Lot owners from QLD are questioning the approval required for payment to committee members, specifically the chairman. Frank Higginson from Hynes Legal provide the following responses.
Jump directly to the QUESTION you are after:
- QUESTION: We have all agreed to pay our chairman an amount per month. To proceed, what process are we required to follow for approval of payment to committee members on our body corporate committee?
- QUESTION: Can a lot owner be both the caretaker and the Chairman? Is this a strata executive committee conflict of interest?
Question: We have all agreed to pay our chairman an amount per month. To proceed, what process are we required to follow for approval of payment to committee members on our body corporate committee?
Our Chairman does a lot of “time” work (not manual work). He coordinates contractors who have to come to the complex and spends considerable time getting quotes and then following up the contractors.
At a committee meeting held in February 2017, it was agreed by those present that an amount of $40 per month is paid to the chairman. The minutes of the meeting were circulated to all unitholders and they were asked to agree or disagree. It was passed without dissent.
Now that the Chairman has asked to be paid, one member of the committee is now making it difficult to make the payment, even though everyone agrees. It has been suggested that we hold an EGM and confirm the payment. Even though it is in the Financial year, the allowance is in the money held.
This is to save us considerable money. The alternative is to pay the Body Corporate Manager and the cost would be much greater.
Are you able to offer us a way forward? The Chairman has spent considerable time on the Body corporate, including negotiating our way out of a poor Body Corporate Manager.
It seems to me, as all unitholders agree, surely it should be able to be paid and not considered illegal.
Answer: Payment to committee members for work needs general meeting approval
Section 43 of the Standard Module relevantly provides that payment to a committee member for work needs general meeting approval and full disclosure of the payment.
The committee can’t approve it.
Question: Can a lot owner be both the caretaker and the Chairman? Is this a strata executive committee conflict of interest?
One of our lot owners has been appointed as a caretaker at the AGM each year (for the past 3 years) for a 12 month period, with an annual remuneration approved. The caretaker carries out tasks such as gardening, pool cleaning and rubbish removal etc on a weekly basis. They have a position description and a list of duties to be performed.
Can this lot owner also be the Chairperson of the committee? I feel this is a strata executive committee conflict of interest.
Answer: Conflict only relates to the discussion around the issues the person has an interest in.
To me, the conflict only relates to the discussion around the issues the person has an interest in. If the committee wants to discuss alternatives to the current services the person should declare an interest and leave the meeting. Otherwise, they can participate.
The prohibition on service contractors being a voting member of the committee only applies if the tenure is more than 12 months. If it is renewed annually, they can be on the committee.
This post appears in Strata News #171.
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Do you pay committee members on your body corporate committee? If you have a question or something to add to the article, please leave a comment below.