Conflicts of Interest on the Body Corporate Committee: Your Obligations

Why This Matters

Body corporate committee members are in a position of trust. They make decisions that affect all owners in the scheme — spending decisions, contractor selections, enforcement actions. When a committee member has a personal interest in one of those decisions, the integrity of the process is at risk.

The BCCM Act and the module regulations set out clear obligations for managing conflicts of interest. Failing to comply can result in challenged decisions, personal liability, and removal from the committee.

What Is a Conflict of Interest?

A conflict of interest arises when a committee member has a personal or financial interest in a matter being decided by the committee — an interest that could benefit them at the expense of other owners, or that could compromise their ability to act impartially.

Common examples:

A committee member's own business, or a family member's business, is being considered for a contract
A committee member stands to benefit from a maintenance decision affecting common property near their lot
A committee member is in a personal dispute with the owner who is the subject of a by-law enforcement decision
A committee member receives a gift or benefit from a contractor the committee is evaluating
A committee member has a financial interest in a supplier being recommended to the committee

What You Must Do

If you are a committee member and you identify a conflict of interest:

Disclose it to the committee before the matter is discussed — at the earliest opportunity
Have the disclosure recorded in the minutes
Leave the meeting while the conflicted matter is discussed and voted on
Take no part in the vote on that matter

This is not optional. These steps must be followed even if you believe your judgment would not actually be affected.

What If You're Not Sure?

If you are uncertain whether an interest creates a conflict, err on the side of disclosure. It is far better to disclose an interest that turns out not to be a real conflict than to fail to disclose one that is.

The chair of the committee can rule on whether a disclosed interest creates a conflict that requires the member to leave the meeting.

What Happens If a Conflict Is Not Declared?

A decision made where a committee member failed to disclose a conflict of interest can be challenged through the Commissioner's office. Depending on the circumstances, the decision may be set aside.

A committee member who fails to disclose a conflict may be removed from the committee by resolution at a general meeting, and may face personal liability if the body corporate suffers loss as a result.

Best Practice for Contractors

One of the most common conflict situations involves contractor selection. Best practice:

Obtain multiple quotes for significant work
Do not allow a committee member with a connection to a contractor to participate in that selection
Record the conflict and the non-participation in the minutes
Have the decision made by the non-conflicted committee members

This article is general information only and does not constitute legal advice. For advice about conflicts of interest in your scheme, consult a strata lawyer or the Office of the Commissioner for Body Corporate and Community Management.