Failing to act a costly gamble for Body Corporates

 

First published in the LookUpStrata Queensland Strata Magazine, June 2024


 

Volunteering to serve on a Body Corporate committee can be a rewarding task, but failing to act on important issues when they arise can make it an expensive and stressful task as well.

Strata schemes rely on the goodwill of owners to put themselves forward for roles on the Body Corporate committee. These unpaid positions are a vital component of a functioning and sustainable strata community. 

But committee members can’t just show up for the tea and Tim Tams at the meetings – they must act when decisions need to be made.

Committees have important responsibilities to uphold, including ensuring the Body Corporate complies with its legal obligation to maintain common property in good condition.

When an issue arises that needs to be addressed and the committee kicks the proverbial can down the proverbial road, it paves the way for potential trouble further down the track.

In particular, maintenance issues that are allowed to fester, often for years, leave a Body Corporate wide open for legal action that will most likely result in hefty repair costs and legal bills, often running to hundreds of thousands of dollars. 

Problems involving water leaks and faulty water-proofing membranes that form part of the common property can be extremely expensive if not fixed quickly.

Law libraries are littered with cases where a Body Corporate has been found liable for remediation works that require a special levy to be set to cover the substantial costs – and an explicit ruling from the Court that the complaining lot owner is to be exempted from paying the levy.

In most cases, the costs would have been minimised if the committee had faced up to its obligations and addressed the issue the moment it was raised.

An active and properly functioning committee should not treat the scheme’s maintenance budget like it’s their own money; the budget is all the scheme members’ money and should be spent to maintain the common property in everyone’s interests.

Repairs can be complex undertakings, involving engineering reports and multiple tenders. Accurate record keeping is a vital part of the Body Corporate committee’s role.

In a governance system where the committee can change membership every year, a clear and accurate history of past committee decisions is essential for the ongoing trouble-free operation of the scheme.

Poor record-keeping will only exacerbate an ongoing maintenance problem. New and sometimes inexperienced committee members need to be able to rely on a clear decision-trail to expedite a repair issue or it risks snowballing into a protracted and unnecessarily expensive affair.

The Courts will not regard with favour poor or absent records. Administrators have been appointed to take over the operation of dysfunctional committees where decision making has stalled or gone entirely off track.

These twin issues of failing to deal with problems in a timely manner and failing to keep accurate records can come back to haunt a strata scheme years after an initial problem has been raised.

In short, volunteering is good for the soul – but make sure you earn the karma boost by being an active and diligent committee member.