Managers Must Not Project Manage

Contributed by John Mahoney, Partner, Mahoneys -19 June 2020

Managers Must Not Project Manage

In Queensland individuals and companies must hold a QBCC licence to carry out building work valued at over $3,300.

Most building managers would assume that what they do isn’t carrying out building work however that may not necessarily be the case. The scope of building work is not limited to actually performing the work but also includes providing administration, advisory, management or supervisory services for building work other than simply scheduling the building work. This may include:

• taking payment or arranging payment of subcontractors;

• arranging labour or arranging and conducting on-site meetings and inspections;

• coordinating the scheduling of work for building contractors even as an agent for another person; and

• supervising building work.

If undertaking such work a “builder – project management services” licence is required. This class of licence is described by the QBCC as a “client-side” project manager. There are a number of exceptions to the requirement to obtain this licence which unfortunately cannot be relied upon in a management rights context.

This licence is not easy to obtain, requiring a degree in quantity surveying, engineering, architecture or construction management along with a minimum of four years’ experience across the scope of work. Not many managers, if any, will hold or be able to obtain this licence!

It is quite common for a building manager to organise and supervise licenced tradespersons and contractors for work on the common property. In many cases, this will not require a licence because the value of the work is $3,300 or less. If however the total cost of the work is over $3,300 a building manager should not arrange and/or supervise the work. Importantly the value of building work is the total cost of having the worked carried out including materials, labour and GST regardless of who supplies the materials. If work is to be carried out in stages under a series of separate contracts the value of the works is the total value of all of those contracts.

Sourcing quotes for building work over $3,300 will not require such a licence and whilst a manager might express an opinion about the quotes sourced the manager should not provide advice about that and the committee, not the manager, should make any decision about what quote/s to accept.

Most management rights agreements contain an exception to the duties excluding anything that requires the skills of a specialist tradesperson or contractor. No doubt, the necessity to hold a licence of the type described above would exclude a building manager from arranging and/or supervising building works with a total value of over $3,300 and a manager would be entitled to refuse to do this.

In addition to the common property, building managers often assist lot owners with repairs, maintenance and renovations to lots in their letting pool. Again, managers need to assess the total cost to determine whether or not they should assist owners. At Mahoneys we have seen a manager prosecuted by the QBCC for arranging and supervising bathroom renovations for owners.

When assessing the total cost of the work the cost of individual tradespersons cannot be isolated to keep the work below the threshold. The manager must undertake an honest evaluation of the scope of works. Is the toilet simply being replaced or is the bathroom being renovated? Is the lobby being painted or are all common property areas being painted over time?

Many bodies corporate will wrongly consider the arranging and supervising all works on the common property to be part of a manager’s role and refusing to do so has the potential to cause dispute. Managers might consider taking a proactive approach, assist where they can and when they cannot advise the body corporate that the work requires this class of licence and recommend a contractor with the appropriate licence who can assist them. At Mahoneys we can assist to prepare information for circulation to committees or navigate a dispute should one arise.