May 2019 – Body Corporate Manager motions

Lot owners have the right to propose a general motion to appoint a body corporate manager of their preference. Their choice of body corporate manager may not match the committee’s preference. In such cases, a motion with alternatives will appear on the AGM Notice of meeting. Lot owners will then get an opportunity to vote and make a choice.

Unfortunately, not all body corporate managers advise the total cost of their service when they give quotes. Very often, a body corporate manager will advise a fixed fee component to their quote but not correctly state the variable fee quote component. On a prima facie analysis, lot owners may vote for a body corporate manager that seems to be the cheapest according to the texts of the submitted motions.

Quotes of this nature are deceptive. The Act requires body corporate managers to follow a code of conduct that includes not engaging in fraudulent or misleading conduct. What should a committee do ?

One suggestion is that all lot owners are requested to resubmit motions that includes the expected total yearly fee of the proposed body corporate manager. However, this may still not get the desired result even if the lot owners agreed to do so.

We suggest that the better way is for the Committee to prepare a one-page summary that forms part of the AGM Notice that provides a true total comparison price for each body corporate manager based on their contract, pricing and the known history of the body corporate. The Committee can then form and express an opinion that voters may choose to follow.

A last option is that the Chairperson, at the AGM, could rule a motion ‘out of order’ on the basis of being misleading conduct by a body corporate manager. However, this would be a long bow to draw and if you read this adjudication, it would not be an option that we would recommend.