This article is about the authority of the administrator in a QLD body corporate.
Table of Contents:
- QUESTION: We are considering appointing an administrator for our scheme. All members of the executive committee have health concerns, there are lots of outstanding matters and the committee are experiencing a lot of criticism.
- QUESTION: Our Body Corporate has had an administrator appointed. Does the administrator have a right to make decisions without consulting lot owners? How far does their authority reach?
Question: We are considering appointing an administrator for our scheme. All members of the executive committee have health concerns, there are lots of outstanding matters and the committee are experiencing a lot of criticism.
I am the secretary of a small body corporate. Of our eight apartments, six are owner-occupied and two are rentals.
What is the cost of appointing an administrator? We have many repairs, insurance and maintenance issues to manage. The current chair, secretary and treasurer have had health issues, travel and family matters that have been taking up a lot of our time. I work full-time and am finding it very difficult to stay on top of things. The committee are also experiencing a lot of criticism and negative feedback.
What are the next steps to have an administrator appointed?
Answer: Appointing an administrator is the most serious intervention which can be made in a scheme.
Take a look at this Practice Direction on Administrator Appointment, prepared by the Commissioner’s Office, as your first port of call.
You will see that appointing an administrator is the most serious intervention which can be made in a scheme and is a decision which an adjudicator does not make lightly. An administrator is warranted where the scheme has become dysfunctional. That can mean things such as no functioning committe, no budgets adopted, no insurance or no maintenance being done. Based on the brief description you have provided, I wouldn’t think your situation warrants an administrator and you might benefit from some other kinds of assistance (e.g., addressing the source of the criticism) before progressing to that step. That said, you might like to seek legal advice for clarification.
Costs vary greatly depending on the nature of the issues. Generally it is a very costly undertaking, as the administrator is tasked with dealing with very problematic situations. They will charge accordingly, in other words.
Chris Irons Strata Solve E: chris@stratasolve.com.au P: 0419 805 898
This post appears in Strata News #621.
Question: Our Body Corporate has had an administrator appointed. Does the administrator have a right to make decisions without consulting lot owners? How far does their authority reach?
Our Body Corporate has had an administrator appointed. Part of the order required the administrator to organise repairs required by the insurance company and, if there are insufficient funds, it specifically stated that a special levy was to be raised.
The administrator has instead chosen to borrow the money for the repairs over 7 years despite objections from some of the lot owners who would prefer to pay upfront because of the high-interest rate. Does an administrator have a right to do this without consulting the lot owners?
We were just advised this is what would happen in a letter. There was no voting. We were also given the minutes of our AGM which none of us were allowed to put motions to, attend or vote. Those minutes show provisions for the loan repayments in the budget.
Answer: It would be important to review the precise terms of the order.
Section 278 of the BCCMA relevantly provides that (our emphasis):
If an adjudicator appoints an administrator to perform obligations of the body corporate, the committee for the body corporate or a member of the committee, anything done by the administrator under the authority given under the order is taken to have been done by the body corporate, committee or member.
Section 301 of the BCCMA then provides:
The administrator has the powers given to the administrator under the order.
…
the power may include…— power to levy a special contribution against the owners of lots included in the scheme to meet the cost of complying with obligations to which the order relates and the costs of the administration.
Accordingly, an administrator:
- only has the powers set out in the order;
- cannot make decisions on matters beyond the scope of the order; and
- does not displace owners’ other rights and obligations.
It would be important to review the precise terms of the order, general meeting agenda and minutes and decisions that have been made to confirm if the decision that have been made are correct or otherwise. If the administrator’s appointment is to be contested, this can be achieved through a further adjudication application. Alternatively, it may be worthwhile in the first instance to put those concerns in writing to the administrator.
Todd Garsden Mahoneys E: tgarsden@mahoneys.com.au P: 07 3007 3753
This post appears in Strata News #609.
Have a question about the authority of the administrator or something to add to the article? Leave a comment below.
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