WGC LAWYERS | Body Corporate Law

Body Corporate Law

Body Corporate Law

Rhiannon Saunders
: (07) 4046 1118
: rsaunders@wgc.com.au

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After practising in the body corporate sector for more than 10 years, I’ve developed considerable experience in many facets of the industry, which is also known as strata or community living. I regularly assist body corporate committees, managers, caretakers, and individual lot owners to solve problems and to comply with statutory obligations. That includes providing advice about bylaws, caretaking and letting agreements, service contracts, meetings, disputes, insurance matters, and the recovery of unpaid levies. In fact, I cover almost anything that is connected to the body corporate industry.

What is a body corporate?
A body corporate is essentially a group of people or entities that share ownership in property. The property might be an apartment block, or a commercial building, or even a group of houses. But in any of those examples, there will be property that is individually owned, and then there is property, called common property, that is shared jointly by the owners. A good example of common property is a pool or a driveway.

There are many benefits to community living: convenience, size and affordability are just a few. Many thousands of people have embraced community living of late, especially in Cairns and Far North Queensland.

So if you’re part of a body corporate, what do you need to know?
There are lots of rules and regulations that govern bodies corporates. It’s important for lot owners to understand those rules, but a lot of my time is spent assisting committees or managers. Properly running a body corporate can be quite technical.

One thing you need to know is who can make decisions, what can they make decisions about, and how can they make those decisions.

There are generally three decision makers in a body corporate scenario. Firstly, as a property owner, you are generally entitled to make decisions about the inside of your property. Secondly, a body corporate is required to have a committee that is able to make decisions on behalf of a body corporate. And lastly, some decisions are reserved for being made by all property owners. In other words, some decisions are so important that the law does not allow them to be made by a property owner or a committee. Those types of decisions include spending money on things that exceed the committee’s spending limit, authorising certain improvements to be made to the property, setting the body corporate’s budget and levies for the year, and commencing certain types of legal proceedings.

How are decisions made in those situations?
The law requires that there be meetings to make particular decisions. There are rules about recording decisions that are made and also distributing minutes of meetings where decisions are made. Some decisions can be made by majority vote, others require what is called a special resolution, and some actually require a resolution without dissent (that is, there can be no, ‘no’ votes). It’s really important that those requirements are met. If a property owner disputes a decision that has been made, they can take steps to challenge the decision and possibly to overturn it.

So if I wanted the ability to be part of the decision making process, what do I need to do?
You should contact your body corporate manager to find out if there are any vacancies on the committee and when the next annual general meeting is going to be held. There are processes
that need to be followed to be appointed to the committee, but if you make some inquiries, you might find out that there are some vacancies, or on the flip side, that the committee is full, and you need to wait until the next general meeting to be appointed. Being on a committee requires time and care. There’s a lot of responsibility involved, but I’ve seen many bodies corporate thrive when there is a hardworking, active committee on board.

If you’re on a committee, what do you need to know?
If you’re on a committee, you’re required to have a commitment to understanding the legislation that governs bodies corporate. You need to be aware of your responsibility to act fairly, honestly, and in the best interests of the body corporate. Most bodies corporate engage a body corporate manager to assist with understanding and applying the legislation. And of course, it can be important to work with your fellow committee members as well. Sometimes it can be useful, if not critical, to obtain legal advice to make sure that your body corporate is following the framework that is set out in the legislation.
What sorts of situations might these be?
I can give you a couple of real-life examples.

The first involves a committee deciding to spend owner’s funds on something without having the authority to do so. In that case, I acted for a property owner who successfully challenged the committee’s decision.

The second is where I’ve acted for a committee who had to consider whether to approve improvements that were requested to be made to common property (that’s the area of property in which lot owners jointly share ownership). There, I worked with the committee to ensure that decisions were made properly and in compliance with the legislation.

Unfortunately, sometimes if decisions aren’t made properly, then a body corporate can find itself embroiled in a protracted, costly dispute that is before the courts, QCAT or the Office of the Commissioner for Body Corporate and Community Management. For that reason, it is important to ensure that decisions are made carefully, and that advice is sought early on.