Finding solutions

25 Sep Finding solutions, not defendants.

Deep Dive into some of the new Laws!

Last month we announced that the review of the Body Corporate and Community Management Regulation Modules is finally here and open for public consultation.

This month we take a deep dive into the background of some of the recommendations we highlighted last month and the reasoning behind them.

Those highlights were to;

  • Clarify that for elections of the committee at a general meeting, nominations for ordinary member positions must be invited at the meeting if a full committee has not been elected (that is, the number of ordinary and executive members of the committee is less than the maximum number of voting members for a committee).

Why:

For some time there has been confusion in the industry as to whether the chairperson should call for nominations from the floor at the meeting for the election of ordinary members of the body corporate committee if the minimum has been reached but the maximum number of committee members has not been reached via the nomination process prior to the end of the financial year.

There was also confusion around what is a minimum number of committee members.

This amendment seeks to clarify that a chairperson must call for nominations from the floor to achieve a minimum of 7 people on the committee if the number of the ordinary members plus the number of executive members of the committee is less than the maximum number of voting members for the committee.

  • Prohibit a committee member from receiving a direct or indirect benefit from a caretaking service contractor or service contractor unless the body corporate has authorised the member to receive the benefit.

Why:

In regards to an express prohibition on a committee member receiving a benefit from a service contractor, it was submitted that this is already implied within the code of conduct (as receiving a benefit is likely to breach the obligation to act with honesty and fairness). It was also submitted that the Regulation Modules also prohibit a committee voting member from voting on a matter when there is a conflict of interest.

However given the significance of the potential impact if a committee member were to receive a direct or indirect benefit from a caretaking service contractor the government have deemed it so important that they have included the obligations and prohibitions in the regulation modules and not just the code of conduct.

  • Clarify that the committee may approve that a voting or non-voting member of the committee attend a meeting of the committee by electronic means.

Why:

Committee members are volunteers and in most cases have busy lives outside of their body corporate commitments and may also live remotely to schemes including interstate or overseas.

This amendment like many others in this reform seeks to clarify exactly what the intent of this section of the regulation module is. In this case that should a committee approve then another may attend by electronic means.

The extent of electronic means has not been specified in the dictionary but one would assume via channels such as Skype, Zoom or a conference facility.

  • Clarify how a motion with alternatives is decided when the alternatives for the motion would require different types of resolution (for example, special resolution or resolution without dissent) if they were to be considered as individual motions.

Why:

This one is for the technically minded. There has been confusion in relation to motions with alternatives as to how the motion is calculated where the options proposed, if decided as individual motions, would require different resolution types.

For example a motion to approve a body corporate to enter into a lease of common property may come with two options for that lease period.

Option a) may be for a lease of common property for 10 years or less thus requiring a special resolution however,

Option b) may be for a lease of common property for 10 years or more thus requiring a resolution without dissent.

This section clarifies that if an alternative receives the highest number of votes the alternative must be decided by the specific resolution type for that alternative and the motion declared accordingly.

  • Restrict inappropriate use of powers of attorney by providing that a person may only vote at a general meeting under the authority of a power of attorney for one lot owner, unless the person is a member of the lot owner’s family, or the power of attorney is given under sections 211 or 219 of the Act.

Why:

This amendment may not be popular in some industry segments but what it does is close off a loophole that exists whereby a person, for potentially their own benefit either financial or otherwise, can currently seek out powers of attorney and use these to vote in bulk in favour of a preferred outcome.

Whilst proxies have been heavily regulated and come under scrutiny again in this review that has not been the case for powers of attorney. This seeks to fix that.

Whilst this is only a small sample of recommendations and their backgrounds if you have a specific recommendation you would like clarified drop me an email at admin@hbcm.co.

You can read all the consultation drafts and find out how to make a submission on the community consultation pages of the Department of Justice and Attorney-General website at:

https://www.justice.qld.gov.au/community-engagement/community-consultation

Simon-Barnard-Circle Finding solutions, not defendants.

Simon Barnard is the Managing Director and Principal of Hartley’s Body Corporate Management which is a medium sized strata firm established in 2004 at Sherwood and now operating out of Graceville, Newstead, North Lakes and Bribie Island. Simon is in his 6th year as President of the Board of Strata Community Australia (QLD) and was recently recognised for his service to the industry with a fellowship of the organisation and Life Membership.

Simon also is a past board member on the SCA National Board and is engaged at an International level through many consultative groups and associations. He meets regularly with the Industry Stakeholders group which is convened by the Commissioner for Body Corporate and Community Management and the Office of the Attorney General and actively engages at all levels of government.

Simon has recently been invited to represent the Strata industry on the QLD Government Ministerial Housing Consultative Committee tasked with advising on developing and delivering quality housing outcomes for people and communities. His contributions at an International, National and State level involve working with key stakeholders and government to ensure lot owners, industry employees, suppliers and Bodies Corporate needs are addressed through Government policy reform, education and training.