Body Corporate and Community Management (Standard Module) Regulation 2020 (Standard Module)

ADMINISTRATOR - whether Stanmore Lodge is dysfunctional and requires an administrator to perform the functions of the body corporate; what the terms of the appointment should be; whether the administrator should arrange exclusive use allocations, improvements, maintenance, and reimbursement of owners for past maintenance.

Act, ss 4(a), 276(4), 278, 283, 301, 330(9)(a); Standard Module, ss 13(5), 83, 86(6), 93(3)(a), 160, 162, 164, 165, 172(1)(a), 173, 180(1), 186, 187, 197, 200.

1. Jason Elliot of Toowoomba Strata is appointed administrator of Stanmore Lodge for three months for a fee of $660. He will exercise all the powers of the committee and its executive members necessary to prepare, call, and chair the 2025 annual general meeting.
2. Mr Elliot is also empowered to obtain a sinking fund forecast on behalf of the body corporate if he considers it necessary to prepare a sinking fund budget.
3. In addition to any other anticipated expenditure described at section 160(2)(a) of the Standard Module, the administrative fund budget prepared by Mr Elliot will provide for:
   1. reimbursement of $950 to Ms Shirley
   2. reimbursement of $6,140.46 to Ms Farley, and
   3. removal of debris from beneath the apron flashing pursuant to motion 13h of the 2024 AGM.
4. The body corporate will pay the above reimbursement when its finances allow, but no later than the end of the 2025-26 financial year.
5. Mr Elliot may levy owners in accordance with their lot entitlements to recover his fee and, if necessary, the cost of obtaining a sinking fund forecast.
6. Mr Elliot may add a motion to the agenda proposing his ongoing appointment as body corporate manager, including under chapter 3, part 5 of the Standard Module.
7. The financial year for Stanmore Lodge will henceforward be 1 June to 31 May.
8. The application is otherwise dismissed.

• [1] Stanmore Lodge is a duplex. Mses Farley and Shirley own lots 2 and 1 respectively. It is undisputed that their body corporate has operated informally without meetings, budgets, and contributions, though an annual general meeting was held in 2024 to try to correct matters. Ms Farley seeks the appointment of an administrator to carry out the functions of the body corporate in compliance with the Act.
• [2] Ms Farley says lot 1 enjoys de facto exclusive use of the common property surrounding lot 1 at the front of the property, while lot 2 has de facto exclusive use of the larger area of common property surrounding lot 2 at the rear. She says there was an agreement to formalise this arrangement with an exclusive use by-law. In recognition of the larger area to be allocated to lot 2, Ms Farley paid for improvements and maintenance to the common property since 2021 and had a new community management statement with the proposed exclusive use by-law prepared at her cost. But Ms Shirley then rejected the new CMS, and Ms Farley now seeks partial reimbursement of her expenditure on behalf of the body corporate.
• [3] Ms Farley applies for orders in the following terms:

An administrator be appointed for a six (6) month period to bring the Stanmore Lodge scheme into compliance with the BCCM Act 1997 and operating in a functional manner. The administrator would assume the powers and responsibilities of the body corporate for this period to decide on the matters that have led to the dispute and demonstrate the ongoing dysfunction via its absence as listed below:-

o Maintain the body corporate building and common property

o Operate the body corporate bank account, with both an administration fund and a sinking fund

o Make decisions regarding the operation of the body corporate and scheme

o Decide on exclusive use area proposal for both lots

o Development of a new CMS for the scheme to indicate exclusive use areas, changes to lot entitlements and by-laws as indicated

o Reimbursement of funds that individual lot owners have paid in the maintenance and improvement to the building and common property since 2021.

o Appoint a body corporate manager for a 3-year period

I nominated Mr Jason Elliot, of Toowoomba Strata as the administrator...

a. That MOTION 14 of the AGM held on 28/5/24 be deemed carried. That the Body Corporate lodge a new CMS for the complex to include Exclusive use areas (for both lot owners option 1).

• The administrator is to negotiate with the owner of lot 2 for compensation to the body corporate and the owner of lot 1 given the disparity in the volume of land in the proposed exclusive use areas. This may or may not include not seeking reimbursement of past expenditure and a change in lot entitlements.

• The administrator would be responsible for the development of a new CMS to reflect the exclusive use areas and changes to lot entitlements. The body corporate would be responsible for the cost of the development and lodgement of the new CMS. Surveyor's plans are already completed...

• The administrator ascertains from the surveyor's plan what within the property's common ground remains the body corporate responsibilities and which areas will become exclusive use areas with the lot owner's assuming responsibility for these areas respectively. This will be clearly recorded for all present and future lot owners.

• The administrator will ensure that the by-laws protect the rights of both the body corporate and individual lot owners and that access to infrastructure be considered in the new CMS. This may or may not require the addition of an easement on the property to allow access without conflict or breach of exclusive use rights of lot owners.

b. That the administrator accepts the quote from Solutions in Engineering to develop a report for a sinking fund forecast. Quote is for $588.00. The cost for the reports will be drawn from the body corporate funds. A special contribution levy would be required to fund this report.

c. That the administrator accepts the quote from National Roof Inspections to develop a report on the roof of Stanmore Lodge. The quote is for $852.50. The cost for the reports will be drawn from the body corporate funds. A special contribution levy would be required to fund this report.

d. That the Administrator sets a budget and raise levies for the scheme to be functional and compliant. The levy would be paid quarterly with the first payment due 30 days from the date of adjudication...

e. That the Administrator impose a special contribution levy to raise funds for the scheme as follows: - each lot owner would be required to contribute to the fund due 30 days from the date of adjudication. Total amount per lot owner due is set at $24,911.87...

1. That the administrator has the body corporate reimburse the individual lot owners from the special contribution levy for the monies spent on maintenance and improvements to common ground since 2021. All expenses were approved retrospectively at the AGM on 28/5/24. The reimbursement requested is as follows:-

Lot 1 Mrs Janet Shirley to be reimbursed: - $5,892.80

Lot 2 Ms Rita Farley to be reimbursed: - $31,049.44

g. That the administrator appoints Toowoomba Strata as the body corporate manager for a three (3) year period to ensure that the scheme remains compliant and functional and lot owners begin to work collaboratively in the management of the property, as they increase their understanding of the obligations and responsibilities of a body corporate...

h. That the administrator engages the services of a contractor to provide garden and lawn maintenance. The administrator is requested on behalf of the body corporate to accept the quote from Top Lawn and engage their services for yard and maintenance at an estimated cost of $3.597.00/annum. The cost for this service would be drawn from body corporate funds...

1. That the administrator engages the services of a contractor to complete driveway works at the rear of the property for safe entry/exit to lot 2. Refer attachment No 10a for quote from Tony's Trade Services for $11,160.00. The cost of these works would be drawn from body corporate funds - a special contribution levy would be required.

j. That the administrator adopts a debt collection policy for the Stanmore Lodge body corporate as follows:-

• 45 day after the due date - the matter is referred to Strata Legal Queensland to recover the outstanding debt

• [4] As discussed in detail below, I am satisfied that an administrator is required to prepare and conduct the 2025-26 AGM, including preparing administrative and sinking fund budgets, as the body corporate has shown itself incapable of meeting those statutory requirements unaided. It is not yet evident that the body corporate is otherwise incapable of operating compliantly.
• [5] I also accept that the owners are entitled to reimbursement of expenses they incurred meeting the body corporate's statutory maintenance responsibilities while it has not been operating properly. The administrator will provide for that in the 2025-26 budgets. However, it is not evident that all the expenses claimed by Ms Farley were for necessary maintenance. Some may have been improvements. I have not made any orders in relation to those, as they were not authorised by the body corporate, it is not obvious that they would have been supported by Ms Shirley if body corporate authorisation had been sought, and they were not mandatory.

Whether an administrator is required and on what terms

• [6] An administrator can be appointed to carry out the functions of a body corporate that is too dysfunctional to comply with its statutory framework.[1] It is typically done on the least intrusive terms sufficient to address the evident dysfunction, preserving body corporate control over its own affairs to the greatest extent possible given that self-management is an inherent aspect of community titles schemes.[2]
• [7] Ms Farley seeks a six month appointment, seemingly to exercise all the powers and functions of the body corporate. But I am not satisfied that level of dysfunction has been demonstrated. At the 2024 AGM, the body corporate resolved to accept an insurance valuation, insure the common property, and conduct some maintenance of the common property.[3] A body corporate committee exists by default, with both owners sharing the executive positions in the absence of agreement to the contrary.[4] The body corporate has shown itself capable of meeting some of its obligations.
• [8] The 2024 AGM failed to adopt budgets and contributions, which was a breach of statutory requirements.[5] A motion to adopt budgets was not on the agenda as required.[6] There was a motion proposing monthly contributions, but it was not based on budgets for the financial year as it should have been.[7] The body corporate clearly requires assistance in this respect.
• [9] It would make best sense to address the absence of budgets at this year's AGM. There is no longer any point worrying about the budgets for 2024-25. I will appoint an administrator for three months to prepare and conduct the 2025 AGM, including motions to adopt administrative and sinking fund budgets and contributions for 2025-26.
• [10] There can be some complexity to preparing a sinking fund budget, particularly at a scheme like Stanmore Lodge where there are no records of historical expenditure or the condition of the common property. The budget must not only provide for expenditure in 2025-26, but also "reserve an appropriate proportional share of amounts necessary to be accumulated to meet anticipated major expenditure over at least the next 9 years after the financial year".[8] That is probably why Ms Farley has sought an order that the administrator engage Solutions in Engineering to prepare a sinking fund forecast.
• [11] I will not make that order as a sinking fund forecast is not a statutory requirement. It is a common and useful tool, but it is not mandatory. Instead, I will empower the administrator to obtain a sinking fund forecast at body corporate expense if they consider it necessary to prepare a sinking fund budget, and leave the question to their professional judgement.
• [12] I will not empower the administrator to engage a body corporate manager as sought by Ms Farley. Body corporate managers are also common but not mandatory. Both owners favour the engagement of a body corporate manager though, and it is likely a good idea given the acrimony between them. I suspect neither owner would enjoy working closely with the other to ensure their body corporate continues to operate in a compliant manner. A body corporate manager could reduce the need for such close collaboration. In fact, the owners might like to engage a body corporate manager to carry out all the functions of the committee and its executive members pursuant to chapter 3, part 5 of the Standard Module, removing the need for either of them to be involved in committee decision-making.
• [13] With that in mind, the administrator will be at liberty to include a motion on the agenda of the 2025 AGM proposing their own engagement as the body corporate manager for Stanmore Lodge, including under chapter 3, part 5 if they wish. Owners may also submit their own motions proposing the engagement of alternative body corporate managers, which would be combined with the administrator's proposal as a group of same issue motions. The body corporate can then decide whether to engage a body corporate manager, who to engage, and on what terms.
• [14] To prepare budgets, determine the timing of contributions, and schedule future AGMs, the body corporate must know its financial year. When the Act commenced, Stanmore Lodge's financial year became "each year ending on the last day of the month containing the anniversary of the first annual general meeting".[9] The present owners are unaware when the first annual general meeting was held, but they have agreed to a financial year of 1 June to 31 May. I will include an order to that effect.[10] That will mean the AGM must be held between 1 June and 31 August.[11]
• [15] I am otherwise not presently satisfied that it is necessary to entrust the following matters to an administrator:
  1. Maintenance of the building and common property. It is not yet apparent that the body corporate will be incapable of undertaking appropriate maintenance with money in its account and the assistance of a body corporate manager.
  2. Scheduling regular meetings and keeping proper records. That may also be achieved with the assistance of a body corporate manager, as favoured by both owners.
  3. Setting budgets and determining levies. The administrator will prepare the budgets and propose the contributions, but owners must then authorise them at the AGM. If that approach fails, it may be necessary to empower an administrator to adopt the budgets and contributions on behalf of the body corporate. But it is not obvious that will be necessary at this stage. No budgets were proposed at the 2024 AGM, and the contributions that were proposed were not based on budgets, so owners have not yet had a proper opportunity to make the decisions required by the Act.
  4. Determining special levy contributions. A special levy is only necessary where "a liability arises for which no provision, or inadequate provision, has been made in the budget".[12] If a liability can be foreseen at an AGM, it should be included in the administrative or sinking fund budget.
  5. Operating the bank account/making decisions about the operation of the body corporate. It is not yet evident that the body corporate will be unable to do these things itself with the assistance of a body corporate manager following a proper AGM. Both owners acknowledge that the past informal approach to running this body corporate cannot continue.
  6. Exclusive use. The body corporate is under no obligation to adopt an exclusive use by-law. The absence of one is not indicative of dysfunction.
  7. Adoption of a debt collection policy. The body corporate is under no statutory obligation to adopt such a policy. It can grant a discount for timely payment of contributions or apply a penalty for late payment, but that is not mandatory.[13]
  8. Obtaining a report on the roof. While Ms Farley is correct that the roof is common property that the body corporate must maintain in good condition, it is not evident that it is presently in poor condition or that investigation of its condition is warranted. It has leaked and been repaired in recent years, but no evidence has been submitted to indicate further repairs might be necessary. There is little evidence of a dispute about this issue either, which is a prerequisite to an adjudicator's jurisdiction. The proposed expenditure of $852.50 requires authorisation by ordinary resolution at a general meeting, but no motion to obtain a report on the roof was submitted to the 2024 AGM.[14]
  9. Engaging a lawn and garden contractor. Ms Farley anticipates that this will be necessary because she is not willing to continue to maintain the area around her lot in the absence of an exclusive use by-law. Ms Shirley, on the other hand, says she intends to continue maintaining the area around her lot. While the lawns and gardens are common property that the body corporate must maintain in good condition, there is no specific obligation upon the body corporate to engage a contractor. It has yet to be seen how the condition of the garden will progress without Ms Farley's help. It is not evident that it is presently in poor condition such that a contractor might be required. The question was not put to the 2024 AGM either, despite the proposed expenditure requiring authorisation by ordinary resolution.

• [16] Ms Farley requests a special levy to raise funds to:
  1. reimburse both owners, but predominantly her, for their past expenditure on maintenance that should have been undertaken by the body corporate, and
  2. meet certain future liabilities she expects to arise.
• [17] A special levy is not suitable for that purpose. However, the administrator could be directed to include these items in the administrative fund budget so the funds will be raised through the contributions paid by owners over the course of the year, as should normally occur in a functional body corporate.
• [18] I consider that the following expenses clearly related to maintenance needs that would ordinarily have been met by the body corporate had it been functioning properly:
  1. $1,000 paid to Tony Inglis Bricklaying in April 2023 for repairs to lot 2's back door after foundation movement caused the brickwork to separate from the timber door jambs, allowing water to enter. The body corporate must maintain in good condition "doors, windows and associated fittings situated in a boundary wall separating a lot from common property".[16]
  2. $500 paid to Nthstar Constructions in September 2022, $214.50 paid to Brendan Coonan Plumbing & Gas in April 2022, $1399.19 and $526.77 paid to Grace Gas Fitting, Plumbing and Home Maintenance in May and September 2022 respectively, all for repairs to roof leaks. The roof is common property that the body corporate must maintain in good condition.[17]
  3. $2,000 paid to Tony Inglis Bricklaying in March 2023 to replace a rotten timber post supporting the front verandah of lot 2, as the body corporate must maintain in structurally sound condition "essential supporting framework".[18]
  4. $1450 paid to Tony Inglis Bricklaying in March 2023 to repair cracked and displaced bricks forming a windowsill on the exterior of lot 2, as the exterior surfaces of the building are common property.
• [19] Ms Shirley acknowledges that this maintenance would ordinarily be the body corporate's responsibility. In fact, she contributed $950 to the cost of the roof repairs. But she objects to contributing further because she says she was not consulted about the work before it was carried out.
• [20] But I do not accept that argument in circumstances where:
  1. the body corporate was not functioning, so there were no regular meetings or other formal opportunities to ask the body corporate to undertake maintenance
  2. there is no suggestion that the fees were excessive or the work inappropriate, and
  3. the body corporate would have had no choice but to perform the work to satisfy its statutory maintenance obligations.
• [21] Accordingly, the administrator will make allowance for reimbursement of the above expenses, totalling $7,090.46, in the administrative fund budget. When the body corporate's finances allow, but no later than the end of the financial year, reimbursement of $950 will be paid to Ms Shirley for her contribution to the roof repairs, and $6,140.46 to Ms Farley for the remaining expenditure.
• [22] Ms Farley also asks that the body corporate makes provision for cleaning debris from beneath the apron flashing on the roof. While little evidence was submitted to substantiate the need for this work, I accept that the body corporate should have it carried out because it resolved to at motion 13h of the 2024 AGM. The committee must put into effect the lawful decisions of the body corporate.[19]
• [23] Several other items of expenditure Ms Farley hopes to have reimbursed may have been improvements rather than maintenance. It is unclear. The distinction is important because maintenance of the common property is mandatory and always done at body corporate expense, while improvements are discretionary and might be carried out by the body corporate or an owner at their cost.[20] Without any properly minuted body corporate decisions, it is difficult to say which category these improvements fall under. Ms Shirley made a minority financial contribution to some of the work, which may indicate that it was a body corporate improvement that she should have contributed to equally. But perhaps she was only willing to agree to the improvements if her contribution would not exceed those amounts. Otherwise, she could validly have voted the proposals down, given the discretionary nature of improvements. I cannot order Ms Shirley to bear half the cost of these works in such unclear circumstances. This applies to the following items:
  1. Earthworks and concreting to the driveway. The material submitted with the application does not establish that this work was necessary. The photographs are unclear. Some cracking of the old concrete is evident, and Ms Farley says there were holes in the bitumen in front of lot 2, but it does not demonstrate the necessity for the scale of work that was undertaken (some $19,000 worth of concreting and earthworks). It is not evident, for instance, that those defects could not have been repaired without installing a new concrete driveway. This work may have substantially been an improvement to the common property.
  2. A new boundary fence. There is insufficient evidence that the old fence was not in good condition, such that the body corporate was obliged to replace it. It does not appear to be dilapidated in the photographs submitted by Ms Farley, and Ms Farley says only that it was inadequate because the neighbour's dog jumped over it on one occasion.
  3. A new section of guttering of larger capacity. An invoice for the replacement of the gutter was submitted, and a photograph of water pouring out of the old gutter when its end caps were missing. That does not demonstrate that a new gutter was required. The replacement of the old end caps may have been sufficient.
  4. Turf for the back yard around lot 2. Ms Farley says there was previously no garden there. Installing turf where none previously existed is an improvement, not maintenance.
  5. A new mailbox. Ms Farley says the old was unstable and at risk of collapse, but that is not obvious in the single photograph submitted as evidence.
  6. Removal of two trees. Ms Farley says one tree was impeding the turning circle for lot 2 and had a termite nest at its base, while the other was compromising the drainage of the roof. But the only evidence that was submitted is photographs of the trees and invoices for their removal. There is nothing to show the trees were not in good condition and required removal, or that their removal was necessary to prevent them damaging some other part of the common property. It is not evident that the termite nest could not have been removed without removing the tree, nor that the roof could not have been kept clear of leaf litter without removing the offending tree. While the removal of trees is probably not an improvement, it is nevertheless not clearly maintenance that the body corporate was compelled to carry out.

• [24] I will appoint an administrator for three months to prepare, call, and chair the 2025 AGM, including preparing administrative and sinking fund budgets. The administrator will be empowered to obtain a sinking fund forecast if necessary. The administrative fund budget is to include provision for:
  1. reimbursement of $950 to Ms Shirley for expenses met on behalf of the body corporate
  2. reimbursement of $6,140.46 to Ms Farley for expenses met on behalf of the body corporate, and
  3. removal of debris from beneath the apron flashing pursuant to motion 13h of the 2024 AGM.
• [25] Ms Farley has proposed the appointment of Jason Elliot of Toowoomba Strata, who has quoted a fee of $660. Ms Shirley has not objected to that appointment. I see no reason not to make it.
• [26] I will declare the financial year for Stanmore Lodge to be 1 June to 31 May, so the AGM will be due between 1 June and 31 August. If owners wish to add motions to the agenda, they must submit them to the administrator by 31 May.[22]
• [27] The application will otherwise be dismissed.

[1] Act, ss 276(4), 278, 301; Surace V Commisso [2009] CCT KA002-09 at [44].

[3] Standard Module, ss 180(1), 197 & 200.

[5] Standard Module, ss 160(1) & 162(1).

[18] Standard Module, s 180(2)(b)(iii).

[21] O'Neill v Perrins & Body Corporate for Bayview Mansions CTS 9302 [2008] CCT KA003-08 at [33].