Part 9 Protection of financiers for service contracts

In this part:

financed service contract means a service contract financed by a financier under section 131.

financier—see section 131.

(1) A person is a financier for a service contract if—

(a) the person—

(i) is a financial institution; or

(ii) in the ordinary course of the person’s business, supplies, or might reasonably be expected to supply, finance for business acquisitions, using charges over contracts for security; or

(iii) if the contract exists immediately before the commencement of this part—at the time the finance was supplied for a business acquisition using a charge over the contract for security, was a person mentioned in subparagraph (ii); and

(b) a service contractor for the contract and the person give written notice signed by each of them to the owners corporation that the person is a financier for the contract.

(2) A person stops being a financier for a service contract if the person gives the owners corporation written notice withdrawing the notice given under subsection (1).

(3) A notice under subsection (2) may be given without the service contractor’s agreement.

The owners corporation for a units plan must give the financier for a financed service contract written notice of—

(a) any change made to the contract by the corporation and the service contractor; or

(b) any arrangement entered into by the corporation and the service contractor that affects the contract.

(1) The owners corporation for a units plan may end a financed service contract only if—

(a) the corporation gives the financier written notice that the corporation has the right to end the contract; and

(b) when the notice is given to the financier, the corporation has the right to end the contract; and

(c) the corporation gives the notice to the financier not less than 21 days before the day the contract is ended.

(2) However, the owners corporation may not end the financed service contract if, under an arrangement between the financier and the service contractor, the financier has given the corporation notice under section 134.

(3) Subsection (2) does not stop the owners corporation ending a service contract for something done or not done after the financier started to act under the contract.

(4) This section does not stop a financed service contract ending by agreement between the owners corporation, service contractor and financier.

(1) The financier for a financed service contract may take the following action:

(a) act under the contract in place of the contractor;

(b) appoint a receiver, or a receiver and manager, for the contract.

(2) However, the financier may only take action under subsection (1) if—

(a) the financier has given written notice to the owners corporation of the financier’s intention to take the action; and

(b) at the time the notice is given to the owners corporation, the corporation—

(i) has not given the financier notice under section 133 (1) (c); or

(ii) has given and withdrawn the notice to the financier.

(3) The financier may authorise a person to act for the financier for subsection (1) (a) if—

(a) the person is not the service contractor or an associate of the contractor; and

(b) the owners corporation approves the person.

(4) In deciding whether to approve a person under subsection (3), the owners corporation—

(a) must act reasonably in the circumstances and decide as soon as practicable; and

(b) may only consider—

(i) the person’s character; and

(ii) the person’s competence, qualifications and experience.

(5) However, the owners corporation must not—

(a) unreasonably withhold the person’s approval; or

(b) require or receive a fee or other consideration for approving the person, other than reimbursement of legal or administrative expenses reasonably incurred by the corporation for the approval.

(1) A financier for a financed service contract must not enter into an agreement or other arrangement with the owners corporation under the contract for a matter relating to—

(a) the financier’s role for the contract; or

(b) arrangements between the financier and service contractor under which the financier is acting, or may act, under the contract in the contractor’s place; or

(c) the operation of this part in relation to the contract.

(2) An agreement or arrangement to which this section applies is void to the extent it contravenes this section.