The Functions and Powers of a Body Corporate

The Functions and Powers of a Body Corporate


In Queensland, there are currently over 500,000 properties that are part of a Community Titles Scheme.  While this means that a large number of people residing in Queensland are members of a body corporate, many find themselves confused about the role of a body corporate.

A body corporate is a separate legal entity created to administer common property and body corporate assets, enforce the Community Management Statement (CMS) of a Scheme, and carry out other functions required of them under the Body Corporate and Community Management Act 1997 (the Act), the relevant regulation module and the CMS. The members of a body corporate are the owners of lots within the Scheme.

Generally, in every action or decision it makes, a body corporate must act reasonably.


Role of the Committee

A committee for a body corporate is elected at every annual general meeting in accordance with the relevant regulation module. It must be made up of lot owners within the Scheme and is tasked with the general day-to-day running of the body corporate.

The committee may make certain decisions on behalf of the body corporate and attend to general administrative tasks, however it must act in the interests of the body corporate. Where the committee makes decisions that it is authorized to make on behalf of the body corporate, the decision will be considered as a decision of the body corporate itself.

For schemes apart from those under the Small Schemes Module and Specified Two-Lot Schemes Module, the committee must have at least three members and will generally include the following:

  1. A Chairperson;
  2. A Secretary; and
  3. A Treasurer.

Each of the positions above requires the committee member to assume different duties, however all committee members maintain equal authority within the committee, regardless of their position.


Body Corporate Managers

A body corporate may choose to engage a body corporate manager to provide administrative services. These administrative services often include tasks such as calling body corporate meetings, establishing budgets, issuing levy notices, and collecting levies.

While body corporate managers may be authorized by the body corporate to perform certain services, the body corporate will still ultimately be responsible for carrying out its duties. The body corporate manager must only act on decisions made properly by the body corporate. Body corporate managers also have strict reporting obligations to the body corporate.


Financial Obligations

Each lot owner in a Scheme is responsible for a share of the expenses of the body corporate. It is therefore necessary for a body corporate to agree on budgets, issue levy notices to lot owners and maintain financial records. The amount each lot owner is responsible for is generally calculated in accordance with the contribution schedule lot entitlements, which can be found in the Community Management Statement for the Scheme.

Where lot owners do not pay the levies by the due dates, the body corporate will be responsible for recovering the debt. For most Schemes, where the debt has been outstanding for two years, the body corporate must start proceedings to recover the debt within two months from the end of the two-year period.

Bodies corporate (other than those regulated by the Specified Two-Lot Scheme Module) must keep at least one or more bank accounts in its own name. They also have financial reporting requirements and must prepare formal budgets every financial year for both the Scheme’s administrative fund and sinking fund.


Common Property Rights and Obligations

As a body corporate is a separate legal entity, it may sue and be sued.

While the body corporate itself does not own the common property within the Scheme, under the Act, a body corporate may sue and be sued for rights and liabilities related to the common property.

For example, a body corporate may be sued in relation to injury or damage caused to people or lots caused by its failure to maintain common property.


Property Maintenance

The maintenance obligations of lot owners and bodies corporate are determined by the Act, the applicable regulation module, and the plan of subdivision the Scheme is registered under.

Generally, a body corporate must maintain the common property within the Scheme in a good and structurally sound condition. However, the question of maintenance obligations in Community Titles Schemes is often contentious.

If you require advice or assistance with a body corporate matter, contact the experienced team at Miller Sockhill Lawyers on 07 5444 4750.

Read other articles discussing Community Titles Schemes – Common Property and Obligation of a Body Corporate to Maintain Common Property.