Trustee Questions Answered — Edition 1

A recurring series answering common governance questions from trustees. General principles only — see the comment policy below.

Running a body corporate raises the same handful of questions again and again, usually at the worst possible moment — mid-meeting, or the week before an AGM. Here are five that come up often, answered the way I'd answer them over a cup of coffee: straight, and grounded in what the STSMA and the Prescribed Management Rules actually say.

"How much notice do we actually need to give for an AGM?"

It depends on what's on the agenda, not on the fact that it's an AGM. Ordinary business needs 14 days' written notice (PMR 15(1)). But if a special or unanimous resolution is going to be considered at that same AGM — say, a rule amendment or borrowing money — the notice period jumps to 30 days (STSMA section 6(2)), and the notice has to specify the proposed resolution.

The mistake I see most often: trustees assume "it's just the AGM" and default to 14 days, then discover a rule change was quietly added to the agenda. Check what's actually being resolved before you set the date, not after.

"We didn't have quorum at our meeting — now what?"

Wait 30 minutes from the scheduled start time. If quorum still isn't there after that, what happens next depends on how the meeting was called. A meeting requisitioned by owners is dissolved outright. An AGM or ordinary special general meeting is automatically adjourned — same day the following week, same time and place, unless the chairperson sets a different date.

Here's the part that surprises people: at that adjourned meeting, if quorum still isn't met after another 30 minutes, whoever is present — in person or by proxy — simply constitutes quorum, and the meeting can proceed (PMR 19). The one thing this doesn't do is lower the bar for special or unanimous resolutions — those still need their full statutory voting threshold regardless of how thin the room is.

"Do trustees have to be owners in the scheme?"

No. A trustee doesn't need to own a unit. The one restriction worth knowing: a managing agent, or someone employed by the managing agent or the body corporate, can only serve as a trustee if they're also an owner (PMR 6). Outside of that, and the usual disqualification grounds (insolvency, dishonesty convictions, and so on), eligibility is broader than most trustees assume.

"Can we dip into the reserve fund to cover a shortfall in day-to-day expenses?"

Generally, no. The two funds have different jobs: the administrative fund covers the current year's operating expenses, and the reserve fund exists specifically to implement the approved maintenance, repair, and replacement plan (PMR 24). Using reserve money to plug an operating shortfall isn't just poor practice — it's outside what the fund is legally there for, unless there's a specific legal basis to do otherwise.

If you're regularly short on the operating side, that's a budgeting conversation for the next AGM, not a reason to raid the reserve.

"A trustee's relative gave us the cheapest quote for a maintenance job — can we just accept it?"

This is the one question I won't answer definitively in general terms, because it genuinely depends on your specific facts — and that's the right instinct to have about it, not a dodge. What I can tell you is the process that applies regardless of the details: the trustee with the personal interest needs to disclose it before the matter is discussed, that disclosure needs to be recorded in the minutes, and the trustee should withdraw from the discussion and the decision unless the remaining trustees lawfully decide otherwise (PMR 6). Price alone doesn't resolve a conflict of interest — proper disclosure and recusal does.

Have a governance question of your own? Send it through — general questions may get featured (anonymously) in a future edition.

This post covers general governance principles and isn't legal advice for your specific scheme. For decisions with real consequences, get advice from a qualified attorney.