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ARTICLE · 01 AUGUST 2007

NSW Decision Casts Doubts On Ability Of Developers To Sell Management Rights

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A recent decision in the Supreme Court of New South Wales has cast doubts on the ability of a developer to retain the proceeds of sale of management rights for a scheme.

AustraliaReal Estate and Construction

A recent decision in the Supreme Court of New South Wales has cast doubts on the ability of a developer to retain the proceeds of sale of management rights for a scheme.

Community Association DP NO 2701801 v Arrow Asset Management Pty Ltd related to a residential development known as Balmain Cove in Sydney. The developer, Australand, agreed to sell the management rights in the complex to Arrow for $190,000. The sale agreement contained usual clauses requiring Australand to cause the Association to enter into a long term site management agreement with Arrow. Under this Agreement, Arrow was to be paid an annual fee to supervise the maintenance of the complex. It also allowed Arrow to carry on a letting service within the complex.

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