Body Corporate Seal – Qld


SSKB always recommends the use of a body corporate seal

The Queensland Government has announced a review into the state’s property laws including the Body Corporate Community and Management Act 1997 and other community titles legislation including body corporate governance issues.

The review period ends on the 22nd of February.

This follows on the heels of the Owners Corporation changes enacted by the New South Wales parliament at the end of 2015.

SSKB – Strata Managers directors Tim Sheehan and Paul Wood, recognised industry experts have reviewed the discussion paper and make  a number of observations which will be featured here on the SSKB blog.

 

A body corporate has many similarities to a business or a corporation and in the past, some statutory obligations have been exactly the same.

One of those has been the use of an official seal. The practice of affixing a seal has been used since ancient times and it assures anyone doing business that the seal holder has the authority to make decisions and agree contracts in the name of that entity – whether it be a king, a duke, a corporation or a body corporate.

The Commonwealth Corporations Act 2001 removed the need for a corporation to use a seal and provided a list of assumptions to allow people to know that a document has been duly executed.

One of those assumptions is a document has been duly executed if it has been signed by:

  • two directors of the company, or
  • a director and the company secretary, or
  • the sole director of a company

In the Property Law Review Issues Paper, it has been suggested that bodies corporate could operate in exactly the same way in its business dealings.

We strongly disagree.

Unlike companies, the directors of a body corporate (the committee) may change year-by-year. Indeed, body corporate managers may change from time-to-time.

The body corporate seal provides the added safeguard of the correct name and scheme number being used on the documentation, the documentation should always match what is on the seal.

The seal is an unambiguous way to ensure the body corporate documentation has been “properly executed”.



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