Welcome to part four of a ten part series discussing the most commonly misunderstood issues related to strata living.
4. Who makes body corporate decisions?
A large number of lot owners are unaware of how they can put forward their ideas to the committee. This week’s article in the series shows you how decisions are made and by who in a body corporate.
There are two ways in which the body corporate can make decisions: most day-to-day decisions can be made by the committee while more significant decisions need to be made by the lot owners in the scheme by voting at a general meeting. Once a decision has been made, the committee is generally responsible for making sure the decision is put into effect.
Who cannot make body corporate decisions?
The following parties cannot make body corporate decisions: individual committee members (for example, the chairperson acting without the authority of a majority resolution of the committee), body corporate managers (unless appointed under Chapter 3 Part 5 of the Standard Module) or resident managers.
How are decisions made?
1. At committee meetings
A lot owner may submit a request or motion in writing for consideration by the committee. At a committee meeting a motion is passed if the majority of voting members are present and who are entitled to vote are in favour of the motion. The committee can deal with most of the day-to-day issues such as authorising minor maintenance or giving approvals in relation to by-laws. However, there are restrictions on the types of matters that the committee can decide. For example, under the Standard Module the committee cannot make decisions that involve spending more than $200 per lot or another amount previously set by an ordinary resolution of the body corporate. If the committee cannot or does not make a decision on the lot owner’s motion, the lot owner can present their proposal as a motion for the body corporate to vote on at a general meeting.
2. At general meetings
All lot owners have the right to submit motions. If a motion is submitted, it must be included on the agenda of the next general meeting on which the body corporate is able to include the motion. Lot owners in a general meeting may vote on a motion only if it is included as an item of business on the agenda and is stated in the voting papers accompanying the notice of the meeting. Depending on the outcome sought, the motion must be passed by an ordinary resolution, special resolution, resolution without dissent or majority resolution.
3. Drafting a motion
Motions must be carefully written so that owners can respond with a simple yes or no vote. The action the committee is expected to take to implement the resolution should be clearly set out in the motion. For example, instead of proposing that ‘the committee investigate ways of fixing the roof’, you should propose that owners ‘accept the attached quotation from ‘XYZ Company’ to report on alternative methods and costings for fixing the roof’.
Motions you put forward should follow the CLEAR guidelines: Concise, Legal, Economic, Action-based and Realistic.
1. Concise — Are you clearly and concisely proposing what should happen so the committee can implement the proposal without the need for any further decisions?
2. Legal — Does this type of proposal have to meet any special legal requirements under the body corporate legislation or any other legislation (for example, building regulations)?
3. Economic — Does the motion approve the necessary funds? Are their funds available in the budget or will a special levy be required? Instead of submitting just one motion, should two quotations and two alternative motions be submitted?
4. Action-based — Is there a clear action to be taken? Is a time frame specified?
5. Realistic — Is the proposed action achievable? Is it something that other owners are likely to support?
A good tip is to start preparing your motion well before the deadline for submitting motions to the secretary. This will give you time to talk to committee members and the body corporate manager about your motion and to obtain any necessary quotations.
If you are unsure, you can always speak to your SSKB Community Manager for advice and tips, or simply comment below to ask a question.