Lot owners from QLD are wondering about body corporate spending. Todd Garsden and Frank Higginson, Hynes Legal provides the following response.
Question: Our Body Corporate Committee claims reimbursements for body corporate spending directly from the Body Corporate Manager. Are the expenses valid and have the committee members been following correct approval process?
Our Body Corporate committee does not attend formal committee meetings but holds meetings via online platforms. However, they repeatedly claim out of pocket expenses in relation to these meetings. As well as expenses for software, they also claim fax and phone expenses.
The claimed the expenses directly through the Body Corporate Manager. Unfortunately, any approval of the owners have not been at general meetings in previous years.
I’d like to know if the expenses are valid, and are if so if they are following the correct procedure for approval and reimbursement.
Answer: Any of the claimed costs actually need to be incurred and it needs to be related to attending the meeting.
Committee member expenses need general meeting approval unless it is reimbursement of expenses in attending a meeting of no more than:
- $50 per meeting; and
- $300 in 12 months.
This is reimbursement though, so that means any of the claimed costs actually need to be incurred and it needs to be related to attending the meeting.
Perhaps the first step is to write to the committee asking them to justify it fits within these parameters.
This post appears in Strata News #242.
Question: A casual conversation between lot owners has been taken as approval to carry out improvements although the required body corporate spending process was not adhered to. Costs have blown out. Who is responsible for the overspend?
I am part of a 7 lot Standard Regulation Module.
Our body corporate comprises a 2 gate entry 7 acreage lot property with about 1000 meters of combined common property bitumen road, lights and 2 security gate access.
One of our lot owner neighbours wanted to improve/upgrade the lights which had not been working for years.
At a community BBQ a couple of years ago they showed some printed copies of a web page with some pictures of sample lights as we were about to leave. I think general comments were they looked OK and interesting, especially as 7 individual light posts cost $225 each and light bollards cost $30 each. We thought that it would be a simple job to just replace the existing broken lights with new ones and fix any associated electrical connections.
From that point on two of the lot owners seemed to take that as an approval to go ahead with the improvement.
There was no committee meeting or minutes to approve.
We saw no quotes to do the job and there was no formal committee meeting to discuss the details of the proposal. One of the two lot owners is a landscaper who was doing the earthworks etc and employed an electrical company he used in his business which I personally think is a conflict of interest.
Since the job has been done we still do not have any working light system except for 3 bunker lights on 1 entry gate that are lit all night long.
We do not have any working lights on our side.
The main concern that I have is that this project has ballooned out to over $11000 from an initial cost of parts being $1575.
I feel the community was duped by these 2 lot owners who have left us in a precarious financial situation where we are no better off than before they started this mess.
Our common property roads are a much higher and very much more costly priority and our funds should be accumulating to address the maintenance of these roads which is looming on the horizon.
Do we have any redress in this matter and are there any avenues for the body corporate community to get any compensation. I believe this has been gross financial mismanagement of the communities funds.
Answer: Any concerned owners should seek to be put on the committee so that any future decisions can be managed with their input.
It would be very difficult to sheet those costs home to the individual committee members and it is probably going to be something that the body corporate bears the costs of. That being said, any decisions should be authorised by the body corporate so what should happen is that all the decisions and spending is sought to be confirmed at a general meeting.
Any concerned owners should seek to be put on the committee so that any future decisions can be managed with their input (of lack of decisions stopped).
This post appears in Strata News #230.
Question: Our body corporate is considering buying a defibrillator in case any of the owners, guests etc have a heart attack. Is this appropriate body corporate spending?
Our body corporate is considering buying a defibrillator in case any of the owners, guests etc have a heart attack.
Putting aside the question of how much it costs, who is going to use it, professional indemnity insurance for ‘Good Samaritan’ conduct, etc, is this appropriate body corporate spending … or is it just a more sophisticated type of Emergency First Aid material required for any workplace?
Answer: In theory, there is no reason why a body corporate couldn’t have as many lifesaving devices around the complex as it wanted too.
In theory, there is no reason why a body corporate couldn’t have as many lifesaving devices around the complex as it wanted too. It could even go and get Baywatch style towers, floaters and the like if it felt like it.
The only issue my end would be the qualifications / training to use them. If there is a defibrillator on the wall the minimum that should be beside it is a warning about being trained to use it or some very clear instructions on how to do it. I don’t know how hard one is to use, and Google would probably help, but if someone is having a heart attack in front of you, there probably isn’t the time to ask Siri and take it all in. then there is the issue of whether it is the right time to use it and whether the person on the receiving end has some condition or implant which might mean they should not be used.
Imagine if it was used on someone who didn’t need it or could not survive the use of it (if that condition exists)?
I think asking a trained paramedic and then the body corporate’s insurer would be the place to start about whether one should be ‘freely’ available to all and sundry.
This post appears in Strata News #178.
- QLD: Body corporate spending limits – What are they and when do they apply?
- NSW: Q&A Capital Works Expenses. What to do about the Overspends?
- Spending limits in a body corporate
- Automated External Defibrillators: (AED) in the community – a FactSheet by SA Ambulance Service (SAAS)
What is your experience with body corporate spending in your scheme? Are the required approvals adhered to? Have a question or something to add to the article? Leave a comment below.