What constitutes as emergency expenditure? Under section 243a of the body corporate and community management act 1997 it states; example of emergency circumstances – a burst water pipe the repair or replacement of which exceeds the body corporate committee’s expenditure limit under the regulation module applying to the scheme.
This is a topic that we have touched on in various Strata Today Editions – the last one being 2019, so we thought it pertinent to do a “refresher” as we come into storm season on what constitutes as “Emergency Expenditure” and how this should be handled.
As we should all be aware the Committee have a default amount that they are allowed to spend on various works, set at $200.00 by the number of lots in a scheme and anything that is above this amount should be approved by Owners at a General Meeting (as an aside this amount can be increased by a motion at a General Meeting – but that is a topic for another day).
The point being that if works are over the amount that the Committee are authorised to spend and a General Meeting is required this can take up to 4 weeks for a quote to be approved and in some cases works need to be done much faster than this!
If the Body Corporate genuinely believe that the work required is considered “Emergency Expenditure” application can be made to the Commissioners Office for an order that the Body Corporate be authorised to proceed with the work and the expenditure required. However the onus is on the Body Corporate to prove, in the application to the Commissioners Office, that the expenditure is an emergency.
In a recent application, the Body Corporate sought approval from the Commissioners Office to engage the services of a plumber to undertake urgent plumbing works as crushed drainage was preventing the testing of the fire sprinkler system in the basement. The works were just over the Committee’s spending limit.
A statement made by the Adjudicator in reviewing this application – “The question to determine then is whether an emergency currently exists that would warrant approval for this expenditure without general meeting resolution” and noting that it was not currently possible to undertake fire sprinkler testing and there was a risk that the basement could become flooded, they were satisfied that the situation amounted to an emergency such that the spending is urgently required and granted the approval for the Body Corporate to proceed.
More information can be obtained by visiting the Commissioners Office Website – https://www.qld.gov.au/law/housing-and-neighbours/body-corporate/maintenance/storms