If it turns out that the managing agent is in breach of some term of the contract or has done something or failed to do something that, in common law, would justify the termination of a contract between a master and servant, then the trustees need not wait, but can terminate the contract immediately. There must be a clause to this effect in managing agent contracts. Any owner is able to tell the trustees to terminate the managing agent’s contract in terms of this clause. However, if the owners do this, they must put up an amount decided on by the trustees as security, and they must indemnify the trustees and the body corporate against any costs or damages involved in the termination.
It is also possible for the owners concerned to lobby support from the rest of the owners, have a general meeting called and decide by special resolution that the managing agent’s contract be terminated immediately. In this case, the managing agent would be free to claim compensation and damages due to the breach of contract.
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