections, Hansard and all the usual trappings of a well thought out legal argument, as to a question of statutory interpretation.

The ‘one option only’ argument was put to the test, by a lot owner who disagreed with the decision of their body corporate to insert an option of renewal into an existing set of management rights agreements.

The lot owner lost at Adjudication in Atlantis West [2024] QBCCMCmr 340 (18 September 2024), and again on appeal to QCAT Appeals, in Stevens v Body Corporate for Atlantis West CTS 8790 & Anor [2026] QCATA 2.

The community titles scheme concerned was under the Standard Module, and what the Adjudicator found, as to renewals and extensions was:

• only one extension can be proposed each year;

• an extension can be up to 5 years but cannot extend the remaining term of the engagement beyond 10 years. The maximum term of any extension granted is the lesser of 5 years or the amount by which the remaining term does not exceed 10 years. The “unexpired term” in paragraph 140(2)(b) is concerned with that part of the term which remains “from the day the resolution approving the subsequent right or option is passed”; and

• the “unexpired term” is otherwise informed by section 136 which provides that it is to take account of a right or option of extension or renewal of the engagement or authorisation, whether provided for in the engagement or authorisation or subsequently approved by the body corporate; and a subsequent right or option, under section 140(2) or 141(2), for the engagement or authorisation.

In the appeal to QCAT the lot owner asked the Appeal Tribunal for orders to reflect the ‘one option only’ theory:

The term limitations of caretaking service contracts under the Body Corporate and Community Management Act 1997 (Qld) can only ever be extended, varied or optioned beyond the initial term once for a single period no greater than five years. Even if the above is gained, the maximum terms would be 15yrs SM and 30 yrs AM and still do not approach the primary objective of contemporary and flexible arrangements.

Rather, the order sought would provide but some relief for bodies corporate from the current constraints of the oppressive, binding, never ending perpetual arrangements of the management rights regime unique to Queensland.

Upon expiry, a body corporate be obligated to uphold the primary object of the Act by ensuring any future arrangements are both- Contemporary (by seeking competitive market tender to determine value) and flexible (by including reciprocal without cause termination rights for either party giving 12 months’ notice) (sic).

The Tribunal Member dismissed the appeal, in the process upholding the extant orthodox view, that provided all of the formalities are observed, management rights agreements can be amended to include further options to extend their terms, as many times as the body corporate approves, subject to the rules succinctly stated by the Adjudicator and quoted above.

As a strata and management rights lawyer I have personally seen, and advised upon, management rights agreements that commenced back in the late 1990’s and which are still going, in largely their original format.  Such agreements are rare, including because they require good, careful drafting, by a lawyer experienced in strata and management rights, the agreements need to suit the community titles scheme, and the scheme has to be a management rights complex by its nature. When I come across such agreements, I look to see if they need any ‘tune ups’ and if they are still doing the job, properly. If not, they are usually amended or replaced.

That process, in my experience, works just fine. There is no need for some sort of ‘drop dead date’ after which management rights agreements must be thrown away. Neither is there any need to curtail the power of lot owners, deciding for themselves, how long they want their management rights agreements to continue for.

Thanks to Atlantis lot owners can continue to do exactly that, for as many, or as few, times as they decide.

This article was first published on 1 February 2026. It was written by QLD Partner Michael Kleinschmidt.

ⓗ humans only; no AI was used to create this content

© Bugden Allen Group Legal Pty Ltd. This is general information only and not legal advice. You should not rely on this information without seeking legal advice tailored to your specific circumstances.