New Body Corporate Regulations
February 19, 2021
This article summarises the changes as a result of the new regulation modules, which commence on 1 March 2021. Some changes will depend on the regulation module each scheme is regulated by.
Proactive body corporate managers will be setting up new processes and policies to help guide lot owners and committees around these changes. However, if you are a self-managed scheme, you may need to change how you administer your scheme.
Read on for a summary of the changes categorised into the following areas:
- Committee eligibility and election changes.
- Committee meeting changes.
- General meeting changes.
- Disclosure changes.
- New development and defect obligations.
- Provision of Information and Records Changes.
Committee eligibility and election changes
- Co-owners who own multiple lots are now eligible to nominate in their own right for multiple committee positions. For example, if Mr and Mrs Smith own two lots together, they can both nominate and fill two committee positions without the need for a third party to nominate one of them.
- For lots with more than 3 lots but no more than 3 owners, the owners can decide amongst themselves which committee positions they will hold. If agreement cannot be reached, the owners will jointly hold the executive positions.
- The new regulations also contain more detailed guidance on how committee ballots are conducted, committee positions are chosen, and committee members are removed.
Committee meeting changes
- Lot owners now have a statutory right to submit motions for the committee to consider up to a maximum of 6 motions in a 12 month period. The committee must consider this motion within 6 weeks (unless extended for good reason).
- Committee meeting attendance can now be done electronically.
- Lot owner representatives are now entitled to attend committee meetings if they provide 24 hours’ notice to the secretary.
- Committee members are now ineligible to vote if they, or their nominating entity, owe a body corporate debt.
- A vote outside a committee meeting is deemed to have been voted against if insufficient yes votes are cast within 21 days.
- The committee now has the power to spend in excess of its spending limit for insurance.
General meetings changes
- Electronic voting can now be used for:
- committee elections (including those by secret ballot); and
- general meeting motions (including those by secret ballot).
- If there is a general meeting with an electronic secret vote, then the agenda must include the electronic voting instructions.
- A part 5 engagement (where the body corporate manager becomes the committee) can now be approved by open ballot if the body corporate approves the open ballot previously.
- There are no longer motions with alternatives for general meetings. These are now called “same issue motions” whereby:
- motions dealing with the same issue are firstly identified and grouped together in the agenda– irrespective of the resolution type;
- the motions are all voted on separately;
- those that have not passed on their own resolution type are then excluded; and
- of the remaining motions, the motion with the most votes in favour is then the motion decided upon by the body corporate. If there is a tie, you flip a coin or draw straws.
- If the body corporate passes a special resolution to do so, the body corporate can now reduce the required quorum for a general meeting to:
- 10% of voters (as opposed to the default 25%); and
- 1 personally present (as opposed to the default of 2),
- The use of a power of attorney at a general meeting has been restricted so that the same attorney cannot be appointed for different owners (other than family members).
- When a motion is ruled out of order at the general meeting, the reasons must be included in the minutes.
- Committee members cannot receive benefits from service contractors unless:
- the benefit is a permitted benefit (which includes the services the service contractor has been engaged for by the body corporate or a committee member at market price); or
- the body corporate has approved the benefit by ordinary resolution.
- The commission disclosure requirements for body corporate contractors now specifically require disclosure of the monetary amount.
New development and defect obligations
- The developer has additional obligations to hand over further material at the first annual general meeting.
- Lot owners now have the right to submit motions to be included in the first annual general meeting if the motion has been submitted with sufficient time for it to be practicable for inclusion.
- The body corporate is required, at its second annual general meeting (and after each stage of development for schemes subject to staged development) to consider a motion to authorise a defect assessment being undertaken.
- For schemes that have standard format lots, the body corporate can establish a voluntary defect assessment plan to arrange for a defect report to be carried out for part of a lot the body corporate is not responsible for maintaining, with the costs to be passed onto the owner.
Provision of Information and Records Changes
- When the body corporate is obliged to give certain information to a person, if agreed to with that person, the body corporate can provide that information in a particular way (for example, sending a link to a file shared document).
- Owners are obliged to give certain information to the body corporate within 1 month (for example, the sale of a lot or a long term lease being entered into).
- The body corporate must now update the body corporate roll within 14 days of receiving relevant information.
- The body corporate manager can be provided with documents on behalf of the secretary.
We will contribute future articles on these topics which will discuss, in greater detail, specific types of changes, including legislative reference that apply.
This article was contributed by Todd Garsden, Partner – Mahoneys Lawyers