BODY CORPORATE COMMITTEE ELIGIBILITY CRITERIA
Lot owners in a community title scheme have a statutory right to nominate for a position on the body corporate committee.
In this article we discuss the eligibility requirements for each regulation module. In other words, who can and who can’t be on the committee – including due to a relationship with another person (such as the caretaker).
As general rule, each regulation module sets out criteria which makes a person:
- eligible to be a committee member; and
- ineligible to be a committee member.
Both requirements must be met to be a committee member.
For example, one ineligibility criteria is an associate of a service contractor. As associate is broadly defined, it can unintentionally exclude committee members from being on the committee in some peculiar circumstances.
Standard and Accommodation Modules
To be eligible under the Standard or Accommodation Module the person must be:
- An individual owner in their own right;
- A family member of the individual owner (only including a spouse, child more than 18 years old, parent, brother or sister);
- A person with a power of attorney from the individual owner;
- A director, secretary or “other nominee” of the company owner; or
- A representative of a subsidiary scheme for a subsidiary scheme owner.
Even if a person meets the eligibility criteria above, they must also not satisfy any of the ineligibility criteria.
A person is ineligible if they:
- Are a body corporate manager, service contractor (which is when there is a contract with the body corporate for a term of more than 1 year) or letting agent;
- Are an associate of a body corporate manager, service contractor or letting agent (associate means a relationship or series of relationships that can be traced through marriage, de facto, ascendant, descendent, partnership, employment, fiduciary, arrangement to act in accordance with instructions or wishes of another, corporation-executive officer and corporation-substantial influencer);
- Conduct a letting business for the scheme (i.e. they operate a rent roll). Notably this does not extend to associates of those conducting a letting business for the scheme; and
- Owe a body corporate debt (or the person they nominate does).
As set out earlier – associate is broadly defined. It would encompass many types of relationships including a committee member being engaged by the caretaker to carry out tasks (even if there is no formal agreement or remuneration arrangement) or even co-directorships of unrelated companies. The only relationship that is excluded is when the caretaker acts as a letting agent for the lot owner.
Commercial Module
The Commercial Module, as with other matters it regulates, is much more flexible in relation to the administrative requirements imposed on bodies corporate.
Relevantly, a person is eligible to be on the committee if they are an owner or are simply nominated by an owner. This allows a much broader range of potential committee members.
There are also less ineligibility considerations.
A person is ineligible if they:
- Are a body corporate manager (or associate); or
- Owe a body corporate debt (or the person they nominate does).
Small Schemes Module
A committee for a scheme regulated by the Small Schemes Module only has a single person or a second person acting as secretary and treasurer – it is not a full committee like the other regulation modules.
Similarly to the Commercial Module, eligibility is determined by ownership of a lot or nomination of another person by an owner.
A person is then ineligible if they:
- Are a body corporate manager or service contractor (or associate); or
- Owe a body corporate debt (or the person they nominate does).
Article Contributed by Todd Garsden, Mahoneys
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So is a contracted onsite manager with letting rights who owns the house the manager lives in plus a vacant lot able to vote at general meetings or not under the accommodation module?
From many years of personal experience at the “coal face” of the Body Corporate Industry, there are other important considerations (as well as the legal requirements) that every owner should consider when they come to cast their important votes for “committee elections”.
It is one of the great mysteries of the Body Corporate Industry that people who are new to the building; are new to the rental pool; have never bothered to attend committee or general meetings can suddenly poll a massive number of votes; very often a number that may correlate well with the number of rental pool owners who are voting. HOW DOES THIS HAPPEN?
Often these people, once elected, attend committee meetings (sometimes), often log out or leave early; always nod most effectively and always vote “yes ” with the hierarchy. (Mind you, if you cast your vote that you personally paid for at the instruction of the caretaker or existing committee, then don’t be one bit surprised if the committee meetings are very harmonious but are rarely in your best interest as an owner.)
My advice is this. Before you vote, go back and look at the minutes for the past 2 or so years. See which existing committee members have input, views and concerns recorded. (Those with little input should never be reconsidered.) Identify which prospective committee members always vote at general meetings, attend committee meetings as observers and physically attend general meetings, submit concerns and ideas via correspondence and raise issues and concerns. These are the people most likely to serve your interests.
New owners are often coerced onto the committee by being given false information. “All you need to do is to turn up to 4 committee meetings annually.” Actually, this is not correct. Firstly, you have a legal obligation to act in the best interests of the Body Corporate and you are also required to have a reasonable understanding of the Legislation, which is really quite complex. To serve effectively you should also acquire an understanding of building process, especially with regards to financial matters. (Mind you I gave up being shocked years ago at how some committee members remain in these positions for many years and acquire zero knowledge of the Act and Regulations.)
Finally, if you are new to a building and invited to join a committee to prevent “undesirables who have nominated”, don’t be flattered. It is very likely that you are not being seen as an astute owner but are being identified as being a probable “push over”.
I guess my message is “think before you vote and think when you are invited to become a committee member.” Are you prepared to stand up for what you consider to be the correct decisions in what are 7 individual, independent votes. There is no party politics in play and no obligation to vote outside your personal code of ethics and what you think is best for all owners.
I agree. I have seen people appointed to the committee by the committee and not attend a single meeting, purely to block a position until an alternative compliant member can be found. AGM minutes are approved by voters who have not attended the previous meeting so cannot possibly know if the minutes are correct or not. Now that AGM votes can be submitted and counted without attending a meeting there is no opportunity for discussion, resulting in decisions being made even before the actual meeting. It has become a waste of time to attend the “meeting”, just cast your vote prior to the meeting and hope for the best. I think the whole regulations are overdue a total revision and committee members should be required to attend a course and demonstrate an understanding of regulations and their responsibilities.
Hi Duncan
Yes – the manager who owns lots in a building is able to vote at general meetings. This is a separate right that is based on ownership of a lot. The rules discussed in this article (about committee eligibility) do not extend to general meeting voting.
I am hearing you loud & clear Sandra and Duncan and agree with Duncan re revision of regulations and committee members attending a course.
I also find it interesting that associates of an onsite letting agent cannot be elected to the committee yet lot owners who have a signed agreement with the letting agent( to manage their lot) can be elected to the committee,I believe that until this rule changes the problems will continue!