Are you an owner in a Body Corporate where members are claiming payment for their service to the committee?
If so, are you aware if approval for payment has been carried out by following the correct procedure? If not, the payments could be illegal.
Just like any other outgoings, payment of committee members must be approved at an Annual General Meeting (AGM) or an EGM by the Body Corporate Members (owners) BEFORE any payments can be made.
Why Might Committee Members Receive Payment?
In most cases, persons nominating for Committee do not require payment for their services. There may, however, be some instances where body corporates have paid committee members. Committee members may request remuneration, for example, if they reside interstate and are seeking payment as reimbursement for air fares or other travel expenses to attend Committee meetings, or in the case of larger schemes which generate a greater workload for the Committee, the member may request remuneration for the time they contribute to the scheme.
While this is not a usual situation, payment can be made as long as correct procedures are followed. As with any outgoings for services – for example a maintenance contract to have the common grounds maintained – costings and amounts must be approved by the Body Corporate (Owners) first.
Prior to an AGM being called, nominations for the Committee are sent out to all Body Corporate owners. This gives all owners the opportunity to nominate for the Executive and Ordinary Member positions on the Committee for the next 12 months. For detailed information on how to become a body corporate committee member, please read our article How to Join a Body Corporate Committee.
The nomination form also allows those nominating for Committee to advise whether they will be requesting payment, should they be elected to the Committee at the AGM. By ticking the relevant box on the nomination form, Committee members may request the reimbursement of expenses of not more than $50 incurred by that member in attending each Committee meeting, up to a maximum amount of $300 in a 12 month period.
If an owner does not request payment on their Committee nomination form, then no reimbursement for expenses may be claimed.
For situations where an owner nominating for Committee wishes to request payment of an amount greater than $300 in the 12 month period, they must submit a separate motion to be included on the AGM agenda, giving all owners the opportunity to vote on the request. The explanatory schedule accompanying the owner’s motion should include full details of the remuneration, allowances or expenses. This is NOT a committee decision, and therefore it must be approved by the owners of the body corporate.
If these procedures have not been followed, then the committee member could be paid illegally and this can be challenged by body corporate members (owner).
To challenge an illegal payment, a search of the Body Corporate records can ascertain whether or not committee members have followed the correct procedure as per the legislation. If not, an application may be made to the office of the Commissioner for Body Corporate, in order for a ruling to be made on the issue.
Why is it important for you to know about paid committee members?
Extra payments that have not been approved effect the amount that YOU pay in your body corporate levies.
The important issue here is that all of the Committee Members need to abide by the current legislation in order for them to carryout their duties effectively. Their Body Corporate Administration has a duty of care to advise the Committee on their breach of the current legislation. Most Committee Members are hard working individuals who give their time to assist in the running of their/your building.
This is not about whether they are paid or not, it is about everyone being aware of the current legislation so that the building can be run more efficiently and effectively.
If you have any questions about this topic or other strata related matters, please contact us on 07 5609 4924.