Bodies corporate and residents should consider the impact of COVID-19 on their body corporate, including what steps may be appropriate to limit transmission of the virus and to look after the interests of all residents and workers in the scheme.
Bodies corporate and their committees have a statutory obligation to act 'reasonably'. This means your actions in response to the COVID-19 pandemic need to balance the rights of individuals with the needs of other owners and occupiers and the broader community.
Additional amendments have been made tobody corporate regulations to further support bodies corporate dealing with issues arising due to COVID-19; in particular, the challenges with social distancing.
The amendments will commence on 2 October 2020 and continue in effect for the COVID-19 emergency period.
A body corporate can satisfy its obligation to allow an interested person to inspect body corporate records by either:
providing a copy
providing electronic access.
The interested person must pay the prescribed fee. The fee for electronic access is the same as the fee for inspecting in person.
Committee and general meetings
If the committee believes a public health directive would be breached, they can modify the way committee and general meetings are held.
Attendance
The committee can decide to allow voters to attend a general meeting or committee meeting remotely. For example, they can limit the number of people physically attending the meeting by holding a meeting by audio or audiovisual link, or by holding a meeting on the papers.
If the committee makes changes to meeting attendance, they must ensure they:
act reasonably in any changes made
take reasonable steps to ensure all members entitled to attend have access to the arrangements made for remote attendance.
People that attend remotely will count towards a quorum.
The committee advise of any ability to attend a meeting remotely with the notice of the meeting.
Voting
The committee may arrange for voters to vote electronically for motions, including secret ballot motions and committee elections.
If the committee allows electronic voting, they must:
be able to accept votes for motions and committee elections from voters simultaneously
take reasonable steps to allow access to electronic voting for all voters.
The committee cannot restrict a voter from voting in another way that does not involve physically attending a meeting, for example, by proxy or written voting paper.
The committee must advise of any changes made to voting with the agenda of the meeting.
Accessing submissions in dispute applications
The changes to the regulations allow us to provide copies of requested documents to inspect for dispute resolution applications, instead of providing inspections, upon payment of the relevant fee.
Waiving fees related to dispute resolution services
The Commissioner has been granted power to waive fees for inspection or copies of submissions about dispute resolution applications lodged with our office, if payment would cause financial hardship.
Likewise, the Commissioner continues to have the power to waive application fees for dispute resolution applications if the applicant is suffering from financial hardship.
Usually the committee cannot make decisions that change the rights, privileges or obligations of lot owners, which may include decisions to restrict access to common property.
The amended regulations allow committees to make decisions about restricting access to common property if reasonably necessary to comply with health directives in a timely way.
Validating actions taken since 19 March 2020 retrospectively
Because of the impacts of physical distancing and quarantine requirements during the COVID-19 emergency some bodies corporate may have already held general meetings and committee meetings that were not strictly in compliance with the legislation.
The new regulations retrospectively validate actions taken by committees to hold meetings in alternative ways, where the committee reasonably believed it was necessary to avoid going against a public health direction.
The new regulations also validate remote attendance and electronic voting procedures that may have been introduced for these meetings.
This will provide certainty that the decisions that have been made are valid, and reduce disputes about technical non-compliance with the legislation.
Earlier amendments to body corporate laws
The earlier amendments made to the Body Corporate and Community Management Act 1997 to assist bodies corporate with dealing with financial issues arising from COVID-19 commenced on 25 May 2020 and are also in effect until 30 April 2021, or an earlier date as decided by the government.
This video gives a summary of the earlier changes.
BCCM COVID-19 Temporary financial amendments
Duration 00:06:24
Slide 1
This is a quick overview of the changes to body corporate legislation included in the Justice and Other Legislation (COVID-19 Emergency Response) Amendment Act 2020 which has now been passed by Parliament.
Slide 2
This video will cover when the amendments are set to expire, sinking fund budgets and refunds, contribution due dates, penalties for late payment, debt recovery, and power to borrow.
Slide 3
Expiry of amendments. The temporary changes to BCCM legislation commence as of 25 May 2020 and expire on 31 December 2020. After this date, the permanent provisions of the legislation will again be in force. Keep this in mind as we go through the rest of the information.
Slide 4
Sinking fund budgets. Currently, the body corporate must have a sinking fund budget for the current year plus 9 years’ projection. The temporary amendments include a new phrase – “anticipated major expenditure amount” – which refers to the capital amount that the body corporate is required to raise for future years under the permanent provisions.
The temporary amendments allow bodies corporate to, via ordinary resolution:
adopt a sinking fund budget even if it doesn’t include some or all of the anticipated major expenditure amount; or
adjust a previously adopted sinking fund budget to reduce or remove the anticipated major expenditure amount
So, under the temporary provisions the body corporate need only raise sinking fund monies for the current financial year.
Slide 5
Sinking fund refunds. This slide appliesonly to those schemes which adjust their current budget.
If the body corporate has reduced or removed the anticipated major expenditure amount, it must refund to owners any amount already paid toward what has been removed from the budget.
An owner does not need to ask for this refund, the body corporate must take action.
Slide 6
Contribution due dates. Usually, any decision to fix or change a levy, including changing the due date of a levy, requires a general meeting decision.
The temporary amendments allow committees to extend the due date for contributions either for individual owners who are suffering financial hardship due to COVID-19, or for all owners regardless of how many are suffering financial hardship.
When making any decisions regarding due dates, the committee must consider the body corporate’s ability to meet necessary and reasonable spending for the current financial year.
Slide 7
Penalties for late payment. The temporary amendment provides that a body corporate cannot impose a penalty for a late payment whilst the amendment is in force. From 25 May 2020 until 31 December 2020, penalties are not applicable to late payments, even if the body corporate has previously resolved to charge penalties.
The amendment further provides an example which clarifies the timeframe.
Slide 8
The example. An account requiring payment of a contribution instalment given to an owner of a lot 2 months before the commencement is not paid until 1 February 2021. The owner is not liable for a penalty for the contribution instalment being in arrears during the relevant period. However, the owner may be liable for a penalty for the contribution instalment being in arrears before and after the period.
So: any penalties charged before the temporary legislation came into force, and after it stops being in force can be recovered. Which takes us to our next slide.
Slide 9
Debt recovery. Under the permanent provisions, the body corporate must commence debt recovery for amounts owing 2 years or longer.
The temporary provisions allow the body corporate to hold off debt recovery action until up to 2 months after 31 December 2020. However a body corporate can still choose to commence debt recovery before a debt is 2 years old, or before 31 December 2020, if it needs.
Any proceeding which commenced prior to the commencement of the temporary legislation is not affected by this change.
Slide 10
Power to borrow. The temporary legislation increases the ordinary resolution borrowing limit for bodies corporate.
Schemes under the Standard, Accommodation, or Commercial Module can borrow up to $500 x the total number of lots in the scheme by passing an ordinary resolution. Above this amount, a scheme under the Standard Module needs a resolution without dissent, and schemes under the Accommodation and Commercial Modules need a special resolution.
Schemes under the Small Schemes Module can borrow up to $6000 by passing an ordinary resolution. Above this amount requires a resolution without dissent.
Finally, there is no change for the Specified Two-Lot Schemes Module as a lot owner agreement is required for borrowing any amount.
Slide 11
And that is all of the changes forming the temporary amendments to BCCM legislation under the Justice and Other Legislation (COVID-19 Emergency Response) Amendment Act 2020. Hopefully we’ve answered any questions you have but our phone number is here on the screen if you still wish to speak to an information officer.
Body corporate levies
Some lot owners may have difficulty paying body corporate levies.
The levies are set based on the budget adopted at the annual general meeting, so the body corporate can decide how much the levies are and when they are due.
Under the amendments, committees can decide to extend the due date for levies that have already been set at the annual general meeting.
Due dates can be extended for either:
a particular owner if the committee is reasonably satisfied that the owner is suffering financial hardship due to the COVID-19 emergency
all owners.
Budgets
A body corporate can adopt a reduced sinking fund budget for its current financial year by ordinary resolution.
The budget must still allow the body corporate to raise a suitable capital amount to accommodate necessary and reasonable spending from the sinking fund in its current financial year.
However, the sinking fund budget does not need to include all or part of an amount required for anticipated major expenditure in future years.
If a body corporate has already had its annual general meeting, it can decide by ordinary resolution to adjust an existing sinking fund budget for its current financial year—removing or reducing part (or all) of the anticipated amount required for future-year major expenditure.
The body corporate must refund any contribution instalment(s) no longer needed due to the adjusted budget.
Penalties, discounts and recovery costs
The body corporate cannot charge penalty interest on unpaid levies during the period between 25 May 2020 and 30 April 2021, or an earlier date as decided by the government.
For levies that were overdue before 25 May 2020, the body corporate can decide by ordinary resolution to revoke a previous decision to either:
impose penalties on levies paid after the due date
apply a discount to levies paid on or before the due date.
In special circumstances, committees can still decide to take these actions for owners who are late in paying their levies:
From 25 May 2020 to 30 April 2021, or an earlier date as decided by the government, the body corporate can—by ordinary resolution—borrow up to an amount equal to $500 multiplied by the number of lots in the scheme. Different borrowing limits apply for schemes regulated by the Small Schemes Module.
practising appropriate hygiene and social distancing when meetings are held
holding meetings remotely (e.g. by telephone or video conference)—the legislation does not prevent this practice
the need for a quorum at meetings does not mean that committee members need to be physically present in the room
committees can also use its capacity to vote outside committee meetings.
General meetings
Bodies corporate may consider:
deferring general meetings unless there is urgent or essential business to consider—particularly in larger schemes
the ability to seek approval from an adjudicator for annual general meetings to be held outside the legislative timeframe. Learn more about expeditable orders
where and how meetings are held. You can encourage owners to submit voting papers instead of attending the meeting personally (or to vote electronically if your committee has decided to allow electronic voting)
that you may only need 1 or 2 people to be present personally at a general meeting to form a quorum (depending on the size of the scheme)
encouraging other voters to submit written votes or participate in meetings remotely (e.g. by telephone or video conference) if the body corporate can facilitate such participation
approving expenditure above the committee spending limit with written consent from all owners—reducing the need for general meetings, particularly in smaller schemes
that general meeting motions can be approved with a vote outside a meeting in schemes registered under the Small Schemes and Commercial modules.
Maintenance of common property
A body corporate must maintain common property in good condition.
The body corporate may need to consider the need for additional cleaning of common areas and facilities.
Some bodies corporate may consider:
reminding all residents, workers and guests of the importance of practising appropriate hygiene (e.g. handwashing) and social distancing
checking the wording of any by-laws to see if there is a requirement for owners or occupiers to disclose if they have an infectious disease
reasonable restrictions on the use of common areas (including facilities like pools and gyms), in line with health directives.
Our office
We have taken steps to ensure our reception is safe for clients and our staff.
Visitors are asked to:
enter the reception area one person at a time
sanitise your hands before handing over documents and using the EFTPOS machine
request brochures from behind the counter
fill out the attendance register on entry.
We will continue to conduct all conciliations by telephone to reduce face-to-face contact or the need to travel on public transport for our clients.
Otherwise it is business as usual at the Office of the Commissioner for Body Corporate and Community Management, and any changes to the status of our office will be communicated to our Common Ground newsletter subscribers and on our website.
