Question: Our body corporate believes the chairperson has a conflict of interest in a fire safety cost dispute, but is that enough to force them off the committee?
Our body corporate was fined for failing to comply with a fire safety order requiring us to make ceiling penetrations to one level of units compliant with fire safety standards. The fine was incurred because the committee at the time disputed the finding and failed to resolve the issue in a timely way, or undertake the rectification work required by the order. A new committee later sought quotes and engaged a company to complete the rectification work, which was paid for from the sinking fund in mid 2025.
The current chairperson is an owner on the affected level and is therefore liable to reimburse the body corporate for the cost to their unit. They are disputing the charges incurred for the rectification works across the entire property, after obtaining an assessment from a sympathetic quantity surveyor to argue the amount paid by the body corporate was excessive.
Our questions are: does the chairperson have a conflict of interest and should they recuse themselves from investigating this matter? Is the body corporate obligated to recover the costs incurred from the affected owners? Should the chairperson be asked to stand down due to unreasonable and unethical conduct?
Answer: Conflict of interest rules only apply at committee level, and removing a chairperson requires either a formal Code of Conduct process or an ordinary resolution at a general meeting.
Addressing your queries in turn:
- Conflict of interest provisions only apply at committee level, not for a general meeting. It’s up to the individual to declare the conflict, and then they should not vote on the issue. If there’s a motion at a general meeting about any of this, the chair is entitled to vote on it (assuming they’re financial)
- The question here is whether the works and associated costs are for maintenance of common property. If so, then that’s a body corporate responsibility. If the owner has somehow contributed to the problem, there is provision for the body corporate to recover costs, although that’s typically by obtaining an adjudicator’s order. It’s not immediately clear to us from your query what the works are and, thus, who might be responsible for them. We would say is that if the body corporate incurred the fine, it doesn’t automatically follow that an individual is responsible for that. There have been several adjudicators’ orders on this issue. Also, while you say that the chair obtained a report from someone ‘sympathetic’, the issue isn’t whether they are sympathetic or not. The issue is whether they are qualified to comment on the issue and provide an expert opinion. If so, it is reasonable for the committee to at least consider that report
- At the risk of answering a question with a question, what’s ‘unreasonable and unethical conduct’? Those terms aren’t defined in Qld’s body corporate legislation. By all means, have a discussion with the chair, table the concerns and invite or urge them to consider their position. Ultimately though, the only way to remove a committee member is either through a Code of Conduct process (which is very prescriptive and drawn out), or simply by ordinary resolution at a general meeting. No reason needs to be given for that
As a general observation, conflicts happen all the time in strata. The mere existence of a conflict is not necessarily a terrible thing. How it is dealt with is always the issue. You’re much better off trying to address this, as a committee, with the chair, as informally as possible. You need to keep in mind that if you initiate formalities to remove them from the committee, you’re going to end up with a very unhappy (ex) chair who is unlikely to take this well and who may well act out in response, including initiating their own dispute. Strata legislation is not about punishment or disciplinary measures, so if you intend to hold the chair responsible for something you believe they’ve done, you need to keep this in mind. You’d likely need to seek legal advice about whether there is a tangible, financial liability the chair might have, and then whether it is worth pursuing them for it.
This is general information only and not legal advice.
This post appears in Strata News #802.
Chris Irons Strata Solve E: chris@stratasolve.com.au P: 0419 805 898
