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EMERGENCY WORKS IN RESPONSE TO DAMAGE CAUSED BY CYCLONE ALFRED IN SEQ
March 6, 2025
1. Preliminary
1.1 At the time of this publication, Cyclone Alfred is expected to have made landfall in South East Queensland. Significant property damage is expected. Essential building infrastructure and services may be compromised and require repairs.
1.2 Lot owners will look to committee members for quick action. Committees will in turn look to strata managers and other advisors for guidance on how to navigate the complicated legislative landscape and administrative procedures to ensure those urgent repairs can be carried out.
1.3 We provide this guidance on the processes, remedies and considerations involved so it may help you help any affected strata communities you manage or are a committee member in.
2. Notify the insurer
2.1 It is imperative for bodies corporate to immediately notify insurers (or brokers responsible for handling claims) of the damage and seek their direction.
2.2 The body corporate may need to take immediate action to mitigate further damage occurring and make-safe the building. Insurers should provide cover for costs incurred in taking that urgent action but seek guidance from them or any broker.
2.3 Gather evidence of the damage so the body corporate can demonstrate the state of the building before the repairs and make-safe works were carried out.
2.4 Ideally, the body corporate should be looking for indemnity to be granted, and for the insurer to take responsibility for repairs that are not immediately needed.
3. Can the committee authorise the spending involved?
3.1 Once the situation has been assessed and the appropriate repairs have been scoped and costed, the first consideration is whether the committee can authorise the repairs being carried out. That turns on whether the cost of the proposed repairs is within the committee spending limit.
3.2 By default, the relevant limit for committee spending is $200 multiplied by the number of lots in the scheme. That limit can be increased by ordinary resolution passed in general meeting.
3.3 Peruse the minutes of past general meetings to check whether the committee spending limit has been altered. If it has not, but the cost of the repairs exceeds the default limit, then the committee can only give effect to the spending if (relevantly):
(a) the spending is specifically authorised by ordinary resolution passed in general meeting;
(b) the owners of all lots included in the scheme have given written consent;
(c) an adjudicator is satisfied that the spending is required to meet and emergency and authorises it under an order made under chapter 6 of the Body Corporate and Community Management Act 1997 (Qld); or
(d) the spending is necessary to comply with a statutory order or notice[1] given to the body corporate.
3.4 We will canvass the steps in (a), (b) and (c) below.
4. If it is within the committee spending limit
4.1 If the costs of the repair works are within the committee spending limit but are more than the major spending limit (which is usually $10,000), then the committee can authorise the spending but will need to obtain at least two quotations unless there are exceptional reasons for only having one quotation.
4.2 The lack of availability of tradespersons may be an exceptional reason. But bodies corporate should have evidence of reasonable attempts made to canvass the market to obtain multiple quotations. Document those attempts and do the best you can in the circumstances to obtain multiple quotations.
4.3 Be mindful of the usual procedures that apply to committee decision making, particularly giving notice of committee meetings and advice of a motion being decided outside committee meeting (VOCM) to all lot owners.
4.4 A VOCM is decided (and passes) when a majority of all committee members entitled to vote on the motion agree to it. You do not need to wait for the ‘closing date’ of the VOCM to pass. Once a majority have voted in favour of the motion, the decision has been made, so prepare and circulate the minute.
4.5 If the scheme is regulated by the Body Corporate and Community Management (Standard Module) Regulation 2020 (Qld), the committee would ordinarily need to wait 7 days after the minute is issued to lot owners before giving effect to the decision the committee has made. But the resolution can immediately be put into effect if it is necessary to deal with an emergency and the cost is within the committee spending limit.[1]
5. Consent of all lot owners
5.1 The quickest solution is to obtain the written consent of all lot owners to the proposed spending.
5.2 This may not be feasible or achievable for large schemes. But if the community is engaged and responsive, prepare written notice of the proposed spending that details the repair work, the quotation/s and the preferred contractor, and ask each owner to sign and return each page of that notice.
5.3 The risk in this approach is that you may not secure the consent of a minority of lot owners. Having 90% of lot owners agree to the spending is not sufficient. All owners need to agree, otherwise an adjudicator’s emergency spending order is needed or a general meeting has to be held.
5.4 Accordingly, other options (such as an application for an emergency spending order, or calling an EGM) should be explored and implemented at the same time as seeking written consent of all lot owners.
6. Emergency spending order
6.1 To short-cut the administrative procedures involved in calling a general meeting or getting consent from all lot owners, an adjudicator can authorise the spending it they are satisfied it is required to meet an emergency.
6.2 BCCM Practice Direction 18 is accessible here. It helpfully sets out the purpose of an adjudication application seeking an emergency spending order, the circumstances that should apply, the grounds that need to be demonstrated, and the material that should accompany the application. The application will also need a minute of a committee resolution authorising the application being made.
6.3 I have seen applications of this kind turned around very quickly. But keep in mind that the Office of the Commissioner for Body Corporate and Community Management is located in Brisbane and predominately staffed by people who live in South East Queensland. They have homes and families that will be affected by the cyclone too. The Office’s capacity will likely be affected at a time when South East Queenslanders call upon it more than ever. It may be that dozens (if not more) of these applications will be made from next week onwards.
6.4 Help the Commissioner’s Office help you. Be patient with the Information Service. Be accommodating with the Dispute Resolution Service.
6.5 Those applications that provide a full and frank assessment of the circumstances, are accompanied by all the required material, and are well-drafted will likely be decided quickly and approved. If an application is lacking in any of these areas, its determination may be delayed by the adjudicator making an information request or even refusing it.
6.6 Seek professional help in compiling or settling any of these applications so you are giving the adjudicator everything they need and presenting the application in a concise, logical manner so they can promptly help you.
7. Authorised by ordinary resolution
7.1 The committee can give effect to the spending if it is specifically authorised by ordinary resolution passed in general meeting.
7.2 The usual rules will apply to that general meeting and the motion proposing the spending. For example, at least two quotations will be needed unless there are exceptional reasons, and at least 21 days’ notice of the meeting must be given.
7.3 If an application for an emergency spending order is not suitable for whatever reason, it may be appropriate to instead file an application for an adjudicator’s order permitting the general meeting to be called and held on less than 21 days’ notice.
7.4 This may be appropriate if the body corporate does not have adequate funds for the repair works, so needs to raise a special contribution. In that case, the body corporate could seek orders permitting some spending for immediate make-safe works that it has available funds for and orders permitting a general meeting to be held on short notice to approve the balance of the works and a special contribution to be raised.
7.5 Use committee circulars or newsletters to inform owners as to the basis of any motion being proposed and the likely outcomes if the necessary resolutions are not achieved. The more the committee can communicate, the higher the likelihood of owners engaging in the voting.
8. If the extent of damage or repair methodology is not yet known
8.1 There will be problems with sourcing available contractors to inspect the scheme to scope out and quote on the repair works that are needed. An adjudicator cannot make an emergency spending order without knowing what spending is required.
8.2 The committee does not need to be idle and wait for a quotation to arrive. Instead, it could take the initiative to call an EGM to consider a motion to increase the relevant limit for committee spending for the purpose of carrying out repairs to any damage caused by Cyclone Alfred.
8.3 Once the committee spending limit is increased, the committee can urgently authorise the repair works. That will save having to make an application for an emergency spending order, seeking written consent of all lot owners or waiting to call the EGM once the quotation arrives.
8.4 This is an appropriate course to take if it may be several weeks until contractors can assess the situation and provide quotations. Use that time to call a general meeting on 21 days notice and call a committee meeting to be held immediately after the EGM, so the spending can be authorised shortly after the quotations are received.
8.5 Even though time will be of the essence, a body corporate should still carry out due diligence on the contractor being engaged. Run QBCC licence and ASIC searches and ensure that appropriate contracts are entered into. The body corporate could also engage a project manager or superintendent to assist it through the process.
We hope you have found this information helpful. Please reach out to us if we can assist in any way. Stay safe.
Article Contributed by Jessica Cannon, Partner, and Jason Carlson, Partner of Chambers Russell Lawyers
[1] For example, an enforcement notice issued by a local government pursuant to section 248 of the Building Act 1975 (Qld) if a building is dangerous, dilapidated or unfit for use or occupation.
[2] Section 73(1)(b), Standard Module.
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