Question: Can the committee extend our energy supply contract of $24,000 pa for another year without owner approval?
Our body corporate spending limit is $15,909 + GST. Our three year energy supply contract expires soon. The contract’s average cost is $24,000 per annum. Two BCMs from different companies have advised the committee they can authorise an extension to the contract for no more than 12 months without owner approval. Can you please advise?
Answer: General meeting approval is needed if the decision of the committee is to engage a contractor for more than 12 months or if the cost is more than the spending limit.
If the extension is already contemplated within the existing contract and is exercisable by the electricity provider, I can see how the conclusion can be drawn that this is within the power of the committee.
If it is a new agreement or a decision by the committee to extend, then it would seemingly require general meeting approval. General meeting approval is needed if the decision of the committee is to engage a contractor for more than 12 months or if the cost is more than the spending limit.
This post appears in the May 2024 edition of The QLD Strata Magazine.
Todd Garsden Mahoneys E: tgarsden@mahoneys.com.au P: 07 3007 3753