*The following information is for community titles schemes registered under the Standard, Accommodation and Small Schemes module.
Committee Spending And Spending Limits
The relevant limit for committee spending (how much a committee can spend without having to go to a general meeting) can be set by Ordinary Resolution in a motion in either an Annual General Meeting or Extraordinary General Meeting. There is no minimum or maximum limit that a Body Corporate can set.
If no amount is set by a general meeting resolution then the relevant limit is $200 x the number of lots in the scheme. For example $200 x 20 lots = $4,000 committee spending limit.
The committee must allow for goods and services tax (GST) in its spending. For example for a scheme with 20 lots the committee spending limit would be $4,000. If the committee obtained a quotation that is $4,400 this can not be approved at committee level as it goes over the relevant spending limit. The committee would need approval by a resolution at a general meeting for the quotation to be accepted.
The relevant limit for committee spending in a layered scheme is calculated by multiplying the number of layered lots in the scheme by $200.
For example: The principal scheme = 5 lots. 4 of these lots have 20 lots inside of them (these are referred to as layered lots). The spending limit is calculated as: 1 (principal scheme) + 20 (layered lots) + 20 (layered lots) + 20 (layered lots) + 20 (layered lots) x $200 = $16,200.
Available Funds
The committee is not allowed to divide a single project into smaller parts to bring the project within its spending limits. For example the project is the renovation of the foyer and there is quotations for tiles $8,000, light fittings $4,000 and painting $6,000. Each quotation comes under the committee spending limit of $16,200 however the renovations cannot be done at committee level as the whole project is over the spending limit. The committee would have to seek approval by resolution at a general meeting.
When can the committee spend over the committee spending limit?
The committee can only spend of its relevant limit if:
- The spending is authorized by a resolution at a general meeting
- The lot owners of all the lots in the scheme have given written consent
- An adjudicator has authorised the spending to meet an emergency
- The spending is needed to comply with a statutory order or notice given to the Body Corporate.
