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: 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?

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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
Mathews Hunt Legal
E: [email protected]

This post appears in Strata News #324.

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