QLD: Q&A Body Corporate Decision Making

This Q&A is about body corporate decision making in QLD. What is the required decision making process at committee level? What is the responsibility of the committee to make reasonable decisions?

Table of Contents:

• QUESTION: Our residential body corporate has unofficial meetings to discuss items and make decisions. Is this a valid decision making process? What constitutes a meeting?
• QUESTION: Our committee wants to stop maintaining areas of common property lawns and gardens and allow these spaces to return to bushland. They plan on entering the estate into a conservation covenant. Is this allowed?
• QUESTION: Can a committee member seek quotes without first obtaining the approval of the committee members?
• QUESTION: Our body corporate is getting quotes for exterior maintenance work on common property. Are they required to have a scope of works?
• QUESTION: Can a vote be taken on an issue/item discussed at an informal committee meeting, or should those present agree to vote at the next committee meeting or by a VOC?
• QUESTION: If the body corporate manager sees the committee members do something wrong, what action should they take?
• QUESTION: We recently had our building painted. The work includes a standard warranty clause. It is not being complied with, essentially voiding the warranty. Is this usual?
• QUESTION: For small expenditures well within our spending limit, is a VOCM required?
• QUESTION: At a recent committee meeting, a new owner arrived late and was refused entry under instruction by the chairperson. Is this reasonable?
• QUESTION: Decision making in a small body corporate. What happens when one owner will not respond to communications? Can we go ahead anyway?
• QUESTION: As an ordinary member on our committee, I notice the executive committee makes decisions without discussion with the entire committee. Is this usual practice?
• QUESTION: How can owners make the Principal Body Corporate hold formal meetings and produce minutes so everyone is kept informed of what is happening, what decisions are being made and how their monies are being spent?
• QUESTION: Can committee members vote in matters of conflict of interest? If not, can you point me to the relevant legislation? We have a committee member who voted at a VOC in favour of a motion that netted him $7000.
• QUESTION: If a committee has decided to accept a quote or approve a motion at other than a recognised meeting, can the quote or motion be acted on before the correct VOC process has been followed and owners are notified of results?
• QUESTION: At a recent Committee meeting, information came to light that would have reversed the outcome of a VOC. The VOC was ratified anyway. Is this correct?
• QUESTION: At my recently purchased apartment, there are two tree stumps in the backyard. The minutes state the stumps were also meant to be removed by strata. Is it too late for me to ask that the stumps to be removed?
• QUESTION: We have negotiated savings with our current lift maintenance company. Owners are sick of all the unnecessary voting so can the committee simply approve the decision and move on?
• QUESTION: I’m after some guidance on the decision making process in my complex. While looking into records, I’ve discovered the gardener has no contract and spending has been approved for repairs that have never been carried out. Where do I begin?
• QUESTION: Our electronic security gate has been broken for five months. The strata manager has not actioned our requests for replacement. We are concerned about the ongoing risk of theft and property damage. Can lot owners withhold strata fees until the security gate has been replaced?
• QUESTION: In minutes from a previous meeting, the committee agreed to repair damage to my unit. Now they tell me the minutes were recorded incorrectly. Is the committee bound by their decision recorded in the minutes?
• QUESTION: Our committee regularly carries out small improvements without seeking approval from the body corporate or notifying lot owners. Are we all required to be involved in the decision making process?
• QUESTION: A new Committee changed agreed suppliers to carry out significant repairs and maintenance without consulting all owners. There are issues with the work of both contractors. Can the committee be held responsible?
• QUESTION: Can a committee charge lot owners a fee of “$160 for a decision made for a flying motion”.
• QUESTION: What is the committee’s obligation to provide detailed information on matters to be voted on at an AGM?
• QUESTION: We have unanimously agreed to repaint but cannot agree on a colour. Does the decision need to be unanimous too, or can it be majority?
• QUESTION: A large sign about the building being Pet Free has been put up in the foyer. Is this sign permissible and what approvals should have been sought by the committee?
• QUESTION: Our small scheme may decide to terminate our strata manager and self manage. I’m very concerned about this decision. As a lot owner, what can I do?
• QUESTION: A previous blanket approval for solar clashes with our energy provider’s 30kw limit. Should we rescind the blanket approval?
• QUESTION: My Committee wants to get legal advice before making any decisions. This just ends up costing more plus sometimes they ignore the advice anyway. Just make a decision.
• QUESTION: Does all committee expenditure need to be recorded formally by a VOC?
• QUESTION: At a recent Committee Meeting, our committee overturned a 2017 General Meeting Motion to adopt electronic voting. Can they lawfully do this?
• QUESTION: Can the body corporate make a donation to a group out of our levies money?
• QUESTION: What can the newly appointed committee (strata) do after finding out the previous committee have used BC funds to improve only their lot? e.g. erect & paint a fence.
• QUESTION: How can committee members be encouraged to understand the laws and to think for themselves rather than being influenced by others?
• QUESTION: An appointed contractor was not able to carry out works. Months later, a different contractor was awarded the contract as their quote was below the agreed amount. Should owners have voted on the new appointment?
• QUESTION: Can you ask committee members to elaborate why they are voting for, say, Option 1 instead of Option 2 when the cost is higher for the same scope of work?
• ARTICLE: A Weighty Problem
• QUESTION: If a resolution has been passed by AGM to authorise payment of repairs, do we still have to have a VOC to carry out the already authorised repairs?
• QUESTION: Our body corporate has a statement “that any one Member does not have the authority to contact the Body Corporate Contractors or Suppliers without the Committee having provided this authorisation”. Is this binding?
• QUESTION: If the body corporate is engaged in multi-million litigation (with another body corporate in a mixed use, multi-purpose development), is the Committee permitted, without specific body corporate approval, to settle the matter – when all it was authorised to do was respond to proceedings?
• QUESTION: Our Committee has granted our caretaker permission to use an area of common property. Should this have gone to an AGM for a vote without dissent?
• QUESTION: Can the painting of the exterior of strata buildings be postponed for twelve months to enable levies to be raised for this maintenance?
• QUESTION: Our body corporate makes decisions that might be unpopular but necessary. Is there any obligation for a body corporate to always act or make a decision for the majority of owners?
• QUESTION: I came home to find a large red No Smoking sign on the wall directly in front of my apartment’s front door. How can I get this removed?
• QUESTION: If a motion has already been voted on and lost, is this same member able to resubmit the same motion again?
• QUESTION: One of our Committee members who is both the Treasurer and Chairperson makes decisions to spend lot owner’s money whenever she wants without approval. Can she do this?
• QUESTION: We failed to form a committee at our AGM. The meeting was dominated by a disruptive lot owner who called for the whole meeting to be void. We need to call an EGM, but how do we proceed without a committee?
• QUESTION: Some committee members wish to improve the scheme to 4 star resort standard. There is only $60,000 in our sinking fund. Are these actions considered unreasonable?
• QUESTION: A body corporate decision to install separate water meters has been on hold due to other expenses. Now we are ready to proceed and one body corporate member has changed their mind. Can the motion be overturned?

The BCCM held a Webinar on this topic: Body corporate decision making and meetings. The webinar can be viewed here:

Question: Our residential body corporate has unofficial meetings to discuss items and make decisions. Is this a valid decision making process? What constitutes a meeting?

Since our residential body corporate (operating under BUGTA) was elected in August, it has had seven unofficial meetings to discuss all things bodies corporate. The reason for the nature of these meetings:

1. They can hand-pick which committee members attend and make decisions (or arrange VOCs to be done) and
2. Lot owners aren’t entitled to attend because it’s not an official promulgated meeting. Therefore, owners are in the dark about what is transpiring or arranged.

The chairperson (also the secretary) emails only the committee members they want present. Should minutes be given to lot owners? Usually, five of the seven members attend. The remaining two members are left out of emails purposely. Items are discussed and sent to a VOC if everyone agrees. Is this a valid decision making process? What constitutes a meeting?

Answer: Committees have one purpose only: to make decisions. That is why legislation is so prescriptive about how those decisions get made.

You might like to refer to section 45 of the Building Units and Group Titles Act 1980, and in particular, subsection 3, reproduced below:

A decision of a committee has no force or effect if, before that decision is made, notice in writing is given to the secretary of the committee by not less than half of the total number of proprietors, the sum of whose lot entitlements exceed one-half of the aggregate lot entitlement, that the making of the decision is opposed by those proprietors.

Whether BUGTA or BCCM, it is the general rule of thumb that purported ‘decisions’ of a purported ‘meeting’ only have effect if the process for calling and conducting the said meeting is followed, as in the subsection above. It is perfectly ok for committee members to discuss, chat and meet outside of formally convened meetings – and indeed, that might constitute good governance and indicate good engagement – but committees really have one purpose only: to make decisions. That is why legislation is so prescriptive about how those decisions get made.

This is general information only and not legal advice.

Chris Irons
Strata Solve
E: [email protected]
P: 0419 805 898

This post appears in Strata News #671.

Question: Our committee wants to stop maintaining areas of common property lawns and gardens and allow these spaces to return to bushland. They plan on entering the estate into a conservation covenant. Is this allowed?

Answer: Possibly, although not without considerable challenges.

The short answer is – possibly, although not without considerable challenges.

Looking at this definition from the relevant Queensland Government agency, it appears entering into a conservation covenant will require the disposal of common property under some arrangement, for example, a lease or perhaps even sale. Disposing of common property requires a decision of a general meeting of all owners and, depending upon how long the disposal is for and under what terms, may require a resolution without dissent. In other words, it could be a tricky thing to achieve.

Then there is the separate issue of the proposal to stop maintaining common property. As you may be aware, maintaining common property is one of the fundamental responsibilities of a body corporate, so I think there would be considerable issues with this plan, even if there is an end goal in mind. Queensland’s strata legislation does not really contemplate the idea that common property – in which all owners have a shared interest – could be voluntarily signed away to a service provider to manage. At the very least, I highly doubt any of these proposed arrangements would be a decision of only the committee. The committee should really be seeking qualified legal advice on these proposals if they have not already done so.

This is general information only and not legal advice.

Chris Irons
Strata Solve
E: [email protected]
P: 0419 805 898

This post appears in the November 2023 edition of The QLD Strata Magazine.

Question: Can a committee member seek quotes without first obtaining the approval of the committee members?

Answer: Yes, any owner can seek quotes, but some quotes may need input from the committee.

Yes. Any owner can seek quotes and put them forward to the body corporate for consideration.

This might be relatively straightforward if you wanted to obtain a quote for a new gardener at the scheme. No special access or knowledge is likely to be required. The owner can contact and meet the gardener, obtain the quote and make their submission.

However, some issues could be quite hard to get quotes for. For something like repairs to the roof, it might be necessary to work with the committee or facilities manager/caretaker to get access to the area so you get an accurate quote. Sometimes, this is easier said than done. In that case, the owner may have to write to the committee requesting either the committee seek the quote, facilitate access or provide the information required. If the committee agree, no problem. It can be harder for the individual to progress if the committee aren’t keen. Depending on the rationale of the committee, you may have to take the matter to the Commissioner’s Office or deal with the matter by seeking to pass a vote that requires the committee to get a quote.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in the October 2023 edition of The QLD Strata Magazine.

Question: Our body corporate is getting quotes for exterior maintenance work on common property. Are they required to have a scope of works?

I am a lot owner in a Queensland high-rise building. Our body corporate is getting two quotes for the maintenance of the pavers around the building. Some pavers need replacing, and all need pressure washing and sealing. The cost of this work will be around $30k. The body corporate is obtaining quotes without a scope of works. Is this the usual procedure, or must they have a scope of works?

Answer: There is no requirement to have a formal scope of works.

There is no requirement to have a formal scope of works.

As such, the process that has been followed is not incorrect, but I can understand some of your concerns.

In theory, having a tender process whereby a professional provides a full scope of works and other companies bid on that may be the best way to arrange works. However, this process can also be time consuming and expensive and as such, is mostly conducted only when major works are required.

As a result, many body corporates contact contractors and ask them to submit quotes based on their estimation of the works required. The contractors are specialists in the area, so they should have a better understanding of what is required than volunteer body corporate members. However, this process is uneven. That’s why you can get two very different quotes for the same job or get contractors thinking they are doing one job while body corporate owners think they are doing another. There are also trust issues around whether the contractor is giving the correct advice. Still, it does limit the body corporate’s upfront costs and so remains the default for many people.

If you have concerns about the processes at your scheme, you could start by contacting the committee about your concerns. Perhaps you could submit an owner’s motion to have the matter formally voted on. If you have the technical knowledge, perhaps you could offer to write a scope yourself. Or you could volunteer your time to get more accurate quotes.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in the September 2023 edition of The QLD Strata Magazine.

Question: Can a vote be taken on an issue/item discussed at an informal committee meeting, or should those present agree to vote at the next committee meeting or by a VOC?

Answer: Informal meetings are one step towards establishing body corporate decisions.

Body Corporates are run by majority decisions. Informal meetings are one step towards establishing what those decisions are. As such, there is no issue with having a vote at an informal meeting – it just establishes the participant’s viewpoints.

You must remember that it is an informal meeting only. If you need to have an actual vote, the decision will need to be made via a VOC or at a committee or general meeting.

A real-life example of this situation would be if a committee held an informal meeting to discuss a proposed item of expenditure. There may be a vote to work out if there is a majority in favour of the proposal. If so, the committee can follow up by calling a VOC or committee meeting to confirm the informal vote. If there is no majority, no further action may be required, or the committee might need to investigate further. In many cases, this can be a good and clear means of communication within a scheme. It’s just people talking to each other and making decisions which is how many good body corporates work.

You can have problems if people are unclear on what they are discussing or if they change their minds between the informal and formal stages. In some schemes, there may also be issues with transparency or disputes between owners. If that is the case, it may be better to stick to formal structures.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #655.

Question: If the body corporate manager sees the committee members do something wrong, what action should they take?

Answer: The manager is an advisor to the scheme, not its police.

How are you defining wrong in this instance? If it is just bad decision making, it’s not necessarily the body corporate manager’s job to correct this or argue for what they believe might be a better decision. Good managers will often advise what they think is the best practice in a certain situation, but it is up to owners to determine if they want to follow that advice. And remember, the body corporate manager can be wrong too – they provide advice based on their experience and knowledge, but they don’t know everything.

If by wrong you mean breaching the legislation, the manager should advise when that is happening and advise what should happen under the legislation. They can talk about what the implications of the breach might be. Whether they should take action after that or what action they can take will depend on the circumstances. In most cases managers will probably just record that they have provided the correct advise in their emails or the minutes and move on. They might show these records at some points in the future if necessary – the records are created to cover the manager as much as the body corporate. Maybe, in an extreme situation, the strata manager could refuse to take action the owners have requested of them. If it was bad enough they could terminate their contract with the scheme. Ultimately though, it’s up to owners to make decisions and vote on matters and they need to be the ones regulating activity at the scheme. The manager is an advisor to the scheme, not its police.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in the May 2023 edition of The QLD Strata Magazine.

Question: We recently had our building painted. The work includes a standard warranty clause. It is not being complied with, essentially voiding the warranty. Is this usual?

One of the towers in our complex was painted over 12 months ago. The following warranty condition was scoffed at by our committee:

“This warranty is dependent upon the coatings being washed at least every 12 months (more often in extreme environments) with warm soapy water and a soft brush”.

It appears that by not complying with this condition, the warranty is void.

Is it fairly common for body corporates to comply with standard warranty conditions like this or is it more common to disregard the clause and void the warranty?

Answer: There is no obligation for body corporates to maintain warranty clauses.

I’m not sure we can point to a common standard here. There is no obligation for body corporates to maintain warranty clauses.

The committee does have an obligation to act in the best interests of the body corporate. Some people might see protecting warranties as part of that best interest.

On the flip side, warranties can be hard to enforce, even if you have been keeping up with the clauses. Depending on the effort and expense required to maintain them, some people will think the cost outweighs the benefit. You’d have to look at all the information to give an opinion.

Where does this leave you? Ultimately the committee are the key decision makers for your scheme. If you don’t like the choices they are making, you can:

• submit motions to either committee or general meetings
• look to join the committee to influence matters from the inside
• make a complaint via the Commissioner’s office if you think the matter is serious enough or the committee are neglecting their duties.

If other owners agree, there might be change. However, some issues are in the eye of the beholder. If that is the case, the basic standard around majority rules would apply.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in the May 2023 edition of The QLD Strata Magazine.

Question: For small expenditures well within our spending limit, is a VOCM required?

Our complex of 12 villas has five committee members and a strata manager. Like all buildings, we have immediate spending requirements for consumables such as light bulbs, security light repairs etc that fall well within the committee’s spending limit.

Our strata management company insists that a VOCM is required before ANY expenditure, no matter how small. This was not required in the past and it seems illogical as it prevents prompt repairs.

Has the legislation been changed to introduce this requirement or is our strata management company misinterpreting the legislation?

Answer: It’s worth remembering that the strata manager works for you – not the other way around.

Technically, a body corporate committee can only make decisions via a committee meeting or a VOC. Some people extend that basic decision making structure into a line of thinking that says all decisions must be made in advance by one of these methods. Debates about the rightness or wrongness of that can be left to the strata philosophers, but if you do follow that thought to the nth degree, body corporates can get stuck in the impractical managerial loop you are currently caught in. As you indicate, this isn’t effective for your body corporate, so why is the system being forced on you when most other schemes operate differently?

What is that different way? Methods will vary from scheme to scheme, but good body corporate administration generally involves committees as the delegated decision-making authority of the body corporate, making multiple ongoing decisions about the running of the scheme to keep it in balance. Most of these decisions are made across emails, phone calls, apps and messages – whatever communication method works – so the scheme can make practical decisions. Provided the majority rules and the committee operates within its spending limit, most schemes reach a point where workable decisions are made. Those decisions can be ratified at the next meeting when the accounts are approved. It’s not a perfect system, and ideally, the legislation would be updated to reflect the digital reality of modern communication, but it is far more practical than one that requires a VOC to be issued to authorise the changing of a light bulb.

In terms of your relationship with your managers, it is worth remembering that they work for you – not the other way around. Maybe meet with them and tell them that you don’t want to operate under their proposed system and that you require a more practical management structure. If they refuse, you may need to look at changing managers, in which case, so be it – many other management companies will help you run your scheme in a way that works for you.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #642.

Question: At a recent committee meeting, a new owner arrived late and was refused entry under instruction by the chairperson. Is this reasonable?

For a recent committee meeting, a new owner who has never before attended a body corporate general or committee meeting, provided written advice of their intention to attend the meeting. The owner was delayed by traffic and arrived one minute late. They were refused entry by the body corporate manager acting on instructions from the chairperson.

Is the chairperson permitted to direct an owner not to be permitted entry because an owner arrived late? This seems unreasonable.

Answer: Individual committee members should not be unilaterally making decisions on behalf of the committee.

The situation you describe is one not specifically covered by legislation (there are several of those situations, you may be surprised to learn). In other words, while the legislation does, as you say, provide for how a non-committee member may attend a committee meeting, it does not provide for what happens if they are late (regardless of reason).

In which case it would come down to whether that was a reasonable decision to refuse that owner entry. Bear in mind here that the ‘decision’ should be one the committee makes, as a whole. Individual committee members should not be unilaterally making decisions on behalf of the committee. Do I think it is reasonable? Well, I can see both sides here: if the legislation goes to the trouble of being so prescriptive about how a non-committee member attends, then the onus is firmly on the non-committee member to ensure they comply. Then again, one minute late seems harsh. In any event it is not up to me to determine, it would be for an adjudicator and then that non-member would need to demonstrate:

1. it was an unreasonable decision and
2. they suffered some detriment as a result of it.

Perhaps the first step now is for that non-member to get their hands on the minutes of that meeting and see what transpired. That might determine future actions.

What I will say, is that if this is a new owner, wanting to be engaged in the process, then this is far from an ideal introduction to it. I hope they will not get discouraged. Then again, if this situation is indicative of broader issues at the scheme, then the new owner may be in for a bit of a journey. Fingers crossed this is just a one-off issue.

Chris Irons
Strata Solve
E: [email protected]
P: 0419 805 898

This post appears in Strata News #640.

Question: Decision making in a small body corporate. What happens when one owner will not respond to communications? Can we go ahead anyway?

We are a self-managed body corporate consisting of three townhouses. Our letterboxes, consisting of four mailboxes including the body corporate mailbox, is broken. There are missing doors and damaged locks. The entire structure wobbles and needs painting.

For some time, two lot owners have explored options to replace the mailboxes, but the third owner will not respond to any form of communication. Can two lot owners agree go ahead with the action, or must all three agree on the replacement? The cost is approximately $1000. We have the funds to cover this.

Answer: You can issue a general meeting notice with a motion to approve the repairs by ordinary resolution and vote on it.

The body corporate is obliged to repair and maintain the common property, so it seems like you have to get the work done.

The approval level required to do this may vary depending on the module you are in and any motions that have been passed regarding spending limits.

Generally, in the standard, accommodation and small schemes modules the default committee spending limit is $200 per lot – so $600 for a three lot scheme. Above that a general meeting is required unless the owners of all lots in the scheme have provided written consent for the works to go ahead.

As such, the best thing to do might be to write to the absent owner again and explain the situation. All they have to do is write back yes to allow you to proceed. Otherwise, you can issue a general meeting notice with a motion to approve the repairs by ordinary resolution and vote on it – this may also be required if the absentee owner voted no. Presumably, the motion would pass if two of you were in agreement and there was no issue with unit entitlements and poll votes. You might also look to pass a motion to increase the spending limit of the committee at the same time to avoid these situations.

Calling a meeting does seem like a lot of faffing around for what seems like a minor and required repair, especially for an owner that doesn’t seem to be taking responsibility for their property. On that basis, some schemes might reason that an opportunity has been provided to the absentee owner to contribute their opinion on this matter. As they haven’t responded, they have effectively decided to leave the matter to the other owners. The other owners might go ahead and do the repairs in that instance. In that case, there is a risk the absentee owner could complain after the fact. They could take the matter to the commissioner’s office and everyone could get a headache. Or maybe they would just do what they are doing now – nothing.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #637.

Question: As an ordinary member on our committee, I notice the executive committee makes decisions without discussion with the entire committee. Is this usual practice?

We have recently bought a unit and I have successfully been elected to our body corporate committee as an ordinary member. I have noticed that the executive members seem to make decisions on expenditure, maintenance, improvements to the common area and other matters without any discussion with the entire committee. Is this usual practice or do all decisions need to be voted on by the entire committee?

Answer: Committees are democratic institutions and to be fully functional all members need to be participants.

Committee decisions are made on the basis of the majority of the committee approving a decision so by extension all committee members need to be aware of the issues in order to provide an answer to create a majority. The body corporate manager, secretary or chair is usually responsible for distributing this information among members and collating responses. Essentially, committees are democratic institutions and to be fully functional all members need to be participants.

However, each committee is also its own delicate ecosystem where characteristics develop between members over time and the group develops habits and patterns of work that are effective relative to their circumstances. It’s not uncommon to have a committee of seven people, but where only one or two are active on a regular basis and, for better or worse, those people become the default decision makers and a new loop of communication often develops around them.

I don’t know if that is the case in your situation, but I’d start out with some gentle communication pointing out the situation and that you need to be included in the decision making process. Bear in mind that you’ve chosen to buy into the scheme, so to some level the work the committee have been doing over time has created a sufficiently positive environment for you to invest in. In other words, they must be doing some things right and you may need to consider that in your communication.

From your end, if you are looped in, you need to make sure you are an active participant by being reasonably quick and clear in how you think issues should proceed. Many times this may just be answering with a yes or no but those type of responses keep issues moving forward.

If you find that you are being blocked for other reasons you may need to be more assertive. You can point out the legislation or maybe discuss it with your body corporate manager. If it is bad enough you may need to go to the Commissioner’s office.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #634.

Question: How can owners make the Principal Body Corporate hold formal meetings and produce minutes so everyone is kept informed of what is happening, what decisions are being made and how their monies are being spent?

I am an owner in a Layered Strata scheme. The major complaint from owners is the minimal communication and lack of transparency from the Principal Body Corporate – apart from a very occasional newsletter.

Principal Body Corporate only hold “informal” ad hoc zoom meetings (apart from AGM or EGM) and therefore no minutes are kept, and it appears decisions regarding spending and planning are made at these meetings. Is this legal?

How can owners make the Principal Body Corporate hold formal meetings and produce minutes so everyone is kept informed of what is happening, what decisions are being made and how their monies are being spent?

Answer: Solving these problems starts with the right representative for the subsidiary scheme, being on the committee of the principal scheme.

‘Keep the bastards honest‘. For almost 25 years, that was the (self-selected) job of the Australian Democrats, who’s national election results (11.1% to 7.3%) pretty much guaranteed that they would have a presence in the Senate. It sounds like what is needed in this subsidiary scheme is a subsidiary scheme representative with the moxie of Don Chip, the tenacity of Cheryl Kernot and the withering death stare of Natasha Stott Despoja….

Solving these problems starts with the right representative for the subsidiary scheme, being on the committee of the principal scheme (if there are 7 or less lots in the principal scheme) and / or representing the subsidiary scheme as a ‘lot owner’ in the principal scheme. That representative is usually a member of the subsidiary scheme committee, but does not have to be. Next, that person needs to hold the principal scheme committee, and the principal scheme body corporate, to account.

‘Claytons meetings’ don’t exist in the Body Corporate and Community Management Act 1997. There is an extraordinary general meeting or annual general meeting, a committee meeting or a vote outside committee meeting – and nothing else (unless section 111 of the Act applies).

If there are deficiencies in process or communication, then all you do is follow the normal pathway of:

1. a polite word
2. a formal communication
3. a warning
4. conciliation and
5. adjudication;

each in turn, if the earlier step does not work.

Sometimes, body corporate managers can be complicit in laissez-faire meeting administration, where they have the work for the principal and subsidiary schemes. Changing your body corporate manager at the subsidiary scheme level can inject a bit of third party rigour, which can help solve the problem.

As for calling meetings, meeting notices, conduct of meetings and minutes, all of the usual rules apply. The only difference is that the bodies corporate of the subsidiary schemes are treated as lot owners in the principal scheme and the committee is made up of representatives of the lots in the principal scheme (which can be a mixture of subsidiary bodies corporate or lot owners). There is no magic in the requirements for, or the conduct of, principal scheme proceedings – they are exactly the same as for a ‘normal’ body corporate (what the Act calls a ‘basic scheme’).

If there is any magic to solve these problems, then it is making sure the subsidiary scheme body corporate has a tireless, dedicated and tenacious representative at principal scheme body corporate meetings and / or committee meetings who is supported and empowered by their subsidiary scheme committee and body corporate, to go forth and ‘keep the bastards honest’.

Michael Kleinschmidt
Bugden Allen Graham Lawyers
E: [email protected]
P: 07 5406 1280

This post appears in Strata News #621.

Question: Can committee members vote in matters of conflict of interest? If not, can you point me to the relevant legislation? We have a committee member who voted at a VOC in favour of a motion that netted him $7000.

Answer: There is little definition of what a conflict of interest is or how such a term could be applied.

For committee meetings, members are expected to disclose if they have a conflict of interest and then withhold from voting. This is stated in the Committee’s code of conduct which reads:

Conflict of interest: A committee voting member must disclose to the committee any conflict of interest the member may have in a matter before the committee.

However, there is little definition of what a conflict of interest is or how such a term could be applied. Generally a committee member is considered to have a conflict of interest if they are being asked to make a decision on a matter where their self-interest could affect their duty to act in the best interest of the body corporate. However, as soon as you start thinking about this, you start entering all sorts of grey areas. Owners are supposed to benefit from Committee decisions and Committee members are owners – it’s impossible to separate these things entirely. For example, is it a conflict of interest for a Committee member to vote on a roof repair that affects their lot? Maybe, but it’s also a body corporate responsibility to undertake the repairs so they are also doing their duty in ensuring the repairs go ahead? Does one sentiment override the other? Who’s to say? Without a specific definition to refer to a conflict of interest at body corporate level, it is probably one of those things that are hard to define but that you know what they are when you see them.

In this case, no detail is provided on how the owner has benefitted so we can’t make any comment on that. However, it might be worth considering how many other people voted on the matter and whether any of them raised a concern about the owner with a potential conflict benefitting? Why did the other Committee members also vote to approve the issue if they had no conflict? If the ‘conflicted’ owner hadn’t voted, would the outcome have been changed in any way? Maybe ask why you are seeing the conflict and others aren’t? There must be a longer story here and it is important to establish all of the facts if you are going to raise an objection.

Otherwise, all owners have the right to object to Committee decisions. You can work through the hierarchy of asking a formal question to the Committee, submitting a motion to reverse the decision if possible, presenting the matter to all owners at a general meeting or taking the matter to the Commissioner’s office.

See the BCCM website for more on dispute resolution.

You can check here to see the Committee Code of Conduct.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #614.

Question: If a committee has decided to accept a quote or approve a motion at other than a recognised meeting, can the quote or motion be acted on before the correct VOC process has been followed and owners are notified of results?

Answer: Committee’s don’t (and can’t) ‘do’ anything, without passing a resolution.

‘I reject your reality and substitute my own’ Adam Savage, MythBusters. Whenever I am asked this question, that quote comes to mind. Committee’s don’t (and can’t) ‘do’ anything, without passing a resolution. That is the sole function of a committee, to make decisions on behalf of the Body Corporate.

A committee decision, once properly made and if it is within the committee’s (legal) competence to make, is a decision of the body corporate. ‘Informal’ decisions of a committee have no force at law – they are either a valid, properly made decision… or they are not.

Committees who ‘accept’ a quote without a VOC or a meeting, are doing so by email, phone calls or even over a cup of tea in Unit 11. The extra effort involved in sending a VOC is effectively zero, except in very large community titles schemes. In those larger schemes, decisions should be ‘batched’ to be dealt with at the quarterly committee meeting or, in urgent circumstances, the next VOC.

It’s critical to remember that committees are not a law unto themselves and that the formal requirements of a meeting or a VOC exist for good reason. For example, completion of the mandated processes help show the world (including adjudicators) that the committee has deliberately, and intentionally, made a decision, and exactly what that decision is. Committee decision making involves notice being given to lot owners, including so that they can either be involved, or challenge the committee’s decision, including if necessary, before it is implemented. A committee who acts on an informal decision, is rejecting the reality of the legislation and substituting their own…

Michael Kleinschmidt
Stratum Legal
E: [email protected]
P: 07 5406 1282

This post appears in Strata News #612.

Question: At a recent Committee meeting, information came to light that would have reversed the outcome of a VOC. The VOC was ratified anyway. Is this correct?

At a recent Body Corporate Committee meeting, some information came to light that would have reversed the outcome of a VOC. The VOC was ratified anyway on the basis that a vote had already been taken to approve the motion. Is this correct? If so what is the process to change the vote?

Answer: A committee is entitled to change its decision – or reaffirm a prior decision if new information has been provided.

A committee is entitled to change its decision – or reaffirm a prior decision if new information has been provided.

The ultimate test is whether the final decision by the committee is unreasonable. If the decision is unreasonable, it can then be overturned. The answer to whether the decision is unreasonable though is very specific to the circumstances as an adjudicator will take into account any relevant matters that are advanced.

Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753

This post appears in Strata News #611.

Question: At my recently purchased apartment, there are two tree stumps in the backyard. The minutes state the stumps were also meant to be removed by strata. Is it too late for me to ask that the stumps to be removed?

At my recently purchased apartment, there are two tree stumps in the backyard.

I have reviewed the minutes prior to the trees being cut down and it states the stumps were also meant to be removed by strata, but for some reason, this has never occurred.

Is it too late for me to ask that the stumps be removed? As it has been around 12 months and there has been a change of ownership of the apartment, am I too late to request this?

Answer: The committee must put into effect the lawful decisions of the Body Corporate.

A lot owner may rely on any prior approval granted by the Body Corporate in relation to the removal of the palm tree and stumps.

Relevantly:

1. section 101 of the Body Corporate and Community Management Act 1997 (Qld) provides that the committee must put into effect the lawful decisions of the Body Corporate.
2. in West Court [2004] QBCCMCmr 589 the adjudicator provides:

As the body corporate has resolved to have the footpath repaired at the recent annual general meeting, there is no longer a dispute and therefore no order is necessary. I would remind the body corporate committee that section 101(2) of the Act requires that “…the committee must put into effect the lawful decisions of the body corporate.” That is, the committee must proceed to have the footpath repairs carried out within a reasonable time.

The Body Corporate would not be required to carry out the works if:

1. the Body Corporate passed a further resolution to revoke its approval for the removal of the tree stumps; or
2. the tree stumps were situated within the boundaries of the Lot (as the Body Corporate has no authority to make an improvement to a lot).

Holly Dunne
Mahoneys
E: [email protected]
P: 07 3007 3753

This post appears in the October 2022 edition of The QLD Strata Magazine.

Question: We have negotiated savings with our current lift maintenance company. Owners are sick of all the unnecessary voting so can the committee simply approve the decision and move on?

We have negotiated a favourable deal with our current lift maintenance company. The committee is very happy as it’s a saving of $3000 per year.

The strata manager says we have to get owners to vote on the decision, but this costs money and time.

We have talked to some residents and they are happy to move ahead. Owners are sick of all the unnecessary voting so can the committee simply approve the decision and move on?

Answer: If you don’t like voting then maybe living in a strata scheme isn’t for you.

Frankly, if you don’t like voting then maybe living in a strata scheme isn’t for you. And to be blunt, it’s immaterial if you or other residents are sick of voting or not. If it’s required by law, it is required by law.

Expanding on this a bit further, committees can absolutely make some decisions on their own. That said, they certainly can’t make all of them and they are restricted by things such as spending limits and legislative provisions. Any decision outside of those restrictions requires a vote of all owners (and again, at the risk of sounding blunt, if you don’t like that, take it up with the government).

The value of the contract will be a factor in whether this is a committee or general meeting decision. While I am no lift expert, I know enough to hazard a guess a contract of this type will require a general meeting decision.

You also need to remember that while it is great you’ve seemingly got a better, money saving deal, these are ultimately contracts we’re talking about and you can’t just arbitrarily decide to drop one and take up another. There may be consequences.

You engage a body corporate manager to assist the body corporate with situations exactly like this one.

Chris Irons
Strata Solve
E: [email protected]
P: 0419 805 898

This post appears in the September 2022 edition of The QLD Strata Magazine.

Question: I’m after some guidance on the decision making process in my complex. While looking into records, I’ve discovered the gardener has no contract and spending has been approved for repairs that have never been carried out. Where do I begin?

I recently completed an audit going back 7 years and found the gardening contractor for the year has never been put on the agenda at a general meeting and for six out of seven years has exceeded the spending limit of $1,400. I want to put a motion on the agenda for gardening at the next AGM, however, I can’t put a start date as there is no previous contract.

The Strata Manager for the last two engagements did not have an agreement attached to the motion.

Spending has also been approved for driveway repairs that were never carried out. The owners were not notified of these works.

Would you be able to provide me with some guidance, please?

Answer: It’s always worth gathering as much information as you can before submitting proposals for change.

It’s not unusual for small contractors like gardeners and cleaners not to have contract in place. There was probably an original quote that was approved and things have gone on from there.

As an owner, you are entitled to put forward motions for consideration at any time. You could put an owners motion to the committee if appropriate, or put one forward for inclusion on the next general meeting.If you wanted to put a start date for a new contractor perhaps a month after the date of the AGM meeting would be appropriate – if you don’t know the date you could state something along the lines of ‘one month after the date of the 2022 AGM is held’. The advantage of the contractor not having a contract is that their service could be terminated immediately or at short notice.

However, before doing this, you might want to talk to the body corporate manager or Committee first. Test the waters to see if any proposal you are putting forward has support. It seems that others at the scheme are comfortable with the current status of the gardener and perhaps they have been doing a good job over time. There is nothing wrong with wanting them to have a contract or having more transparency over the work they do but it’s always worth getting as much information as you can before submitting proposals for change.

When you say the spending limit has been exceeded do you mean the budget has been exceeded or the committee spending limit has been exceeded? If it is the budget it may depend on how much, but costs may have been authorised by the Committee within their spending limit. The budgeting may have been a bit careless and you can ask that this be rectified in the future. If the Committee is exceeding its spending limit that may be of more concern and you might want to seek more specific information about why.

For the driveway repairs, again I would start by asking the Committee what the situation is and seeing what the answer is. Perhaps there was a reason why they didn’t go ahead or maybe they just didn’t proceed due to the absence of decision making. If the Committee aren’t available, the body corporate manager should be able to discuss with you how the scheme is running. Indeed, from reading your email, my guess is that you would be a good Committee member yourself. You can volunteer at the next AGM but in the interim you can start a dialogue with Committee members just to see where things stand and how you can help.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #585.

Question: Our electronic security gate has been broken for five months. The strata manager has not actioned our requests for replacement. We are concerned about the ongoing risk of theft and property damage. Can lot owners withhold strata fees until the security gate has been replaced?

Answer: The committee, or all owners at a general meeting, will have the decision-making responsibilities to resolve this situation.

The strata manager is not the decision-maker. The committee, or all owners at a general meeting, will have the decision-making responsibilities about this, depending on the value of the works.

Have quotes been obtained for a decision to be made on them? If not, then that is what needs to happen. As an owner, you have the right to put motions to the committee and general meeting for decision. The body corporate must maintain common property. I would assume the boom gate is common property – I cannot see how it is not – so it would follow the body corporate must maintain this.

I should also add that an adjudicator at the Office of the Commissioner for Body Corporate and Community Management can make an order requiring the body corporate to reimburse an owner (or occupier) for damage they have incurred as a result of the body corporate’s failure to maintain common property. So perhaps that is a point you could highlight to the committee. In my experience, consequences with a dollar value are usually a good motivator to action.

And no, you cannot withhold your levies because of this. The two things are not connected. Your levies do not pay only for the boom gate and it is an essential fact of life that if you are an owner in a body corporate, you must pay your contributions. It is up to you now to move this situation along if you are not happy with the pace of things (and bearing in mind that at present, it is extremely difficult to get contractors to attend onsite to quote, let alone do works, in most situations).

Chris Irons
Strata Solve
E: [email protected]
P: 0419 805 898

This post appears in Strata News #580.

Question: In minutes from a previous meeting, the committee agreed to repair damage to my unit. Now they tell me the minutes were recorded incorrectly. Is the committee bound by their decision recorded in the minutes?

Does a strata committee need to act on the minutes that are published and agreed to?

I recently moved into my new home in a gated complex. In the minutes from the previous meeting, it was mentioned that there was damage to my unit and the committee agreed to repairing the damage.

I’ve approached the committee about the matter and now they tell me that the minutes were incorrectly recorded and they never agreed to fix the damage, even though the minutes were voted true and correct at the next meeting. How do I proceed?

Answer: It is not so much the minutes which are the issue, it is the decisions reached and if the decision reached was to do the works, then that is what must be done.

Section 101 of the Body Corporate and Community Management Act 1997 provides that the committee ‘must put into effect the lawful decisions of the body corporate’. In other words, it is not so much the minutes which are the issue, it is the decisions reached and if the decision reached was to do the works, then that is what must be done.

Given what you’ve said about the minutes being voted as true and correct at a subsequent meeting, it certainly seems the committee are suggesting it is the decision, not the minutes, which are the issue. You don’t say if the decision to do your works occurred at a committee or body corporate meeting (i.e., a meeting of all owners). If it is the latter, then the committee can’t override that. If it was a committee meeting, the committee can rescind their decision, although they still need to be reasonable in doing so.

Can you have the decision verified (or not) by anyone else present at the meeting? That might be a good first step. Following that, you may wish to write to the committee and seek clarification, as it sounds like that formal clarification is yet to occur. If the clarification is they intend to rescind the decision, you may have the option to challenge that through the Commissioner’s Office.

Chris Irons
Strata Solve
E: [email protected]
P: 0419 805 898

This post appears in Strata News #567.

Question: Our committee regularly carries out small improvements without seeking approval from the body corporate or notifying lot owners. Are we all required to be involved in the decision making process?

Our committee approved a handyman to construct an area for the wheelie bins without any plans for what it would look like. We received the minutes from the meeting on Monday and the handyman arrived the next morning to commence the job. We were not notified about the meeting, only the outcome.

This has happened in the past. We are just advised they have approved a motion put forward by a member of the committee as it is within the spending limit and work is carried out. If any work is carried out in the complex I would like it to be carried out by a tradesperson. Is this a requirement? Do we not have a right to object? As we have a body corporate manager, they must approve of these tactics.

Answer: Committees are appointed to help manage the affairs of the body corporate without needing to refer every decision to the wider group of owners.

Committees are appointed to help manage the affairs of the body corporate without needing to refer every decision to the wider group of owners. It seems like that is what is happening here.

It’s within the Committee’s power to authorise improvements to the common property via a Committee resolution. The cost limit for these improvements is $200 times the number of lots per scheme. That limit can be extended to $300 if approved at a previously general meeting. So, if you have a 20 lot scheme with the standard cost limit, the Committee can approve costs of up to $4000 inc GST. The question doesn’t state the costs involved, but provided the works are within that limit it appears that the Committee has acted within the limits of its authority.

If there is a fault here, it seems that owners weren’t advised in advance that the improvement proposal was being considered. Ideally, you should have received notification that either a Committee Meeting or VOC was taking place. As you have received minutes, it seems there was such a meeting. You could reasonably contact the Committee or body corporate manager to ask whether such a notice was issued and if not why not. You might also ask what you would have done if you had received such a notice. You could have filed an objection to the works, but ultimately the vote would still have been in the hands of the Committee members.

You ask whether a handyman can be appointed to do such works. Provided they have insurance, is there a reason why not? In Queensland a licence is not required to be a handyman and they are allowed to do general works up to a value of $3300 inc GST. Many ‘handymen’ will have licences that allow them to do more than this. You could ask the manager or committee to provide evidence that the handyman was insured and that the job was within their limitations. Otherwise do you have reason to believe that the handyman wasn’t able to do the job? Has the job been completed unsatisfactorily?

Moving forward you seem to have a keen interest in the management of your building. If you want to play an active part in Committee decision making the best way to be part of this is to volunteer to be a committee member at the next opportunity.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #563.

Question: A new Committee changed agreed suppliers to carry out significant repairs and maintenance without consulting all owners. There are issues with the work of both contractors. Can the committee be held responsible?

At our 2021 AGM there were 2 Ordinary Resolutions for quite significant expenditure. One was $166,000 for rooftop tiling and waterproofing and one was $42,000 for replacement of hallway carpets. Both Resolutions were carried with significant majorities (56/1 and 55/3).

A new Committee was voted in at this AGM and they then changed the agreed suppliers for both these issues. (Without consulting all owners).

We now have problems in both areas. There are more leaks on the rooftops and the carpets were installed without the appropriate underlay. Both issues will incur significant repair costs.

Is there any way the new Committee can be held financially responsible for going against the wishes of the Owners as confirmed at the 2021 AGM?

If so, what is the process?

Answer: This committee may have a problem!

Committee’s must put into effect the lawful decisions of the Body Corporate. If the resolutions were to engage given contractors, the committee appointed other contractors and there was no amending or revoking motion passed at a subsequent general meeting, then this committee has a problem!

When acting in good faith and without negligence, committee members are immune from civil liability. Choosing a different contractor out of ignorance, arrogance or stupidity, is not necessarily negligent or acting in bad faith. Something more may well be required; for example a kick back, or if the choice of new contractors was ‘jobs for the boys’.

Even if one of those sorts of bad behaviour was present, committee’s in this situation will often reach for ratification. That is, at a general meeting they will propose motions to authorise their engagement of the different contractors, and a committee that knows what it is doing, will also seek to revoke the earlier resolutions engaging the original contractors. Ratification gets the committee members off the hook, even though that would not be in the best interests of the Body Corporate.

Where to start can be tricky. At one end of the spectrum a discreet investigation, followed by adjudication is a viable alternative. At the other end of the range of options, is a frontal assault in the form of a requisitioned EGM, to effect a coup d’état replacing the committee, followed by a forensic audit of the material, experts reports and an action for breach of statutory duty (best done in the District Court, if possible). Good luck!

Michael Kleinschmidt
Stratum Legal
E: [email protected]
P: 07 5406 1282

This post appears in Strata News #558.

Question: Can a committee charge lot owners a fee of “$160 for a decision made for a flying motion”.

Our committee charged me a fee of “$160 for a decision made for a flying motion”. Can they legal charge this?

When I questioned the committee about the charge, this was their response:

“Official approval takes place at the next committee meeting, which is held quarterly in Feb, May, Aug & Nov. however the committee is happy to vote via email circulated to all members which can then be ratified at the next meeting. This will avoid applicants having to pay for a flying motion at a cost of $160”

This is my first body corporate experience and this place is a financial mess with outstanding and ignored repairs and a dysfunctional committee that wants to keep me in my box.

Answer: If the purpose of the VOC is to make a decision that only benefits one lot, it is reasonable to ask that lot owner to pay the costs of holding the meeting.

This may depend on what matter you are raising, but if the purpose of the VOC is to make a decision that only benefits one lot, it is reasonable to ask that lot owner to pay the costs of holding the meeting. Otherwise, the matter can be determined at the next meeting for which there is no cost.

In this case, it seems that the Committee is being both clear and reasonable in advising you of your options. The worst-case scenario is that you have to wait a few months or pay a small amount if you require an urgent response.

It’s important to remember this is a two-way street, as presumably the same conditions apply to all owners. Let’s say your neighbour wants to 9make an application to house a pet at the property. They are in a hurry and want the committee to make a quick decision. As an owner are you happy to pay your share of a meeting cost so your neighbour can have a fast decision made or do you think your neighbour should pay the full costs of the meeting? I think most people will say the neighbour should pay as they are the ones gaining utility from having the meeting.

That said, you also need to consider your rights as an owner to submit motions to the committee and the committee’s obligation to provide a response.

Legislation introduced in March this year now requires that if an owner submits a properly structured motion to the committee a response to the proposal should be provided within six weeks. The implication here is that the body corporate would be responsible for the costs of paying this meeting although it is not explicitly stated.

So, if you submitted a motion requesting approval for a pet the committee should now give you a response within six weeks. If that response were that the matter would be decided at the next committee meeting there could be some grounds for dispute, although you still wouldn’t have your approval. If the motion you were submitting wasn’t for the benefit of your lot but was for a body corporate issue you may well feel entitled to a more substantial response.

From the Committee’s perspective, the regulation requires that while they must give a written response to the owner within six weeks they can also seek an extension of time before a decision is made for a further six weeks. If, as in this situation, that response is advising that meetings are being held quarterly and that the matter would be determined at the next one that may be considered a reasonable reply. However, that may not always be the case. If you were raising a safety issue or an outstanding repair that compromised the habitability of your lot a quicker decision may be expected.

I’m interested in the phrase you use in the question in saying that the committee wants to ‘keep you in your box’. There is obviously a bigger issue at play here and it is always best for owners at a scheme to listen to each other and try and reach a basis under which they can work together. This involves understanding from all parties.

In this case, it would seem that the committee is offering a correct and reasonable platform to owners to have issues heard and determined by organising the quarterly meetings. They are providing a structure in which all parties can operate with clear rules. This structure will also help cut down on correspondence between meetings. Is there a reason why you are finding these opportunities insufficient? It sounds like the scheme has some problems to work through, but does having VOCs resolve these in a way that the more structured meetings can’t? No one can really answer that from the outside but it is something to consider.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #552.

Question: What is the committee’s obligation to provide detailed information on matters to be voted on at an AGM?

What is the committee’s obligation to provide detailed information on matters to be voted on at an AGM?

I have received papers for our next AGM which includes the Sinking Fund budget with 2 items with a proposed substantial increase. Although there was provision for these in the last budget, there was NO expenditure. A third item of $20,000 has no previous history.

The cumulative cost of these items represents 35% of the sinking fund expenditure of $274,000 for the year, but there are no explanatory notes. Are owners entitled to know why these funds are being raised and what the money will be spent on?

Answer: It is necessary for the Body Corporate to give proper notice of what is to be considered at a meeting, and point out the relevant consequences of the approval of a motion.

The committee does not have an obligation to provide detailed information on each and every item that appears in an annual general meeting agenda. However, they do have an obligation to ensure that proper notice of the meeting is provided and information as to the significance of certain motions. For example, the adjudicator in Condor [2016] QBCCMCmr 350 relevantly provided that:

[42] It is necessary for the Body Corporate to give proper notice of what is to be considered at a meeting, and point out the relevant consequences of the approval of a motion. The District Court has said that if notice of a motion is “…misleading as to what is really proposed, or its effect and implications, then that may well impact on the validity of the resolution…”

The Committee has a fiduciary duty to make full and fair disclosure. However the Court also agreed with another case which said in regard to fiduciary duty:

“The need to make full and fair disclosure must be tempered by the need to present a document that is intelligible to reasonable members of the class to whom it is directed, and is likely to assist rather than to confuse. … In the circumstances the court should not be quick to conclude that a contravention … has occurred because other information could have been provided that was not. The need for the applicants to establish the materiality of errors and omissions is an important step in the proof of their claims.”

[43] The Court noted the onus was on the party alleging a breach to identify what it was which was not disclosed by the committee, and how that meant that there had been a failure to make full and fair disclosure . It also said that there was no obligation on a committee to present a balanced view of the matter.

In relation to the budget, I suspect that it would be difficult to argue that the agenda includes a deficiency because it does not include details justifying each line item in the budget. That does not mean the owner’s concerns are not genuine – but rather than seeking an outcome that would declare the budget motion invalid the owner would be better placed to query this concern to the committee by putting the question in writing prior to the meeting.

That approach will allow the committee the opportunity to respond to any concerns, and if appropriate, address the issue at the meeting (keeping in mind that some limited adjustments can be made on the day of the meeting).

Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753

This post appears in Strata News #551.

Question: We have unanimously agreed to repaint but cannot agree on a colour. Does the decision need to be unanimous too, or can it be majority?

I live in a block of 5 townhouses. We have a management committee of two. We have recently approved a full repair and repaint of the building. It was an unanimous decision. The sticking point is the colour scheme. As there are only five of us, does a vote on the colour scheme affecting all five have to be unanimous or a simple majority of three?

Answer: For the colour scheme alone, a simple majority should be sufficient.

For the colour scheme alone, a simple majority should be sufficient. However, you would also likely need to consider the overall costs of the project and how these might affect any approvals given.

If the total cost of the project is more than $2000 times the number of lots – $10,000 in a five lot scheme – a special resolution would be required to agree the works. This equates to four out of five owners agreeing in a scheme of that size. If the total of the project is less than $2000 per lot a general resolution would be sufficient.

The advice would be to have the colour scheme included in any such vote so that owners can clearly agree in advance on what they are going to get.

Check the BCCM webpage for full details about the approvals required: Improving common property and lots

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #550.

Question: A large sign about the building being Pet Free has been put up in the foyer. Is this sign permissible and what approvals should have been sought by the committee?

On the wall in the foyer of our standard module residential building is a large sign stating that the residents of the building enjoy an animal-free environment.

This sign was no doubt purchased with body corporate funds. No approval was sought from the owners to place such a sign there nor to expend body corporate funds for that purpose. Were those approvals required?

A number of owners find the sign offensive and it is known to be a turn-off to many prospective purchasers thus likely devaluing the lots. Even though there is now a state of the art animal by-law in place, is such a sign permissible given the current law relating to pets in strata?

Answer: You really do have to wonder what the committee is trying to achieve with the placement of the sign.

This is a great and somewhat head-scratching question.

At one level, your question ‘does the committee need approval to spend the funds?’ has a simple answer: no, they don’t, if it is within their spending limit (you’d think a sign like that would be). Not every single transaction has to be authorised by all owners.

Of course, though, your queries are not confined to spending and involve the by-law. This is a bit more complicated. I am not sure what a ‘state of the art by-law’ about pets is, although I suspect you are referring to a by-law which requires committee permission to keep a pet. In which case, I’d agree with you that the sign is in direct conflict with such a by-law and you really do have to wonder what the committee is trying to achieve with the placement of the sign. As you say, it is likely to have a detrimental impact on property values.

You would need to get your hands on the committee minutes where this purchase and installation was discussed. After that, it’s about whether you wish to take further steps. If so, the first one would be writing to the committee to voice the concerns you have articulated above and request their removal of the sign. Further steps flow from what happens at that point.

Chris Irons
Strata Solve
E: [email protected]
P: 0419 805 898

This post appears in Strata News #547.

Question: Our small scheme may decide to terminate our strata manager and self manage. I’m very concerned about this decision. As a lot owner, what can I do?

I am a lot owner in a small complex of 5 units and do not hold a committee position. A majority of owners may decide to terminate the existing strata management contract and instead, self-management.

I do not accept that this would provide safe or effective governance and am very concerned about the potential for adverse outcomes.

Does the law provide any recourse or protection against body corporate decision making?

Answer: If a body corporate decision is legal and approved by a majority of owners, there aren’t any good grounds to dispute this.

If a decision of the body corporate is legal and approved by a majority of owners then there aren’t any good grounds to dispute this.

That seems to be the case here. Self-management, as opposed to having a body corporate manager, is the default position for all schemes and many small schemes find this an effective means of management. If it is what the majority wants then you have to go along with it.

However, you are entitled to speak to other owners about your concerns and check whether the body corporate will be able to meet all of its obligations under the legislation if it is self-managing. The day to day operations of running a small body corporate plan can be mostly straightforward. No particular knowledge is required to book a plumber or pay an electricity bill. But, factors such as financial reporting, debt collection, insurance and provision of access to records can be more challenging for self-managed buildings and you are entitled to ask how they will be handled. If self-management is brought in and owners struggle with these aspects then there could be grounds to seek professional assistance.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in the February 2022 edition of The QLD Strata Magazine.

Question: A previous blanket approval for solar clashes with our energy provider’s 30kw limit. Should we rescind the blanket approval?

In 2009 a Blanket Approval for the installation of solar panels was approved at an AGM.

We have reached the limit of 30kW allowed by the energy provider for our complex.

Can the committee rescind the blanket approval or does it have to be voted on at a General Meeting?

Answer: Rather than proposing a motion to revoke the blanket approval resolution, a more prudent approach is to formulate and propose either a new regulating resolution, or even better, an appropriate by-law.

As a general rule, the committee is obliged to put into effect the lawful decisions of the Body Corporate; section 101(2) of the Act. Let’s assume (!) that the ‘blanket’ approval motion was lawful at the time it was made and it allows lot owners to install on a first in, best dressed basis. The issue at present then, is most likely that the blanket approval now permits something that is no longer lawful; because the 30kW limit has been reached.

This sort of thing happens more frequently than most people realise; for example consider the changes to rules relating to smoking, fire alarms and pool fencing in the last 24 years since the Act was introduced. In this case, if our assumptions are correct, the net effect is likely that owners wanting to now install solar, can no longer rely on the blanket approval as authority to install. Of course they may not know that, and a prudent committee would let them, and indeed all, lot owners know the limit has been reached.

Rather than proposing a motion to revoke the blanket approval resolution, a more prudent approach is to formulate and propose either a new regulating resolution, or even better, an appropriate by-law. For example, if an old solar system is decommissioned, who can install a new one; first in best dressed, or cab rank rule? Likewise, has the body corporate considered if the hard limit of 30kW is not as hard as they may think (battery stored and not grid connected?)

Michael Kleinschmidt
Stratum Legal
E: [email protected]
P: 07 5406 1282

This post appears in the December 2021 edition of The QLD Strata Magazine.

Question: My Committee wants to get legal advice before making any decisions. This just ends up costing more plus sometimes they ignore the advice anyway. Just make a decision.

My QLD BC Committee wants to get legal advice before making any decisions. Then sometimes they ignore the advice received. Some expenses do not relate to improving or maintaining Common property but deal with Unit Owner requests not covered in by-laws. Can they keep spending on matters where they should just make decisions?

Answer: Which is more important, the relative speed of decision-making, or the quality of the decision based upon informed views?

That depends. How do you think decisions should be made? Or perhaps the better question is this: which is more important, the relative speed of decision-making, or the quality of the decision based upon informed views?

From your query I’m sensing you think it’s the former. Whereas I think the latter. Ideally, the ‘best’ approach would be at a balanced point in between: timely decision-making based upon an objective basis. If the committee has to spend money to get to that objective basis, then so long as they are doing so within their spending limits, I see nothing wrong with that. I am a big believer in committees (and owners, for that matter) getting qualified advice. Got a water ingress issue? Consult a plumber, or engineer. Financials need work? Ask an accountant. Need to know where you legally stand? Engage a lawyer. Want to resolve a dispute? Talk to a mediator. And so on. Doing otherwise sees you running the risk of not making a reasonable decision, which can end up in far more cost than the cost of the legal advice.

You appear to have an issue with the committee considering “unit owner requests not covered in by-laws”. Committee responsibility is not confined to maintaining common property and by-laws. Since 1 March 2021, owners have a legislated right to put motions to the committee, so the committee has a legislated obligation to consider owner requests.

Chris Irons
Strata Solve
E: [email protected]
P: 0419 805 898

This post appears in Strata News #528.

Question: Does all committee expenditure need to be recorded formally by a VOC?

Is it necessary that all expenditure approved by the committee, even within a spending limit, be recorded formally by a VOC? We have been told by our Strata Management Company that this is required by QLD Legislation.

How is this possible with an emergency e.g. a burst pipe requiring immediate repair?

Answer: Although the answer is yes, there is more to it.

As always, there is never a straightforward yes or no answer in Body Corporate world! Although the answer is yes, there’s more to it than that.

Everybody corporate decision, including expenditure, requires the relevant resolution. The legislation allows for the committee to approve certain expenditure, otherwise, approval must be sought from owners at a general meeting.

A Vote Outside Committee Meeting, or VOC, is the quick way for the committee to make a decision. Holding a formal meeting means providing the relevant notice period to owners, whereas with a VOC the notice goes to the committee and owners at the same time, and minutes are subsequently sent to everyone.

For an emergency repair that is within the committee’s spend limit, the VOC notice can go to committee members that it is practical to contact, which may be by phone or an app. The notice is given to owners as soon as it is reasonably practical to do so.

The committee can act on the resolution straight away in an emergency, as long as it is within their spend limit. If it is not, the body corporate would need to seek an order from the office of the Commissioner for Body Corporate and Community Management.

In practical terms, some committees proceed with emergency repairs as the need arises and then ratify this at their next committee meeting, however, this is not specified in the legislation and may be open to challenge.

The other point to note is when a committee can act on a committee resolution, and this differs depending on which module your body corporate operates under.

For those under the Accommodation or Commercial module, you can act on the resolution once it has been made. For those under the Standard Module, there is provision in the legislation for a notice of opposition. This gives owners the ability to contest a committee decision, however, the committee may proceed with a resolution if it is of a routine administrative nature, perhaps sending a letter for example, and if the cost is not more than the greater of $200 or $5 multiplied by the number of lots in the scheme.

All VOC motions must be confirmed at the next committee meeting.

Charlotte Divall
SSKB
E: [email protected]
P: 07 5504 2000

This post appears in the November 2021 edition of The QLD Strata Magazine.

Question: At a recent Committee Meeting, our committee overturned a 2017 General Meeting Motion to adopt electronic voting. Can they lawfully do this?

At the end of August 2021 the Committee issued Minutes for a meeting held 2 weeks earlier passing a motion as follows:

Electronic Voting

That, in accordance with Motion 11 at the AGM held on [date] approving the adoption of electronic voting, the Body Corporate Committee hereby resolves to the contrary.

A decision was taken at the 2017 AGM to implement electronic voting upon the availability of an enabling electronic voting system. The software has been available for more than 2 years and there have been multiple requests made to the Committee to “put into effect the lawful decisions of the body corporate” pursuant to s.101(2) of the Act – which have been ignored/fobbed off without explanation.

Answer: The committee has an obligation to put into effect the lawful decisions of the body corporate.

This would appear fairly clear cut – the committee has an obligation to put into effect the lawful decisions of the body corporate. It also does not have the power to overturn a general meeting resolution. Only a general meeting resolution of the same resolution type can achieve that.

It may be worthwhile asking the committee why they have taken this approach and formally setting out the limitations and restrictions on the committee taking this tact.

Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753

This post appears in Strata News #511.

Question: Can the body corporate make a donation to a group out of our levies money?

Answer: The body corporate would be acting outside its powers by raising funds for the purpose of making a donation to charity.

The body corporate would be acting outside its powers by raising funds for the purpose of making a donation to charity.

In Kensington Gardens Retirement Village [2005] QBCCMCmr269, the adjudicator relevantly provided:

“Whilst it might be argued that a Christmas function does benefit the body corporate in a general sense by fostering or improving good relations between members, I conclude that it is not properly a body corporate expense. I suggest that such expenditure should be funded not by the body corporate but rather by individual owners or residents who choose to participate in such activities. In the circumstances, I intend to order that in future that body corporate funds not be used for such activities.”

This logic has subsequently been used by adjudicators to invalidate motions that purport to approve charitable donations. For instance, in Edgecliffe Apartments [2021] QBCCMCmr30, the adjudicator provided:

“It has been held that even where the idea is a popular one, that bodies corporate may not, for example, use body corporate funds for a Christmas party. The same considerations apply here. There is nothing in the body corporate’s functions at section 94(1) of the Act, or elsewhere in the legislation, that would make it responsible for donations to a surf life-saving club or sponsorship of any equipment it uses. This expenditure does not relate to the administration of the common property or body corporate assets, the enforcement of the CMS, or any of the items that are to be included in the administrative or sinking fund budgets. Consequently, I am not satisfied that it is a permissible use of body corporate funds.”

Update by Admin Apr 2022: There has been a new adjudication on body corporate decision making and making donations from the sinking fund : Paradise Palms Country Club – The Keys [2022] QBCCMCmr 130 (6 April 2022).

Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753

This post appears in Strata News #510.

Question: What can the newly appointed committee (strata) do after finding out the previous committee have used BC funds to improve only their lot? e.g. erect & paint a fence.

Answer: Body corporate funds can only be used on body corporate expenses.

It’s not entirely clear from your query what you are suggesting has happened here, so I’ll take a stab at what I think you’re saying.

First and foremost, body corporate funds can only be used on body corporate expenses. There are instances where it is reasonable for the body corporate to spend its funds on work to an owner’s lot, for example, if the owner has incurred damage as a result of the body corporate’s failure to maintain common property.

That said, if what you are suggesting is that former committee members have used body corporate funds for their lots without proper decision-making having taken place, that’s a very different story. I suggest if you haven’t already done so, you make very sure this is the case (for example, search of records, forensic audit of accounts) – you wouldn’t want to be suggesting this without being sure of it. You may also wish to seek legal advice about your options in relation to possible recovery of funds. If you are suggesting criminal activity has occurred – and again, I’m not sure if that’s what you are saying or not – then you would need to raise that with the Police.

Frank Higginson
Hynes Legal
E: [email protected]
P: 07 3193 0500

This post appears in Strata News #506.

Question: How can committee members be encouraged to understand the laws and to think for themselves rather than being influenced by others?

Answer: Every person only has one vote, and it’s incumbent on each committee member to exercise their vote

I think behind the question, this person has experienced one or two individuals on the committee who might be influenced by others and what they’re hoping for is that everyone takes on the responsibility of making individual choices. It’s very tough. Committee members, they tend to be lay people. They’re not specialised within the industry. Although some might be lawyers or builders etc, they very rarely have a wide knowledge of the whole industry.

It does seem to be the case that people who can express themselves very confidently, who are very definite in their position, can have an outside influence on committees.

All I can say is every person only has one vote, and it’s incumbent on each committee member to exercise their vote.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in the August 2021 edition of The QLD Strata Magazine.

Question: An appointed contractor was not able to carry out the works. Months later, a different contractor was awarded the contract as their quote was below the agreed amount. Should owners have voted on the new appointment?

At an EGM, owners were given a choice of 2 qualified contractors to provide services on a project worth some $20K (the spend exceeded our scheme’s relevant spending limit). The owners voted for their preferred contractor but the winning contractor was then unable to undertake the project. 

Some 9 months after the EGM, the Committee obtained a quote from a 3rd contractor and awarded the project to that contractor. Our body corporate manager advised that because owners had voted to spend the $20K originally quoted, there was no problem in accepting the 3rd contractor’s quote which was slightly less than $20K. Would this be right? I’d have thought the committee couldn’t simply appoint a contractor not previously nominated for owners to consider, not voted for by owners, some 9 months down the track and with no information regarding the 3rd contractor being provided so they might make a considered decision (eg. licenses, warranties, reputation). I’d believed owners had voted not just on price but on a range of factors. Should this have gone back to owners to vote on again?

Answer: It would depend on how the motion was structured but it would seem this would require a further general meeting approval, keeping in mind that it could be ratified subsequently to the works being carried out (although that is not the preferred approval method).

Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753

This post appears in Strata News #498.

Question: Can you ask committee members to elaborate why they are voting for, say, Option 1 instead of Option 2 when the cost is higher for the same scope of work?

Answer: You can certainly ask.

You can certainly ask. I always think a reasonable question should be awarded a reasonable answer. Provided the answer in response is logical and consistent, then I think that’s fine. People are allowed to make decisions.

In terms of quotes, if you’ve got two very close options, and you might get slightly different prices, people still can choose the more expensive one, and that’s okay. The cheapest quote isn’t necessarily the best one that’s available to us. For example, if you’re dealing with a contractor, maybe it’s a contractor you’re familiar with that has done good work for your building before. That might be a good reason why you choose their quote, which may be a little bit more expensive. But that’s fine because you have confidence that they’re going to come on time to work properly, respond to any problems that you might have. As opposed to a contractor who was a bit cheaper that you have never dealt with before. So usually, I think if there’s a logical and reasonable response, and it’s no problem.

Should the decision-making process be minuted for future reference? My view is, it’s the decision that matters and not so much the opinions that have build-up to it. Because in the end, we are all entitled to different decisions, but what gets counted is the vote and how you vote that really matters. It may be important in some schemes and in some circumstances to record some rationale if that was helpful to owners to help them understand why certain decisions should be made and I don’t see a problem with that. I wouldn’t see it with absolutely required myself.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #497.

ARTICLE: A Weighty Problem

A prospective unit buyer recently contacted us wanting to know whether it was worthwhile challenging a committee decision to refuse approval for their pet dog.

The buyer had the unit under contract and the finance condition was due in a week or so. The contract was otherwise unconditional, so that once finance approval was obtained and notified to the seller, the purchase would be completed.

The unit complex was multi-level, with carparks on the ground floor and residential units in the three floors above. Each unit had front and rear balconies. No units had courtyards. The buyer wanted approval for what would be considered a “medium” size dog i.e. roughly 18-20kgs in weight.

Through the agent, the buyer had made an application to the body corporate committee for approval of the pet dog. The committee refused on the basis that the scheme by-law provided that dogs must weigh 10kgs or under.

Was it worthwhile for the buyer to challenge the committee’s decision? The buyer could not bear to be separated from his dog but also really liked the unit…

Adjudicators’ decisions in relation to pet approvals probably now number in the thousands. It is not hard to find decisions in relation to by-laws that impose weight limits. After sifting through a sample of those decisions some relatively clear principles emerge:

1. A by-law which bans domestic pets, or any type of them, is almost certainly void.
2. A by-law which bans domestic pets over an arbitrary weight limit is almost certainly void.
3. A by-law which permits pets up to a certain weight limit without approval, but which imposes a requirement for approval over an arbitrary weight limit, is also likely void.
4. A by-law which permits pets after approval, but which imposes restrictions on the exercise of the body corporate’s discretion when granting that approval which are inappropriate to the circumstances of the scheme, is likely to be void.
5. A by-law which permits pets after approval, but which places restrictions on the exercise of the body corporate’s discretion when granting that approval which are appropriate to the circumstances of the scheme, is likely to be valid.

Of course the validity of the by-law is not the only issue. There is also the question of whether the decision made under it, typically by the committee, is valid. Taking these two criteria into account you end up with options which look like this:

Considering that a buyer does not have standing to bring a dispute resolution application to the Office of the Commissioner for Body Corporate and Community Management, the buyer has the additional task of working out how to approach the matter. Take the worst-case scenario, for the buyer, which is a valid by-law and a valid committee decision. In the event of a pet refusal under these circumstances there is little point in the buyer continuing with the purchase if they cannot bear to be separated from their pet.

Conversely in the best-case scenario where an invalid decision is made under an invalid by-law, what is the best way the buyer could approach the matter? Arguably a letter to the body corporate committee informing them of the fact that not only is their decision wrong but also that their by-law is invalid. Further, the buyer could say that in the absence of a valid by-law the buyer (and for that matter anyone else) can have a pet “as a right”. Whilst that would no doubt cause some waves within the body corporate, it would be the legally correct position. It would also permit the buyer to continue with the purchase and keep their pet.

The two other options within the matrix require different considerations.

Where a valid committee decision is made under an invalid by-law, the buyer’s approach could be the same as an invalid decision under an invalid by-law; simply proceed after notice. The reason being that if a valid decision is made (procedurally, with a correct exercise of discretion) under an invalid by-law, the decision is not enforceable. That is because absent a by-law requiring consent for pets being valid the body corporate has no other, for example, statutory right to regulate domestic pets within lots. Accordingly, the buyer could proceed with the purchase if they wished to.

The fourth option is perhaps the most frustrating. That is because even though the committee’s decision is invalid, the by-law itself is valid. If the buyer took the risk of proceeding with the contract whether or not they put the committee on notice as to their invalid decision, all it would subsequently take is for a valid decision to be made. That is, if the buyer put the committee on notice of their invalid decision then the committee could simply make a new, valid decision. If the buyer didn’t put the committee on notice about their invalid decision, settled the contract and moved in, then the buyer would have to seek to set aside the committee’s decision as invalid, whilst having the pet onsite and facing the prospect of receiving a fresh decision refusing consent for the pet. This is clearly not an attractive option.

Unfortunately for the buyer that approached us, their circumstances fell into this fourth category. The committee’s decision was invalid. The committee had simply refused the pet on the basis that it weighed over 10 kilograms. The body corporate’s by-law however, permitted pets subject to body corporate approval. The committee was able to give that approval on conditions that it saw fit. Examples of some conditions were provided in the by-law including, most relevantly, that the pet weigh under 10 kilograms. This was not a mandatory condition, and neither was it expressed in such a way as to limit the decision making power of the body corporate. Based on the wording of the by-law the committee could have equally imposed of a condition that the pet weigh under 15 kilograms.

Given the difficulties associated with this option, the buyer understandably elected not to proceed with the purchase.

Michael Kleinschmidt
Stratum Legal
E: [email protected]

This post appears in Strata News #495.

Question: If a resolution has been passed by AGM to authorise payment of repairs, do we still have to have a VOC to carry out the already authorised repairs?

Answer: Generally if a decision has been made by the Body Corporate that is the direction to the Committee to ensure those works are undertaken so having a VOC to reconfirm this would be unnecessary.

It may depend on the exact wordings of the motions, but generally, if a decision has been made by the Body Corporate (the motion at the AGM) that is the direction to the Committee to ensure those works are undertaken so having a VOC to reconfirm this would be unnecessary and would incorrectly imply that the committee could overturn the decision of the Body Corporate by voting against its wishes.

That said, every decision and motion is different and there may be some subtleties here that can’t be considered without knowing all the details of the situation. If you are concerned you should contact your body corporate manager and ask for a rationale behind the process.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #493.

Question: Our body corporate has a statement “that any one Member does not have the authority to contact the Body Corporate Contractors or Suppliers without the Committee having provided this authorisation”. Is this binding?

Is this statement Binding:

“It is important for all Committee Members to be aware that any one Member does not have the authority to contact the Body Corporate Contractors or Suppliers without the Committee having provided this authorisation”

Answer: It’s an accurate statement.

It’s an accurate statement. The body corporate committee is a collective decision-making entity. Individual committee members are not empowered to make decisions on behalf of the committee. Once the committee has made a decision, that decision might then empower an individual committee member to take action, for example, speak to a contractor. It’s also common for a committee to decide upon a committee member as a liaison person between the committee and its contractors, although again, this is something that needs to first be decided upon by the committee.

Your question ‘is this binding?’ suggests that this statement comprises part of a contract, by-law or other legal document. If so, you might wish to seek legal advice about specific interpretation of it.

Chris Irons
Hynes Legal
E: [email protected]
P: 07 3193 0500

This post appears in Strata News #489.

Question: If the body corporate is engaged in multi-million litigation (with another body corporate in a mixed use, multi-purpose development), is the Committee permitted, without specific body corporate approval, to settle the matter – when all it was authorised to do was respond to proceedings?

Answer: Generally not, but it depends.

Generally not, but it depends.

The committee has the power to make decisions for the body corporate to the extent that owners’ rights, privileges and obligations are not changed as a result of the decision.

Accordingly, the decision to settle the matter is capable of amounting to a restricted issue. On most occasions entering into a settlement deed would be a restricted issue, but it depends on whether any of the specific clauses in the deed will change the rights, privileges and obligations of owners. This can only be ascertained by reviewing the details of the deed. Keeping in mind that the committee can always enter into a deed on the basis it will be later ratified at a general meeting.

Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753

This post appears in Strata News #487.

Question: Our Committee has granted our caretaker permission to use an area of common property. Should this have gone to an AGM for a vote without dissent?

Our Committee has granted our caretaker permission to use an area of common property to use as a nursery including right to use common property water.

Our caretaker has a landscaping business on the side. The committee uses the “excuse” that the caretaker supplies some plants at no charge in the complex.

The committee has also constructed a colour bond enclosure on common property that was partly used previously as a car park for the caretaker to store equipment.

Should this have gone to an AGM for a vote without dissent?

Answer: Granting an occupation authority requires an ordinary resolution at a general meeting.

The Committee cannot grant the Caretaker rights to the common property. The Caretaker can only be granted permission to use an area of common property via an ‘occupation authority’ for purposes associated with the caretaking and/or letting. Granting an occupation authority requires an ordinary resolution at a general meeting. This can be either an EGM or an AGM, not a Committee meeting. The motion will be approved if a majority of those who validly vote on the motion vote in favour of it. The occupation authority will only last while the caretaking and/or letting agreements are in effect.

If the Caretaker does not have an occupation authority in respect of either area, then I recommend that you raise your concerns with the Body Corporate Manager and/or Committee. If the issue is not resolved, I recommend that you proceed to conciliation in the Commissioner’s Office.

Hayley Gath
Mathews Hunt Legal
E: [email protected]
P: 07 5555 8000

This post appears in Strata News #471.

Question: Can the painting of the exterior of strata buildings be postponed for twelve months to enable levies to be raised for this maintenance?

Answer: If the painting had been agreed upon at an EGM/AGM then the committee would or should have also agreed how they were going to pay for it and if they did, they cannot postpone for 12 months unless they had another meeting to agree to that.

If the painting had been agreed upon at an EGM/AGM then the committee would or should have also agreed how they were going to pay for it and if they did, they cannot postpone for 12 months unless they had another meeting to agree to that.

The committee needs to hold an EGM if the financing was not agreed to at the meeting to make that decision.

Debbie Barker
StrataLoans
E: [email protected]
P: 1300 785 045

This post appears in Strata News #471.

Question: Our body corporate makes decisions that might be unpopular but necessary. Is there any obligation for a body corporate to always act or make a decision for the majority of owners?

On a regular basis, our body corporate makes decisions that might be unpopular but necessary.

Some owners have argued that the body corporate is not acting in the interests of the majority of owners when it makes unpopular decisions.

I have reviewed the legislation regarding body corporate obligations. I note that Section 94:

1. states that a body corporate for a community titles scheme must –
   
   1. (a)administer the common property and body corporate assets for the benefit of the owners of the lots included in the scheme, and
   2. enforce the CMS (including enforcing any by-laws for the scheme in a way provided for in this Act, and
   3. carry out other functions given to the body corporate under this Act and the CMS.
2. the body corporate must act reasonably in anything it does under subsection (1) including making, or not making, a decision for the subsection.

Based on the above I cannot see any obligation for a body corporate to always act or make a decision for the majority of owners. It must administer common property and assets for owners and act reasonably. Am I correct?

Answer: Being in a body corporate is a numbers game. If there are sufficient numbers to achieve the required threshold, then it passes and it is up to an aggrieved party to show why there was something amiss with that result.

While I appreciate it makes sense to assume that a majority decision would be the ‘right’ decision, decisions in a body corporate get made according to legislation and the legislation prescribes different thresholds to pass things. For example, a resolution without dissent requires no ‘no’ votes to be cast, in order to be successful. It doesn’t mean that there must be unanimous agreement.

For an owner to suggest that if something is “not popular” (not popular to them, I assume) then it must be incorrect, betrays a misunderstanding of how things work in a body corporate. Moreover, I would be very interested to know how one owner can know or think they know what the majority of owners want or what is in their best interests. It is a presumptuous (or psychic) position to take, without evidence to back it up.

Being in a body corporate is a numbers game. If there are sufficient numbers to achieve the required threshold, then it passes and it is up to an aggrieved party to show why there was something amiss with that result. Simply saying “I don’t agree” or “I don’t like it” is not going to cut it. Equally, though, if you’re on the committee and you’ve got people telling you they don’t like your decisions and that people are unhappy with them, wouldn’t it make sense to take heed of that and perhaps do a little more to explain your reasons? That might be part of the issue.

Chris Irons
Hynes Legal
E: [email protected]
P: 07 3193 0500

This post appears in Strata News #468.

Question: I came home to find a large red No Smoking sign on the wall directly in front of my apartment’s front door. How can I get this removed?

I own a ground floor unit and came home to find a large red No Smoking sign on the wall directly in front of my apartment’s front door, i.e. when I open my door the sign is immediately in front of me on the wall.

I immediately rang the body corporate chairman who after a discussion sent me a text message stating – ‘I don’t really care if you don’t like looking at the sign – it is my call where they go’.

What can I do about this as, although I am not a smoker, I find the sign very unpleasant.

Answer: Many of us find many things in life unpleasant, yet they happen all the time.

While I’m sympathetic to your situation, finding something ‘unpleasant’ is not of itself grounds for having something done about it. Many of us find many things in life unpleasant, yet they happen all the time.

In this case, what I would say is that the chairperson doesn’t have unilateral power to decide things. This should be a decision of the committee and you can check committee minutes for that. If the decision wasn’t properly made in your view, you could challenge the decision in the Commissioner’s Office. You might also be able to argue the sign causes a nuisance – a visual nuisance, perhaps – although you might want to research previous cases about that sort of thing first. In the first instance, as an owner you have a right to put motions to a committee meeting so your first step would be to put a motion to the committee and asking for the sign to be moved (I’m assuming you simply want it moved – do you know where to?). If that motion fails, you could also challenge that, potentially.

On the sign itself, do you know what your by-laws say about smoking? Generally a by-law banning smoking will be invalid, which I suppose may make the sign invalid also, depending on what it says.

Chris Irons
Hynes Legal
E: [email protected]
P: 07 3193 0500

This post appears in Strata News #464.

Question: If a motion has already been voted on and lost, is this same member able to resubmit the same motion again?

Our body corporate had a committee motion submitted for the yearly servicing of newly installed garage doors at the expense of the body corporate. The motion lost and now the same committee member that submitted the first motion has asked for the motion to be resubmitted with information about the garage doors needing to be serviced yearly for the warranty to remain in place.

As the motion has already been voted on and lost, is this same member able to resubmit the same motion again?

Does this stop the committee member from getting the garage door serviced at their own expense?

Answer: If it is the body corporate’s responsibility, there is no limit on how many times a motion can be reconsidered.

It would be important to first ascertain who is responsible for maintaining the garage door. This is the party that should be paying for the maintenance.

If it is the body corporate’s responsibility, there is no limit on how many times a motion can be reconsidered.

If it is the lot owner’s responsibility, the body corporate should not be bearing this cost.

To determine who is responsible, can you please confirm whether the door is part of an individual car parking spot or the common property access door.

Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753

This post appears in Strata News #459.

Question: One of our Committee members who is both the Treasurer and Chairperson makes decisions to spend lot owner’s money whenever she wants without approval. Can she do this?

One of our Committee members who is both the Treasurer and Chairperson has a vendetta against me and another lot owner. They are also not happy that we run Airbnb at the building. This has been approved by council.

She has spent lot owner’s money to go to a Solicitor to see if she could stop the Airbnb business. Can she just spend our money on this vendetta she has against our Airbnb business? 

Can she also just spend money on her apartment i.e. new fire door/fly screens that she broke herself? She says she can spend a certain amount and I have no say in what she does with our money. Is this right?

Answer: As an owner, you are entitled to see minutes of committee meetings and decisions and that’s your opportunity to exercise oversight on what the committee does.

The committee – i.e. the committee acting as a group, and not a single committee member acting of their own volition – can indeed spend money up to a defined limit without having to seek owners’ approval to do so.

The important qualifier here is the committee. The treasurer/chair can’t just decide she wants to do something herself, it will be subject to committee approval.

As an owner, you are entitled to see minutes of committee meetings and decisions and that’s your opportunity to exercise oversight on what the committee does. The other way to monitor committee activities is at the AGM. All committee positions are vacant at the AGM so you can nominate yourself or someone else that you think would do things more competently. If you think it necessary, you can also consider seeking to remove a committee member before the AGM via an ordinary resolution to an EGM. Be mindful, though, that you’ll need someone willing and able to replace them.

As an aside, if your treasurer/chair was part of a committee decision to seek advice about prohibiting AirBnB, then it was likely a waste of time, as the legal position on AirBnB in most bodies corporate is quite clear, namely, that a body corporate generally doesn’t have the ability to prohibit it.

Putting all the above to one side I’d suggest your issue is less to do with the above and more to do with a communication and relationship breakdown with this person. Is there a reason why they’ve got a ‘vendetta’ against you and AirBnB? Have there been problems with guests? If so then I’d suggest that might be a far more productive area of discussion for both of you.

Chris Irons
Hynes Legal
E: [email protected]
P: 07 3193 0500

This post appears in Strata News #453.

Question: We failed to form a committee at our AGM. The meeting was dominated by a disruptive lot owner who called for the whole meeting to be void. We need to call an EGM, but how do we proceed without a committee?

We are a Standard Module Scheme of only 4 lots with unequal contribution entitlements.

We held our AGM 3 days ago.

A motion to appoint a Body Corporate Manager was submitted by a lot owner prior to the voting papers being distributed. The owner also forwarded 2 proposals from Body Corporate Managers which were attached to the voting papers.

This Motion was the last item on the agenda as we had received 2 nominations for Executive Committee Positions and we also called for further nominations from the floor at the meeting. A Committee was not formed. A motion to change to a Small Scheme Module with Form 19 and associated costs was also an agenda item.

This was voted 2 for and 2 against the motion. A poll was not called for as the owner who lodged the motion to appoint the Manager challenged the result of the vote and verbally attacked the meeting chair causing the meeting to descend into a shambles. The Chair suggested that the meeting be halted and rescheduled but this only aggravated the situation.

The same owner refused to vote (recorded as abstain in the minutes) on any other motion on the agenda by stating that even the statutory motions had been loaded to stop the appointment of a Body Corporate Manager and were unnecessary as the Body Corporate Manager would ‘sort all of that out’.

All in all the actions of this owner were disruptive and offensive and she stated without proof, that there had been financial fraud. She would not listen to any explanation offered by the secretary or treasurer as to how the proposed budget was derived and how the levies were calculated.

The meeting continued and some motions passed.

So, finally the last motion is tabled and she ducks out and comes back with 1 of the 2 proposed Body Corporate Managers. She had paid him to attend. This was a positive as it afforded the owners a chance to directly ask questions and assist in their decision.

The votes were 2 for and 2 against and as it was a special resolution failed the 2/3 majority needed.

She was extremely angry and stated that she considered the whole meeting to be void and would not accept the outcome of any of the votes.

N:B: This was the first meeting she had attended in her 9 years as an owner and had never previously returned a voting paper. As a courtesy for submitting a motion we let her choose the date for the AGM.

We need to call an EGM. But as there is no committee how do we do that?
Who calls the EGM and distributes voting papers?

The motion to hold future meetings via email was passed. What are the legislative requirements?

Answer: An EGM should be called – by those committee members that are in existence – at which the body corporate considers appointing the necessary members to form the committee.

On the basis that you don’t have a valid committee, what should occur is that an EGM should be called – by those committee members that are in existence – at which the body corporate considers appointing the necessary members to form the committee. And then if that doesn’t happen, there should be a motion to approve the engagement of a body corporate manager under what’s called a ‘Part 5 agreement’. That agreement gives the manager the power of the committee. Refer to Part 2, Division 2, Subdivision 2 of the Standard Module.

That assumes, of course, that you have a body corporate manager and it’s not clear from your query you do. Not all body corporate managers are willing to undertake Part 5 responsibilities. If you go through all of those steps and can’t get either a committee or a Part 5 agreement in place, then your scheme is likely dysfunctional and will probably require the appointment of an administrator, which occurs on application to the Commissioner’s Office.

The fact that the owner ‘won’t accept’ the outcomes of the meeting is immaterial. The meeting outcomes stand until such time as an adjudicator orders otherwise.

Having either a Part 5 agreement or appointing an administrator is a serious and costly step for a body corporate. It means that you lose rights as an owner to vote – someone else does that for you. You may wish to point this out to the other owner in an effort to get them working cooperatively.

Chris Irons
Hynes Legal
E: [email protected]
P: 07 3193 0500

This post appears in Strata News #440

Question: Some committee members wish to improve the scheme to 4 star resort standard. There is only $60,000 in our sinking fund. Are these actions considered unreasonable?

Our committee has decided upon a series of improvements to our strata scheme. When a chosen contractor could not start by a desired date, they called an EGM to rescind the motion/quotes and supply a new one with extra work included. This included unnecessary items, such as a new decorative coating of all 3 pools and a new water slide, not just repairs to the main pool only. Some committee (6 out of 7 are letting investors) and have stated their wish for the building to appear to be a 4 star resort standard.

These unnecessary upgrades come at a time when a new roof to our 5 storey 220 lot building is essential and a great deal of neglected maintenance and replacement of plant is required. One lift is not working and we have an old leaking hot water system.

As only $60,000 is left in our sinking fund the loan obtained for the extra work will have to be paid back by owners. Owners were not advised of the future funding needs. 

Are these actions considered unreasonable and could committee members be held personally responsible for making unreasonable decisions? 

Answer: A committee has an obligation to put into effect the decisions of the body corporate. However, if that motion is successfully revoked, the committee will not have failed to meet that obligation.

This raises a few separate issues:

Implementation and revocation of a decision

A committee has an obligation to put into effect the decisions of the body corporate. However, if that motion is successfully revoked, the committee will not have failed to meet that obligation.

If there are genuine issues with what was approved by the owners at general meeting (i.e. the scope of work falls short of the work that is required) then I do not see an adjudicator making any adverse finding against the committee. However, if the additional works amount to an improvement or works that are not required as a consequence of the body corporate’s maintenance obligations, I would suspect that the committee may be getting close to crossing the line to being required to implement the body corporate’s decisions if:

1. the new general meeting does not go their way; and
2. they refuse to take the appropriate action to implement the body corporate’s decision on the second round.

Budgeting

It sounds like there is a great deal of maintenance required that has not been properly budgeted for. The body corporate needs to ensure that:

1. It is maintaining all common property in good condition – irrespective of the cost; and
2. Any spending is properly authorised and budgeted for.

If there is insufficient budgeting then there would be no other option but to increase the levies on owners or obtain loans.

Upgrades to the scheme

There is nothing inherently wrong with a committee wanting to improve the overall standards of the scheme. But it can only do so with the endorsement of owners with the correct approvals and funding when required from general meeting.

Committee liability

Committee members can be held personally liable for their actions, but only if their actions are not in good faith and without negligence. This is a very difficult threshold to meet and the actions taken do not appear to be in that vicinity. Even then, there is ordinarily insurance coverage provided to the committee members.

Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753

This post appears in Strata News #429.

Question: A body corporate decision to install separate water meters has been on hold due to other expenses. Now we are ready to proceed and one body corporate member has changed their mind. Can the motion be overturned?

In 2017, our body corporate voted unanimously on installing separate water meters in our small complex. This was confirmed again in the Minutes in 2018.

We have been waiting on funds to cover the cost of installation as other non-related maintenance came up.

We have been advised that there are finally enough funds to go ahead with the installation of the separate meters and the plumber is still honouring his 2017 quote.

However, one of the body corporate members has now changed her mind and no longer wants this to proceed because she feels it’s a waste of money.

Can a body corporate member who voted on the installation in 2017 then again in 2018 change there mind? The original decision is noted in both minutes.

Can this confirmed Motion be overturned? And if so, how?

Answer: The legislation deliberately makes it hard to challenge a resolution.

A Body Corporate must implement its decisions.

If an owner changes their mind about a Body Corporate resolution they can seek to have the resolution overturned by proposing a motion for the owners consideration at the next scheduled general meeting. An earlier meeting can be held if the owner persuades the committee to call a general meeting, or if the owner can gather the written support of 25% of the owners to compel a general meeting to be held.

If an owner believes a decision is invalid then they can seek to challenge the decision through the Commissioner’s office, provided that the adjudication application is made within 3 months of the decision (unless there is a good reason for the delay).

The legislation deliberately makes it hard to challenge a resolution so as to give the Body Corporate certainty about its decisions because otherwise nothing would ever be achieved.

Peter Hunt
E: [email protected]
W: Mathews Hunt Legal

This post appears in Strata News #324.

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