A body corporate's spending on one maintenance item will exceed the amount set for that item in its long-term maintenance plan by more than 10%. How must the spending be approved?
Correct Answer
A) By special resolution of the body corporate
Under section 117(3) of the Unit Titles Act 2010, the body corporate must approve by special resolution any spending on a maintenance item that exceeds the long-term maintenance plan's figure for that item by more than 10%. Most other spending decisions are made by ordinary resolution (s 101), so this is one of the Act's specific special-resolution triggers.
Why This Is the Correct Answer
Section 117(3) of the Unit Titles Act 2010 requires the body corporate to approve by special resolution any amount to be spent on a single maintenance item that exceeds the amount set for that item in the long-term maintenance plan by more than 10%.
Why the Other Options Are Wrong
Option B: By ordinary resolution, like most other body corporate decisions
Ordinary resolution is the default, but section 117(3) specifically requires a special resolution for this overspend.
Option C: By unanimous resolution of all the unit owners
Unanimity is not required anywhere in section 117. The Act sets a special resolution.
Option D: By the committee, under its general delegated powers
The committee cannot exercise a power the Act reserves for a special resolution.
Deep Analysis of This Property Law Question
The long-term maintenance plan is meant to give owners warning of major costs. Section 117(3) protects owners from large overspends on a planned item by requiring the higher special-resolution threshold.
Background Knowledge for Property Law
Every body corporate must have a long-term maintenance plan (s 116) and, unless it opts out by special resolution and reviews that yearly, a long-term maintenance fund (s 117). The fund may be used only for spending relating to the plan. Spending more than 10% over the plan's amount for any one item needs a special resolution (s 117(3)). Other decisions default to ordinary resolution (s 101).
Memory Technique
Remember 'ten over means seventy-five': more than 10% over the plan for an item needs a 75% special resolution.
When a question pairs the long-term maintenance plan with an overspend, go straight to section 117(3) and a special resolution.
Exam Tip for Property Law
This is a specific statutory trigger. Do not generalise it into a rule that all major spending needs a special resolution.
Real World Application in Property Law
The plan budgets $80,000 to repaint the exterior, but quotes come in at $95,000. Because that is more than 10% over the planned amount, the body corporate puts a special resolution to the AGM before signing the contract.
Common Mistakes to Avoid on Property Law Questions
- •Thinking all large spending needs a special resolution
- •Forgetting the 10% overspend trigger in section 117(3)
- •Assuming the committee can approve the overspend
Related Topics & Key Terms
Key Terms:
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