This article is about body corporate decision making has been supplied by the Commissioner for Body Corporate and Community Management.
Community living requires a body corporate to make formal decisions to ensure the smooth day-to-day running of the complex.
However, it is not always clear whether a body corporate decision should be made by the committee or by owners at a general meeting.
There is a common misconception that if a by-law or a provision of the legislation refers to a body corporate decision, a general meeting vote of the owners is automatically required.
However, many of these decisions can simply be made by the committee – the body corporate’s elected representatives.
This article clarifies the committee’s integral role as a body corporate decision-maker.
General meeting decisions
Some body corporate decisions must be made by the owners at a general meeting – namely, at an annual general meeting (AGM) or an extraordinary general meeting (EGM).
Various general meeting resolution types exist under the legislation. For each of the resolution types listed below, there is a different method of counting votes to determine if a motion passes or fails:
- ordinary resolution
- special resolution
- resolution without dissent
- majority resolution.
When the legislation specifies a general meeting resolution type, it is clear what is required to decide an issue.
However, when no resolution type is specified, or an issue to be considered by the body corporate is not covered under the legislation or the by-laws, the process for decision-making can be unclear.
When no resolution type is specified, a decision can normally be made by:
- an ordinary resolution
- at a general meeting; or
- a committee resolution (if it is not a restricted issue for the committee).
Restricted issues for the committee
While the committee is empowered to make many decisions on behalf of the body corporate, certain issues fall outside the scope of their decision-making power – these are called ‘restricted issues.’
The Standard Module and the Accommodation Module specify that the committee cannot:
- set or change a body corporate levy
- make decisions which change the rights, privileges or obligations of owners
- make decisions that must be decided by one of the general meeting resolution types (as discussed above)
- start a legal proceeding, unless it is:
- to recover a liquidated debt against an owner (debts with a clearly defined amount such as levies or interest)
- related to a proceeding where the body corporate is already a party
- for an offence under the by-law contravention provisions of the Body Corporate and Community Management Act 1997 (the Act)
- a proceeding under chapter 6 of the Act (including for the enforcement of an adjudicator’s order)
- pay remuneration, allowances, or expenses to a committee member unless it is for:
- reimbursement of expenses of no more than $50 incurred in attending a committee meeting; and
- the reimbursement would not result in more than $300 being reimbursed to the member in a 12-month period for this purpose.
While mostly the same as the Standard Module and the Accommodation Module, restricted issues for the committee differ slightly under the Commercial Module and the Small Schemes Module.
Starting legal proceedings
The type of legal proceeding a body corporate wants to initiate will determine how the decision is made.
The committee cannot start legal proceedings unless it falls into one of the exceptions listed above – these exceptions are called ‘prescribed proceedings’ under the Act.
Normally, proceedings (other than prescribed proceedings) must be decided by special resolution at a general meeting.
According to section 312 of the Act and the restricted issues provisions in the modules, an appeal against an adjudicator’s order is the only prescribed proceeding that cannot be decided by the committee. As such, a general meeting vote by ordinary resolution is required to lodge an appeal.
Paying committee members
Most body corporate committee members are volunteers who are not paid for their services.
As highlighted earlier, the committee cannot vote to pay a committee member unless the payment falls within the specified exception about expenses incurred in attending a committee meeting.
Any other remuneration, allowances or expenses paid to a committee member must be approved by ordinary resolution at a general meeting.
There is no equivalent restriction on paying committee members under the Commercial Module.
Power of the committee to make decisions for the body corporate
The committee’s role as a decision-maker is vital to the administrative and day-to-day running of the body corporate.
Given the time and expense often involved in organising a general meeting – especially in larger bodies corporate – it would be impractical for every decision to be made at a general meeting.
According to section 100 of the Act, a committee decision is a body corporate decision unless it is a restricted issue.
Also, in section 94(2) of the Act, a resolution made at a committee meeting is listed as an example of a body corporate decision.
Consequently, if a by-law or a provision in the legislation simply refers to a body corporate decision, or an issue is not covered under the legislation or a scheme’s by-laws, the committee has the authority to make the decision – either at a committee meeting or by a vote outside a committee meeting (VOCM) – provided it is not a restricted issue.
When discussing the committee’s role as a body corporate decision-maker, the adjudicator in Hedges 252 [2022] QBCCMCmr 457 referred to the Queensland Civil and Administrative Tribunal (QCAT) appeal of Carroll and Ors v Body Corporate for Palm Springs Residences CTS 29467 [2013] QCATA 21 in which it was observed that: “as between the committee and the body corporate, the general rule is that the committee is for most purposes the agent, or alter ego of the body corporate.”
Examples of committee decisions as the body corporate
Some common examples are outlined below to help illustrate the committee’s power to make decisions for the body corporate.
Example 1: improvements to common property by a lot owner
The legislation provides that the body corporate can authorise an owner’s improvement to the common property for the benefit of their lot if:
- the total cost is $3000 or less; and
- the improvement does not detract from the appearance of any lot or common property; and
- the body corporate is satisfied that the use and enjoyment of the improvement is not likely to be a breach of the owner’s duties as an occupier (such as causing a nuisance).
However, an owner’s improvement must be authorised by ordinary resolution at a general meeting if any of the points above are not satisfied.
The distinction between body corporate approval on the one hand, and approval by ordinary resolution on the other, indicates that committee approval is sufficient for an owner’s improvement that meets the relevant criteria.
The regulations for owner improvements to common property differ under the Commercial Module.
Example 2: improvements in an exclusive use area
Unless a body corporate’s exclusive use by-law states differently:
- an owner can only make an improvement to their exclusive use area if it is authorised by the body corporate; or
- if the cost of the improvement is greater than $3000, it must be authorised by an ordinary resolution.
Again, a distinction is made between body corporate approval (which can be satisfied by a committee resolution) and approval that must be authorised by an ordinary resolution at a general meeting.
Example 3: animal by-laws
Many bodies corporate have a by-law which requires written approval of the body corporate to keep an animal. If there is only a reference to the body corporate in the by-law (and no reference to a general meeting resolution), a committee decision is usually sufficient.
In the matter of Robina Crest [2016] QBCCMCmr 275, the by-law required written approval of the body corporate to keep an animal. The committee refused the applicant’s request to keep a Maltese terrier and suggested that the applicant submit their request to the AGM to be voted on by the owners instead. As several owners did not want animals in the scheme, the committee did not want to make the decision on their behalf.
Rather than submitting a motion to the AGM, the applicant lodged an application disputing the reasonableness of the committee’s decision to refuse the animal.
The adjudicator noted that “the fact that the committee invited the applicant to submit a motion to the AGM does not make the committee’s decision to refuse consent any less unreasonable”.
The adjudicator also observed that although an owner can still submit a motion to a general meeting after the committee has made their decision, “this does not negate the committee’s responsibility to make decisions reasonably on behalf of the body corporate”.
Reserved issues
If there are certain matters that owners do not want the committee to rule on, they can vote by ordinary resolution at a general meeting to make the matter a ‘reserved issue’.
Any reserved issues must be recorded in a register kept by the body corporate. The register must include:
- a description of the issue
- the date of the general meeting decision reserving the issue.
A copy of the register of reserved issues must also be circulated to owners with the notice of the AGM.
We hope that this article has clarified some of the confusion surrounding the committee’s important role as a body corporate decision-maker. In view of the potential impact that certain decisions may have on individuals in a body corporate, it is imperative to understand who has the power to make these decisions. Equipping yourself with this knowledge may help to avoid unnecessary disputes in the future.
Information Service Freecall 1800 060 119 Commissioner for Body Corporate and Community Management
This post appears in Strata News #689.
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This article has been republished with permission from the author and first appeared on the UOAQ website.
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