Risk in a body corporate context is rarely where people expect it to be. That was the central message from Frank Higginson, partner and strata lawyer at Redchip Strata Law, during a recent LookUpStrata Queensland webinar. Frank didn’t present theory. He presented war stories — real cases from his desk that show exactly what happens when risk goes unmanaged, unacknowledged, or quietly passes to someone else.
It’s not me. It must be you.
Most body corporate disputes that reach a lawyer’s desk were not created recently. Their client has made a decision months or years earlier that may only now have come home to roost, like a contract signed without scrutiny, a deferred repair, or a budget shortcut.
Frank’s seen committee members, owners, resident managers, and body corporate managers all point at everyone else. When the dust settles, responsibility can land with the committee. They are the custodians of the common property, and that does not disappear because others were in the room.
Insurance protects you less than you think if you’re doing it wrong.
Bodies corporate are legally required to insure common property for full replacement value. In some parts of Queensland, particularly North Queensland, it’s become genuinely difficult and expensive to get that level of cover. Frank acknowledged that some committees have little choice but to accept a lower level of coverage.
This risk problem isn’t always underinsurance itself, but what happens next. The committee can’t skip the correct process. They must apply to the Commissioner’s office for approval and formally notify owners, otherwise, they absorb that risk.
All owners have a right to know. A committee that quietly accepts underinsurance without disclosure is not protecting anyone. It is deciding, on everyone else’s behalf, to carry a risk those owners may not even be aware of.
The contracts you sign define your exposure.
Frank walked through a real case involving a service contract with a liability cap significantly below the potential exposure of the work being done. The body corporate nearly signed it unchanged. Legal review identified the risk. They went back to market, found a different provider, and avoided a potential six-figure problem.
The same principle applies to major works. Committees must obtain two quotes for expenditure above a certain threshold. Skipping this step, even when getting a second quote is genuinely difficult, creates a window for any owner to challenge the decision at the Commissioner’s office for up to three months after the meeting. Frank has seen projects delayed by months, and costs blow out significantly as a result.
Your body corporate should never ignore the simplest solution.
Frank’s closing message was about red flag awareness. Not every risk can be anticipated. But many of the cases he described could have been avoided by asking one question earlier: should we get some advice about this?
- For committees: that means pausing before signing, before approving, before proceeding.
- For strata managers: that means documenting concerns in writing and asking committees to confirm instructions for actions they have advised the committee against.
These tips will not prevent every problem, but they can help shift who bears the risks when something goes wrong.
This post appears in Strata News #791.
Frank Higginson
Redchip Strata Law
E: FrankH@redchip.com.au
P: 07 3193 0500
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