Question: Can a committee fix and levy an insurance contribution based on an old EGM motion, without a further AGM or EGM?
At an extraordinary general meeting, the developer, acting as the body corporate, passed a motion authorising the committee to obtain insurance quotes and issue an insurance levy contribution to owners once the premium amount was known, apportioned in accordance with the interest schedule lot entitlements under section 201 of the Body Corporate and Community Management (Standard Module) Regulation 2020.
Our committee has adopted the interpretation that this motion authorises it to seek quotes, approve a quote and then levy owners without the need for a further AGM or EGM. Our body corporate manager refuses, stating that, by law, we need an AGM to approve a levy. Who is correct?
Answer: The committee can procure quotes and put insurance in place, but generally can’t fix the actual contribution amount without an AGM or EGM to approve it.
Generally, the committee is authorised under section 172 of the Body Corporate and Community Management (Standard Module) Regulation 2020 to:
- procure quotations for policies of insurance; and
- put in place certain policies of insurance.
A motion cannot, however, authorise the committee to fix contributions in relation to the premium for an insurance policy where the amount of the premium was unknown at the time the motion was considered.
Under section 162, the committee may fix an interim contribution before adopting the administrative fund budget for the next financial year where the premium payable was accounted for in the administrative fund budget. However, where the premium payable was not accounted for in the administrative fund budget, the body corporate will be required to call an extraordinary general meeting to fix a special contribution in this regard.
This post appears in Strata News #811.
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