In this video, OMB Solicitors Senior Associate, Tom Robinson discusses what you need to know about the new Body Corporate regulation modules.
Hi everyone. I’m Tom from OMB Solicitors and I work in our Body Corporate Lawyers Gold Coast team here.
Today I wanted to have a chat with you about our new body corporate regulation modules. And as you may be aware, these modules are a reform of our legislation regarding those regulation modules and that will commence from the 1 March this year. As a bit of background to those modules, it has been making in time for quite a long period, being almost eight years.
And what we’ve seen is recommendations being considered. There were originally 64 recommendations that was narrowed down to and we’ve seen a number of those recommendations now being implemented. So I thought today would be a good opportunity just before those regulation modules commence on the 1 March to look at some of the main changes that we’ve seen from this reform.
A large part of that reform is a modernisation and I think that’s an important note because what we’re dealing with is a modernisation of our regulation modules where we are bringing the modules up to practices that are already applied throughout the industry. So as you may suspect, a large change to our regulation modules relates to electronic means.
So that is electronic voting, electronic meetings, attendance, electronically video conferencing, teleconferencing and the like. It also means the ability to hold ballots, whether they be open ballots or secret ballots via electronic means. Of course, there has to be certain software upgrades and updates there, but at least the legislation now contemplates the electronic update, let’s call it.
Obviously, that was a big push because of what we went through in 2020 where Bodies Corporate were faced with the predicament of having to comply with the legislation with respect to holding of meetings and attending and having owners attend and vote at meetings when the legislation didn’t appropriately deal with those electronic access voting attendance issues. And that has probably been a very big push of why the modules have now been implemented at this time. They will be known as the 2020 regulation modules.
So what I thought I’d do now is talk about five of the main changes that we’re seeing other than, as we call it, the electronic update. So one of the more interesting update changes that we’ve now seen is the ability for lot owners to submit a motion to the committee for consideration at a committee meeting.
Now that might seem like something that happens quite frequently, but the reality is under our current legislation, owners can only submit a motion to be considered at an EGM or AGM, but the legislation now will allow for lot owners to submit a motion to a committee meeting.
What you may recall is committees deciding matters on behalf of owners such as pet applications or renovation applications. But that delegated authority that is given to the committee to be able to make those decisions is given through the bylaws, not necessarily the fact that a committee must consider someone’s motion that’s put to them. Well now that will change and lot owners will certainly be able to do that. There might not be a huge impact from that because there certainly are going to be restrictions around how that will operate and work, such as owners can only submit so many motions within twelve months. And obviously, if the motion is invalid or a restricted issue, then it doesn’t have to be considered.
There will obviously also be time frames on the committee that will be imposed as to how frequently and how quickly they must consider that motion. As it stands, if a committee receives a valid committee motion, it’s got six weeks to determine it. So that will be an interesting one to see how that plays out and whether there is a large impact on that other than realistically the requirement to have the motion determined within six weeks.
Another aspect that will affect committees will be the ability for a voting member of a committee to be considered a debt a member. So what that means is if a committee member now owes a body corporate debt, such as they haven’t paid their levies, they will lose their entitlement to vote at a committee meeting.
So as you may be aware, currently that only applies at an EGM or AGM. Being an owner loses their entitlement to vote if they owe a body corporate debt. Now this will apply to committee meetings as well. I think that was something that probably was always intended, not necessarily regulated, and now that has been regulated in the new modules.
Moving on to one of the other main amendments that we’re seeing and probably the main one that will cause a bit of grief, I think to start with, is the abolishment of motion by alternatives and it will now be considered and called a group of same issue motions.
So this will be a very topical matter, I think for bodies corporate is worth the change whereby under our current legislation, if there are two or more motions submitted that deal with the same issue, a body of corporate must put a motion, so one motion, and then list the alternatives. So there requires a bit of creative redrafting there of the motion itself and then the alternatives are listed. So the owners only get to vote once and choose one alternative. What will now occur is that won’t exist and it will be called group of same issue motions. So if a body corporate receives two or more of the motions of the same issue, all the motions will be put, but they will be designated and deemed a group of same issue motions whereby every owner can vote on every motion and you may get a result where multiple motions will actually deem to be have resolved.
But there will be a process to determine which is actually the resolved motion so that one will be a topical one I think that will cause a bit of confusion and a lot of change in terms of how we do some practices but one to be mindful of moving from the 1 March.
Another good update that we’re seeing is the ability to change a quorum. So currently it’s 25% of voters at a general meeting gives you a quorum that is going to now change to between 25% and 10% if the border corporate resolves a special resolution. So there are a lot of schemes out there, specially the investor owned schemes that will struggle to get 25% of the number of voters to make a quorum at a general meeting. That can now be amended to not less than 10% and not more than 25% if you resolve a special resolution at a general meeting.
So a good update, one that’s going to probably assist a lot of those investor owned schemes. The final one I thought I’d talk about today is closing an industry loophole regarding Powers of Attorney. So you may recall there was obviously a period there Where there was what we call proxy farming where owners would go out and farm and gather as many properties as they could so that they could vote with multiple votes, really and that got closed by the last and current modules Where there is a percentage limitation on how many owners can hold. So what the loophole that was found related to powers of attorney where an owner realistically could hold as many powers of attorney as they wanted and in some instances owners were holding ten to almost £100 of attorney for one owner which gave them a voting majority that has now changed and owners can only hold one.
Obviously there are exceptions to that such as if you have a power of attorney for a family member that won’t necessarily count towards your one power of attorney that you can hold and certainly no change to when developers hold powers of attorney under contracts of sale, usually at the original development stage.
They’re the five main amendments that I thought I’d chat about today and probably some of the more interesting ones that we’ve seen from the regulation modules outside of, as we called it, the electronic update.
If you’ve got any questions, of course, about any of those changes or any other changes to the new regulation modules, please do not hesitate to contact us here at OMB Solicitors.