Body Corporates Behaving Badly
To the general public, the term “Body Corporate” is recognised as a property ownership arrangement where individuals own one particular unit contained within a larger multi-unit complex. For those actually involved in Body Corporates (BC’s), the term is often more aligned with a hellish twist of confusing rules and procedures which must be used in an attempt to resolve what at times can be a hotbed of bullying, greed and conflict.
In regards to understanding the “rules” there is some justification for criticism. The starting position is to look at the Body Corporate and Community Management Act (1997). Beneath the main act however there are sub-laws found in one of five different “Regulation Modules”, sub-sub-laws in something called a registered “Community Management Statement” (CMS) and even sub-sub-sub-laws in “by-laws” typically attached to the CMS. The problem is that in many cases, working out the applicable rule to a particular BC situation requires the reader to piece together parts of the main act with other provisions found down the line of the various sub-laws. With the main act containing 444 sections and the various sub-laws adding in another 100 to 250 sections, even trained Lawyers can struggle to work out which provision fits where.
In regards to situations where some (or even one) of the BC members attempt to unjustifiably foist a financial and/or physical burden onto other BC members, there is a golden rule in BC law that applies to every single decision any BC ever makes, regardless of whether it is at an AGM, EGM or Committee meeting.
S94 of the BCCM Act states…. the Body Corporate must act reasonably
Case law on s94 has explained that “reasonable” does not mean a BC must always adopt the best or fairest option nor that the BC must always take an even-handed or conciliatory approach of trying to strike a balance between competing interests. What is required is that the BC must be able to show that there was a logical basis (or reasoning) for the decision.
When it comes to BC law, the situation is that the rules are the rules. Non-compliance means any action taken is illegal and can be struck out/down by court application. In the broader area of BC debates on hot/vexed topics however, the s94 obligation for the BC to show it has acted reasonably can be a very handy tool to keep on your belt.
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.