New QLD Body Corporate Laws – March 1

The Queensland Government has passed amendments to the Body Corporate and Community Management Regulation Modules with the aim to modernise body corporate regulations and improve protection for owners.

The new amendments come into effect on 1 March 2021 and are intended to reduce costs and formally accommodate common modern practices like online voting and electronic attendances at meetings.

Please read on for a brief summary on some of the key changes that might impact you. Please note, these are not all of the amendments.

General Meetings

Electronic Voting and Attendance

Sped up by the realities of COVID-19, the new laws will permit electronic voting (including those by secret ballot) and attendance at meetings, including the use of “live” electronic voting and remote personal attendance by teleconference or videoconference.

You now have the ability to attend committee meetings electronically, if the Committee have passed a motion approving this.

You can also have a representative attend to observe the meeting on your behalf, if 24 hours’ notice has been given to the Secretary. Please note this change does not apply to Small Schemes module.

The use of email and other forms of electronic communication for the exchange of information and documents within body corporates will also be permitted.

 

Power of Attorney

To prevent “proxy farming,” 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).

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.

This does not affect the use of power attorney voting by the Original Owner.

 

New “Group of Same-Issue Motions” Procedures

Two or more motions that propose alternative ways of dealing with the same issue will now be categorised – on the agenda and in the voting papers – as a ‘group of same-issue motions’.

Under the new provisions, owners will now be able to vote for or against any or all motions in the group, or abstain from voting on any or all of the motions

Read more about “group of same-issue motions” here.

 

Reduced Quorum Requirements

Bodies corporate will soon have greater control over the requirements for achieving a quorum which is the number of people who must be present for a general meeting to be valid.

The expiring Standard Module requires at least 25 per cent of voters to be present at a general meeting before it can start.

From March 2021, a body corporate can reduce this percentage, by a special resolution, to an amount that is no less than 10 per cent of voters.

Bodies corporate will also be able to decide, by a special resolution, that only one voter must be present personally, instead of the current requirement for two voters to be present.

 

Body Corporate Manager to Receive Documents

Clarifying what was already common practice in the industry, body corporate managers are now permitted to receive documents on behalf of the Committee Secretary.

Claims that voting papers may be challenged as they were sent to the BCM rather than the secretary are no longer valid.

For more information on regulation changes for general meetings click here.

 

Committees

There are several other changes for body corporate committees to be aware of, including:

  • Eligibility of any two committee members cannot derive from ownership of the same lot
  • Motions under consideration will have a set time frame of six weeks (which may be extended to 12 weeks if required).
  • Committees members will have up to 21 days to respond to votes outside a committee meeting.
  • The ability to approve insurance policies for schemes to avoid unnecessary delays and risks.
  • Any committee member who owes a body corporate debt, will be ineligible to vote at a committee meeting or by a vote outside a committee meeting.

Eligibility of Committee Members

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.

For example, a husband and wife would now have to own two separate lots in a scheme to both be eligible for committee membership.

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.

The new regulations also contain more detailed guidance on how committee ballots are conducted, committee positions are chosen, and committee members are removed.

 

Committee Member Financial Status & Eligibility to Vote

If a committee member has a debt to the body corporate they are unfinancial and cannot vote at a meeting or via a VOC.

To be active, committee members need to stay up to date with their payments. Arrears will need to be checked before each meeting. Note that even if the member can’t vote their presence at the meeting still counts towards the quorum.

 

Owner Submitted Motions

Owners can now submit a maximum of 6 motions to be decided by the Committee within a 12 month period. If they have reached this maximum, the Committee must give written notice to the owner of that. The Committee then has 6 weeks to make a decision. If a reasonable reason can be given then the Committee can be afforded a further 6 weeks to make a decision. If a resolution is not made (either via VOCM or at a meeting) then the decision is deemed to be defeated.

 

VOCs (vote outside a committee meeting)

VOCs must now be decided within 21 days of issue or the motion will expire. If there have not been enough ‘yes’ votes to pass a motion the motion will be considered defeated.

Previous legislation allowed for the VOC to be issued but no conclusion reached. VOCs will now provide a definitive answer within 21 days. Committees need to be aware that if they don’t respond the motion may be defeated.

Insurance

Insurance is no longer subject to the Committee spending limit.

The committee will be able to spend above the limit for committee spending to put in place or renew an insurance policy, if it is not a restricted issue. However, the committee will need to supply 2 insurance quotes if the cost of the insurance policy is above the major spending limit for the scheme.

Information about the body corporate insurance policy provided at the annual general meeting will have to include details of any insurance broker or intermediary involved with the policy.

Committees will now be able to select and approve an insurance policy for their scheme allowing for quicker decisions to be made by owners and more practical solutions to situations where policy renewals do not line up in an timely manner with body corporate meetings.

Owner Protections

Disclosure of Benefits

Another measure included in the new laws will also aim to prevent inducements or rewards being given to committee members for preferential consideration of contractors.

Body corporate contractors now have to declare any commission they receive and the amount of that commission.

Before a body corporate decides to enter into a contract (including insurance), the body corporate manager and the caretaking service contractor for the scheme will need to disclose any associated:

  • commission
  • payment
  • other benefit, including the amount of the benefit if is monetary.

This is a welcome transparency change for the industry that allows owners to clearly see the value of commissions received by agents while working on owners’ behalf.

 

New Development and Defect Obligations

The new laws encourage early identification and remedy of building defects with all new schemes to be subject to defect assessment requirements.

Furthermore, 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.

Having these documents on hand from the creation of a scheme will contribute to the effective operation of bodies corporate in a range of areas. While the developers have some added responsibility, it is anticipated that the impact of this new requirement will be minimal, as these documents are likely to be in their possession already.

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.

Additionally, body corporates will now be required to consider motions to prepare defect assessment reports at second annual general meetings.

As with many of the other regulation changes, the clear intent of the new regulation is to increase owner involvement and enhance the protections afforded to them.

 

Other Changes

Body Corporate Roll

You will be required to update your details with the body corporate for the body corporate roll within 1 month (previously 2 months) after:

  • you become the owner of a lot
  • a lease or sublease is entered into for 6 months or more
  • you engage a person to rent out   your lot
  • the engagement of a person renting your lot is terminated
  • as a mortgagee, you enter into possession of a lot (i.e. when it is repossessed)

The body corporate will have to record the information required for the roll within 14 days of receiving the information.

This is important for new owners and owners with tenants. New buyers who don’t update their details will not be able to complain if they are charged late fees for unpaid levies if they haven’t provided their contact details.

Owners and agents need to keep tenant details up to date. If tenants need to be contacted and details aren’t available owners could be to blame.

 

Conclusion

These new regulations are welcome amendments for strata owners who have been seeking more flexible and modern body corporate procedures. The convenience of electronic body corporate processes is expected to assist in encouraging greater participation in body corporate decision-making.

Above all, the new limitations on committee memberships, voting and use of powers of attorney are designed to ensure a more equitable level of owner representation in decision-making processes, and the new disclosure requirements to assist in ensuring owners have the right information to make informed decisions on what is best for their scheme.

Read more about the changes to:

  • Committee membership —including voting, nominations, and engaging a body corporate manager in place of a committee
  • Committee meetings —including motions, committee decisions, voting and attendance (electronic or by an owner or representative)
  • General meetings —including quorums, power of attorney, grouping same-issue motions, voting electronically, changes to early annual meetings, and proxies for layered schemes

The regulations applying to the standard module, specified two-lot schemes, small schemes, commercial modules and accommodation modules and are largely uniform.

Each of the five regulation modules have been updated and can be accessed below:

 

If you have questions about the new strata legislation or are not sure which regulation module your scheme falls under, contact your Body Corporate Manager.

 

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