Body Corporates Behaving Badly: Building Maintenance Part 2

Last month, we discussed how maintenance obligations are divided between the Body Corporate (BC) and individual Lot owners according to the definition of “common property”.

In this part we cover the rules that govern how and when a BC may authorise repair/maintenance work, the difference between maintenance and improvements and the consequences for maintenance neglect.

The rules: Generally, the BC committee has the power to authorise any building maintenance up to a limit of the total number of Lots in the complex (“Qty/Lots”) multiplied by $200.00. Each individual BC has the power to increase the spend limit but otherwise, any maintenance cost in excess of the limit must be approved at a general BC meeting. If the work will cost in excess of Qty/Lots x $1100.00 (or $10,000.00 whichever is less) then a minimum of two quotes must be obtained. Any committee for a BC covered by the Commercial Module has no spend-limits except for the universal rule that it must always act reasonably. Any maintenance falling outside these rules must be approved by a BCCM Adjudicator.

Is it maintenance or an improvement: The basic rule is that anything which repairs or replaces a pre-existing item in the BC complex will be considered to be “maintenance” and therefore capable of action by the BC committee in the usual way. Any work which stands to create something new will be classified as an “improvement” and as such can only be authorised at a
general BC meeting.

The consequences of neglect: A BC that fails to properly maintain any part of the common property, usually becomes directly liable to compensate any Lot owner or visitor who suffers financial loss as a consequence of the building defect. Compensation will be for repair/replacement of damaged property or medical bills but can also extend to cover economic loss such as the loss of rental income. Where the neglect is extreme, the BC risks having its insurance voided and the BC committee members can even be sued personally for payment of compensation out of their own money. Where the maintenance neglect is by an individual Lot owner of their own unit, the BC has the right to enter and perform the work inside the relevant Lot and then bill the Lot owner for it. This may seem brutal but a BC that fails to take action, again, becomes exposed to pay compensation to any other effected lot owner or visitor.

If any readers of this article have questions relating to their personal BC situation then we at Zande Law are presently offering a free initial consultation service. Just give us a call and we would be happy to book you in for an appointment. Michael Zande is the principal at Zande Law Solicitors and has over 25 years’ experience. To contact Michael for advice, phone 3385 0999, Suite 7, Norwinn Centre, 15 Discovery Drive, North Lakes.

The information in this article is merely a guide and is not a full explanation of the law. This firm cannot take responsibility for any action readers take based on this information. When making decisions that could affect your legal rights, please contact us for professional advice.