QLD: Q&A Body Corporate Decision Making

This Q&A is about body corporate decision making in QLD.

Table of Contents:

• 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: 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: 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.”

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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