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Restricted issues for committees

A committee can decide things for the body corporate, but not everything. Things that the committee cannot do include:

· fixing or changing a contribution to be levied by the body corporate;

· changing rights, privileges or obligations of owners;

· anything the body corporate decides to restrict by ordinary resolution;

· anything the legislation says the body corporate must decide by a resolution at a general meeting;

· starting court proceedings;

· paying remuneration, allowances or expenses to a committee member.

There are some exceptions to court proceedings and remuneration, however. A committee may decide to start proceedings against a lot owner to recover a liquidated debt, which is usually to recover levies. If a body corporate is already party to proceedings (such as being sued and making a counterclaim, or being involved as a third party) then the committee can act. The committee can also take court action to enforce an adjudicator’s order, but only the body corporate can appeal.

Reimbursement for committee members is also a difficult topic, because it may come close to being a conflict of interest, which we will discuss in another post.

For now, there are only two ways to reimburse a committee member. The first is if the body corporate agrees by ordinary resolution to allow certain allowances and expenses, where an explanatory schedule with full details is presented to the body corporate with the voting paper. Once decided by ordinary resolution, the committee can then pay monies according to that schedule. However, those payments must strictly comply with the schedule.

Otherwise, a committee can decide to reimburse expenses of up to $50 for a committee member to attend a meeting, but said committee member cannot be reimbursed by more than $300 in any 12-month period.

The important thing to note here is that the payment can only be made by “expenses”, and the payment is “reimbursement”. The expenses must be able to be proved, and the payment must be made by way of reimbursement. This exception does not allow committee members to be paid up to $300 a year – if an expense cannot be proven, but a member is paid, they will need to repay the body corporate.

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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