Don’t forget the formalities!

Don’t forget the formalities!

For lot owners in smaller body corporate schemes, particularly in 2 lot schemes, it may be tempting to neglect some of the formalities required under body corporate or owners corporation legislation. Where less people are involved, decision making can be more efficient, and a body corporate manager may not be engaged for administrative services. Over time, this may result in a relaxation over body corporate record keeping and the passing of proper resolutions.

When lot owners in a 2 lot body corporate scheme have synonymous views and are generally agreeable, it may seem counterproductive to ensure body corporate legislation is strictly complied with. Imagine if one lot owner decided they want to build a new garden bed on common property. Obtaining verbal consent from the other lot owner is significantly more convenient than passing a resolution at a meeting of the body corporate. Particularly if that meeting only consisted of the 2 owners! Similarly, if it comes the time to renew the insurance and each neighbour agrees that there is no need to change insurers, why should they waste time convening a meeting to formalise such? These decisions may seem insignificant at the time however, any failures to record the decisions of the body corporate may lead to unsavoury circumstances.

Whilst it may appear ideal to resolve body corporate matters informally, there will come a time where one lot owner sells their property. If an incoming lot owner is not as agreeable and decides to challenge decisions made regarding the body corporate, those past informal verbal approvals may come back to haunt. For example, that garden bed which has been built on common property without a proper resolution or any body corporate records to prove body corporate approval, may need to be removed. Similarly, without meeting minutes confirming the insurance, an incoming lot owner may question whether the body corporate is functioning properly. These same issues may arise if a dispute unravels between the 2 lot owners regarding a past informal decision.

It is important to remember that whilst you may get along with your current neighbour and are able to administer the body corporate efficiently, an incoming neighbour may not be as easy to deal with or a dispute with your current neighbour can still arise. To avoid any future problems, you need to ensure the body corporate has maintained accurate records and resolutions are passed to formalise decisions.

Author: Jaimi-Lee Johanson