QLD: Q&A Can You Vote at Committee Meetings if You Are Unfinancial?

This Q&A article is about whether you can vote if you are unfinancial, a debtor member or in breach of an order.

Table of Contents:

• QUESTION: Can a body corporate committee member who is financially sound for the unit they represent but has one unit with an unpaid levy due to a pending property sale still participate in committee meetings and voting?
• QUESTION: Our body corporate mows the private lawns of some owners. If owners do not reimburse the body corporate, what are the consequences of outstanding body corporate debt?
• QUESTION: A member asked to erect a fence on common property as a child safe play area. The body corporate manager delayed the vote until another member was financial. Is this correct?
• QUESTION: Can an unfinancial committee member sign a legal document?
• QUESTION: We have an unfinancial chairman. What role can this debtor member play in a body corporate committee meeting until such time as he becomes financial again? Can he vote?
• QUESTION: Is our Treasurer (by proxy) eligible to vote at the AGM and still hold their position as Treasurer if they are in breach of an order made by an Adjudicator in the Commissioner’s office?

Question: Can a body corporate committee member who is financially sound for the unit they represent but has one unit with an unpaid levy due to a pending property sale still participate in committee meetings and voting?

A body corporate committee member owns thirteen lots in our body corporate. They have paid the levies for twelve of their lots, but one remains unpaid. This lot is tied up in the settlement of the unit’s sale with the unpaid levy.

The committee member is financial for the unit they represent on the committee. Can they still vote in committee meetings, or is there any issue with them technically being unfinancial for one unit?

Answer: I think they are entitled to vote on the committee.

I think that if they are financial for the other 12 lots, and one of those was the lot they nominated for, they are entitled to vote on the committee.

Frank Higginson
Hynes Legal
E: frank.higginson@hyneslegal.com.au
P: 07 3193 0500

This post appears in the November 2024 edition of The QLD Strata Magazine.

Question: Our body corporate mows the private lawns of some owners. If owners do not reimburse the body corporate, what are the consequences of outstanding body corporate debt?

Our body corporate engages a gardener to mow the common property lawns and some owners’ private lawns.

These owners have signed agreements to reimburse the body corporate, but some owners are very tardy and one has not paid anything for a while, claiming financial hardship. The committee does not like to issue demand notices. Does this debt disentitle the owner from voting at our AGM?

Answer: If you owe the body corporate a debt, many consequences flow from that.

A ‘body corporate debt’ is specifically defined to include other amounts associated with the ownership of the lot and then provides examples, including lawn services arranged by the body corporate for the owner of the lot. If you owe the body corporate a debt, many consequences flow from that, including the inability to:

• nominate people for committee,
• be on the committee or
• exercise votes at general meetings on most motions.

An amount of this nature is therefore akin to non-payment of levies. There are consequences.

Frank Higginson
Hynes Legal
E: frank.higginson@hyneslegal.com.au
P: 07 3193 0500

This post appears in the August 2024 edition of The QLD Strata Magazine.

Question: A member asked to erect a fence on common property as a child safe play area. The body corporate manager delayed the vote until another member was financial. Is this correct?

We have three committee members. Member A asked if they could pay for and erect a fence on the common property directly opposite their lot to provide a child safe play area. I voted yes. The third committee member (B) was unfinancial. The body corporate manager delayed the vote by several weeks until they were financial, and then member B voted no.

How long can a vote remain open? By waiting, did the body corporate management team follow the correct procedure or should the vote have gone ahead?

Answer: Contact the body corporate manager and cite the legislation around counting votes.

The question doesn’t say, but from description, it sounds like the vote was held via a VOC.

In that case, the VOC is open 21 days after the date of issue, but it can be considered decided once you have a majority decision. In other words, if you have a committee of seven members and four of them return votes in a way that can decide the matter, the vote can be considered concluded. Once the 21 days have passed, the VOC is concluded, and the votes received should be counted.

However, a committee member cannot vote at a committee meeting or outside a committee meeting if they owe the body corporate a debt at the time of the vote. So, in this case, it seems that only two of the three committee members should have been able to vote.

There is no indication of what happened to member A’s vote – did they abstain due to a conflict of interest? If they did, and they formally voted that position, there may have been a quorum, and the motion should have passed. If they didn’t, maybe there wasn’t a quorum, and the motion could have been defeated due to lack of a quorum.

As a next step, I would go back to the body corporate manager and cite the legislation around counting votes. You can highlight the information on the below page: Committee voting

See what they say. Maybe the decision was incorrect. Maybe you need to have a new vote and have all members vote to get a more definitive position.

William Marquand
Tower Body Corporate
E: willmarquand@towerbodycorporate.com.au
P: 07 5609 4924

This post appears in the November 2023 edition of The QLD Strata Magazine.

Question: Can an unfinancial committee member sign a legal document?

Answer: Yes they can. The only restriction on an unfinancial committee member is casting their vote for a committee resolution (or renominating/being elected).

Todd Garsden
Mahoneys
E: tgarsden@mahoneys.com.au
P: 07 3007 3753

This post appears in Strata News #583.

Question: We have an unfinancial chairman. What role can this debtor member play in a body corporate committee meeting until such time as he becomes financial again? Can he vote?

Answer: The relevant question is when did the member owe the debt?

Assuming their scheme is governed by the Standard Module, Section 10(2)(d) of the Body Corporate and Community Management (Standard Module) Regulation 2008 states that a committee member is ineligible to be a voting member of the committee if the member “owes a body corporate debt in relation to a lot or lots owned by the person at the time voting members are chosen”.

So the relevant question is when did the member owe the debt?

If they owed the debt at the time they were elected as a member of the committee (which is usually at the annual general meeting), then they would not have been validly elected as a voting member of the committee.

If they subsequently become financial that would not change the position – because they were never validly elected to the committee in the first place.

Gary Bugden
Partner
Bugden Allen Graham Lawyers
E: gary@bugdenallenlawyers.com.au
P: 02 9199 1055

This post appears in Strata News #313.

Question: Is our Treasurer (by proxy) eligible to vote at the AGM and still hold their position as Treasurer if they are in breach of an order made by an Adjudicator in the Commissioner’s office?

I am Secretary of a Body Corporate. We have a Treasurer (by proxy) who has defied a Commissioner’s ruling that they are only allowed to keep one dog, not two, in our complex.

They have continued to defy the Commission’s ruling. Are they eligible to vote at AGMs and still hold their position as Treasurer if they are in breach of the order?

Answer: They are not disqualified from voting at general meetings or being appointed to an executive position on the committee.

A person who is in breach of an order made by an Adjudicator in the Commissioner’s office is not disqualified from voting at general meetings or being appointed to an executive position on the committee, because of that breach alone. If the breach related to an order requiring the payment of a “body corporate debt” (such as a levy or recovery costs), then the body corporate debt (rather than the order itself) would disqualify the person from becoming a committee member and holding that office. It would also disqualify them from nominating someone as a candidate for election to the committee or that office.

If the breach of order occurred after the person was elected to the committee and appointed Treasurer, then the person can continue to hold the executive position and vote at general meetings (even if a body corporate debt was involved). This is because:

• the disqualifying factor did not exist at the time they were elected or appointed to the committee and the position of treasurer; and
• there is nothing in the Regulations which would cause their position to be vacated, or to disqualify them from voting, because of non-compliance with an order (even if the order related to a body corporate debt).

If the person is not the treasurer, but merely the proxy of the treasurer, then the position is more complex because the proxy appointment would need to be renewed by committee vote at each committee meeting and would only last for that meeting. Therefore, the committee itself would be in a position to remove the person as the treasurer’s proxy.

Gary Bugden
Partner
Bugden Allen Graham Lawyers
E: gary@bugdenallenlawyers.com.au
P: 02 9199 1055

This post appears in Strata News #306.

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This article does not constitute legal or other advice and should not be relied upon this way. Readers should take legal or other advice before applying the information containing in this publication.

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