This article discusses the impact of an unfinancial committee member election, including how different types of debt affect eligibility and whether past committee decisions remain valid.
Question: If a committee member was elected while unfinancial due to ‘sundry debt’, what effect does this have on any decisions during that time?
Two of the three executive committee members re-election in 2020 had a Sundry Debt to the Body Corporate, making them unfinancial at the time of the AGM.
As their election should have been made invalid, what effect, if any, does this have on any motion votings during the year that they as treasurer and secretary participated in?
Answer: The existence of a “Body Corporate Debt” is what makes a committee member ineligible.
It is important to determine what type of debt the “sundry debt” is. The existence of a “Body Corporate Debt” is what makes a committee member ineligible. Body Corporate Debt is defined to mean one of the following amounts owed by a lot
owner to the body corporate—
- a contribution or an instalment of a contribution;
- a penalty for not paying a contribution or an instalment of a contribution by the date for payment;
- another amount associated with the ownership of a lot.
Given the debt is being referred to as a “sundry debt” I presume (a) and (b) of the above are not applicable. (c) has been given a limited interpretation by adjudicators as it must relate to the ownership of the lot.
For example, if the sundry debt is related to payment for an exclusive use right, then the sundry debt would impact on the committee member’s eligibility. However, if it were related to something unrelated to the ownership of the lot, such as the recovery of damages to the common property, then it would not have any impact on the owner’s eligibility.
This post appears in Strata News #531.
Todd Garsden
Mahoneys
E: tgarsden@mahoneys.com.au
P: 07 3007 3753
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