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What is the purpose of a body corporate committee?
At each AGM, a body corporate committee is elected with the responsibility for the day-to-day operations of the body corporate. The committee is bound by a code of conduct.
Committees work closely with the body corporate manager (Capitol) who help to administer their obligations.
The primary objective of the body corporate is to manage and maintain the common property in the best interests of all owners.
Some general responsibilities of the body corporate are to:
- Determine the contributions (levies) payable by owners required to fund the operation of the body corporate.
- Collect additional contributions for the future maintenance of the common property (sinking fund).
- Insure the common property, including public liability insurance.
- Establish by-laws (rules) that govern:
- Management and control of common property and body corporate assets;
- Use and enjoyment of lots, common property and assets.
- Keep records of the body corporate’s operations, including meeting minutes, roll of owners, financial accounts and various other registers.
Duties of the committee include:
- Acting in the best interest of all owners,
- Overseeing the operation of the body corporate,
- Instructing the body corporate manager (Capitol),
- Carry out instructions of body corporate general meetings (implementing motion outcomes),
- Overseeing day-to-day maintenance and administrative tasks (limited circumstance).
For example, the body corporate for 100 lots needs to purchase a new mop for the cleaning room, the committee could be authorised to make that decision, rather than convening a meeting of all lot owners.
Visit introduction to body corporate for more detailed.
We have a body corporate manager - do we need a committee?
The body corporate is required to elect a committee, even where a body corporate manager is appointed.
A body corporate manager (Capitol) is engaged by the body corporate to carry out various functions of the committee including:
- administration of the bank accounts,
- issuing levy notices, and
- preparation and circulating minutes and notices of meetings.
The committee delegate those tasks to Capitol through an administration agreement.
Accountability remains with the body corporate committee (may not delegate decision-making) but instruct the body corporate manager (Capitol).
For example, if a lot owner requests approval for a pet from Capitol, Capitol will seek direction from the Secretary to call a committee meeting and may prepare and issue a voting paper to the committee for their vote. The committee then makes a decision and instructs Capitol to notify the applicant of the outcome.
What decisions can the committee make?
The committee’s primary function is to make decisions to fulfil the duties of the body corporate.
Limits to the authority of the committee to make decisions include:
- Committee spending limits.
- 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 does the committee make decisions?
Decisions may be made using one of two methods:
- By committee meeting, or
- Voting outside a committee meeting (referred to as VOCMs, or flying minutes).
The regulation module sets provisions for how the meeting or voting process should occur to ensure that the committee decision process is transparent.
Using either method, committee decisions must to be recorded in full and accurate minutes.
Some committees hold regular committee meetings to deal with ongoing matters. Others prefer to conduct voting outside of committee meetings when issues arise and do not meet at all through the year.
How is a committee formed?
Body corporate members vote to elect a committee at the annual general meeting (AGM).
Depending on the regulation module that applies to the scheme, specific requirements of the committee may include:
- minimum number of members,
- maximum number of members, and
- positons available
All bodies corporate are required to elect a committee each year (other than those under a Specified Two-lot Module).
How many people are required to form a committee?
The regulation module applying to the scheme define the minimum requirement for committee members.
Most body corporates committees must have at least 3 members with a maximum of up to 7 members.
Bodies corporate registered under the Small Schemes module can have either 1 or 2 members.
A caretaker/onsite manager or body corporate manager (Capitol) are not included in minimum and maximum number counts. They are automatically non-voting committee members.
When the committee is selected at an AGM the number of members must be retained until the following AGM.
For example, if 5 members are selected at the AGM and one of those members sells their lot (and therefore resigns), a 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?
Where a committee is not formed at the AGM, the body corporate is required to hold a second meeting (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 time and administrative cost, and can 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 stringently regulated.
This service attracts substantially higher management fees due to the additional work involved, and should be avoided by forming a valid committee.
What are the different roles of a committee member?
The regulation module applying to a scheme defines the roles available for each committee member.
Committee positions available across the board include:
- Chairperson:chairs meetings but does not have a deciding vote.
- Secretary:responsibilities include record keeping, calling meetings and voting papers.
- Treasurer:responsibilities include preparing financial records and bank account administration.
- Ordinary committee member:does not receive a specific administrative charge, but receives an equal vote.
Capitol helps committees to provide many of these services, saving time and effort required by the committee members to fulfil their obligations.
For example, Capitol prepares the financial records and administers the bank accounts on behalf of the Treasurer.
Does the committee have emergency powers?
Committees do not receive special or increased powers in the case of an emergency.
In some situations the committee would ordinarily be able to make a decision.
Where an emergency exists, the committee may be allowed to expedite the decision process in the best interests of the body corporate.
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 spending limit:
The committee may consult with as many of its members as possible by telephone or email if practical.
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.
The committee became aware of a serious roof leak, with a repair cost beyond its spending limit:
The committee is not entitled to exceed the limit for committee spending, even in an emergency.
In case of an emergency situation 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.
The adjudicator may then 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 are obligated to comply with an adjudicator’s order.
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