Question: Can a body corporate use body corporate funds to paint areas that lot owners are responsible for?
In Queensland, can a body corporate use body corporate funds to paint the walls and soffits of balconies, patios, or courtyards that form part of a lot or exclusive use areas, which the owner is required to maintain in good condition under the exclusive use bylaw? If not, is the body corporate allowed to include the cost of this private painting in the lot owner’s annual levies, for example, through the sinking fund?
Answer: In any circumstance, the body corporate shouldn’t pay for lot owner’s maintenance obligations.
The body corporate can use body corporate funds to paint items that lot owners are responsible for, but only under two particular circumstances. Both of those circumstances involve recovering those costs from the lot owner.
The first example is when you’ve got a big painting project. The body corporate wants to ensure that everything within the building is painted, including items that fall under the body corporate’s responsibility and those that fall under the lot owner’s responsibility.
What should happen? A service agreement is entered into between the body corporate and each lot owner, whereby the body corporate is engaged to procure the works on their behalf. There are several reasons why that makes sense. Getting one contractor to do the whole building in one go is going to be a lot cheaper than every lot owner engaging a painter. Works will be at different standards, and this will not happen simultaneously. It’s a good idea for those practical reasons.
When you do that, the legislation says that the body corporate must recover the costs from the lot owner that relates to the work carried out on the lot. Ultimately, it shouldn’t be funded by the body corporate. The lot owner should fund it.
In terms of budgeting for this, the body corporate will initially pay the funds but will recover that from the lot owner. It wouldn’t make sense to budget for it as part of the levies and then recover it from the lot owners. You’d have to make an adjustment. There should probably be a separate line item on the income statement that says owner recoveries for painting works, and then it will have an equivalent outflow of the expenses for those elements of the contract paid for the lot owner work.
The second circumstance is when the lot owner refuses to carry out the painting works, and the body corporate does it on the owner’s behalf, then they recover the cost and sue the owner for that work.
In any circumstance, the body corporate shouldn’t pay for lot owner’s maintenance obligations. The principle also applies to a standard format plan with front yards that are part of the lot. Those costs must be recovered from the lot owners.
There is a recent decision that discusses this principle, which I like to refer to in Waves [2024] QBCCMCmr 269.
Todd Garsden Mahoneys E: tgarsden@mahoneys.com.au P: 07 3007 3753