Queensland’s new Body Corporate and Community Management Regulations came into force on Monday, 1 March 2021. The reforms are designed to streamline voting and management procedures, reduce body corporate costs, tweak committee rules and enhance protections for owners.
In this article Solicitor, Elliott Baldwinoutlines the key changes across the five regulation modules:
- Small Schemes; and
- (as relevant) Specified Two-Lot Schemes.
Electronic voting and management changes*
The new modules facilitate electronic voting for both open and secret ballot committee elections. The body corporate must decide by ordinary resolution that voters can cast their votes electronically. If a secret ballot is required, the body corporate must have an appropriate electronic voting system in place.
Another welcome change is, with the approval of the committee, voting members can attend committee meetings and vote electronically (i.e. by email, teleconference or videoconference). Non-voting members of the committee and lot owners or their representatives can also attend committee meetings electronically if approved to do so.
The new modules also increase flexibility around electronic voting at general meetings and detail the minimum requirements for electronic voting systems to be used at general meetings. Bodies corporate can also now agree that a person is personally present at a general meeting if that person can vote electronically at the meeting (i.e. by teleconference).
To help reduce the cost of elections and scheme management, where electronic voting is being used, owners can waive the requirement to receive hard copy materials for secret ballots on motions or committee elections.
If an owner provides an email address as part of their address for service, then documents and notices required to be given under the Act can now be emailed to that owner. Owners can also agree with bodies corporate to receive documents and information through file sharing services. Owners should beware that if they nominate an email address, they are taken to have consented to being served with any document or information required under the Act by email.
Changes have also been made to committee rules, including to clarify those rules:
- for each lot in the scheme, no more than one person may be elected to the committee*;
- to enhance transparency and avoid preferential treatment, committee members cannot receive direct or indirect benefits (excluding routine services such as the supply of, or payment for, a letting agent business) from caretakers and service contractors unless approved by ordinary resolution of the body corporate;
- lot owners and representatives of lot owners who are not members of the committee can attend committee meetings, provided they give notice to the secretary at least 24 hours before the meeting (representatives must provide the required information to prove that they are the lot owner’s representative in their notice)*;
- members of the committee who owe (or were nominated by an entity that owes) a body corporate debt are ineligible to vote either at committee meetings, or outside committee meetings (nor can debtor members have proxies, or be a proxy for another);
- if a motion is presented for a vote outside of a committee meeting, it will lapse if it is not agreed to within three weeks of it being presented for a vote*;
- to ensure committees are responsive to owners, motions which are submitted by lot owners for consideration by the committee must be decided as soon as reasonably practicable. The motion is deemed to be not agreed if the committee does not decide the motion within six weeks from when the motion was submitted (unless the committee elects to extend that period to 12 weeks, by notice to the lot owner stating the reason they require more time). The committee is not required to decide a lot owner’s motion if within the previous 12 month period, the lot owner has submitted a motion on the same issue, or submitted more than six motions in that period;
- unless it is made a restricted issue, the committee can now arrange or renew required insurance for the scheme (without requiring approval at a general meeting) and if the cost of the policy is more than the limit for major spending, the committee must obtain two quotes+;
- where a scheme has seven or more lots, the maximum number of committee members is limited to seven.
Enhancing the rights of owners
The new modules also include new, or clarified existing, features designed to provide greater protection of lot owners’ rights:
- clarity is provided regarding the removal of committee members by ordinary resolution (committee members can be removed by ordinary resolution or by ordinary resolution following a notice for breach of the code)^;
- motions submitted by lot owners before the first annual general meeting must be included on the agenda (if practicable)^;
- the original owner is required to provide additional material to the body corporate (both in hard copy and electronic form) at the first annual general meeting including (but not limited to) copies of the following:
- the development approval;
- the recorded community management statement for the scheme (as well as a copy of the community management statement in Microsoft Word version);
- documents relating to any claims on the original owner’s policy of insurance;
- fire and evacuation plans;
- utility service contracts and agreements;
- documents relating to all warranties for body corporate assets, plant and equipment forming part of the common property and buildings or improvements forming part of the scheme land; and
- any proxy forms under which the original owner is granted proxy for a lot owner,
- restrictions on inappropriate use of powers of attorney by limiting circumstances that a person can act as a representative for another owner under a power of attorney for more than one lot (subject to exceptions, such as where the power of attorney is given in favour of the original owner by its buyer)+;
- if a motion is ruled out of order at a general meeting, the relevant reasoning must be included in the minutes^;
- disclosure requirements regarding benefits received by body corporate managers or caretaking service contractors associated with contracts the body corporate is entering into for the supply of goods or services, are clarified and improved;
- disclosure requirements for insurance policies are expanded^;
- at the second annual general meeting (except for progressively developed schemes, where the requirement arises at the first annual general meeting) bodies corporate are required to consider a motion proposing the engagement of a qualified person to prepare a defect assessment report;
- deemed committee membership for schemes with only three owners (and three or more lots are in the scheme)*;
- introduces a strict 14-day timeframe for the body corporate to record information on the roll, coupled with a reduced timeframe for giving notices of transfer (and other matters) to one month, ensures the roll is kept up to date^.
Our Commercial Property team welcomes the overhaul of the existing Regulations and look forward to working with our clients and body corporate managers in managing these new modules. This is not an exhaustive synopsis of the changes and if you have any questions about the new modules please contact our Commercial Property team.
* Comments apply to Standard, Accommodation and Commercial modules
^ Comments apply to Standard, Accommodation, Commercial and Small Schemes modules
+ Comments apply to Standard, Accommodation and Small Schemes modules