Body Corporate Changes on 30 April 2022

Committee Members, diarise 30 April 2022 in your diary.

30 April 2022 is the day the Qld COVID-19 legislation is currently due to expire.

Below, we compare the temporary options your Body Corporate gained to help alleviate the financial burden caused by the COVID-19 emergency on Queensland bodies corporate and lot owners, and what your Body Corporate must do when those temporary laws expire:

Changing the Sinking Fund Budget

During Temporary COVID-19 laws

Your Body Corporate has the option to adopt a sinking fund budget that allows for raising a 'reasonable capital amount' to provide for necessary and reasonable spending from the sinking fund for the financial year.

Note: even if this means that your budget does not include the capital amount required to be reserved in your sinking fund budget to be accumulated to meet anticipated major expenditure in future years.

Your Body Corporate has the option to adjust a sinking fund budget for the current financial year to remove or reduce the anticipated major expenditure amount.

When COVID-19 laws expire

Your Body Corporate will need to ensure that its sinking fund budget allows for raising a reasonable capital amount to meet anticipated major expenditure over at least the next 9 years and that it raises contributions to cover that capital amount.

Your Body Corporate cannot adjust its proposed sinking fund budget by 10% more or less than the proposed budget amount, and only then to add or remove amounts for spending that were proposed in the meeting agenda and is either not adequately provided for, or was not approved at the meeting.

Overdue levies

During Temporary COVID-19 laws

Your Body Corporate cannot charge lot owners a penalty for late payments of their contributions.

Your committee has the option to decide to extend the due date for payment of a contribution from lot owners, to a date that is not later than the end of your body corporate’s financial year for all lot owners but taking into consideration the body corporate’s ability to meet its anticipated expenditure.

Your committee has the option decide to extend the due date for payment of a contribution from lot owners, to a date that is not later than the end of your body corporate’s financial year for a particular lot owner if it is reasonably satisfied that the owner is suffering financial hardship because of the COVID-19 emergency but taking into consideration the body corporate’s ability to meet its anticipated expenditure.

Your Body Corporate has the choice of whether or not to start debt recovery proceedings for contributions that have been outstanding for over 2 years.

When COVID-19 laws expire

Your Body Corporate may fix a penalty of not more than 2.5% for each month a lot owner’s contribution is not received by the due date and may waive penalty interest if it is satisfied that there are special reasons for waiving penalty interest.

If a contribution has been outstanding for 2 years, your Body Corporate must start debt recovery proceedings within 2 months after the end of the 2 years.

Decisions to Borrow Money

During Temporary COVID-19 laws

Your Body Corporate may by ordinary resolution decide to borrow an amount on security that is less than $[x], where [x] = $500 x the number of lots in your scheme.

For example, if you have 50 lots, you may decide to borrow up to $25,000 by ordinary resolution.

When COVID-19 laws expire

Your body corporate may by ordinary resolution borrow an amount on security that is less than $[y], where [y] = $250 x the number of lots in your scheme.

For example, if you have 50 lots, you may decide to borrow up to $12,500 by ordinary resolution. A special resolution is required to borrow more in a scheme regulated by the Accommodation Module. A resolution without dissent is required to borrow more in a scheme regulated by the Standard Module.

Committee restricting access to common property

During Temporary COVID-19 laws

Your Committee may make a decision changing the rights, privileges or obligations or lot owners in the scheme if the Committee considers it is reasonably necessary to restrict access to, or the use of, common property or body corporate assets to ensure compliance with COVID-19 public health directions.

When COVID-19 laws expire

The Committee does not have the power to make decisions that change the rights, privileges or obligations of lot owners in the scheme.

Why engage The Nuu Co

We have over 10+ years strata law experience, so we can easily stay ahead of the curve with law changes that will affect your Body Corporate and owners.