Question: We arranged artwork on behalf of the committee. We’ve been asked to pay the deposit and seek reimbursement from the committee. Is this usual?
We have secured a quote for new artwork on behalf of our committee. The company required a 50% deposit before releasing the artwork. Our committee requested that we pay the deposit on our credit card and submit a request for reimbursement. We will be paid within 2 weeks, and then the following month, we can claim the credit card interest on the transaction. Is this the usual procedure?
Answer: The process is usually smooth as long as there is a clear chain of authority to undertake the expense and authorisation to reimburse the cost.
This sounds a bit convoluted. The fact that you are asking questions about the process indicates the process isn’t clear, which is usually the start of a problem.
That said, it is fairly common for committee members to undertake some expenditure on behalf of the body corporate and then be reimbursed.
Body corporate companies are usually ably set up to make payments after the fact, but some expenses need to be paid on the spot. The easiest way to do that is often for a committee member to make the payment and claim the reimbursement. The process is usually smooth as long as there is a clear chain of authority to undertake the expense and authorisation to reimburse the cost. If the expenses are regular, many body corporates also pass a motion to give a committee member an expenditure limit so they don’t have to keep seeking approval for regular minor expenses.
That’s fine if there is a clear system and people are comfortable with it. Here, the system doesn’t seem clear, and you are adding complications like reimbursement for interest on a credit card payment. You indicate that it is a deposit for artwork. Is it possible to get an invoice and have the body corporate pay for it? Maybe not if you are buying from a shop, but if you make a payment and submit the invoice the same day to the body corporate it should still be possible to make a reimbursement payment to you within a week or so – two at the outside, so I’m not too sure how interest gets factored in. And, if your body corporate company can’t arrange a payment in that time, it is operating inefficiently, and you might want to ask why.
Ultimately, if you can work with the committee and agree to a clear process for reimbursement that everyone is happy with, that’s fine. Be careful of making agreements or payments when that isn’t the case, as you could be heading for a dispute.
This post appears in the March 2025 edition of The QLD Strata Magazine.
William Marquand
Tower Body Corporate
E: willmarquand@towerbodycorporate.com.au
P: 07 5609 4924
One of our committee member’s currently takes care of putting out, bringing in and cleaning all wheelie bins for our large townhouse complex. They currently do this voluntarily. We have looked at outsourcing this work as it seems unfair to expect someone to do this for free, but it is quite expensive considering the time required. Is there anyway we can pay the committee member to do this, which would be considerably less expensive as they do not have travel time, without the need for them to resign their position from the committee?
Could Caretaker send seasonal gift cards to the Committee members just to say thanks for their efforts? For example, gift cards less than $400. Is this allowed?
Hi Liz
The following response has been provided by Chris Irons, Strata Solve:
There may be an issue here with s113 of the Body Corporate and Community Management Act 1997, namely this provision:
(1)The body corporate for a community titles scheme must not seek or accept the payment of an amount, or the conferral of a benefit, for—
(a)the engagement of a person as a service contractor for the scheme (including a replacement or renewal of an engagement of the person as a service contractor); or
(b)the authorisation of a person as a letting agent for the scheme (including a replacement or renewal of an authorisation of the person as a letting agent); or
(c)extending the term of—
(i)an engagement of a person as a service contractor for the scheme; or
(ii)an authorisation of a person as a letting agent for the scheme.
A ‘benefit’ here could mean a gift card and it could be argued that a committee member’s acceptance of same was indicative of the body corporate accepting a benefit for the engagement, or extending the term, of the caretaker.
As well, there are restrictions on paying committee members under legislation. Could it be argued that providing gift cards was giving the committee member ‘remuneration, allowances or expenses’ as per s53 of the Standard Module?
There is also an issue of optics here. How might your scenario look to non-committee members? Would they think the caretaker was favouring committee members over other owners? Does it create an expectation of what the committee member might do in future, in relation to the caretaker?
While all of the above might be drawing long bows, I think there’s enough there to suggest that the caretaker’s sending of gift cards, even though done with good intentions, might be an issue.
The BC has reimbursed to the secretary for annual organizer plan on GoToMeeting hold there committee meetings, general meetings and informal committee meetings, that are not transparent to owners/. Sums included fees for payment by credit card as well. One general meeting and two committee meetings were hold online remotely, cost more that $600.
Can that all expence be paid by the secretary by her card?
There are months with no general meeting or commitee meetings, but the payment of the annual plan includes these months.
How to deal with more issues, when the committee may approve expense for $50.00 for attendace of the committee meeting, max. $300.00 in 12 months. But annual plan is not attendance. How to solve it?
Hi,
As a first step you can contact the body corporate secretary/manager and ask to see a record of expenses and inquire as to why they have been incurred. there may be a straightforward explanation.
It’s not quite clear from the description but it seems the Secretary has set up an account to facilitate online meetings. That may be a reasonable expense that was approved by the committee within their spending limit. Online meetings are to be encouraged and they have to be held on one platform or another for which there is usually an annual fee of some kind. Owners may have voted to have the capacity to have online meetings and may want the access. If the Committee has facilitated that what’s the problem? It’s also reasonable for the committee to use the platform for any informal discussions it may want – there is no real difference between that and people sharing emails or phone calls.
There may be some confusion here over expenses paid to a committee member. This is referenced in the last paragraph and is covered under by sections 52 and 53 of the standard module:
https://www.legislation.qld.gov.au/view/html/inforce/current/sl-2020-0233#ch.3-pt.3
However, this doesn’t seem like a payment to a committee member but a reimbursement of an expense. Maybe it should have been paid direct from the body corporate accounts but if a credit card was required this may have been the simplest way to arrange the facility.
Due to resignation of our live in managers, we want to pay a member of the body corporate committee to do caretaker/office work. Is this allowed
Hi Julia
The following response has been received from Frank Higginson:
Absolutely – you just have to then be careful about whether that person remains on the committee and the potential for conflicts of interest in any decision making about that.