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The QLD Strata Magazine

When should Committee Members declare a Conflict of Interest? Page 17-18 | Cannon & Co Law

INSURANCE OFFER INSIDE

SAVE UP TO $500 Page 3-4 | Strata Insurance Solutions

Dealing with noise from upstairs neighbour Page 7-8 | Hynes Legal

August 2021 // ISSUE 9 1

Encouraging Committee Members to Vote Independently

How can committee members be encouraged to understand the laws and to think for themselves rather than being influenced by others? Every person only has one vote, and it’s incumbent on each committee member to exercise their vote.

I think behind the question, this person has experienced one or two individuals on the committee who might be influenced by others and what they’re hoping for is that everyone takes on the responsibility of making individual choices. It’s very tough. Committee members, they tend to be lay people. They’re not specialised within the industry. Although some might be lawyers or builders etc, they very rarely have a wide knowledge of the whole industry. It does seem to be the case that people who can express themselves very confidently, who are very definite in their position, can have an outside influence on committees. All I can say is every person only has one vote, and it’s incumbent on each committee member to exercise their vote. READ MORE ON THIS TOPIC HERE

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William Marquand | Tower Body Corporate willmarquand@towerbodycorporate.com.au

Calculating the Strata Insurance Premium Q

How much do historical claims impact the upcoming year’s strata insurance premium? Is there a ratio?

Claims history does impact the insurance premium.

Claims history is a major rating factor considered by insurers and therefore it does impact the insurance premium. Guidelines around claims history will differ from insurer to insurer. In our discussions with insurers, we are advised they are targeting clients with “running losses” for everyday claims such as water damage, glass & impact damage claims of less than 30% of the insurers base premium (excluding GST, Stamp Duty, Fees). In addition to paying for claims associated with “running losses” the remaining premium is used by the insurer to cover operating costs (such as wages, rent etc) and re-insurance which insurers purchase on global insurance markets to cover low frequency/high cost claims that might happen say every 25, 50 or 100 years including one off large losses (claims over say $500,000) & catastrophe events (such as storm’s, earthquake, tsunami etc). 4 www.lookupstrata.com.au

When “running losses” exceed 30%, due to operating & re-insurance costs the insurer must provision for, a policy starts to run at a loss for the insurer. Insurers are also looking at the type of claim – for example, water damage claims are less favourable for some insurers. A series of water damage claims can be a lead indicator that pipes, membranes, roofs and other water apparatus are starting to fail due to either coming to the end of their use life or they were not installed correctly when the property was built. To avoid your claims history impacting your insurance premiums, it is recommended that regular preventative maintenance is conducted.

Tyrone Shandiman | Strata Insurance Solutions tshandiman@iaa.net.au

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Body Corporate Responsibility Washing the Building

Our Body Corporate is intending to undertake a building wash, but this will not include our balconies. I know the wash will result in dirty water being deposited on the balcony windows and doors. Surely the body corporate needs to clean this?

The Body Corporate is intending to undertake a building wash of our highrise complex. The onsite manager has told me that my open air balcony walls and balcony ceiling will not be included in the building wash because they’re behind the balustrade which is not common property. If the Body Corporate is responsible for painting these areas then why are they not responsible for maintaining them i.e. cleaning. From past experience in other highrise buildings, high pressure water blasts cause dirty water to be deposited all over windows and glass doors on balconies. Why should lot owners have to clean this up if it is a result of the building wash? Is there any legislation stating that: a. is the areas within my balcony i.e. the walls ceiling etc the Body Corporates responsibility to clean and b. the body corporate must rectify, fix or clean which resulted from the works they authorised. 6 www.lookupstrata.com.au

If lots are damaged and/ or dirtied as a result of the cleaning works, the Body Corporate should make good any damage or mess.

The Body Corporate is: 1. r esponsible for maintaining its common property; 2. n ot responsible for painting your balcony if it is not common property; and 3. n ot responsible for washing the areas of your balcony which are not common property. If lots are damaged and/or dirtied as a result of the cleaning works, the Body Corporate should make good any damage or mess. READ MORE ON THIS TOPIC HERE

Hayley Gath | Mathews Hunt Legal hayley.gath@mathewshuntlegal.com.au

Apartment living

Dealing with noise from the upstairs neighbour

Our body corporate does not seem to have any bylaws to deal with neighbour’s noise such as from hard flooring and children running around.

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I’m concerned about the flooring and sound proofing of my apartment. How can residents deal with neighbour’s noise like walking, moving furniture, kids jumping up and down and running around? In our body corporate we do not seem to have bylaws or standards to cover these problems?

Your first step is to ensure you have your current by-laws.

Every scheme registered in Queensland will have by-laws. Whether they deal with noise and renovations specifically is another matter – chances are they will. Your first step is to ensure you have the current by-laws. These can be obtained from the Titles Office in Queensland. Only the bylaws registered with Titles are the ones which apply to your scheme. After that, there will be various options you can pursue, depending on what your by-laws say. Regardless of by-laws there are legislative provisions in Queensland around nuisance. Both the nuisance provisions and process for enforcing by-laws can be technical and prescriptive. With that in mind, your first step, if you haven’t already done so, is to approach the source of the noise and try to work out a solution. You are required by law to at least attempt this. After that, you may need advice on your next steps.

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Chris Irons | Hynes Legal

chris.irons@hyneslegal.com.au

On sending motions into meetings, how many motions can be sent by the one owner per year? Where can I see the legislation detailing this?

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How many motions per year?

Six in a rolling 12 month period. You’ve got six in a rolling 12 month period. So if you send six in March of 2021, you have to wait till April in 2022, before you can submit another one. The body corporate can also accept extra submissions, but they don’t have to. So it’s really important, I suppose for an owner to either pace themselves or really think about which motions are important to themselves before they start submitting them to the committee. It’s a rolling 12 month period, so you can space it out and do one every two months if you really wanted. I think a lot of thought should be put in before you start burning through your limit.

Todd Garsden | Mahoneys tgarsden@mahoneys.com.au

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As well as following all requirements of AS 4685 and subsequent testings, safety measures etc, the BC should also implement a number of checks to meet their duty of care. The playground should be routinely checked for safety hazards that may cause a slip, trip fall or impact injury. The playground should be completely fenced off to avoid the danger of roads/ moving vehicles. Signage should be installed promoting hours of use, supervision required, emergency contact numbers and stranger danger safety information. Cleaning should be frequent and particularly more so during the current pandemic climate. If of an elevated nature a severe fall is possible, a safety mechanism should be implemented to ensure children cannot fall from any elevated heights. Should an injury occur relating to the playground on common property, similar to any other common property, the questions raised would be ‘was it up to standards and maintained?’ ‘What was done that was reasonably practical to minimise and mitigate a hazard?’ If you are particularly concerned about fall areas this would be an example of a risk that needs a reasonably practical means of minimising or mitigating. This may include installing netting, barriers or crash mats. The inherent nature of outdoor play presents risks, the important thing is that the body corporate do everything that is reasonably practicable to minimise and mitigate safety hazards. For any more information relating to common property safety, please feel free to contact myself or the team as we complete thousands of safety reports and audits.

“Guests” accessing the facilities I am concerned that some owners lend their fobs to friends so they can use our facilities. Who is entitled to access common property facilities as an ‘invitee’?

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The term ‘invitee’ is not defined in the Body Corporate and Community Act 1997, which can lead to uncertainty and disputes regarding who is entitled to use the common property facilities as a genuine ‘invitee’.

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Jessica Stanley | Mathews Hunt Legal jessica.stanley@mathewshuntlegal.com.au

In Hope Harbour Marina [2020] QBCCMCmr 538 (19 October 2020), an owner filed an application regarding concerns about the use of the common property facilities by non-genuine invitees. In that case, a lot owner also operated a business at the marina adjacent to (but not forming part of) the Scheme. Some owners held concerns that customers of the marina were using the common property facilities. In the decision, the adjudicator relevantly stated: “… customers of the marina have no rights to use the recreational facilities or the boat ramp by virtue of… [the marina operator’s] ownership of lots within the scheme. Section 226 of the Act makes it quite clear, with respect to the definitions of “occupier” and “owner” that those terms mean a person in the person’s capacity as “occupier of the lot” and “owner of the lot”, not in some other capacity. The fact that the marina might be owned and/or operated by an entity that happens to also own lots in the scheme in which those recreational facilities and boat ramp are located is of no consequence. The rights… [the marina operator] and its invitees have to use the common property arise only from its ownership or occupancy of lots within the scheme.” From this decision, it is clear that a person will only be a genuine ‘invitee’ if they are a guest of a person in their capacity as an owner/occupier of a lot. This decision is important: 1. as it establishes clear criteria to determine who is a genuine invitee; 2. as it recognises the rights of owners, occupiers and genuine invitees to enjoy the common property facilities; and 3. because owners pay levies to maintain common property facilities for the benefit of owners and occupiers, not for the benefit of the general public pretending to be invitees. 15

Setting a precedent to deny solar installs Is setting a precedent a Q valid reason to deny lot owners permission for solar installation or would the BC committee first need to put a bylaw in place? I live in an 11 Unit complex which comprises a mix of townhouses and units. Some lot owners have no access to roof space. All roof space within the entire complex is common property. A townhouse owner wishes to install 14 solar panels on his roof. I’ve read about structural integrity, bylaws re solar (which aren’t in place), etc but wonder whether the Body Corporate Committee can refuse permission on the grounds that allowing the townhouse lot owner to install the solar panels would set a precedent for other lot owners to do the same? Is setting a precedent a valid reason to deny permission or would the Body Corporate Committee first need to put in place a bylaw which sets parameters for solar installation and also make provision for the lot owners who don’t have roof space?

‘Precedent’ is only likely to be ‘binding’ (or at least persuasive) if the decision which sets it is lawful and reasonable.

It sounds like this scheme is created under a building format plan. Assuming it is, then the roof space should be common property. If we assume that the common property is not the subject of exclusive use, then the owner will need permission to make the improvement to the common property (the roof) for the benefit of their lot. Absent a by-law granting and regulating that permission, the usual principles will apply; is the improvement minor (less than the specified amount; i.e. $3,000 or less), does it detract from the appearance of a lot or the common

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property and will the approval promote a breach of the owners duties as an occupier? There is no criteria there which goes to ‘if we grant this approval, then we have to give the same approval to everyone else, which we cannot do because there is not enough roof space, ergo we grant no approval to anyone’. A Body Corporate does have to act reasonably in making its decisions and if that is the only factor in the decision making then to me that would be unreasonable. A reasonable approach may be to say ‘there is a total of 500sqm of roof space, of which 330sqm is useable for solar PV. A proposal is more likely to be approved if it is limited to 30sqm of roof space, so that all 11 owners get the same amount of roof space and the proposed installation does not impair the ability of other owners to install panels if they wish’.

This is a grossly simplified example, because typically cells can only be economically installed on the roof of the building in which the lot is situated. The example however makes the point that ‘precedent’ is only likely to be ‘binding’ (or at least persuasive) if the decision which sets it is lawful and reasonable. That will depend, in every case, on the circumstances of the scheme. As always you should obtain independent legal advice. This comment is not and is not intended to be legal advice to you or anyone else.

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Michael Kleinschmidt | Stratum Legal info@stratumlegal.com.au

When should a committee member declare a conflict of interest? In what situations do committee members need to declare a conflict of interest in a matter and abstain from voting?

Our body corporate has to replace some unit’s windows which are in common walls. These windows are a body corporate maintenance responsibility. They are currently either awning style or fixed panes and have to be replaced as part of a maintenance project. Some unit owners on the committee would like to have some of their unit windows replaced with more expensive louvres while others want to keep the same styles. It is a general principle that body corporate maintenance projects replace like for like (or a modern equivalent). If the committee votes on whether to install louvres, wouldn’t those committee members who want louvres need to declare a conflict of interest in the matter and abstain from voting? Otherwise, they are voting on an issue in which they can derive a financial benefit by getting the other members of the body corporate to fund upgraded windows in their units. It seems to me to be a clear conflict of interest. A committee member is required to disclose and refrain from voting upon a matter where there is scope for their personal financial or material interests to conflict with their fiduciary obligations to the body corporate.

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First and foremost, we A assume from the question that the Body Corporate will be responsible for payment of the louvre windows. Therefore, the Committee is not approving an improvement to common property by an owner (whereby the owner is responsible for the cost associated with the improvement) however, is approving works to occur to common property and authorising the cost associated with same. As the question states that the matter will be voted on by the Committee, we presume that the expenditure is capable of being authorised by the Committee and therefore have not considered this aspect. On those assumptions, we provide the below general information for your consideration.

The relevant section dealing with a conflict of interest at Committee level is section 66 of the Standard Module / section 58 of the Accommodation Module. These sections relevantly state [our emphasis]: 1. “A member of the committee must disclose to a meeting of the committee the member’s direct or indirect interest in an issue being considered, or about to be considered, by the committee if the interest could conflict with the appropriate performance of the member’s duties about the consideration of the issue.” 2. “If a member required under subsection (1) to disclose an interest in an issue is a voting member, the member is not entitled to vote on a motion involving the issue…” Additionally, we note that the Code of Conduct for Committee Members in Schedule 1A to the Act states that Committee members “must act in the best interests of the body corporate in performing the member’s duties”. Adjudicators have stated that the term “conflict of interest” is a broad term, generally used in the context of a person voting upon a motion to obtain a material benefit that they would not otherwise be entitled to. The purpose of that section is to prevent a committee member from voting on an issue if their personal interest in the issue could conflict with the appropriate performance of their duty to consider the issue in the interests of the Body Corporate (V Human Space [2007] QBCCMCmr 105 (27 February 2007)). Alternatively, as described in Grand Pacific Resort [2010] QBCCMCmr 255:

On the limited information provided, we see a potential argument that: 1. t he installation by the Body Corporate of more expensive louvred windows on Committee members’ lots would provide a direct benefit to those Committee members, as the effect of the motion will be that their lots will receive improvements to the windows rather than the maintenance of the existing windows; 2. t hat personal interest could conflict with the obligation for those Committee members to vote on the motion in such a way that is in the best interests of the body corporate; and 3. t hose Committee members should seriously consider whether they feel their personal interests conflict with the best interests of all owners and declare a conflict of interest at the meeting and abstain from voting on the relevant motion. If the relevant Committee members do not declare a conflict, and as a result the relevant motion passes, an owner or interested person could apply to the Commissioner’s Office seeking orders invalidating the conflicted Committee members’ votes. However, we do caution that such action is only likely to be of any material benefit if the outcome of the motion would have been different if those conflicted members had abstained from voting. It goes without saying that there are a number of variables when considering maintenance vs improvement works and conflicts of interest. We would therefore encourage a concerned owner to obtain independent legal advice.

“Put simply, a committee member is required to disclose and refrain from voting upon a matter where there is scope for their personal financial or material interests to conflict with their fiduciary obligations to the body corporate – for example where a committee is a party to a contract with the body corporate or has a beneficial interest in a business that supplies goods or services to the scheme.” Jessica Cannon | Jessica Stanley Cannon & Co Law jessicacannon@cannonlaw.com.au

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QIA Group

info@qiagroup.com.au

How often should we be testing smoke alarms? Who is responsible for Q maintaining smoke detectors that are hard wired to the alarm panel? Is it the body corporate or the lot owner? The maintenance of a Fire A Detection and Alarm system within a building falls under the responsibility of the Body Corporate. The maintenance of a Fire Detection and Alarm system within a building falls under the responsibility of the Body Corporate as the managing entity as it is part of the base building installations. Same as a hydrant or sprinkler system if installed. This includes the annual testing of the smoke detectors and any other actuating devices and interfaced system. This is to confirm that the system continues to operate as per the original design intent. If the detection system extends to covering individual units, then 50% of smoke detectors installed within the units must be tested on an annual basis. This is different to smoke alarms (detectors with internal sounders) when installed within a unit, the testing and maintaining is the responsibility of the occupier. 22 www.lookupstrata.com.au

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Stefan Bauer | Fire Matters sbauer@firematters.com.au

Body Corporate Committee Members are Undervalued Understanding the Unpaid Economy

If we look at the broader economy, it is now increasingly recognised that unpaid work, usually performed by women in the form of child and elderly care and domestic duties, is a substantial contributor to the national output representing as much as a third of formal GDP. Here’s a nice paper on the topic if you are interested in these things: Understanding the unpaid economy. There is no comparative study for the body corporate industry, but for anyone with experience of how buildings are run on a day to day basis, it won’t take a great leap of the imagination to draw a parallel between the mostly unpaid work of body corporate committee members and the army of domestic workers who keep our lives afloat.

The work of body corporate committee members is unquantified and the work they do goes unseen. In Tower’s recent survey of body corporate owners, we asked whether owners would favour making payments to committee members for the work they do. Some 45 per cent of respondents said they preferred to keep committees as a volunteer organisation, while a further 20 per cent indicated that any such payments would just be viewed as an additional cost. It’s understandable that owners aren’t looking to pay more for the running of their building, but perhaps the responses also reflect the extent to which the volunteer work of Committees is underestimated because it doesn’t appear as a line item on the budget. 24 www.lookupstrata.com.au

After all, while the role of body corporate committees is neatly set out in the legislation, the legal definition doesn’t really explain the practical reality of the role for many involved in it. Even the most straightforward of buildings will require committee members to have multiple interactions with body corporate managers, building managers, owners and occupants to organise meetings, approve invoices, review pet applications, action safety issues and so on. And most buildings aren’t that straightforward. Budgets and long term planning grow ever more complex, while social issues around by-law breaches can require time and skill to negotiate. The hours needed to keep things moving quickly add up, while the patience of owners waiting for a response tends to run dry quickly. Ask any body corporate manager if they would volunteer their free time to join a committee and, at best, you might be met with a polite smile.

For an example of the work committee members might do, let’s consider the classic case of the effort required to change a light bulb. Here, we’ll assume that a light in the common hallway is out in a scheme where there is no building manager. A watchful committee member spots the broken light, knows this is a safety risk and contacts the body corporate manager to arrange a repair. The manager lets the whole committee know, so the member gets an email as part of that group then responds by authorising an electrician to attend. The member’s number is listed as the site contact, so the electrician calls them to find out where the light is and how to get access. The member agrees to meet the electrician the next day to let them in and shows them the light when they attend. The member sends an email to the manager to confirm the work is finished and a week later approves the electrician’s invoice on the payment hub. It’s only a minor job and everything went smoothly, but the committee member still had a series of contact points through the process when they had to engage.

Multiply that effort by the number of issues that affect a building through the year and you start to get an idea of the value of the contribution made. Imagine if you saw that effort quantified as a dollar item on the budget.

Should committee members get paid for the work they do?

Does this mean that committee members should get paid for the work they do? Not necessarily, but greater consideration should be given to the value they bring to the schemes they assist. Bodies corporate rely on volunteers and if they don’t do the work, someone will have to be paid to do it, or it just won’t get done. It’s up to each body corporate scheme to determine if compensation is due, but if committee members aren’t going to be paid, they could be due some greater consideration. A bottle of wine at the AGM or even a thank you can go a long way to compensating a weary committee member every now and again.

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William Marquand | Tower Body Corporate willmarquand@towerbodycorporate.com.au

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Electrical Altogether Group Power.Water.Data P: 1300 803 803 W: https://altogethergroup.com.au/ E: eaustin@altogethergroup.com.au Energy On Pty Ltd Providing utility network solutions P: 1300 323 263 W: https://www.energyon.com.au/ E: EnergyServices@EnergyOn.com.au ENM Solutions Providing Solutions for Embedded Networks P: 03 9836 6366 W: https://www.enmsolutions.com.au/ E: info@ENMSolutions.com.au

Pacific Facility Services Strata Cleaning & Ground Maintenance Services P: 1300 378 388 W: http://www.pacificfs.com.au/ E: a.smith@pacificfs.com.au

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Painting

Fire Matters Fire Safety Compliance P: 07 3071 9088 W: https://firematters.com.au/ E: sbauer@firematters.com.au

Higgins Coatings Pty Ltd Specialist painters in the strata industry P: 1300 HIGGINS W: https://www.higgins.com.au/ E: info@higgins.com.au

Trilogy Fire Safety Fire Industry Professionals P: 07 3901 8203 W: https://www.trilogyfiresafety.com/ E: service@trilogyfiresafety.com

Calibre Coatings Committed to Delivering Excellence in Painting P: 07 5593 6175 W: https://www.calibrecoatings.com.au/ E: qld@calibrecoatings.com.au

Hartec Fire Systems Fire Systems Maintenance & Admin Solutions P: 1300 300 367 W: http://www.hartec.net.au/ E: info@hartec.net.au

Enterprizing Pty Ltd We are a company you can rely on P: 0424 059 117 W: https://www.instagram.com/enterprizing_paint/ E: enterprizing@outlook.com.au

Simpli Fire Consulting FREE Evacuation Diagram Review with Every Fire System Audit

P: 0439 100 286 W: https://simplifire.com.au/ E: campbell@simplifire.com.au

Lifts and Elevators Lift Logic Management Services Lifts, Escalators & Electrical Services P: 07 3298 6056 W: http://liftlogic.net.au/ E: enquiry@liftlogic.com.au Equity Elevator Consultants Saving our clients time and money P: 1300 080 816 W: https://www.liftsconsultant.com/ E: enquiry@equityelevator.com.au Innovative Lift Consulting Pty Ltd Australia's Vertical Transportation Consultants P: 0417 784 245 W: https://www.ilcpl.com.au/ E: bfulcher@ilcpl.com.au

Clothes Lines Lifestyle Clotheslines Clothesline and washing line supplier & installer P: 1300 798 779 W: https://www.lifestyleclotheslines.com.au/ E: admin@lifestyleclotheslines.com.au

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Waterproofing The Superseal Group Trusted Experts in all aspects of Waterproofing P: 07 5519 4916 W: https://supersealgroup.com/ E: admin@supersealgroup.com

Windows and Doors Windowline Pty Ltd Australia’s strata replacement window & door specialists

P: 02 8304 6400 W: https://windowline.com.au/ E: info@windowline.com.au

Sustainability and Energy The Green Guys Group Australia’s Leading Energy Saving Partner P: 1300 511 875 W: https://greenguys.com.au/ E: sean@greenguys.com.au Humenergy People, innovation and value sharing P: 1300 322 622 W: https://www.humenergy.com.au/ E: Info@humenergy.com.au

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Safety and Security

AC Fitouts COMMERCIAL FITOUT SPECIALIST P: 1300 765 782 W: https://acfitouts.com.au/ E: info@acfitouts.com.au

Pacific Security Group Experts in electronic security since 2005 P: 1300 859 141 W: https://www.pacificsecurity.com.au/ E: operations@pacificsecurity.com.au

Would you like your Strata Story featured in the next edition of The QLD Strata Magazine? We want to share your strata stories with the LookUpStrata community. Some examples of what you may wish to share: A project you have implemented in your complex that has made a positive impact (e.g a process, community building activities, parking procedure, ect) Do you have a funny story to share about strata living? Have you received a response back from one of the LookUpStrata professionals that has positively impacted you or your complex? Have you made a change to improve sustainability? (e.g installed solar, swapped over to LED lighting, reduced waste?) You could even share a photo of the view from you balcony or catching up with neighbours for a coffee. If you would like to share your strata scheme story with the LookUpStrata community, Please send your story and photos to: administration@lookupstrata.com.au Disclaimer: If you send your strata story to administration@lookupstrata.com.au, you are agreeing to have your story published on the LookUpStrata platform or via social media. We must have written permission from each individual shown in the photo. Submissions may be refused for any reason.

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Attention QLD Strata Service Professionals

Join our printable Strata Services Directory today

Contact lizaj@LookUpStrata.com.au to find out more today! 34 www.lookupstrata.com.au

The QLD Strata Magazine | August 2021