Think Nicholsons

Apr 27

Body Corporate Tips - Spending Limits

What is the committee spending limit?

The limit for committee spending is the number of lots in the scheme multiplied by $200, or the amount set by ordinary resolution by the owners in general meeting (this can be more or less).

For example, if there are ten lots in a scheme, where the body corporate has not previously resolved to change the limit at a general meeting, the committee will be able to approve expenditure of up to $2,000 (inclusive of GST).

If the spending is above the committee spending limit what must the body corporate do?

Where the proposed spending exceeds the committee spending limit, it will need to be approved at a general meeting.

What is the major spending limit?

The limit for major spending is the lesser of the number of lots in the scheme multiplied by $1,100 and $10,000, or the amount set by ordinary resolution in general meeting (this can be more or less).

For example, using a ten lot scheme, where the body corporate has not previously resolved to change the limit at a general meeting, the major spending limit is $10,000.

Can the committee spending limit be more than the major spending limit?

It is possible for the limit for committee spending to exceed the limit for major spending. For example, in schemes with more than 50 lots that have not resolved to change any of the relevant limits at a general meeting, the limit for committee spending will be more than the limit for major spending.

If the spending is above the major spending limit what must the body corporate do?

Where the proposed spending exceeds the major spending limit, at least two quotations must accompany the motion for spending, whether it is to be voted on by the committee or in general meeting. A single quotation will suffice where, for exceptional reasons, it is not practicable to obtain two quotations.  

Can the spending be broken up?

A single project cannot be broken down into smaller parts or stages, in order to bring it within the committee or the major spending limits.

Can the limits be changed for specific expenditure?

Although not explicitly contemplated in the legislation, there is nothing preventing a body corporate from resolving to change, by ordinary resolution, the limit for committee spending and the limit for major spending for a specific item of expenditure. For example, the body corporate may wish to increase the limit for committee spending and the limit for major spending but only to enable the committee to renew the insurance policy for the building when it falls due.

What should a committee do?

A committee should:

  • be aware of the committee and major spending limits;
  • only vote on motions within the committee spending limit;
  • refer expenditure above the committee’s spending limit to a general meeting;
  • ensure sufficient quotations are obtained.

If you would like to discuss the above issue, or body corporate issues more generally, please telephone Bronwyn Ablett on (07) 3226 3944.    


Bronwyn Ablett

Senior Associate
Bronwyn has experience in the litigation and resolution of disputes predominantly in the Supreme and District Courts and also in the Magistrates Court . Those disputes have included complex commercial disputes, including proceedings against the State.