27 Jul Imposing a Financial Penalty

Imposing a Financial Penalty

The case that we are reviewing this month is whether the Body Corporate, through the Committee, has the power to impose a financial penalty on an Owner or Occupant as a fine or reimbursement.
The adjudicators order Chevron Renaissance [2020] QBCCMCmr 358 (6 July 2020) notes:

“The power of a body corporate and its committee to make decisions and take action is limited by its statutory functions. Notwithstanding how justified it may seem in the circumstances, a committee does not have the power to unilaterally impose a charge on an owner, whether as a fine or for the reimbursement of costs. Rather, it must have specific authority under the Act, regulation module or the by-laws to charge an owner or occupier for any particular amount.”

The order goes on to further note:

“The only statutory provisions that enable the body corporate to impose charges on an owner or occupier (beyond levies and associated penalty interest and debt recovery charges) include:

a. A contribution notice may include an amount payable by an owner to the body corporate for a specially contracted service enjoyed by the owner, or an exclusive use or special right over common property enjoyed by the owner.

b. To the extent that a body corporate may have a statutory obligation to maintain part of a lot, the body corporate may recover the reasonable costs of maintenance from a person whose actions cause or contribute to damage or deterioration of the part of the lot.

c. If an owner or occupier fails to undertake work it is obliged to carry out under the Act or the regulations, or the CMS, or a statutory notice, or the order of an adjudicator, QCAT or a court, the body corporate may carry out the work and recover the reasonable cost from the owner as a debt. Before the body corporate could act, it would arguably need to identify a specific statutory or judicial obligation and give the owner or occupier the opportunity to undertake the work themselves.”

The penalty that the Committee had imposed onto the applicant followed a motion that had been proposed via committee resolution to charge anyone found to be dumping garbage or rubbish on common property a $250.00 fee for the offence.

The applicant argued that the body corporate did not have the power to issue “fines” or impose penalties and sought an order that the motion be ruled invalid. After considering the submissions from the applicant and also the committee, the adjudicator did rule the motion carried by committee resolution as void.

It is important to ensure that the correct legislative processes are followed to avoid orders being made against the Body Corporate for decisions that are carried at either General Meetings or via Committee resolution.

The full order can be read – http://www8.austlii.edu.au/cgi-bin/viewdoc/au/cases/qld/QBCCMCmr/2020/358.html

And more information on body corporate can be obtained by visiting the Commissioners Office Website – https://www.qld.gov.au/law/housing-and-neighbours/body-corporate/bccm