How Committees Make Decisions in Body Corporates: A Simple Guide

If you're part of a body corporate committee in Queensland, it's crucial to understand the procedural steps for making decisions. Whether you're at a committee meeting or making decisions outside of one, following the correct procedures ensures transparency and compliance with the law. Here's a straightforward guide to help you navigate these processes, with references to the Accommodation Module (AM) and Standard Module (SM).

Making decisions as a body corporate committee involves following clear procedures set out in the regulations.

By complying with the procedural steps, your Committee ensures that decisions and notified to all owners made transparently and in compliance with the law. Remember to keep detailed records, distribute minutes promptly, and adhere to the code of conduct to maintain a well-functioning committee.

A Body Corporate cannot delegate its powers to one person or avoid following the decision-making procedures set out below (s.97 of the Body Corporate and Community Management Act 1997).

Failure to comply with the 2 below procedures for making Committee decisions leads to invalid decision-making and opens the Body Corporate up to the risk of being sued by a lot owner disgruntled by the lack of compliance. Non-compliance also has the potential to devalue the lots in the scheme because it prevents the Body Corporate from demonstrating to the auditor and potential purchasers that proper and compliant legal governance is in place to protect all members of the Body Corporate and the funds they contribute via levies to the collective pool of funds.

The decision-making procedures must be followed at all times in order for legally compliant decisions to be made and notified to all members of the Body Corporate.

First Method:

Making Decisions Outside of Committee Meetings: The "Vote outside of Committee Meeting" (VOCM) procedure

1. Proposing a Committee Motion

Notice of Proposed Motions: The secretary or an authorised committee member must give notice of the proposed motions (including motions to authorise spending of owners' funds) to all voting and non-voting committee members and all lot owners. The notice must include the details of the motion and any supporting documents (e.g. quotations) (AM 72, SM 72).

Quotations: For any proposals involving spending above $10,000, the committee need at least two quotations unless there are good reasons (which must be specified) why 2 quotes cannot be obtained (AM 163, SM 173).

2. Voting on the Proposed Motion

Written Votes: Committee members must submit their votes in writing within 21 days of receiving the notice. This can be done via email (AM 73, SM 73).

Majority Decision: The motion is passed when a majority of the voting committee members vote in favour (AM 73, SM 73).

Distribution for transparency to all owners: Within 21 days after the meeting, the secretary must give all committee members and all lot owners a copy of the notice of decisions made outside of committee meeting (AM 63, SM 63).

Second Method:

Making Decisions at Committee Meetings

1. Calling a Committee Meeting

Who Can Call a Meeting?: The secretary (or the chairperson in the secretary's absence) or any committee member with majority approval can call a meeting.

Notice: You must give at least 7 days' notice to all owners and all voting and non-voting committee members (including body corporate manager and caretaking service contractor) before the committee meeting. The notice should include the time, place, and agenda of the meeting (AM 63, SM 63).

2. Preparing for the Meeting

Agenda: The agenda should list all the motions to be discussed and voted on. It should also include any necessary documents, such as quotations for major spending (AM 164(6)(a), SM 174(6)(a)).

Quotations: For any proposals involving spending above $10,000, you need at least two quotations unless it's impracticable to obtain them (AM 163, SM 173).

3. During the Committee Meeting

Quorum: Ensure that at least half of the voting committee members are present to proceed with the meeting (AM 66, SM 66).

Voting: Decisions are made by a majority vote of the voting committee members present. Each member has one vote, and the majority rules (AM 67, SM 67).

4. Recording the Committee Meeting

Minutes: The secretary must record the minutes of the meeting, detailing the decisions made and any correspondence or documents tabled (AM 63, SM 63).

Distribution for transparency to all owners: Within 21 days after the meeting, the secretary must give all committee members and all lot owners a copy of the minutes (AM 63, SM 63).

Restrictions on types of decisions that cannot be made by the Committee

In a body corporate, certain decisions are significant enough that they cannot be made by the Committee and must be made at a general meeting of all owners, ensuring transparency and collective agreement among lot owners.

Here are the types of decisions that can only be made at a general meeting:

Any decision involving spending above the committee's spending limit

Any decision requiring a "Resolution Without Dissent"

• Leasing or Licensing Common Property: Leasing or licensing the whole or part of common property for terms exceeding three years.

• Incorporating Land: Incorporating contiguous land or a lot into common property.

• Selling Common Property: Selling or disposing of common property.

• Changing Regulation Module: Changing the regulation module that applies to the community titles scheme (CTS).

• Amending Engagements: Amending the engagement of a service contractor or letting agent to include a right or option of extension or renewal.

Any decision requiring a "Special Resolution"

• Short-Term Leasing or Licensing: Leasing or licensing the whole or part of common property for terms less than three years.

• Engagement of Body Corporate Manager (BCM): Approving the engagement of a BCM under a Part 5 Engagement.

• Changing Lot Entitlements: Changing the contribution schedule lot entitlements of the lots.

• Recording New CMS: Consenting to recording a new Community Management Statement (CMS) that identifies a different regulation module.

Any decision requiring a "Majority Resolution"

• Transfer Notice to Letting Agent: Giving a letting agent a written transfer notice requiring the transfer of management rights for the CTS.

Any decision requiring an "Ordinary Resolution"

• Engagements and Authorisations: Approving the engagement of a BCM, service contractor, or letting agent. Amending the engagement of a BCM or service contractor. Approving or amending the authorisation of a person as a letting agent.

• Removing Committee Members: Removing a voting committee member from office for breaching the code of conduct.

• Electing Committee Members: Electing committee members at the Annual General Meeting (AGM).

• Deciding Motions: Deciding motions submitted by lot owners for consideration at a general meeting.

• Approving Budgets: Approving the body corporate’s annual budget and levying contributions.

Other Specific Decisions

• Insurance: Decisions related to obtaining building reinstatement insurance, public risk insurance, and optional additional insurance covers.

• Improvements to Common Property: Authorising improvements to common property, including those that exceed the basic improvements limit.

• Financial Decisions: Adopting administrative and sinking fund budgets, fixing lot owner contributions, and levying special contributions.

• Legal Proceedings: Starting legal proceedings that are not prescribed proceedings.

• CMS Changes: Consenting to the recording of a new CMS, including changes to by-laws and regulation modules.

• Exclusive Use By-laws: Creating, deleting, or modifying exclusive use by-laws.

• Borrowing Money: Decisions to borrow money on security for amounts exceeding specified limits.

• Facilities Sharing Agreements: Entering into agreements with other bodies corporate for sharing facilities.

• Termination of CTS: Decisions to terminate the CTS or amalgamate with other CTSs.

• Adjusting Lot Entitlements: Changing contribution schedule lot entitlements.

• These decisions require the collective approval of lot owners at a general meeting, ensuring transparency and democratic decision-making within the body corporate.