Common Misconceptions of Strata Living – Part 5


Body Corporate

Welcome to part five of a ten part series discussing the most commonly misunderstood issues related to strata living.

5. The Committee

It is often the case that lot owners misunderstand the difference between their committee and their body corporate manager.

The committee is the executive arm of the body corporate. The committee has the duty of putting into effect the lawful decisions of the body corporate (Body Corporate and Community Management Act Section 101). It is a group charged with the decision-making power to deal with matters of lesser importance that confront a body corporate during the year. Every body corporate must have a committee (Standard Module Section 7), unless a body corporate manager is engaged in place of the committee to carry out the executive functions. (Standard Module Section 58, (Body Corporate and Community Management Act Section 122). The committee is elected yearly at the annual general meeting.

Committee members are representatives of all owners, not just themselves. For this reason they must disqualify themselves from voting on any issue where they have a direct pecuniary financial interest, though the committee members may not be excluded from the meeting (Standard Module Section 53). Where a possible conflict concerns a non-voting committee member, voting members have the right to exclude the non-voting member of the committee from the meeting (Standard Module Section 50(1)).

Committee members must be selfless in the way they go about their duties. They must take a long-term view of the body corporate to ensure the facilities management produces the most beneficial long-term impact on the community titles scheme. Generally, committee members are not entitled to payments for their services nor to reimburse their expenses unless such a payment is approved by ordinary resolution at general meeting. This resolution is subject to strict requirements (Standard Module Section 26(2))

The general duties of the committee members include:

  •  Attending all the committee meetings each year – these meetings are called as required and are usually quarterly
  • Reading the meeting notices prior to attending the meeting
  • Attending to various jobs (e.g. obtaining quotes for painting or gardening)
  • Generally committee members do all these things without any remuneration for their time and talents

Different Committee members can have different responsibilities, for example:

CHAIRPERSON:

  • Must chair every meeting (in the absence of the Chairperson another member may chair the meeting with agreement of the voting members)
  • Authorises the Minutes of the previous Committee/General Meeting
  • Has the authority to rule a motion “Out of Order” at General Meetings
  • The Chairperson must be aware of the Committee’s spending limit and authorisations imposed on the committee
  • Approves annual building insurance quotes and renewals

SECRETARY:

  • Generally calls Committee meetings
  • To advise owners of any Committee Meetings by placing a copy of the Meeting Notice on the common property notice board, if applicable
  • Takes Minutes of meetings in the absence of a Body Corporate Manager
  • To keep record of the outcome of any decision taken outside of a meeting
  • Accepts from owners quotes and tenders for proposed major work (in conjunction with the Body Corporate Manager)
  • Obtains quotes or tenders for major expenditure when the project is proposed by the committee
  • Prepares any correspondence required of the committee

TREASURER:

  • Pays authorised remuneration, allowances or expenses to a committee member
  • Approves draft of budget prepared by Body Corporate manager
  • Reviews monthly financials
  • Approves payment of invoices to be forwarded to Body Corporate Manager
  • If authorised by the body corporate, borrows funds

ORDINARY COMMITTEE:

  • To enforce the Community Management Statement (CMS) including Body Corporate By-Laws
  • In the absence of a Building Manager, to organise ‘common property’ repairs and maintenance
  • To implement the lawful decisions of the Body Corporate
  • To administer the common property and body corporate assets for the benefit of all owners

The decision making power of the committee is defined by what it cannot do. It may make any decision of the body corporate except for decisions the Body Corporate and Community Management Act says it cannot make. The decisions it cannot make are called “restricted issues” (Standard Module Section 26). This means that the committee can do anything that is otherwise within the power of the body corporate, except for the following matters that can only be decided at a general meeting –

  • Fixing or changing the body corporate contributions for the year
  • Changing rights, privileges or obligations of the owners of lots in the scheme
  • Matters that the body corporate at general meeting has decided must only be considered at a general meeting (i.e. reserved issue)
  • Matters set out in the Act as requiring an ordinary resolution, a special resolution, a majority resolution or a resolution without dissent
  • Certain litigation matters
  • Certain payments to members of the committee (Standard Module 42(1)(f) & 43(1)).

While there is a general prohibition on the committee’s power to commence litigation, the committee can start proceedings to (Standard Module Section 42(1) (e)) –

  • Recover a liquidated debt against the owner of a lot
  • Counter claims or other third party proceedings to which the body corporate is already a party
  • Enforce by-laws
  • Enforce adjudicator’s orders.

The community manager is responsible for overseeing all the decisions made by the committee and helps guide them in implementing these. The community manager also helps by ensuring by-laws or enforced and the community is fully functioning in terms of financials and harmony.

It is really important to be proactive within your community to ensure that if you’re not happy with something you can voice your opinions in changing it. If you’re a lot owner that’s not on the committee or not voting, then you’re leaving others to decide the important aspects of your own property!

If you’d like to find out more or have a question, please comment below.



Related post

Who’s Responsible For Pest Control in a Body Corporate
Who’s Responsible For Pest Control In An Owners Corporation
Running A Business in a Body Corporate

Recent Comments

7 Comments

Sandra Crowe On October 18, 2012 | Reply

There has been a few articles in the news lately regarding body corporates not getting the best deal insurance wise for its customers. How can you assure us that you are?

    Chelsey On October 19, 2012 | Reply

    SSKB always tries to ensure their customers get the fairest deal. We use an Insurance Broker called ‘Insurance Aid General Brokers’ who externally sources the best deal for our clients. If you’d like more information on this process please email Sharon at sharonb@insuranceaid.com.au or call 07 36301823 and she would be happy to assist with any enquiries or concerns you may have.

Terry Fisher On October 18, 2012 | Reply

It would be even better if the committee knew their responsibilities when they were elected and whilst representing the community. Their self interest in not approving or neglecting issues to save money is mainly due to them being unaware, untrained and thus non-competent in their elected roles.
In industry non-competence is dealt with by training and assessing so that any negligence cannot be excused.
At the vistas this, in recent years, this has been by dominance by the “King” or Chairperson by not delegating and making unilateral decisions.

Laurie Mead On October 18, 2012 | Reply

As Chairperson (last 2 years) of a 12 year old complex, I found it necessary to establish “ground rules” for our committee, that can be used ongoing by any future committee. Each year a new committee may contain members without any previous experience, therefore some guidelines need to be set in place for continuity of local rules.
Such as:
MAINTENANCE:
There were issues of maintenance responsibilities in which the delineation of that responsibility was not clear and therefore became ok for some to have maintenance paid for by the Body Corporate, where in another instance, maybe by a previous committee, the decision was made to have the lot owner pay.
A list of responsibilities, pertinent to our community, was developed, in consultation with interested lot owners, over-sighted by our Body Corporate Manager to ensure compliance with the Act/Reg. This was then disseminated to all lot owners.
ADDITIONS/ALTERATIONS:
An application for was developed for the lot owner to detail the work required and a check list is used by the committee to assess/approve the application. This acts as a record of the work, for future similar applications and allows the committee follow a precedent.
KEEPING OF A PET:
An application form has been developed for this purpose, detailing the type of pet and any pertinent details, such as neutering etc;
An acceptance form is used to notify the applicant of their responsibilities to adhere to the conditions of the approval and the consequences of not complying.
CONTENTIOUS ISSUES:
Any decisions to be made by the committee, which introduce a significant change to the appearance of the common area, is made after surveying the community for input to the decision. The result of the survey displayed on the notice board. This way, a committee, sometimes a small group of people, do not make grossly unpopular decisions and leave behind, for example, a hideous water feature fountain at the entrance.

I have found the above to be very beneficial to the committee and favourably accepted by the community.

    Chelsey On October 19, 2012 | Reply

    Thanks very much for your advice Laurie, I’m sure it will benefit many of our readers!

Lorraine Mizzi On July 31, 2013 | Reply

I live in a large strata community of 65 units with an on-site building manager. He has recently been engaged to manage the day to day affairs of the complex, such as, rental management, by-law compliance and generally grounds and building maintenance. However, he refuses to do general weeding and garden maintenance apart from trimming hedges. He uses a leaf blower to blow leaves and rubbish, such as paper and other rubbish, back into the garden beds rather than putting it into the garbage disposal units. No cleaning or moping of stairwells and has to be told to speak to tenants about by-law breaches.
When the Committee spoke to him about his duties and responsibilities he yelled and argued and said that his lawyer told him he was not required to do these things. His management contract does not spell out these duties, and therefore he does not believe he is obligued to do these things.
Despite having tried to encourage the committee to remedy this problem, nothing has been done. I am a very frustrated property owner and would welcome any advice or direction in addressing this untenable situation.

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