When the Committee Can and Can’t Make Decisions on Behalf of the Body Corporate

September 23, 2024

Home » Committee advice » When the Committee Can and Can’t Make Decisions on Behalf of the Body Corporate

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The committee plays a crucial role in overseeing the day-to-day operations and making decisions on behalf 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 decided by a vote of all owners.

However, the committee’s authority is not absolute, and there are clear guidelines that define when and how it can act on behalf of the body corporate.

What is the body corporate committee?

The committee is essentially the executive arm of the body corporate. It is elected by lot owners at the Annual General Meeting (AGM) and typically includes a chairperson, secretary, treasurer, and ordinary members. The committee’s role is to manage the operational tasks of the body corporate and ensure the proper functioning of the scheme.

General authority of the committee

The body corporate committee has the authority to make decisions on a wide range of matters without needing to call a general meeting of all lot owners. These decisions typically relate to the day-to-day management and maintenance of the property, ensuring compliance with by-laws, and handling financial matters for the scheme.

Some common examples of decisions the committee can make include:

Organising repairs or maintenance of common areas (within approved spending limits)
Ensuring compliance with body corporate by-laws.
Renewing the body corporate’s policy of insurance
Approving minor renovations or improvements within common property (within approved spending limits)
Managing service contracts for providers such as cleaners or gardeners.
Administering routine financial tasks, like paying invoices for services.

Certain decisions, however, must be made by all the lot owners at a general meeting, either at the Annual General Meeting (AGM) or an Extraordinary General Meeting (EGM). These decisions require one of the following types of resolutions:

Ordinary resolution
Special resolution
Resolution without dissent
Majority resolution

Each of these resolution types has specific voting rules for determining whether a motion passes.

See our article on voting in a body corporate: general meeting resolutions

When the committee can act on behalf of the body corporate

The committee can make decisions on any matter that falls within its powers, as long as it doesn’t exceed certain financial thresholds or infringe on decisions that are reserved for lot owners in a general meeting.

These thresholds and limitations are governed by the Body Corporate and Community Management Act 1997. For instance, the committee can make decisions involving spending up to a specific limit, known as the “relevant limit.” If the cost exceeds this limit, approval from the general body corporate is required.

The committee can also make decisions when:

The decision falls within a pre-determined scope:

If the body corporate at a general meeting has delegated certain responsibilities to the committee, it can act without needing further approval.

Within the authority of the by-laws:

The committee may enforce by-laws and make decisions related to ensuring all lot owners are in compliance, without seeking broader approval.

Examples of committee decision making

Example 1

Owner improvements to common property: If a lot owner wants to improve common property, the committee can authorise it if:

The cost is $3,000 or less (inclusive of GST)
It doesn’t negatively affect the appearance of any lot or common property,
It doesn’t cause a nuisance or breach the owner’s duties.

If these conditions aren’t met, approval must be sought through an ordinary resolution at a general meeting.

Example 2

Improvements in exclusive use areas: For improvements in exclusive use areas like patios or courtyards, the committee can approve the request if it doesn’t it costs more than $3,000 (inclusive of GST), in which case it must be approved by an ordinary resolution at a general meeting.

Example 3

Animal by-laws: If a by-law requires body corporate approval to keep an animal, the committee can usually make this decision unless the by-law specifically requires a general meeting vote.

When the committee can not make decisions on behalf of the body corporate

Despite the broad authority granted to the body corporate committee, there are specific limitations on the decisions it can make without input from all lot owners.

The following situations require a general meeting to pass a resolution, as they fall outside the scope of the committee’s authority:

Exceeding financial limits: If a decision involves spending more than the allowed threshold, it must be approved by the lot owners through a special or ordinary resolution at a general meeting.
Changes to by-laws: The committee does not have the power to amend, introduce, or repeal body corporate by-laws. These decisions must be made by the lot owners at a general meeting.
Major changes to common property: Decisions involving significant changes to common property, such as structural alterations or the sale of common areas, must be referred to the body corporate for approval.
Conflict of interest: If a committee member has a conflict of interest in a decision, they must declare it. In such cases, the decision may need to be made by the lot owners at a general meeting.
Setting or changing a body corporate levy: Only lot owners can approve changes to levies.
Altering rights, privileges, or obligations of owners: Decisions that impact the fundamental rights or obligations of lot owners must be made at a general meeting.
Matters requiring a specific resolution: Decisions that must be resolved through a particular resolution type, for example a special resolution or resolution without dissent, cannot be made by the committee alone.
Legal Proceedings: The committee cannot start legal proceedings unless:
- It is to recover a liquidated debt from an owner, such as unpaid levies or interest.
- The proceeding involves an offence under the by-law contravention provisions of the Body Corporate and Community Management Act 1997.
- The proceeding falls under Chapter 6 of the Act, including enforcement of an adjudicator’s order.
Committee member payments: The committee cannot approve remuneration, allowances, or expenses for its members unless it is for:
- Reimbursement of expenses up to $50 for attending a committee meeting.
- Reimbursement that does not exceed $300 over a 12-month period for that member.

In these cases, the committee must defer to the body corporate in a general meeting to ensure transparency and broad decision-making among all lot owners.

Source: https://www.publications.qld.gov.au/ckan-publications-attachments-prod/resources/8295722e-b4b3-4f67-8884-af23a59acd02/issue-45-common-ground.pdf?ETag=2a7425681c80c0e32bc0febb71037dc8

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