This article summarises the changes and what body corporate managers need to do (in addition to communicating the changes to their clients) before the new regulation modules commence on 1 March 2021.
Some changes will depend on the regulation module each scheme is regulated by. If you are unsure which changes apply, please contact us.
Electronic voting
The change:
Electronic voting can now be used for:
- committee elections (including those by secret ballot); and
- general meeting motions (including those by secret ballot).
For these changes to take effect, the body corporate must pass an ordinary resolution.
What you need to do:
Select a compliant electronic voting platform and have the body corporate pass an ordinary resolution allowing electronic voting.
Committee changes
Committee member eligibility for co-owners who own more than one lot
The change:
Co-owners who own multiple lots are now eligible to nominate for multiple committee positions based on the number of lots they own. For example if Mr and Mrs Smith own two lots together, they can both nominate and fill two committee positions.
What you need to do:
Update any templates that seek invitations for committee nominations.
Minor committees
The change:
For lots with more than 3 lots but no more than 3 owners, the owners can decide amongst themselves which committee positions they will hold. If agreement cannot be reached, the owners will jointly hold the executive positions.
What you need to do:
Identify schemes with more than 3 lots but no more than 3 owners, communicate the change to them and document the existence of the minor committee and who the committee members are.
Committee ballot, appointment and removal
The change:
More detail about how a committee ballot ought to be conducted, how committee positions are chosen and how committee members are removed.
What you need to do:
Update staff manuals and templates to ensure that they cover the more detailed provisions in sections 31-39 of the Standard Module.
Lot owner committee motions
The change:
Lot owners now have a statutory right to submit motions for the committee to consider up to a maximum of 6 motions in a 12 month period.
The committee must make a decision on the motion within 6 weeks (or an extended 6 week period if there is reason for the extension) otherwise it is deemed to have been voted against by the committee.
What you need to do:
Update templates for receiving lot owner motions which includes a process for recording the motions submitted by lot owners.
Committee meeting attendance
The change:
Committee meeting attendance can now be done electronically.
Lot owner representatives are also now entitled to attend committee meetings if they provide 24 hours’ notice to the secretary.
What you need to do:
Select a platform to allow committee members to attend meetings electronically.
Update any templates providing for only owner attendance to now contemplate representative attendance.
Committee meeting voting
The change:
Committee members are now ineligible to vote if they, or their nominating entity, owe a body corporate debt.
What you need to do:
Update processes to ensure that, before any committee votes are cast, the committee member and their nominating entity do not owe a body corporate debt.
Vote outside committee meeting deadline
The change:
A VOC is deemed to have been voted against if insufficient yes votes are cast within 21 days.
What you need to do:
Update any VOC templates and set reminders once VOCs are issued.
Part 5 engagements
The change:
A part 5 engagement (where the body corporate manager becomes the committee) can now be approved by open ballot rather than secret ballot if the body corporate approves the open ballot by ordinary resolution.
What you need to do:
Have the body corporate pass an ordinary resolution, if this open ballot is pursued (it may not be necessary).
Committee member benefits
The change:
Committee members cannot receive benefits from service contractors unless the:
- benefit is a permitted benefit (which includes the services the service contractor has been engaged for by the body corporate or a committee member at market price); or
- body corporate has approved the benefit by ordinary resolution.
What you need to do:
Carry out training on this process.
Insurance spending
The change:
The committee now has the power to spend in excess of its spending limit for insurance.
What you need to do:
Update processes to allow committee approval for insurance.
General meetings
First annual general meeting owner motions
The change:
Lot owners now have the right to submit motions to be included in the first annual general meeting if the motion has been submitted with sufficient time for it to be practicable for inclusion.
What you need to do:
Update any templates to invite submissions for motions to be included in the first annual general meeting.
General meeting agendas with an electronic secret ballot
The change:
If the meeting is to be by electronic voting, the agenda must include the electronic voting instructions for the secret ballot.
What you need to do:
Update general meeting agenda templates.
Motions with alternatives and same issue motions
The change:
There are no longer motions with alternatives for general meetings.
A better way of dealing with these issues is now called “same issue motions” whereby:
- motions dealing with the same issue are firstly identified and grouped together in the agenda– irrespective of the resolution type;
- the motions are all voted on separately;
- those that have not passed on their own resolution type are then excluded; and
- of the remaining motions, the motion with the most votes in favour is then the motion decided upon by the body corporate. If there is a tie, you flip a coin or draw straws.
What you need to do:
Update general meeting agenda templates.
Developer handover material
The change:
The developer has additional obligations to hand over further material at the first annual general meeting.
What you need to do:
Update general meeting agenda templates.
Quorum
The change:
The body corporate can now reduce the required quorum for a general meeting to:
- 10% of voters (as opposed to the default 25%); and
- 1 personally present (as opposed to the default of 2),
if it passes a special resolution to do so.
What you need to do:
Update general meeting agenda templates, quorum calculators and have the body corporate pass a special resolution.
Use of powers of attorney
The change:
The use of a power of attorney at general meeting has been restricted so that the same attorney cannot be appointed for different owners (other than family members).
What you need to do:
Update staff manuals and training material.
Out of order motion
The change:
When a motion is ruled out of order at the general meeting, the reasons must be included in the minutes.
What you need to do:
Update general meeting minute templates.
Second annual general meeting defect assessments
The change:
The body corporate is required, at its second annual general meeting (and after each stage of development for schemes subject to staged development) to consider a motion to authorise a defect assessment being undertaken.
What you need to do:
Update general meeting agenda templates.
Defect assessment plan
The change:
For schemes that have standard format lots, the body corporate can establish a voluntary defect assessment plan to arrange for a defect report to be carried out for part of a lot the body corporate is not responsible for maintaining, with the costs to be passed onto the owner.
What you need to do:
Update staff manuals and training material.
Information
Provision of documents by the body corporate
The change:
When the body corporate is obliged to give certain information to a person, if agreed to with that person, the body corporate can provide that information in a particular way (for example, sending a link to a file shared document).
What you need to do:
Update staff manuals and training material.
Information to be provided to the body corporate
The change:
Owners were obliged to give certain information to the body corporate within 2 months (for example, the sale of a lot or a long term lease being entered into). This period has now been shortened to 1 month.
What you need to do:
Update staff manuals and training material.
Updates to the roll
The change:
The body corporate must now update the body corporate roll within 14 days of receiving the relevant information.
What you need to do:
Update staff manuals and training material.
Secretary receipt
The change:
The body corporate manager can be provided with documents that are required to be sent to the secretary.
What you need to do:
Update staff manuals and training material.
Disclosure of commissions
The change:
The commission disclosure requirements for body corporate contractors now specifically require disclosure of the monetary amount.
What you need to do:
Update disclosure and engagement templates.
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