Question: Can a Body Corporate pay compensation to an owner during renovations?
Answer: The body corporate cannot voluntarily pay any compensation to an owner or occupier.
There seems to be an increasing number of bodies corporate carrying out major repairs that require the lot to be vacant for a short time as the lot is essentially a workplace.
Not surprisingly, occupiers want to know if their alternate accommodation will be paid by the body corporate, and landlord owners want compensation for lost rent.
The position is that the body corporate cannot voluntarily pay any compensation to an owner or occupier. This is because a body corporate’s powers are limited by legislation, which only allows body corporate funds to be spent on administration and operating costs or for the replacement or maintenance of property. There is no scope for paying any amount to an owner or occupier, just like there is no power to pay for Christmas parties or voluntarily maintain a path on another body corporate’s land.
It is also clear that an Adjudicator has no power to award compensation.
It is unclear whether a Court would award damages to an owner or occupier affected by works required to comply with the body corporate’s statutory duties to maintain the premises, where there has not been a breach of those duties.
Meghan Meloni Mathews Hunt Legal E: meghan.meloni@mathewshuntlegal.com.au P: 07 5555 8000