Building manager’s apartment

Question from Nadeem updated on 6th August 2014:

Are there any laws around on-site building manager apartments? Does the body corporate (BC) have to use that apartment for a manager? What if the manager doesn't want the apartment or if the BC doesn't want to lease it to the manager? Appreciate your help in this regard. Thanks.

Our expert Krister Samuel responded:

A resourceful, practical and friendly on-site building manager is worth his or her weight in gold to the building’s owners. Generally speaking a term contract is awarded by the BC at the AGM to a building manager for a package including a salary for services and sometimes fully paid or subsidised accommodation within the building. The BC does not own the apartment rather it is owned by a private investor with a lease to the BC for the managers use. It is almost impossible to break this lease prior to the end of the agreed term. Often these leases have a ratchet clause in them which results in a very high rental being paid to the investor. In this case there has been precedent of a lease being renegotiated to a figure more in line with market rent but as I say it’s very difficult and rare to achieve.  Practically speaking a building manager will often sublease the manager’s apartment (often a smaller, ground floor unit with limited outlook) and privately rent a larger apartment with views, higher in the building.

Krister is ranked in the top 1% of all real estate agents nationwide and specialises in the high yielding Auckland apartment market. He is happy to share insights and information on any aspect from an extensive knowledge base built up over a decade.

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