QLD: Q&A Should a committee member receive a commission for arranging a body corporate loan?

This article discusses body corporate loan commission rules in QLD and whether a committee member can personally receive a commission.

Question: If the treasurer arranges a body corporate loan, should the commission be paid to them personally or to the body corporate?

Our body corporate needs to take out a large loan of around $500,000 to cover unexpected maintenance costs, with repayments to be made through a loan levy. The treasurer introduced the loan to the financial institution and intends to take a rolling commission from the loan over the 20-year term, regardless of whether they remain on the committee.

Should there be a commission? If so, should the body corporate, rather than the committee member, be the introducing party so that the commission is paid into the body corporate account for the full duration of the loan and the benefit of all owners?

Answer: It would seem unusual for the committee member to obtain the benefit of any commission

Chris Irons, Strata Solve:

Your query touches upon several possibly relevant areas.

Let’s remember that a committee is a creature of statute, designed only to do what legislation empowers it to do, and that a committee is obliged by legislation to ‘act reasonably’. Moreover, committee members are only protected from liability to the extent they act in good faith. There are also Code of Conduct provisions that apply to committee members, including those regarding conflicts of interest. Another issue is that a body corporate is not meant to be a commercial enterprise (including making money from a body corporate function).

So in your scenario, we are not sure – to say the least – how the committee member in question has met their obligations with any or all of the above. It’s also not clear from your query the extent to which the committee and the specific committee member have adequately disclosed these arrangements: even if there isn’t an express requirement to disclose these specific instances, one would think owners would like (need?) to know about this.

Liam Boudin, Mahoneys:

While there is nothing in the legislation which requires the body corporate to be the introducing party in relation to a loan, the code of conduct for committee voting members (Code of Conduct) relevantly provides that a committee member must:

1. act in the best interests of the body corporate; and
2. must disclose to the committee any “conflict of interest” the member may have in a matter before the committee.

In circumstances where the loan agreement would be between the lender and the body corporate (rather than the individual committee member or lot owner), it would seem unusual for the committee member to obtain the benefit of any commission. However, this may depend on the terms and conditions of the loan agreement, and it may be reasonable for the body corporate not to approve any loan where it is not the party receiving the commission.

In any event, where the committee member is proposed to take the benefit of a commission under the agreement, the committee member is:

1. not likely to be acting in the best interests of the body corporate if entry into the loan agreement is for their own financial benefit, in breach of the Code; and
2. required to disclose this conflict of interest to the committee for any committee decisions being made (such as agreeing to put a loan motion on the agenda of the general meeting).

In this regard, section 66 of the Body Corporate and Community Management (Standard Module) Regulations 2020 relevantly provides:

1. A member of the committee must disclose to a meeting of the committee the member’s direct or indirect interest in an issue being considered, or about to be considered, by the committee if the interest could conflict with the appropriate performance of the member’s duties regarding the consideration of the issue.
2. If a member required under subsection (1) to disclose an interest in an issue is a voting member, the member is not entitled to vote on a motion involving the issue.

The committee member ought to also ensure that it complies with any obligation to avoid a secret commission being retained, which again is dealt with through disclosure.

Chris Irons
Strata Solve
E: chris@stratasolve.com.au
P: 0419 805 898

Liam Boudin
Mahoneys
E: lboudin@mahoneys.com.au
P: 07 3007 3724

This post appears in the December 2025 edition of The QLD Strata Magazine.

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