What is the purpose of a body corporate committee?
Visit INTRODUCTION TO BODY CORPORATE for an overview of the purpose of the body corporate committee.
The body corporate committee (elected at each AGM) is responsible for the day to day operations of the body corporate and works closely with Capitol as the body corporate manager. The committee’s duties include:
- Acting in the best interest of all owners
- Overseeing the operation of the body corporate
- Providing instructions to, and working with the body corporate manager (Capitol)
- Carrying out instructions from the body corporate in a general meeting (implementing motion outcomes)
The committee takes instruction from the body corporate at a general meeting, and must carry out the body corporate’s lawful instructions. For example, if the body corporate resolves to have the financial records audited, the committee must arrange the auditor and provide the necessary information.
- Overseeing maintenance, and other day to day administrative tasks.
The committee has the authority to act on behalf of all owners in limited circumstances. For example, if the body corporate for a large high-rise with 100 lots needed to purchase a new mop for the cleaning room, the committee would be authorised to make that decision, rather than convening a meeting of all 100 lot owners.
Committee members are bound by a statutory code of conduct. Visit CODES OF CONDUCT to view the code.
If we have a body corporate manager, why do we need a committee?
A body corporate manager such as Capitol can be engaged by the body corporate to carry out various functions of the committee, including administration of the bank accounts, issuing levy notices, preparing and sending notices of meetings and minutes. These functions are delegated to the body corporate manager by the committee through the administration agreement. The committee cannot delegate its ability to make decisions through the agreement, therefore the body corporate committee remains responsible for making decisions and instructing the body corporate manager.
For example, if a lot owner writes to Capitol requesting approval for a pet, Capitol will seek direction from the Secretary to call a committee meeting, and may prepare a voting paper and issue to the committee for their vote. The committee makes a decision, and then instructs Capitol to notify the applicant of that decision.
The appointment of a body corporate manager does not change the requirement for the body corporate to elect a committee.
What decisions can the committee make?
The body corporate committee’s primary function is to make decisions that enable the efficient and effective management of the duties of the body corporate. The committee’s power to make decisions is limited by a number of factors, including;
- Limits on spending by the committee.
- Restriction on decisions such as:
- Fixing or changing a contribution to be levied by the body corporate (levies),
- Changing rights, privileges or obligations of the owners of lots,
- Commencement of certain legal proceedings.
- Additional limits placed on the committee by the body corporate (e.g. the committee may be restricted from deciding on matters relating to financial investments).
How can the committee make decisions?
The committee may make decisions only at a committee meeting, or by voting outside of a committee meeting (referred to as VOCMs, or flying minutes). The regulation module that applies to the scheme sets provisions for how the meeting or voting process is to occur, with the aim of ensuring that the committee decision process is transparent. Decisions of the committee via either method must be recorded in full and accurate minutes.
Some committees hold regular committee meetings to deal with ongoing matters, and some committees do not meet at all through the year, instead preferring to conduct voting outside of committee meetings when issues arise.
How is the committee formed?
Each year at the annual general meeting (AGM) the body corporate members vote to elect a body corporate committee. The specific requirements of the committee (minimum and maximum number of members, positons available) vary, and depend on the regulation module that applies to the scheme. All bodies corporate are required to elect a committee each year, other than those under the Specified Two-lot Module.
How many people are required to form a committee?
The minimum requirement for committee members depends on the regulation module applying to the scheme. For most bodies corporate, the committee must have at least 3 members, up to 7 members maximum. Bodies corporate registered under the Small Schemes module can have either 1 or 2 members only, but that type of body corporate is not common.
The minimum and maximum number of members does not include the caretaker/onsite manager, or body corporate manager (Capitol) – both of whom are automatically non-voting committee members.
When the committee is chosen at the AGM, that number of members must be retained until the following AGM. For example, if 5 members are chosen at the AGM and one of those members sells their lot (and therefore resigns), one new member must be added to restore the 5 members, even though the 4 remaining members are still more than the minimum of 3.
What happens if a committee is not formed?
If a committee is not able to be formed at the AGM, the body corporate is required to hold a second meeting – an extraordinary general meeting (EGM) for the purpose of forming the committee. This effectively allows the body corporate owners to try again. The EGM involves additional administrative cost, and should be avoided by forming a valid committee at each AGM.
If at the EGM a committee is again not formed, the body corporate is required by law to consider a motion to appoint the body corporate manager (Capitol) to take over from the committee in full. This type of management service effectively removes the committee’s ability to make any decisions, and is therefore stringently regulated in the legislation. This service attracts a substantially higher management fee due to the additional work involved, and should be avoided by forming a valid committee.
What are the different roles available on the committee?
The roles available on each committee are dependent on the regulation module applying to that scheme. Below is a list of the committee positions available across the board:
- Chairperson: chairs committee meetings and general meetings, but does not have a deciding vote.
- Secretary: responsible for record keeping and calling meetings, receiving voting papers etc.
- Treasurer: responsible for preparing financial records, administration of the bank accounts etc.
- Ordinary committee member: does not receive a specific administrative charge, but receives an equal vote.
When Capitol is engaged by the body corporate to assist the committee, we provide many of the services above, thereby reducing the time and effort required from the committee members. For example, Capitol prepares the financial records and administers the bank accounts on behalf of the Treasurer.
Does the committee have emergency powers?
The body corporate committee does not receive any special or increased powers in the case of an emergency. In some situations, if the committee would ordinarily be able to make a decision, the fact that an emergency exists may allow the committee to expedite the decision process in the best interests of the body corporate.
For example, if a communal entrance door was broken and residents were unable to get in or out, and the cost of fixing the door was within its limit for spending; the committee may consult with as many of its members as possible by telephone or email if practical, and that process would constitute a vote outside of a committee meeting – rather than wait the standard 7 day notice period for this type of decision.
However, if the committee became aware of a serious roof leak, with a repair cost beyond its limit for spending, the committee is not entitled to exceed the limit for committee spending, even in an emergency. If an emergency situation arises that is not ordinarily within the committee’s powers to address, the committee may apply for an urgent order of an adjudicator. The adjudicator may review the facts and make an order; e.g. the adjudicator may order that the committee engage a contractor to repair a leaking roof even if the cost of the work is over the committee spending limit. The committee must comply with an adjudicator’s order.