Question: Do we need more than one quote for a strata loan?
My Body Corporate needs a loan of over one hundred thousand dollars to repaint the roofs. How many quotes do we need to obtain for the strata loan to carry out this work? They obtained three quotes for the physical painting but only one quote for the strata loan.
Answer: I could see an argument that a loan could amount to the acquisition of personal services necessitating a second quotation.
The relevant limit for major spending is the threshold as to when at least two quotations need to be considered. Ordinarily, this will kick in at a cost of more than $10,000, but this will depend on the number of lots in the scheme and if the body corporate has previously changed the threshold at a general meeting. It will also only apply if a second proposal is capable of being obtained.
The threshold applies to motions that propose:
the carrying out of work or the acquisition of personal property or services.
Approving a loan is not the carrying out of work or acquiring personal property. However, I could see an argument that a loan (with an interest component of more than the relevant limit for major spending) could amount to the acquisition of personal services necessitating a second quotation – but this argument may be novel. Notably, it was not an issue that the adjudicators considered in Waimana Gardens [2003] QBCCMCmr 168 or Allen Court [2007] QBCCMCmr 296.
This post appears in Strata News #644.
Todd Garsden Mahoneys E: tgarsden@mahoneys.com.au P: 07 3007 3753