29 September 2020 was a momentous day for the community titles sector, as it saw the making of new Body Corporate and Community Management Act 1997 regulation modules that will modernise body corporate procedures, reduce body corporate costs and enhance protections for unit owners.
The new regulations represent the culmination of work by the Queensland University of Technology (QUT) to review current laws, and an extensive Queensland Government led consultation process in relation to QUT’s recommendations and the new regulations. The new regulations will apply to all community titles schemes under the Body Corporate and Community Management Act 1997 and will commence on 1 March 2021. This five-month timeframe will provide those living, working and investing in community titles schemes with the time needed to understand how the new regulations will apply in their scheme and to prepare for any changes.
Electronic voting and attendance
During the COVID-19 pandemic, individuals and organisations across all sectors have embraced the benefits of electronic technologies to help them communicate and conduct business and other activities. One of the key objectives of the new regulations is to help modernise body corporate procedures by allowing for greater use of electronic technologies to attend and vote at meetings, and to give and receive documents. Under the new regulations, from 1 March 2021:
Voting and non-voting body corporate committee members, and in some cases owners and certain owner representatives, will be able to attend a committee meeting electronically if authorised by the committee. Committees will be able to authorise electronic attendance:
- for a particular committee meeting or any committee meetings;
- using a particular electronic means, or any electronic means.
A body corporate will also be able to decide, by ordinary resolution, that owners can:
- attend a general meeting by electronic means such a videoconferencing;
- vote electronically.
Documents or other information that may be given under the Act or regulations, such as documents given by owners to a committee or notices of general meetings, or copies of committee meeting minutes given to owners, may be given by email, or by other agreed electronic means such by posting to file-sharing sites.
A system for receiving electronic votes, and notices and instructions to owners about electronic voting, must meet certain requirements to ensure the integrity of electronic voting processes.
There are several other changes for body corporate committees to be aware of in the lead up to March 2021. In particular, from 1 March 2021:
Membership of new committees may look different. This is because eligibility of any two committee members cannot derive from ownership of the same lot. Except in certain circumstances, an owner cannot be a voting member of a committee at the same time as a family member, co-owner, or a person who holds a power of attorney from the owner unless they own a separate lot.
An owner who submits a motion to be considered by the committee can expect an outcome within specified timeframes. The new provisions set a timeframe of six weeks, which may be extended to 12 weeks if required.
Committees members have up to 21 days to respond to a vote outside a committee meeting, otherwise the motion is deemed not passed if not enough votes are received within this timeframe.
Committees will be able to approve insurance policies for their schemes, in most circumstances, to avoid unnecessary delays and risks.
A committee member who owes a body corporate debt, or who was nominated by an entity that owes a body corporate debt, is a debtor member and ineligible to vote at a committee meeting, or by a vote outside a committee meeting.
More information about changes to committee meetings can be found here.
More information about committee membership can be found here
There have also been a number of changes which affect the running of general meetings.
To prevent what has become known as “proxy farming”, except in certain circumstances, a person will only be able to vote on motions at a general meeting, under the authority of a power of attorney for one lot owner.
New “group of same-issue motions” procedures will also apply, to facilitate fair and appropriate consideration of multiple motions about the same issues at general meetings.
There are more flexible quorum requirements for general meetings. A body corporate can reduce the number of voters required to be present at a meeting to achieve a quorum, within certain limits, and reduce the number of voters who must be personally present to one. Bodies corporate are also able to decide that a person is personally present if they can cast a vote electronically at the meeting (for example, by teleconference).
More information about changes to general meetings can be found here .
Improved lot owner protection
To improve protections for owners, under the new regulations: body corporate managers and caretakers will be required to disclose the amount of monetary benefit they are entitled to receive if a body corporate enters into an insurance policy or other contract; and new schemes will be subject to defect assessment requirements.
The new Standard Module restricts committee members from receiving direct or indirect benefits from caretaking service contractors and service contractors unless the body corporate has authorised the receipt of the benefit by ordinary resolution. The measure is intended to prevent inducements or rewards being given to committee members for preferential consideration of a contractor.
Additional items have been added to the list of documents developers must hand over to the body corporate at the first annual general meeting, including a copy of the development approval if one was required and the schemes community management statement.
More information about these changes can be found here.
The new regulations will be welcome news for many across the community titles sector, who have been seeking more flexible and contemporary body corporate procedures to support self-management of schemes and harmonious community living. In today’s busy world, the convenience of electronic body corporate processes is expected to assist in encouraging greater participation in body corporate decision-making. The new limitations on committee memberships, voting and use of powers of attorney are designed to ensure fair representation in these decision-making processes, and the new disclosure requirements to assist in ensuring owners have the information they need to make informed decisions. For further information about these and other changes in the new regulations and how they apply, contact our Information and Community Education Unit on 1800 060 119 or visit our website.
Author: Michelle Scott, Commissioner for Body Corporate and Community Management