For the vast majority of lot owners paying levies, observing by-laws and voting at general meetings will be the sum of their involvement with the body corporate.
To a chosen few falls the task of leading and decision making.
Management of a body corporate is a simple enough premise: all the lot owners combined vote to elect a committee who are then responsible for day to day management, sometimes with the help of contractors such as a body corporate manager or a building manager.
Unfortunately, it’s not really all that simple. In fact there are any number ways in which body corporate committee management can go pear shaped, including:
- no one lot owner is actually prepared to be on the committee
- committee members have different agendas and conflict arises
- the committee is ineffectual and can’t get things done
- conflict occurs between the committee and contractor(s)
- the contractors are ineffectual and tasks remain undone
- the committee ends up being one person who starts feeling they “are” the body corporate
- the committee no longer has control over the scheme and disputes arise
The Effects of Poor Management
Management is a system: the combined lot owners elect the committee, the committee reviews what’s going on, discusses and makes decisions. They then instruct the body corporate manager and, if there is one, the building manager who carry out the specific tasks and provide feedback.
It will depend on where the system breaks down as to what effect it will have on the body corporate.
The most common issues are poor maintenance and cleanliness, overgrown gardens and cluttered common areas.
But other issues do arise.There may also be compliance issues such as fire safety requirements not being met leaving the building unable to respond in a crisis.
Without good management by-law breaches may not be rectified and “lawlessness” abounds. Eventually there will be those who do what they want, when they want at the detriment of other investors.
Financially levies in arrears may accrue as no effort is put into collection. The levies may not increase over a long period of time and consequently financial buffers are eroded. I’ve seen several cases where sinking funds were whittled away leaving administrative fund deficits.
The video below is a good example of the effect of poor management in a strata scheme.
Rubbish like this is a clear fire hazard. That the committee hasn’t ensured the building is cleared out signals a lack of either interest or effectiveness or even that there isn’t a committee. Quite possibly the complex is completely tenanted with no owners onsite. Possibly the perpetrator is even on the committee.
What If There Isn’t a Body Corporate Committee?
Committee positions are entirely volunteer, which is a bit of a problem if you can’t find anyone who’s prepared to give it a go. There is provision in the BCCM Act to appoint a body corporate manager to act as committee in the event that no, or not enough, lot owners are prepared to get involved.
It’s pretty rare to see it happen though and for good reason. It’s a expensive option for lot owners.
This may come as a shock but not all body corporates follow the provisions of the act to the letter of the law. Corners are cut in lots of different ways, usually aimed at keeping levies as low as possible.
When a body corporate manager is appointed to act as the body corporate committee they don’t have the ability to pick and choose what they’re going to do. If there is a maintenance issue it must be rectified. If there is a report or assessment that’s required for compliance purposes it must be obtained.
Anything that is required of a body corporate under the Act must be done by a body corporate manager appointed to act as committee.
And that’s on top of paying the body corporate manager more.
Along with rising costs comes rising levies.
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It’s really better for both body corporate and contractors if there is a committee and that committee is engaged and effective.
Which doesn’t necessarily mean that a body corporate with management issues is a poor investment, more that it’s a bargaining tool for the investor who’s prepared to get involved.
If you’re not prepared to get involved, well maybe it’s worth reconsidering.
Unless stated otherwise all the information on this website relates to Queensland legislation.
Is there a mechanism whereby one lot owner who has substantially more lots in a strata scheme (and therefore more votes) can essentially have their voting power reduced in order to maintain a balanced committee an outcomes for others? If so how can this be done?
What if that large lot owner has placed his or her nominees in committee through voting power and then proceeds to dominate the outcomes in his/her favour?
What recourse have other lot owners here?
Hi Rob
Bodies corporate are democracies – majority rules. If an owner has the majority, then they rule. They’re not doing anything wrong in protecting their interests.
The other owners are free to band together to try and outvote the majority owner, or, of course, sell and move on.
The only limits on voting rights provided in the legislation is the prohibition on voting, nominating or acting on committee if the lot owner account is in arrears.
In my current experience the body corporate committee have a power trip and use the management company as a source of power play and what I described as bullying. Despite using the conciliatory process through the BC commission and identify issues of false and misleading information and trying to enforce something out of their jurisdiction (and proving it) we are left to continue – in our view – to be isolated, made an example of and left with no option but to look to file defamation proceedings – all at our cost while also indirectly in the levy’s we also pay for the lawyer that’s defending them. Where is there fairness in the BC areas?? I’d sell and leave if I wasn’t so heavily financed to be here.
That sounds challenging Paulette
I always think of body corporate legislation like road rules. The rules are there to ensure safety and fairness, but it makes no difference how many rules there are if some people choose to ignore them and act contrarily anyway.
I am seeking for help. The developer holds many lots in my building. He ran a hotel (short rental/Airbnb) business with all the lots in this building. I believe he pushed his business cost to be shared by all owners through the body corporation Levi. We often receive raised Levi, extra administration fees and maintenance fee. I also believe the body corporation is cheating us by listing fake costs in their budget. I shave asked for all invoice and bills so I can understand how the cost occurred but received with no respond. What should I do and who (any organisation or government departments)should I contact ?thank you
Hi Vanessa
If you believe there is a dispute you may seek legal action via the Office Commissioner Body Corporate. This is NOT an ombudsman such as for the telecommunications or insurance industry. There is no body like that in a body corporate. It is up to owners to act as oversight on their own management. What that means is there is no one to complain to about this sort of issue.
If you’re suggesting the Developer is using body corporate funds to pay for costs related to their own business you will need to verify that yourself. Rather than ask for all invoices / bills to be sent to you, a mammoth and expensive process you’re likely going to have trouble enforcing, arrange for a search of records. All body corporate documents should be made available to you. You can go through, take copies of anything that concerns you then follow up.
If you do find evidence of wrong doing you will need to try to self-resolve the matter first. That means you will need to have a dialogue with your committee / fellow owners on the matter seeking the resolution you’re after, which I suppose would be repayment of funds. If that doesn’t work, then you can seek an Adjudicators Order on the matter. That is legal action against another party. So for instance, if you were to seek an Order against the body corporate, you might seek an order like “the body corporate do all required to seek reimbursement for expenses …”. The onus would be on you to prove that there is evidence to support that money was used for expenses not relating to the body corporate.