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