The last BCCM Act review recommendations paper is out

This set of proposals doesn’t cover as many difficult topics as the previous ones on by-laws and lot entitlements but it does have some interesting recommendations.

Remember – these are not law. They are what the QUT professors have recommended to the government about what could or should become law. What happens now depends on the government. We think the recommendations in this paper are the least controversial, but whether they get prioritised into draft legislation this close to an election will be interesting.

There are 64 recommendations in response to the 89 questions posed.

We take this largely in order but deal with what we think are the biggest recommendations first.

Removal of committee members – At the moment there is a process that requires two general meetings to remove a committee member through a breach of the committee Code of Conduct. This is completely impractical (and we have never seen it used) because a committee member can be removed by ordinary resolution at any time without cause.

The recommendation is to remove that Code of Conduct right and make it an ordinary resolution only, but there are some consequences. If a motion to remove a committee member hits an agenda, the committee member must be given the right of reply (at body corporate expense) if they want to circulate a statement to owners. They must also be given the right to speak at the meeting held to consider their removal and the right to challenge their removal after the event. The grounds for challenging their removal are not stated. Ultimately, if half of the owners who care enough to vote choose to remove you, how can you argue with that?

The reason for the right to challenge is that if a committee member is removed by ordinary resolution they will be prohibited from re-nominating for the committee for two years.

General meeting quorum – if you have a meeting and no one shows up is it a meeting? The answer is, ‘Yes’.

The recommendations suggest dropping the requirement for two voters being present in person at a general meeting for the purposes of a quorum. Someone just needs to be there, so body corporate managers will be able to have meetings (if you call it that) very much on their lonesome.

Adjourned meetings – the current process if you don’t get a quorum for a general meeting is that it is held over to the same time and place next week and whatever is there is counted.

The new process would displace that. The recommendation is to have that first meeting count as valid but give people who did not vote the right to submit votes for up to 28 days after the meeting. This would mean that every resolution at a general meeting without a quorum would be provisional for up to 28 days.

This is a balancing exercise between giving people more time to have a say as against delaying things for up to 28 days to give those same people who couldn’t be bothered to vote the first time a chance to have their say.

What it would mean in practice for general meetings without a quorum would be:

• a body corporate decision at general meeting level could take just under 60 days to be made from the posting of the agenda (21 clear days plus postage to the meeting date) plus the new 28 days.
• people who were not happy with the numbers on a particular resolution could rustle up others who didn’t vote the first time around to support their position during that 28 day period. This bit could be very interesting.

Emails – email addresses will become part of the body corporate roll and documents will be allowed to be sent electronically (which in theory isn’t lawful yet as much as it does happen). Owners need to opt in for that and can still choose to receive hard copies at body corporate expense. Larger documents can be sent by a link.

Developers – we could call this the ‘off-the-plan’ segment, but it is really aimed at developers. The recommendations include:

• Developers having to hand over a lot more information at the first AGM.
• Allowing for a dispute with the developer about the lack of these documents to come into the domain of the Commissioner’s Office.
• The second AGM having to include a motion to undertake a building defects assessment.
• The creation of a facilities management plan (to be defined in the Module) and a forecast for the administrative fund for the first five years to meet that plan. This should prevent body corporate levies being set artificially low as well as (we hope) making duties schedules in management rights agreements more accurate.

Committee numbers – the maximum number will still be seven except in principal bodies corporate where each subsidiary representative will be able to be on the PBC committee.

Then the rest of the recommendations include:

End of financial year dates – a body corporate will be able to change its end of financial year by resolution, as opposed to adjudicator’s order. This can happen once every five years.

General meeting timeframes – the recommendation is to stay with 21 days notice.

Insurance – Every body corporate must insure. The recommendation is to include new statutory motions to allow a committee to arrange an insurance policy within set parameters at the AGM and then to ratify it at the next AGM. That next AGM would then also include the authorisation for the next policy as well. If either motion was defeated an EGM would be needed to deal with the reason for the refusal.

Major spending limit – the major spending limit will be increased to the lesser of $1,100 per lot or $20,000 (up from $10,000).

Committee spending limit – will be the lesser of $500 per lot or $20,000. This will tie it up with the major spending limit more closely and deal with the anomaly we wrote about here.

Committee membership – committee members will need to remain financial during their tenure or they will not be able to vote on committee resolutions.

Minutes – what is ‘full and accurate’ will get a definition. It still will not include transcripts of what was said at the meeting.

Resident managers – will still not be able to have a voting role on the committee even if they own a lot.

Committee ballots – will be changed so Accommodation and Standard Module votes for committee positions will be by secret ballot unless the body corporate has decided otherwise.

Lobbying – the proposal is to extend the obligations for resident managers not to unfairly influence the outcome of a committee election, which currently applies to body corporate managers only. The key is what ‘unfairly’ will mean. If you don’t like someone, is recommending a vote against them unfair?

Committee meetings – owners will have the right to submit motions for consideration at the next committee meeting. Committees will have to reasonably consider those motions. This one will be interesting.

Votes outside committee – will expire if they are not passed within 21 days. At the moment (despite the practice of some body corporate managers to insert a drop dead date on these), they can be left open indefinitely if votes do not come back in one way or the other.

Expert committee members – Committees can still get external advice but there is no suggested need for an independent professional committee member from outside the scheme to be appointed.

Electronic voting – this can still happen after the appropriate resolution, but it will not become the default voting method (yet).

Proxies – will be capped at 5% of the number of lots in the scheme for all Modules. If there are fewer than 20 lots, only one proxy can be held.

PBC / subsidiary lot owners disputes – a subsidiary lot owner will be able to file an application against a principal body corporate relating to access to PBC records and by-law enforcement. At the moment there is no direct connection between a subsidiary lot owner and a principal body corporate.

Costs awards – an adjudicator will be able to award costs of up to $5,000 (up from $2,000).

Body corporate seals – will be removed completely. Two signatures will be all that matters.

Body corporate emails – a body corporate should have an actual email address that is not simply ‘care of’ the body corporate manager or a committee member. Strata managers will also have a statutory obligation to update the address for service of the body corporate when they take over management of a scheme.

Committee education – the Commissioner’s Office should be given more support (i.e. funding) to educate strata owners across Queensland. As an aside, we cannot ever see a qualification to become a committee member as compulsory.

The full paper is here.

You can have your say here.