Question: Our small scheme is facing an urgent repair with an inadequate sinking fund, and our body corporate manager has left the committee to manage it alone. Shouldn’t the manager have advised us along the way?
We are a small lot community titles scheme (format plan) facing an urgent repair to a retaining wall and fences. The committee organised quotes and approved a company to complete the work. Beyond a couple of emails, our body corporate manager (BCM) has left us on our own despite our requests for help, as we don’t feel we have sufficient knowledge. Dealing with adjoining owners, their agents and bodies corporate, along with short-life quotes, has been incredibly stressful for our treasurer and chairperson. The BCM said they could get involved in correspondence, but there would be a cost.
Over many years, we’ve had sinking fund reviews conducted by BCM-recommended companies and approved budgets that included those recommendations. Despite this, we now find ourselves in a significant deficit, requiring a special levy on all four owners. Recent cost increases have left us with an inadequate sinking fund. Should the BCM have advised us of our financial situation?
In addition, the recent changes to pet ownership have left us with outdated by-laws. Should our manager have kept us up to date with these changes?
Answer: A body corporate manager provides only the services in their contract, is not a decision-maker, and is unregulated in Queensland, so expectations of proactive advice often exceed the reality.
We’re not 100% clear on the issues about the fence. That said, your query seems to be more about the role of your body corporate manager (BCM), so we’ll focus on that.
It’s essential to keep in mind at the outset that a BCM is engaged under a contract to provide specified services. We know the role of a BCM is often misunderstood, with expectations that they’ll do something when, in fact, that’s not their role, or they’re not contracted to provide it. Also essential: BCMs are not regulated in QLD, which means the way in which they carry out their role can vary greatly. The final, essential comment about BCMs is that, despite anything in their contract or anyone’s expectations of them, they are not decision-makers and cannot compel an owner or committee to do something. Decisions are made by the committee or by all owners at a general meeting.
In your case, it appears your BCM is not providing an advisory-type role. Some BCMs do play that kind of role, and if that’s what you and your fellow owners want, you might want to start asking around to find a BCM that better aligns with your needs. On the issue of the sinking fund, we would typically expect a BCM to play a role in monitoring, forecasting and then recommending adjustments to the sinking fund. However, again, not every BCM does things the same way. And given that it is ultimately the owners who vote on budgets at a general meeting, is it fair to suggest that owners need to take a more active role in the finances?
Similarly, with your query about pet by-laws, yes, one would hope and like for the BCM to keep you updated on that, although that’s not necessarily their role. In Queensland, the Commissioner’s Office has a statutory role to provide information.
What your query highlights for us is the sometimes-vast discrepancy between the ideal of a BCM and the reality. Until there are mandated qualification benchmarks for BCMs, along with other things such as compulsory (and meaningful) continuing professional development, a ‘good character’ test, tangible consequences for poor performance, and standard contract terms, that discrepancy will likely remain. Owners and committees need to be clear-minded and realistic about what their BCM does and work with the BCM to achieve the optimal outcome, or, as noted above, find a BCM that will.
This is general information only and not legal advice.
This post appears in Strata News #800.
Chris Irons Strata Solve E: chris@stratasolve.com.au P: 0419 805 898
