The Body Corporate Manager (BCM) is responsible for maintaining the Body Corporate Portal, which until July 2023 included a ‘Financials’ tab which let owners inspect, for example, the body corporate ‘General Ledger’. It disclosed, in near to real time, all payments made by the body corporate to service providers and allowed associated invoices to be inspected.

In July 2023, the BCM was advised that certain invoices on the General Ledger would not open and asked that she correct the problem. In response, she removed the ‘Financials’ tab entirely from the portal and has not reinstated it. This is despite requests to do so.

Transparency in body corporate financial management promotes accountability. When such information is openly shared, owners can see how their contributions are being used. This creates a sense of ownership and encourages owners to take greater interest in body corporate affairs, which can help prevent financial mismanagement.

Annual body corporate expenditure usually exceeds $4 million! Responsibility for authorising payments for all goods and services is in the hands of the committee, which is comprised of unpaid volunteers.

Restoring the General Ledger to the portal will enable ALL owners to oversight body corporate expenditure throughout the year, in ‘real time’. They will be able to question transactions, as was the case until July 2023 when the General Ledger was removed in questionable circumstances.

Legislation provides that all members of the committee must be allowed access to the body corporate’s records, without payment of a fee.

If the BCM is unable or unwilling to reinstate the General Ledger on the portal, the Committee is equipped to publish a Monthly Newsletter to all owners, with a link to the General Ledger including invoices, or attach a copy of that month’s General Ledger.

Global warming has and will continue to be a major cause of extreme weather disasters. Clean energy is the only way to save our environment for future generations.

We should take advantage of the government’s clean energy scheme to reduce the carbon footprint in our community and to save money at the same time.

Both solar panel and battery system can be subsidized by the government’s clean energy scheme.

We have total of more than 800 m2 of existing roof area on the level 3 entertainment area that is empty and available for installing solar panels. This includes more than the 400 m2 roof area on top of the gym building, more than 200 m2 of the indoor pool roof, more than 100 m2 of the conference room roof, and more than 100 m2 of the barbecue shed roof.

The removal of the trees along the length of the northeast wall on Level 3 has created an opportunity to install a line of solar panels atop the length (of almost 140 metres) of the 1.5 metre high parapet/wall. We could add another 200 m2 solar area.

Using solar to provide electricity for the recreation facilities would not result in any direct savings on electricity bills for individual apartments, but it would reduce the overall cost of providing electricity to common areas which in turn would reduce body corporate electricity costs and thereby produce saving for owners.

We estimate that solar panels could generate more than 100kw and the saving could be more than $65,000 per year.

Installing solar also is an opportunity to invest in our own complex and demonstrate a commitment to reducing energy costs. There are numerous environmental benefits of solar panels including the generation of clean, renewable energy and a reduction of greenhouse gas emissions.

Are there maintenance costs for solar power system? No, solar companies provide a 10-year warrantee for system and a 20-year warrantee for the panels.

Is there any compliance issue with AS/ANZ 3000:2018? Not at all. AS/ANZ 3000:2018 is an electrical wiring standard. All solar panel system and battery system are designed in compliance with AS/ANZ 3000:2018. It is not a question at all.

Solar companies are legally responsible to install the system per the AS/ANZ 3000:2018 requirement.

Voters should be wary of the motives of those who ask them to ‘sign’ completed voting papers.

Some body corporates communities have reported that owners were contacted about voting before an Annual General Meeting and invited to ‘sign’ completed voting papers. They were told that once signed, they should submit those voting papers as stated on the voting paper.

Some owners have been misled into believe it is permissible for another party to fully or partly complete a voting paper on their behalf. It is NOT.

Lobbying in relation to body corporate matters is not specifically regulated by law but this conduct is contrary to the spirit and intent of it.

You also have to be careful to submit your vote directly to the body corporate secretary and for it not to be forwarded to the secretary by a third party. Those votes are not counted.

In the case of Bayview Residences, the Body Corporate Adjudicator concluded that:

“If an owner simply signs a voting paper when someone else has ticked ‘yes’ or ‘no’ against each motion then the owner is not completing their voting paper themselves . . .” and declared those votes invalid.

Make your vote count. Please take a few minutes to read the voting papers and vote in favour of the results you want – not what someone else wants.

WANT MORE INFORMATION ABOUT A MOTION?

In the case of Ipomoea Court the Body Corporate Adjudicator said: “Each lot owner has 21 days’ notice of the motions on the agenda. If he or she wishes to find out more about a motion, he or she may contact the proponent of the motion, or the committee.”

Take time to read the AGM motions and if the explanatory notes are not clear, submit your questions to the Body Corporate Manager (cmg@completemanagementgroup.com.au) before you vote.

In 2019 four trees in our level 3 recreational area were proving problematic.

The trees had been planted in a very large purpose-made concrete planter box/garden bed located forward of the indoor pool. However, they had grown too large and for structural and safety reasons, had to be removed. Shrubs in the garden bed, like those planted elsewhere on the pool deck, were also removed.

This left behind a large planter box full of soil.

All that was ever needed was to top up the soil and replant shrubs – in keeping with the original ‘approved landscaping plans’ designed to complement the otherwise mostly tiled area. A timber deck was the last thing ever needed on the pool deck.

However, it’s what we got. The timber deck was inappropriately installed on top of an unstable garden bed at a cost of around $30,000. This was despite there being an abundance of space across the pool deck for more deck chairs and lounges if required.

Now, just four years later, the entire timber structure has been removed and is being replaced by, surprise, surprise, yet another timber deck – the cost of which has not been disclosed.

The committee says more than 10 cubic meters of soil were removed from the planter box and the drainage wastes cleaned. Only time will tell whether water seeping through the deck will fully drain or pond below in the planter boxes, smell and attract mosquitoes etc.

There’s also the obvious safety hazard posed by the absence of a balustrade. People unfamiliar with the area could tumble from the upper paved level onto the timber deck below. Will this be addressed this time around?

The photos put into perspective what was once a beautiful, gardened area. The abundant shade has disappeared, and we’re left with an incomplete, very expensive mess.

A long-running legal battle between Southport Central’s residential and commercial body corporates have cost residents dearly.

Our complex shares the Southport Central site with ‘Commercial’, three retail body corporates, and the Australia Fair western carpark.

Newsletter 12 published by the Committee on 14 August 2019, described the circumstances concerning the apportionment of expenses of running the Southport Central site which led to a dispute between the Commercial and Residential body corporates.

Commercial commenced legal proceedings against Residential after Residential refused to pay an amount that Commercial says was owed as part of a cost sharing arrangement,

Newsletter 12 said: “it is clear that around $4,000,000 is owed to Residential” and that the committee “will endeavour to keep owners updated and believe this process will result in a significant reduction in levies”.

Unfortunately, there were minimal efforts to keep owners updated.

In response to an owner’s question at the 8 June 2022 committee meeting question and answer session, a committee member told the 16 owners present that the legal claim by Commercial against Residential had ‘settled’ – neither party would pay anything to the other and that both parties would bear their own legal costs.

That advice was disputed by Mr Colin Buckley, the former chairperson, whom those present and the minutes confirm had been engaged by the committee as a consultant. The settlement issue has never been further addressed by the committee.

Committee minutes of 23 October 2023 (Voting Outside of Committee Meeting – or VOCM), said: “The matter remains unresolved and is essentially unchanged from what is described in Newsletter No 12”.

Ahead of the 25 March 2024 committee meeting, it was put to the committee:

That concluding (VOCM) statement is not true in that the Residential counterclaim was, in March 2021, reduced to $545,962.34 (a long way from the $4 million counterclaim mentioned in Newsletter 12) and implies that the proceedings are continuing, whereas there has been no progress in this proceeding for over three years and if the committee intends to advance the matter, it must first obtain an order from the court – which can be expected to incur significant legal costs.

QUESTIONS:

Why has no action been taken to advance or finalise this matter?
What are the intentions of the Committee?

The Chairman avoided addressing the above questions, saying only that the committee would “follow the legal advice it receives”.

The 10 June 2024 committee meeting minutes said in relation to item 6.1 legal claim by Commercial:

“We refer owners to committee newsletter no 12 sent to all owners on 14 August 2019 which is available in English and Chinese for downloading from the online community portal. Newsletter No 12 gives the background of the matter. Requests by Residential to Commercial to cease the legal action and resolve the issues by discussion have not been successful. The matter remains unresolved and is essentially unchanged from what is described in Newsletter No 12.

What can be concluded from the above is that the repeated advice to owners that the matter is ‘essentially unchanged from what is described in Newsletter No 12’ is false; and that owners have been intentionally misled by committees since March 2021

There is more to be said regarding this matter.

In the Queensland court system, where there has been no action in a court matter for a period of two (2) years, the matter is said to have gone “stale” and a party wishing to proceed further, must first obtain an order from the Court – at a cost. Costs to date, including those paid to Herdlaw, a barrister and a Queens (now Kings) Counsel are estimated to be in excess of $150,000, but the committee needs to clarify this!

This article does not dispute the committee decision to oppose the Commercial application, the original Residential counterclaim or the amended counterclaim, it does question why the committee has intentionally misled owners, leading us to believe that there was a prospect of recovering up to $4 million, notwithstanding the amount of the counter claim was reduced in March 2021 to $545,962.34.

Transparency in body corporate administrative and financial management should concern every owner.

Unfinished legal actions could cost owners hundreds of thousands of dollars. Owners have little or no way of knowing what is happening in several expensive cases due to a lack of transparency by the current body corporate committee.

We list several cases where information has been concealed. These cases demonstrate a lack of transparency by the committee. Transparency means being open and honest about what you do. It’s a necessary step in fostering a culture of trust and is essential if owners are going to understand body corporate matters and successfully manage their apartment finances in an informed manner.

1. Removal and/or omission of records from the body corporate portal

The Southport Central Residential Community ‘Portal’, to which all owners have access, is
maintained by the Body Corporate Manager (BCM). You can access the portal on your
computer using the login information and password provided by the Body Corporate Manager or on your mobile using the Community app found on the Apple and Android App Stores.

The portal is effectively the only means by which owners can keep abreast of information
concerning the body corporate and is therefore of vital interest to all owners.

Until July 2023, owners could access the portal ‘Financials’ tab which included details of invoices submitted by, and payments made to, service providers. It allowed owners to see how our body corporate monies were being spent.

However, the Financials tab was removed after the Body Corporate manager was asked why access to invoices issued by the body corporate gardener had been blocked. Rather than unlock access to the gardener’s invoices, the BCM removed the Financials tab entirely (including the General Ledger) from the portal. The BCM has not responded to requests to re-instate the ‘Financials’ tab.

The ‘Financials’ tab could not have been removed without the knowledge of the committee.

The questionable actions previously included a payment of more than $50,000 for legal costs from body corporate funds. A legal company had provided services to the company CTS 35751 Investments Pty Ltd, not the body corporate and had erroneously invoiced the body corporate. It was paid by the Body Corporate Manager from body corporate funds and the payment apparently not disputed by the committee at the time. The body corporate was subsequently re-imbursed, but the entirety of this ‘error’ was never disclosed to owners and would not have been discovered save for the investigations of the Adjudicator.

In the Adjudicator’s words: “. . . there appears to have been a wholesale failure of even a basic level of appropriate and transparent decision-making and record-keeping over an extended period . . . . decisions to invest in the company, would appear. . . to have occurred in a procedural vacuum. There appears to be an extraordinary lack of records. There also appears to have been very little disclosure to owners as to what was being done.”

If you don’t have access to the portal, or have forgotten your password, just email the Body Corporate Manager: cmg@completemanagementgroup.com.au Click here if you’d like to download the Adjudicator’s report.

2. The legal dispute with the Southport Central Commercial Body Corporate

In August 2019, a body corporate newsletter reported a long running dispute over the Residential Body Corporate arm of Southport Central paying a disproportionate share of expenses for the overall operation of the Southport Central site, which it shares with the Commercial arm, three Retail Body Corporates and Australia Fair. It was estimated that the Residential arm overpaid by $4 million. As a result, Residential withheld contributions to the common property electricity costs. Commercial then started legal proceedings.

Our committee told owners that they would be defending the proceedings and counterclaiming to claw back this money.  The newsletter concluded “We will endeavour to keep owners updated and believe this process will result in a significant reduction in levies.”

Despite repeated requests for information, successive committees did not update owners. However, in June 2022, a committee member told a committee Q&A session (attended by just 16 owners) that the legal dispute had settled along the lines that “neither party would pay anything to the other, and that both parties would bear their own legal costs”. This was despite Residential incurring legal expenses of about $150,000 which included engaging a solicitor, barrister and Kings Counsel. No further details were disclosed.

However, the matter hasn’t ended there and it seems our body corporate is still incurring legal costs. Committee meeting minutes dated 31 August this year says Southport Central Commercial action against Southport Central Residential is amongst legal matters noted as ‘current and ongoing’.

We don’t know what, if anything, has been achieved to date, and what exactly is the present status of this unresolved issue despite the spending of $150,000 of owners’ funds.

3. Unresolved debt issue with Metered Energy Holdings (MEH)

In October 2018, a body corporate newsletter reported that Southport Central Residential had changed its electricity and gas supplier from MEH to Flow Systems.

At the AGM in the same year, the body corporate approved the purchase of three gas hot water heater systems for up to $150,000, subject to a final valuation.

However, there is no available record that this purchase occurred, or confirmation as to who owns the hot water systems that Residential continues to use and maintain despite terminating the MEH contract as Southport Central Residential’s energy and gas supplier.

This raises the following questions:

• Does the body corporate or MEH own the hot water systems?
• Is the body corporate at risk of legal proceedings arising from this issue?

4. Unpaid invoices from Altogether Group estimated at $480,000

A dispute eventually arose between Flow Systems and our body corporate. In February 2021, the committee passed a motion not to pay invoices previously issued by Flow Systems (renamed as Altogether Group) and all future invoices for ‘common property’ electricity. The committee alleged that communications and negotiations between the supplier and the committee had been “unsatisfactory”, but no explanation was provided by the committee.

Common property electricity is for lighting across the complex, lifts, air-conditioning, carpark lighting and exhaust system, security system etc. As a result of the committee’s decision, invoices for common property electricity costing about $20,000 per month were not paid between February 2020 and February 2022. The two-year financial liability is calculated at about $480,000.

In March 2022, solicitors for Altogether Group, wrote to the Body Corporate concerning the outstanding accounts. The Body Corporate Manager denied receipt of such a letter but later paid an invoice from Herd Lawyers for “Professional fees for all attendances up to 5 April 2022” in response to a letter received from Hall & Wilcox regarding alleged outstanding accounts.

At the 8 June 2022 Q&A session, the committee denied there were unpaid invoices but offered no explanation as to why this could be so.  We all know that all electricity is not free and that Altogether has threatened debt recovery proceedings over these unpaid invoices, including interest and court costs.

The Committee has been asked to explain exactly where this matter stands but won’t say. Silence is NOT golden. Altogether have six years to recover the debt but do we want this issue hanging over our heads??

5. Removal of Altogether Group as our Energy Supplier

In what can only be described as dubious circumstances, the committee proposed a motion at the October 2021 AGM to replace Altogether Group with Locality Planning Energy Pty Ltd (LPE) for the supply and billing of electricity, hot water heating and cooker gas.

The motion is described as ‘dubious’ as owners were intentionally misled by the committee which presented a quote from LPE, but submitted a quote ‘attributed’ to Altogether, which had been prepared in January 2020 and was valid only until 30 June 2021. The expired quote used by the committee gave the impression that it had obtained two competitive quotes, when only one new quote had been sought, that being from LPE. At the very least, this was intentionally false and misleading, a slight of hand, the committee assuming that naive owners would not notice what had been done.

Despite several requests, neither the committee (nor the Body Corporate Manager who published the material) has not have provided an explanation as to why they engaged in such conduct.

Owners are invited to draw their own conclusions.

6. Investment Adviser’s Report

We have detailed the Body Corporate’s dubious action to spend almost $1.5 million of owners’ funds on buying four apartments in the name of a company established and operated by the then chairman of the body corporate committee and now under the control of the present Chairman. Not only was the activity ethically questionable, the body corporate’s own financial adviser had warned about the plan.

The committee had told owners and a Body Corporate Commission Adjudicator that it had relied on the investment advice provided by Innovative Financial Solutions (IFS).

The IFS report was initially provided to the committee in June 2020, but was not posted publicly on the community portal until just a few days before the 2020 AGM. The timing was too late for most owners to read and consider the report before they voted at the 2020 AGM.

Importantly, the IFS report did NOT advise the committee to invest in residential property, as they had claimed. The report cautioned against investing in real estate.  It warned about “a lack of diversity in investments”. It said: “alternative investment vehicles and asset classes are not being addressed in detail in the light of your decision to invest in residential property”/ The IFS report said it was unable “to draft an actual investment strategy document”; and concluded that “you are still heavily exposed to residential property”. The Body Corporate Adjudicator concluded: “I do not consider that the decision to invest in the Company was in accordance with the IFS advice.”

It seems this highly relevant report was removed from the community portal because it did not support the Committee’s investment scheme. In September 2022, the Adjudicator ordered that the body corporate “divest itself of its current shareholding CTS 35751 Investments Pty Ltd and recover the funds invested in that company”.

A copy of the Innovative Financial Solutions (IFS), ‘Statement of Advice’ can be found here.

The purpose of a body corporate sinking fund is to collect a small amount of money from all owners each year to meet anticipated major expenditure over the next 10-year period.

The sinking fund forecast (SFF) estimates the cost to cover future expenditure for the replacement and/or maintenance and repair of building components at the end of their expected life – and calculates what owner levy contributions will be required each year to cover those expenses when they become due.

The importance of the SFF is obvious, but few people know ‘what it looks like’ and how it provides a ‘window into the future’ of the body corporate finances.

The SFF is not set in concrete because it is based on estimates, made by experts, but there will be occasions when components fail prematurely or when a vital component must be replaced, and/or the current cost of replacement far exceeds the estimate made in the last SFF.

An example can be seen here in the case of the 2018 estimate of the costs replacement of the scheme intercom system, which enables visitors to contact residents at the entrance to their respective tower, and for the resident to remotely release the front door and activate the lift call button to enable the visitor to reach the resident’s apartment.

In 2018 this cost was estimated at $121,471 whereas Motion 10 (on the 2023 AGM agenda) shows competitive quotes between $408,204 and $539,572. The body corporate is not required to strictly follow the SFF, but it must adapt to unforeseen demand on financial resources.

The sinking fund forecast provides a blueprint and a ‘window into the future’ through which owners can see what is ‘reasonably’ expected to occur over the coming year or years both in terms of repair and maintenance of building components and the associated costs.

The easiest way to understand the scope of the SFF is to take a look at the attached SFF prepared by Seymour Consultants for our scheme in 2018.

For reasons not apparent, the sinking fund forecast has not been posted on the body corporate portal where it could be perused by owners.

Gardens across the Level 3 Pool Deck and Level 12 have progressively deteriorated over recent years. Many established plants/shrubs and palms have died off or are looking increasingly distressed.

The pool deck gardens are an important feature of our complex, which if properly maintained, will add considerably to its attractiveness and value.

The gardens are desperately in need of professional attention. The current contractor, a one-man band, does not purport to possess any horticultural qualifications, which are essential if the gardens are to be rejuvenated and maintained to an appropriate standard.

‘Thrive Horticultural’, are a team of professionals with qualifications in horticulture, relevant experience and the firm is a member of Nursery and Gardening Industry Association of QLD.

Last year we proposed a motion at the AGM that we engage Thrive Horticultural to perform the groundskeeping works at the scheme on a month-to-month agreement. This would enable us to assess the quality of the service being provided. No other contractor was proposed for this position.

The Budget proposed by the committee for 2023 included $85,000.00 for garden/lawn maintenance. The Thrive quote was $79,552 per annum (or $6630 including GST per month). We need a better solution than the current one to restore our gardens.