QLD: Q&A Body Corporate Decision Making

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

Table of Contents:

• 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 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.

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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