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Be very careful when reimbursing committee members or lot owners

Committee members are volunteers, and in doing their job they may incur some expenses. For example, if a committee member does not live at the scheme, they may need to drive and pay for parking to attend a committee meeting. There are a few ways a committee member can be reimbursed for expenses, but the requirements for reimbursement are very strict, and if they are not complied with, the committee member will need to pay that money back to the body corporate.

The easiest way to reimburse a committee member for expenses in attending a meeting is by a committee decision. The committee is allowed to do this, so long as the committee member is paid no more than $50 for a single meeting, and otherwise no more than $300 over a 12-month period. For example, if a committee member spends $60 on parking to attend a meeting, then they can only be reimbursed $50.

It's important to note that it is reimbursement, not payment or remuneration. If a committee member cannot provide evidence of their expense, then they cannot be paid. Reimbursement is reimbursement only.

Other reimbursements might otherwise be made if a lot owner incurred an expense that was for the benefit for the body corporate, and otherwise should have been paid for by the body corporate. For example, in a smaller body corporate, a lot owner might choose to look after the pool instead of paying someone to do so. The lot owner buys their own pool cleaning supplies to use. As this is directly related to the body corporate’s functions, that is maintaining common property, then the body corporate may be able to reimburse them. It may also be possible for the committee to reimburse them if it is within the spending limit, but if that lot owner is a committee member then they must make sure to not vote to avoid a conflict of interest.

Again it is important to note that such a payment can only be made by reimbursement only. If it is not a provable expense, it cannot paid. Also, if the expense was not incurred for the benefit of the body corporate, and if it was not related to administering or maintaining the common property or its assets, then it cannot be paid.

It may also be possible that the committee or body corporate will simply not agree to reimburse someone. Whether or not this is reasonable depends on the circumstances, but if one thing can be said, it is this: if you volunteer to do something, expect to not get paid. If you want to be reimbursed, arrange that beforehand, as there is no obligation to pay for something that was voluntarily given.

This article is intended as general information only and should not be relied upon as legal advice. For specific legal advice please contact us here.


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