Body corporate expenses – is that a hill to die on?

Contributed By: Hynes Legal on

Three takeaways:

  1. Arguing over spending limitations may not be worth the grief it brings
  2. Communication with the Body Corporate is key
  3. A relationship of trust with a Body Corporate Committee will solve many problems

Hills to die on in management rights

We often talk about the ‘hills to die on’ in management rights. And while that’s obviously colloquial, sometimes in management rights relationships there are times when you have to take a stand — and there are other times when you should roll over because it’s not worth the grief. 

Reimbursement of expenses is one of those things. 

Spinning out over spending

Resident Managers often look at their agreements and argue they’ve got spending authority for $500 or $1000 per item or month; yet the body corporate is saying they can’t spend that money. 

The reality is that it’s the body corporate’s money that you’re spending. It’s up to them to decide what authority they’re going to give you regarding spending. 

So even if the committee’s behaviour in relation to your spending limits is not consistent with the agreement itself and they’re pulling the reins in on you, for me, this is definitely not a hill to die on. 

You have got to ask yourself the question: Why is this happening? 

The trust factor

Usually, when spending is being micro-managed it’s because there’s some element of trust that might not be in place where it should be. It might be that there’s a new committee that wants to rein in spending across the board.

Whatever the reason, the main thing is not to pick a fight with your body corporate about your ability to go and spend $200 at Bunnings without their authorisation. That is going to lead to a far larger legal bill if we’re going to generate fights about that.

If this is happening, it is important to get back on the front foot with your relationship with the committee.

What you can do

Seek approval in advance if that’s what the issue is, because the reality is that the scheme is always going to need spending in some form on items that aren’t part of the budget.

Get the relationship back on track where you have that degree of trust, then you can go and start running your own race again in terms of expenses. 

But arguing about what your agreement gives you the right to spend is 99 times out of 100 not the path to head down.

If you do need help, please reach out

Leave a Reply

Your email address will not be published. Required fields are marked *