QLD: Need for speed with owner rights. Use it or lose it

Three things to know:

1. Identifying a potential problem early will optimise the chance of success in challenging anything
2. Specified timeframes for lodging objections and appeals must be followed
3. Early legal advice can protect your rights

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Use it or lose it

One of the problems we often see in strata is when people respond to an issue too late, and lose their rights in the delay.

In a body corporate context, what normally happens when you’ve got an issue is that it gestates over a period of time, and particularly around things like general meetings.

If there’s a dispute in relation to what is going to happen at a general meeting, a lot owner has at least 21 days’ notice before the meeting to understand and seek advice about the issue. They have three months after the meeting to bring whatever proceeding they need to bring to contest what happened.

If a lot owner has an objection and they don’t get on the front foot quickly enough, they can lose what would otherwise have been a winnable case.

A recent example

A recent adjudication from the Queensland Body Corporate and Community Management Commissioner’s Office involved the renovation of common property.

A lot owner raised questions about spending limits and the type of resolution which was put to a general meeting – whether it needed to be an ordinary resolution because it was maintenance, or whether it needed to be a special resolution because it was an improvement. There were also questions about spending limits being breached.

All of these issues were well and truly apparent on the meeting agenda.

In this case, the motions were passed, potentially by the wrong level of authority, and the body corporate committee immediately signed the contracts that those motions had authorised.

When the general meeting decision was contested by the lot owner who went to the Commissioner’s Office seeking an interim order to stop work going any further, the adjudicator denied that on the basis that the contracts had already been signed.

At that stage, the adjudicator had to balance what was technically correct against what the commercial consequences for the body corporate would be if it stopped the work or put the body corporate in breach of the contract that it had signed with the builder.

What this means for you

The lesson here is that there was plenty of time to stop the committee from undertaking the work by acting before the meeting itself. Seeking an interim order to prevent motions being given effect, pending the outcome of a decision over the lawfulness of the motions in due course, is a well-worn path in adjudication.

When you have doubts about what a meeting is voting on, you need to move quickly.

To quote John Howard: be alert, not alarmed. Know what’s going on, and if you need to take legal steps, make sure you do them as soon as you practically can because otherwise you might lose some rights.

The adjudicator’s report detailing the above-mentioned case can be found here.

Frank Higginson
Redchip Strata Law
E: FrankH@redchip.com.au
P: 07 3193 0500

This post appears in Strata News #784.

This article has been republished with permission from the author and first appeared on the Redchip Strata Law website.