The QLD
STRATA MAGAZINE FEBRUARY 2022
Is the body corporate’s insurance excess of $10,000 an “unreasonable burden”? Page 6 | Tyrone Shandiman, Strata Insurance Solutions
Does the 75% Rule Apply For Selling to a Developer? Page 16 | Todd Garsden, Mahoneys
What if you don’t agree with the Body Corporate’s Decisions? Page 30 | Will Marquand, Tower Body Corporate
About Us LookUpStrata is Australia’s Top Property Blog Dedicated to Strata Living. The site has been providing reliable strata information to lot owners, strata managers and other strata professionals since 2013. As well as publishing legislative articles to keep their audience up to date with changes to strata, this family owned business is known for their national Q&A service that provides useful responses to lot owners and members of the strata industry. They have created a national network of leading strata specialists across Australia who assist with 100s of the LookUpStrata audiences’ queries every month. Strata information is distributed freely to their dedicated audience of readers via regular Webinars, Magazines and Newsletters. The LookUpStrata audience also has free access to The LookUpStrata Directory, showcasing 100s of strata service professionals from across Australia. To take a look at the LookUpStrata Directory, flip to the end of this magazine.
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Nikki began building LookUpStrata back in 2012 and officially launched the company early 2013. With a background in Information Management, LookUpStrata has helped Nikki realise her mission of providing detailed, practical, and easy to understand strata information to all Australians. Nikki shares her time between three companies, including Tower Body Corporate in SEQ, and is currently in her third term on the SCA (WA) Education and Professional Development Committee. More recently Nikki has become known for presenting regular strata webinars, where LookUpStrata hosts a strata expert to cover a specific topic and respond to audience questions.
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Learn more here → https://www.lookupstrata.com.au/about-us/ You can contact us here → administration@lookupstrata.com.au
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Contents 4
Funding new pool furniture by selling off the old deck chairs
18
William Marquand, Tower Body Corporate
6
Is the body corporate’s insurance excess of $10,000 an “unreasonable burden”?
Chris Irons, Strata Solve
20
10
Know your obligations with embedded energy networks
22
Drew McKillican, Altogether Group
24
What are the tax implications if we repurpose unused common property to sell? Rod Laws, Tinworth & CO
12 14
Body corporate duty of care over the common property Dakota Panetta, Solutions in Engineering
16
Does the 75% rule apply for selling to a developer? Todd Garsden, Mahoneys
Who maintains our car stacker? Todd Garsden, Mahoneys
Can the committee restrict access to common property? Michael Kleinschmidt, Stratum Legal
26
Leaky lots and common property Homan Webb Lawyers
Pursuing a ‘retired’ builder through QBCC Frank Higginson, Hynes Legal
Tyrone Shandiman, Strata Insurance Solutions
8
How do we deal with the growing use of scooters as mobility devices and commuters?
FAQs - How can Strata Guardian assist your body corporate Tim Fuller, Strata Guardian
28
Changing from an Accommodation to a Standard Module Jessica Cannon, Cannon + Co Law
30
What if you don’t agree with the Body Corporate’s decisions? William Marquand, Tower Body Corporate
32
Strata - investment of the future SCA (Qld)
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in freehold land, only if authorised by resolution without dissent;
Funding new pool furniture by selling off the old deck chairs The committee wishes to replace outdoor furniture as it is showing signs of wear and tear. Can the current furniture be sold and the proceeds from the sale deposited into our sinking fund budget? Yes, the body corporate can sell the furniture.
It’s important to be transparent and give owners a say, but that seems like a very high standard for the sale of some old furniture. Most general meetings will cost a few hundred at minimum to set up and run so if that is the only or main item you have to consider then it looks like an expensive way to do it. Some revision of these conditions may be required in the future. Still, depending on the cost of the new furniture you are planning to buy a general meeting may be required to approve this and that could be the opportunity to cover both items at the same time.
Yes, the body corporate can sell the furniture.
For reference the relevant section in the modules states:
How you approach that will depend on the anticipated value of the sale.
Standard module, s190, Accommodation modue s180, Act, s157:
Both the standard and accommodation modules state that if selling an asset for more than $1000, a special resolution at a general meeting is required to approve the action.
Other dealings with, and disposal of, body corporate assets
Otherwise, at a lower cost, the approval requirement isn’t specified, but presumably, the committee could agree to the sale at a Committee meeting or via a VOC.
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1. The body corporate may do any of the following— a. s ell or otherwise dispose of a body corporate asset that is freehold land, or a leasehold interest READ MORE ON THIS TOPIC HERE
b. grant or amend a lease over a body corporate asset that is freehold land, or another body corporate asset capable of being leased, only if authorised by— (i) if the term of the lease, as granted or as amended, is more than 10 years—resolution without dissent; or (ii) if subparagraph (i) does not apply—special resolution; c. s ell or otherwise dispose of a body corporate asset that is personal property, not including personal property mentioned in paragraph (a) or (b), but including a licence or concession related to freehold land, only if authorised by special resolution, if the market value of the asset is more than the greater of the following amounts— (i) $1,000; (ii) the asset dealing limit. 2. In this section— asset dealing limit means the amount worked out by multiplying the number of lots included in the community titles scheme by— (a) if paragraph (b) does not apply—$200; or (b) if the body corporate has by special resolution decided an amount greater than $200—the amount decided. Check the limits for making improvements here: Improving common property and lots.
William Marquand | Tower Body Corporate willmarquand@towerbodycorporate.com.au
5
Is the body corporate’s insurance excess of $10,000 an “unreasonable burden”?
The body corporate’s excess for water damage to my timber floors is $10,000. Is this amount considered an “unreasonable burden”? I live in a strata title block in Queensland. The Body Corporate have an insurance policy that covers water damage to my timber floor. The excess for water damage is $10,000. A Qld Govt website states that the excess must not create an “unreasonable burden” on the owners of individual lots. I believe the excess of $10,000 for water damage imposes an “unreasonable burden”. How do I encourage the body corporate to see it this way?
Whether an excess of $10,00 would impose an “unreasonable burden” on an individual lot owner is a case by case consideration that is at the discretion of the committee. A number of decisions about this matter have been before the body corporate commissioner. I have drawn from the below two decision in responding to this enquiry. •
Cianna Gardens [2016] QBCCMCmr 553 (2 December 2016)
•
River Park View [2006] QBCCMCmr 29 (20 January 2006)
Various regulations under the BCCM Act state that, when putting the insurance in place, the body corporate must ensure that the 6 www.lookupstrata.com.au
arrangements for the liability for an excess under the insurance would not impose an unreasonable burden on the owners of individual lots, having regard to subsections (3)…. (3) For an event affecting only 1 lot, the owner of the lot is liable to pay the excess unless the body corporate decides it is unreasonable in all the circumstances for the owner to bear the liability. In River Park View [2006], the commissioner stated the exercise of that discretion is not fettered, that is, it may be exercised in accordance with the concept of ‘fault’, or ‘ability to pay’ or ‘compassionate grounds’ provided that the body corporate acts reasonably in the decision to which it comes. This is a clear demonstration that legislation provides the committee some degree of elbow room in making a decision as to who is responsible for the excess, provided they can demonstrate they are acting reasonably in making the decision. It means that the decision to accept or deny a lot owner’s request for the body corporate to pay the excess may both be considered to be reasonable decisions by the committee. Below are some considerations for owners and the committees:
Did the body corporate have an option to consider a lower excess? Did the body corporate have an option to consider a lower excess when obtaining quotes for the insurance renewal? In River Park View [2006], the commissioner stated
The reason behind the provision is that bodies corporate may be able to obtain a cheaper premium if they agree to a bigger excess with the insurance company, and in such circumstances, it might be considered ‘unreasonable’ for one lot owner to bear the excess when the benefit of the reduced premium was for the whole body corporate.
Was the claim a result of a maintenance issue inside a lot? Was the claim a result of a maintenance issue inside a lot? Various regulations under the BCCM Act require the owner of a lot to maintain the lot in good condition. Previous rulings before the court give guidance on what the duty to maintain actually is: “That duty is not one to use reasonable care to maintain and keep in good repair the common property, nor one to use best endeavours to do so, nor one to take reasonable steps to do so, but a strict duty to maintain and keep in repair. The duty to maintain involves an obligation to keep the thing in proper order by acts of maintenance before it falls out of
condition, in a state which enables it to serve the purpose for which it exists ……Thus the body corporate is obliged not only to attend to cases where there is a malfunction but also to take preventative measures to ensure that there not be a malfunction …..The duty extends to require remediation of defects in the original construction of the common property ……It follows that as soon as something in the common property is no longer operating effectively or at all, or has fallen into disrepair, there has been a breach of the [s 62] duty” So to answer the question of whether an excess of $10,000 for water damage would impose an “unreasonable burden” on an individual lot owner, this is a case by case consideration that is at the discretion of the committee having consideration to all circumstances.
READ MORE ON THIS TOPIC HERE
Tyrone Shandiman | Strata Insurance Solutions tshandiman@iaa.net.au
7
Know your obligations with Embedded Energy Networks
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There are key differences between having a billing agent manage your embedded network under an exemption scheme versus an authorised energy retailer. Drew McKillican, Executive Manager of Energy Services at Altogether Group, a leading multi-utility service provider, says that it is important for strata managers and bodies corporate to be aware of the legal and financial ramifications of using the two types of arrangements.
“Many strata managers or bodies corporate are not aware that retail and billing agency arrangements under the Exemption Scheme are vastly different in terms of liabilities and responsibilities under the National Electricity Retail Rules and the regulatory requirements. All energy consumers must always retain their customer rights and protections, however the reality under the two arrangements can differ significantly in terms of having proper access to those rights. Many owners of embedded networks wrongly assume that they are not responsible for the delivery of key consumer protections under an exempt seller arrangement, which means their operation of the embedded network may not be compliant, leaving them vulnerable to financial and legal risk.” – Drew McKillican, Executive Manager Energy
3 tips for reviewing your embedded energy network arrangement 01
02
03
Consider what matters most to your community in terms of their energy services, this will largely depend on the composition of your building. Do you have a high proportion of owner occupiers, or frequently changing tenants? Do you have vulnerable residents who need help understanding bills, or life support arrangements which are dependent on electricity supply to operate? This can complicate your ability as a body corporate to recover energy costs from residents and compliantly operate your network.
Understand your obligations as an Exempt Seller and whether you are meeting them currently. If you understand the gap, you can select the appropriate strategy to close it. Refer the AER’s Exemption Guide: AER (Retail) Exemption Guideline Version 5, or simply contact Altogether for an obligation free briefing on Exemption Rules and we can help you navigate the requirements.
Get advice on where you currently stand – Altogether are a specialist energy retailer in the embedded network space. We can help you navigate your obligations and better understand them. As a result, you can assess whether your current arrangement is fit for purpose or not. From here, you can then consider your options and make the right choice to futureproof your building.
Altogether Group works with strata managers, bodies corporate and developers to design and manage embedded energy networks on behalf of communities. Enquire today 1300 803 803 altogethergroup.com.au 9
Repurposing Common Property For Sale Are there tax implications? If we repurpose unused common property into a single bedroom unit for sale, what are the tax implications for lot owners and how would they be distributed? Our 51 unit complex is in Airlie Beach. In addition to the units, there is a Garden Room of about 18m x 4.5m. This space is for the use of all lot owners. It has hardly been used over the past 14 years, so the committee has suggested the common property asset be repurposed by converting the space into a one-bedroom unit to be sold. Quotes and costings indicate that it would be sold for a substantial profit. What are the tax implications, if any, for the owners and if there are tax considerations how would they be distributed?
The sale of the unit would be subject to income tax and this income tax would be payable by the owners in accordance with their unit entitlements. This is quite a common issue we come across these days. There are significant income tax and GST issues associated with proceeding with this course of action that should be considered. The CTS is planning on altering the roll by including common property as a new unit. As the unit would qualify as new residential 10 www.lookupstrata.com.au
property, the sale of the new unit would attract GST. The sale of common property is addressed in the ATO ruling on bodies corporate. In that ruling, the ATO express the long held view that common property is held by the CTS as agents or trustees for the owners. Accordingly, the sale of the unit would be subject to income tax and this income tax would be payable by the owners in accordance with their unit entitlements. The cash would stay inside the CTS. How this transaction will be taxed in the hands of the owners will depend on the motivation of the CTS in developing and selling the unit. If there is a profit motivation, it is possible the gain on sale will be on revenue account and no CGT discount would apply. If there was no profit motivation, then it would be assessed on capital account and it is possible a CGT discount could apply if owners have owned their units for more than 12 months. The transaction is taxable to owners despite not receiving the proceeds on the basis a benefit is received in the form of lower future levies. If the CTS wanted to distribute this gain to owners, if it was the result of a profit or gain, this could be considered an appropriation of profits or a dividend. There are sections in the Income tax act that prevents double taxation. READ MORE ON THIS TOPIC HERE
Rod Laws | TINWORTH & CO RodLaws@tinworth.com
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Leaky Lots and Common Property Sam Marsh, Senior Associate Shane Roberts, Partner Given the rise in the level of people living in strata communities in Australia, there will inevitably be an increase in issues relating to common property and the potential responsibilities of body corporates with respect to same. This article is a short refresher on the question of what duties are owed by a body corporate to lot owners when it comes to defects on common property, particularly in relation to defects that may cause issues with a lot owner’s own property such as a water penetration issue.
What is common property? The common property of each body corporate is individual. In Queensland, common property will be defined in part by the type of plan the body corporate is registered under, either Building Format Plan or Standard Format Plan. Some examples of common property are: • • • •
access roads and paths, stairways, lifts and foyers; gardens, pool areas, gyms; services such as electricity cables, water and sewer pipes; and roofs, and building walls.
Occasionally, common property is described as being ‘everything on the scheme which is not contained within a lot’. Sometimes though, areas of the common property are allocated as exclusive use to a particular lot owner. Such allocations must be recorded, either on the title itself or within the Community Management Statement. The only way to be certain of whether something is common property or not, is to review the registration of the scheme and the Community Management Statement. Even then, questions can arise as to what actually is common property. For example, how much of a wall is common property - is it measured to the inside of the lot’s wall, the outside, or somewhere between? This can be important when deciding who is responsible for attending to maintenance or fixing defects of the common property.
Duties owed Section 152 of the Body Corporate and Community Management Act 1997, provides: “(1) The body corporate for a community titles scheme must – a) administer, manage and control the common property and body corporate assets reasonably and for the benefit of lot owners; and b) comply with the obligations with regard to common property and body corporate assets imposed under the regulation module applying to the scheme…”
The above refers to compliance with the “regulation module applying to the scheme”. In this regard, Section 159 of the Body Corporate and Community Management (Standard Module) Regulation 1997 provides that: “(1) The body corporate must maintain common property in good condition, including, to the extent that common property is structural in nature, in a structurally sound condition… “(2) To the extent that lots included in the community titles scheme are created under a building format plan of subdivision, the body corporate must – (a) maintain in good condition - … iii.) roofing membranes that are not common property but that provide protection for lots or common property.” The applicability of these statutory duties to cases involving waterproofing issues was considered in MAGOG (No.15) Pty Ltd (ACN 001 745 286) v The Body Corporate for the Moroccan CTS 17574 [2010] QDC 70 (‘Moroccan’). In Moroccan a defective water membrane in a building caused a leak onto a particular lot. The body corporate failed to repair the leak or take sufficient steps to rectify the defects and consequently damage occurred to the lot owner’s lot. In Moroccan, Newton DCJ (the Judge) made the following statement relating to the duty: “The defendant had a duty to maintain common property in good condition, including, to the extent that common property is structural in nature, in a structurally sound condition. The duty to maintain a common property in good condition required the defendant to maintain and manage and control the common property so that water did not leak from the common property…”
Steps taken by the body corporate In light of the above, the body corporate has a duty to “maintain and manage and control the common property so that water (does) not leak from the common property’’. It follows that if there is a defect in the common property that allows water ingress, the body corporate should look to have that defect rectified so that it can comply with its general duty specified in the BCCMA and as confirmed in the Moroccan decision. This then leads to further questions, such as ‘what options are available to a body corporate when it comes to having defects to common property rectified?’. Another question that might arise is ‘what (if any) personal liability might a person serving on a body corporate attract from an issue such as a defect to common property?’. Due to the limits of this article, those questions will be dealt with in a future Holman Webb strata article.
For legal advice or assistance with any Strata or Body Corporate matters, contact Sam Marsh or Shane Roberts via Holman Webb’s LookUpStrata directory listing.
Body corporate duty of care over the common property Our car parks have a retention pit on the far side with a drop of up to 500mm. Residents are reluctant to park in these spaces due to the precipice. Is there a legislative requirement for a safety barrier? I own a unit in a 12 unit single level complex. Each unit has a car park adjacent to its unit. My car park has a retention pit on the far side with a vertical, sloping drop off of 300mm to 500mm. My neighbour in unit 2 has a level drop off of 200mm. Residents are reluctant to park in these spaces, especially at night, due to the precipice. I would like to know what the legislation is regarding this area as I feel that a safety barrier is required.
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No, but the greater risk to the body corporate is the duty of care that everybody corporate has over the common property. This is a great question to raise and one that we receive quite regularly from Strata Communities. As we advise on safety reporting and compliance across the entire Australasian region, we come across many scenarios like this one. To answer the question of ‘is there a legislative requirement for a safety barrier’… the simple answer is no. The building code and the national construction code only reference the need to have a barrier or system to prevent a fall when the possible fall is 1 metre or greater.
As you have described the precipice only reaches a maximum of 500mm. Now that covers the requirements under relevant building and construction codes. BUT the greater risk to the body corporate is the duty of care that everybody corporate has over the common property. As you have identified and most would notice even at a glance, this scenario is still a hazard. Whilst it does not breach any specific codes, you have a trafficable area of vehicles and people, with a sharp drop into a retention pit.
A pedestrian walking could easily slip, particularly at night without lighting and a vehicle reversing could misjudge the edge and cause significant damage to the mechanisms of the car. In strata, whilst it is always important to observe and be aware of the relevant codes and standards of compliance, even more important to remember the term ‘reasonably practicable’ because these would be the words you would hear in court when an owner or visitor sues you. The courts would ask, what did you do that was “reasonably practicable” to
mitigate this hazard and prevent injury or damage? It is quite reasonable to believe that this scenario could be a hazard and therefore the strata scheme has a duty of care to mitigate or at least minimise the risk. Simply failing to act would not be an excuse in court. In my opinion, it would be worth contacting the builder and asking about the necessity of this retention pit.
READ MORE ON THIS TOPIC HERE
Does it need to be this deep given there are two stormwater drains in the pit? If so, then we would strongly be recommending that a barrier of some sort be installed and ensure that this barrier is a contrasting colour to ensure drivers of vehicles will see it when trafficking the area. We would also recommend lighting be installed to assist visitors walking up and down the common property at night.
Dakota Panetta | Solutions in Engineering dakotap@solutionsinengineering.com
Contact Marty Campbell at Dulux to discuss how we can support and add value to your property and paint projects. E: marty.campbell@dulux.com.au T: 0402 780 047
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Does the 75% Rule Apply For Selling to a Developer? What does the legislation say about the termination of a strata scheme in Queensland? If 75% of owners want to sell, can the majority force the remaining 25% into selling? How is the price for each lot determined? I own an apartment in a small QLD complex. The managers want to terminate the scheme and sell it to a developer. Can I be forced to sell my apartment to the developer and how is the price for each lot determined? The manager presented me with a contract. The price offered doesn’t cover my apartment cost and the renovations I completed last year. There has been a verbal agreement of more money and also a lease after the sale, but I’ve received nothing in writing. I haven’t signed either option deed or contract. What does the legislation say about the termination of strata schemes? If 75% of owners want to sell, can the majority force the remaining 25% into selling? Can I be forced to sell my apartment to the developer and how is the price for each lot determined?
Todd Garsden | Mahoneys tgarsden@mahoneys.com.au
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READ MORE ON THIS TOPIC HERE
The manager cannot arrange for the lots to be sold to a developer. Each owner would need to individually agree to this; Any reduction to a lower threshold (such as 75%) does not presently exist. Section 78 of the Body Corporate and Community Management Act 1997 (Qld) relevantly provides that the Scheme can be terminated through either:
Termination of scheme
1. a resolution without dissent and entry into an agreement about termination issues ; or 2. by the District Court if it is just and equitable. A resolution without dissent is only passed if no lot owners vote against the motion. There has been very little judicial consideration of circumstances of when it is just and equitable. Mahoneys acted in one case that was ultimately resolved by consent with the parties. However, this did consider a number of issues such as the costs to continue maintaining the scheme. Law reform in this area has been discussed for a long period of time and QUT has published some detailed research on this issue. I have extracted some of that research below:
Determining ‘just and equitable’ The District Court should have reference to the following factors when determining whether a termination plan is just and equitable: •
any structural engineer’s report, quantity surveyor’s report or valuation prepared for the purposes of scheme termination at the scheme;
•
the aggregate market value of individual lots compared to the market value of the scheme as a whole in its highest and best use;
•
any other factor specified in the relevant Regulation Module; and
•
any other factor the Court decides is relevant.
Accordingly, for present purposes:
•
any termination plan, collective sales agreement or redevelopment plan prepared by the person proposing the termination;
1. the manager cannot arrange for the lots to be sold to a developer – each owner would need to individually agree to this;
•
the economic reasons for the termination plan;
2. any reduction to a lower threshold (such as 75%) does not presently exist;
•
the consequences to lot owners (both individually and as a whole) if the scheme is terminated;
3. it would not be wise to sign a sale contract that does not include all the promises being made about what you will receive; and
•
the consequences to lot owners (both individually and as a whole) if the scheme is not terminated;
•
the age and condition of the building or any structures on scheme land;
4. it might be worthwhile receiving some formal advice as to the documents you have been sent. Option contracts can be relatively complicated as far as sale contracts go.
•
sinking fund forecasts and current balance;
Remedial repairs & cost management Management of remedial works can be challenging at the best of times and may cause considerable financial stress as owners try to navigate the minefield of complexity of Strata repairs. Value vs competitiveness is the driver to desired outcomes. Defining your objective and the extent
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0424 750 900 sales@au.sedgwick.com
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How do we deal with the growing use of scooters as mobility devices and commuters?
Old bylaws in our QLD scheme prohibit the use of scooters. As electric scooters are used more as both mobility devices and commuters, how do we address this? Our complex consists of free-standing homes with common area gardens and paths as well as a private road around the complex that is also Common property. The bylaws are quite old and do not permit the “use of skateboards, scooters, or roller blades on common property”. Bicycles can only be ridden in ingress or egress to an owners lot. Some lot owners would like to use an electric scooter as a commuter and they have requested permission to ride it between their lot and the front gate. As there were no electric scooters around when the by-laws were written, is the by-law applicable or is this a grey area? In addition, what would happen if someone were to injure themselves while riding the scooter in the complex? If the Body Corporate were to give approval, what would be needed to ensure that the Body Corporate is not liable for any claims or accidents? Also, what happens if the electric scooter is to be used as a “personal Mobility Device”? From my reading of this situation, in this instance the “scooter” fits these QLD Government guidelines. Can it be called a scooter and, therefore could it be argued that the by-laws do not pertain to the device? As the popularity of these devices is exploding I would imagine that this is a matter that could become a big issue for Body Corporates in the future if they have by-laws about scooters.
If the by-law prohibits scooters, then there is no ability for the committee to permit their use. If the device isn’t a scooter….. If the by-law prohibits scooters, then there is no ability for the committee to permit their use. 18 www.lookupstrata.com.au
That’s one of the perversities of by-law enforcement: technically, the committee must continue to enforce a by-law, even if it is in all likelihood invalid, right up until the point the bylaw gets changed. So, what to do now? Assuming the owner has requested permission and the committee deny it, then either the owner or committee can put a motion to a general meeting to have the bylaw changed. If that motion were to fail, the owner would have the ability to challenge that decision in the Office of the Commissioner for Body Corporate and Community Management. I can’t comment on your query re: liability for injury, you would need to seek qualified advice (e.g., legal advice, or advice from your insurance broker) about that. I’d suggest that advice would be essential if a new by-law was being contemplated and there was any thought of including in it a provision for the body corporate to have no responsibility in the event of an accident.
very carefully in making a decision about the use of a device needed to aid someone with a disability, as other laws might then come into play (e.g., human rights and disability laws). Another fly in your ointment to consider: is the shared driveway in good condition? Has the committee been proactive in ensuring that it is even and free of potholes, cracks and other potential hazards? Because if not, and someone is going to use a device – mobility scooter, or otherwise – to traverse it, there would be every chance the body corporate would be held responsible for any damage incurred as a result (there is provision under body corporate legislation for this). That’s putting aside the injury (or worse) possibility which might arise.
READ MORE ON THIS TOPIC HERE
Chris Irons | Strata Solve chris@stratasolve.com.au
The golden rule: any by-law which prohibits, rather than regulates, is very likely to be invalid.
Personal Mobility Devices
If the device isn’t a scooter, then the committee could decide to give permission for its use because they are being asked to give permission on something for which there is no by-law. That said, you need to take care here. You’ve framed this in terms of ‘your reading’ of it and that it ‘could be argued’. Which of course, means the opposite could be argued from someone else’s ‘reading’ of it. In other words, someone else on the committee may take a different view to yours and say they can’t give permission. Which is where the need to seek qualified advice might be needed and really, where you are headed here, I think, is a review of the bylaws to get this one – and any others – up to date. What you don’t mention is whether the device in question is related to a disability (and perhaps you don’t know that one way or the other). The committee would need to tread 19
Pursuing a 'retired' builder through QBCC
Our 4 year old building is full of defects. The committee has taken the builder, who is also a lot owner in our building, to QBCC. The builder took a fine and cancelled his builder license rather than fix the building. We’ve found he is now operating under a new ABN. What are our rights? Our building is 4 years old. The committee has already taken the builder to QBCC regarding fire, waterproofing and roofing defects and the builder chose to fix some of the DTRs and then opted to take the $2500 fine and 4 demerit points rather than address the $100k plus costs associated with rectifying the remaining issues. The builder and developer still own 6 of the 24 units, and successfully voted down a motion at our AGM to take the builder to QCAT to recoup the $40K spent getting our building compliant. We now have drain pipes falling away from the building and failed waterproofing which has allowed water to penetrate the concrete slab at the entrance, causing the slab to erode significantly. When we approached the builder regarding these matters, he sent an email saying he was retiring from the family business and cancelling his builder’s licence. Several owners are now experiencing leaks in their units and going through QBCC again. The committee has recently discovered the builder is now trading under a new name and ABN and has reactivated his builder’s licence. What are our legal options?
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Bodies corporate do have rights of subrogation into the developer’s shoes with contractual rights against contractors, but that starts with the contractual documentation. The first is that a body corporate has a statutory duty to keep common property in good condition. That means defects must be addressed and not left to wait until court proceedings or the QBCC might produce an outcome. And dare I say it, if the developer still owns a quarter of the lots through ownership, then dealing with that now at least means they get to share in the costs as an owner.
The second is control of the general meeting. The answer is way more complex than would serve here, and it really is looking at whether those votes can be overturned or ignored so the body corporate can do what it should. Then you need to look at the rights of the body corporate to recover from someone and that then sounds a bit messier, but bodies corporate do have rights of subrogation into the developer’s shoes with contractual rights against contractors, but that starts with the contractual documentation. But you have to start with the first two. Then look at this. READ MORE ON THIS TOPIC HERE
Frank Higginson | Hynes Legal frank.higginson@hyneslegal.com.au
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Who Maintains our Car Stacker?
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We have a car stacker in our QLD body corporate. Our Bylaws state that owners have exclusive use of the car stacker and are responsible for its maintenance However, wouldn’t the car stacker be classed as utility infrastructure? Our unit block has a mix of car stacker system parking and ‘normal’ parking. 12 of 15 units have car stackers. 2 motors drive the car stackers. The motors are regarded as Body Corporate property. Our by-laws state that owners own the car stacker and have exclusive use. They also state that owners are responsible for any cost in relation to the operation, maintenance, repair or replacement of the car stacker or any of its component parts and costs are not recoverable from the body corporate. The QLD Government website provides a definition of utility infrastructure. Would the car stacker parking system fall into this definition as ‘another system or service designed to benefit a lot or common property‘? How does this fit with the by-laws? Do by-laws take precedence? Where does liability rest if a personal injury accident is sustained on the car stacker?
The exclusive use by-law would transfer the maintenance obligation of the car stacker to the lot owner. The car stackers would amount to utility infrastructure within the scope of the definitions of the BCCMA. Section 20 of the BCCMA then provides that utility infrastructure is common property. The important distinction with grants of common property is that they cannot be given over utility infrastructure as section 177 of the BCCMA relevantly provides:
An exclusive use by-law must not give exclusive use to the rights and enjoyment of, or other special rights about, utility infrastructure that is common property or a body corporate asset. Accordingly, the exclusive use allocation related to the car stacker would be over the common property airspace where the car stacker is located as opposed to the car stacker mechanism itself. The exclusive use by-law would then transfer the maintenance obligation of the car stacker (but not its nature as common property) to the lot owner. Liability for injury is, unfortunately, a very open ended question as it would depend on a number of factors including the cause of the injury, whether the stacker was being properly maintained, whether there was a manufacturing fault, etc. READ MORE ON THIS TOPIC HERE
Todd Garsden | Mahoneys tgarsden@mahoneys.com.au
Experts in Body Corporate Law • By law reviews & enforcements • Improvement applications • Lot owner disputes • Debt & levy recovery • BMS & CMS issues • LAAN access notices • Building defects • Assignments & variations • Caretaker performance issues • General advice and disputes Brisbane office L 18, 167 Eagle Street Brisbane Qld 4000
Gold Coast office L 2, 235 Varsity Parade Varsity Lakes Qld 4230
p 07 3007 3777 f 07 3077 3778
p 07 5562 2959 f 07 5575 7803
Tenants and friends of tenants are using the pool area as staging for commercial activity. We think this may be a misuse of our property as we do not wish the property to be advertised. Can this activity be restricted? Through its by-laws, a body corporate can regulate the use and enjoyment of the common property. Tenants are occupiers for the purposes of the Body Corporate and Community Management Act 1997. Occupiers have the same rights to use and enjoy the common property as lot owners do, subject to the by-laws.
Can the Committee Restrict Access to Common Property?
Through its by-laws, a body corporate can regulate the use and enjoyment of the common property. That might include regulating commercial activities; for example making such activities subject to prior approval by the Body Corporate, before they can occur. To take an example, if the pool was being used for aqua aerobics classes, with paid participants, then the Body Corporate could make by-laws about the use of the pool and associated areas that were both more consistent with a residential (non-commercial) use, and prohibit commercial use
without prior body corporate approval. A body corporate deciding whether to grant such approval would consider matters such as the impact of the commercial activity on the Body Corporate’s insurance, the impact of the activity on other lot owners and occupiers use of the space, and so on. Outright bans should be avoided, as they are prone to being overturned as ‘prohibitory’ instead of ‘regulatory’ and also, for being unreasonable or manifestly oppressive. For example, a clumsy by-law prohibiting all commercial activity in the pool area would lead to absurd results such as stopping lot owners taking business calls in the pool area or catching up on work emails on their laptop while minding their kids.
READ MORE ON THIS TOPIC HERE
Michael Kleinschmidt | Stratum Legal info@stratumlegal.com.au
As with any by-law, the starting point is to identify the problem, consider whether it is already dealt with elsewhere in the Act or regulation module, and only if it is not, then to draft the minimum by-law necessary to address the problem. The draft is then checked against the statutory limitations for by-laws and thought is given to practical matters and consequences
arising, such as enforcing the by-law. After all of that is done, the by-law should be presented for approval at a general meeting, by special resolution. To pass and be adopted, the proposed by-law will need good community support, which means involving lot owners in the issue, explaining the problem and getting their ‘buy in’ to the proposed solution.
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FAQs About How Strata Guardian Can Assist Your Body Corporate
Does the legislation allow us to invest?
What if something unexpected happens?
The simple answer is yes, usually through either a company account in the name of your scheme, or through a trust (if the scheme has one). In most cases, state and territory legislation allows for a wide range of investments held in strata schemes and refers to the relevant acts for Trusts and Trustees.
Unexpected things happen all the time, we understand that.
These acts then serve as a guide to the types of investment and other considerations for committee members. There are some areas that differ slightly from state to state, so feel free to be in touch to discuss further. For more information about your state’s legislation, head to our Articles page.
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We recommend that you speak to us to work through the options available and ensure you are making an informed decision. We only use reputable and well-known, diversified investments (exchange-traded funds) that are highly liquid and can be transacted whenever markets are open. Your committee can instruct Strata Guardian to draw down any amount, any time from your investment simply by getting in touch. All accounts are capable of being sold down and withdrawn whenever markets are open and capital is typically returned within 6 business days of notification.
Is our buildings capital safe? The investment structure that sits behind Strata Guardian is what we would call the 'gold standard' in ensuring client capital protection. All capital is held in custody by major financial institutions, administrated by a renowned and reliable platform, with Strata Guardian serving as your primary source of contact and help with your building’s investment.
Tim Fuller | Strata Guardian contact@strataguardian.com
READ MORE ON THIS TOPIC HERE
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Changing from an Accommodation to a Standard Module
As QLD caretakers, we are 12 years into our 25 year agreement. An owner has put forward a motion to change from an accommodation to a standard module. Can we challenge this? We are caretakers of a QLD complex and our agreement is currently at 12 years (out of 25) in an Accommodation module complex. 28 www.lookupstrata.com.au
A disgruntled owner has put a motion forward to change the module to the Standard module. We know that this will affect our ability to sell whilst this is on the table, but what would the module change mean to residents? Approximately 20% of the residences are rentals, plus we have a number of lockups (owners who live overseas). Are there any strategies that have been successfully deployed to mitigate or defeat such a motion?
The biggest changes would be your caretaking and letting agreement will be capped at 10 years and you will need to get some advice about how this affects you. This is something we’re seeing a lot of lately. I’m seeing a big shift where committees are looking at changing their regulation module. There are some requirements that I think should be factored into what
module is appropriate for the scheme and that is something that individual schemes should get some legal advice on. Generally your short term holiday letting style high rises with predominantly leased lots is more tailored towards your accommodation module where your townhouse Villa style mainly owner occupier lots he’s genuinely targeted towards your standard module.
What are the repercussions for owners? Not a huge amount apart from the biggest kick being that the caretaking and letting agreements are capped at your 10 years. As your term is currently at 12 years, you should certainly get some legal advice about what implications that change could have on your agreement. In terms of challenging it, it’s an owner submitted motion. It should be included on the
Jessica Cannon | Cannon + Co Law jessicacannon@cannonlaw.com.au
agenda and that’s what is required of the committee. The question for both the committee residents and yourself as a caretaker is whether there will be any grounds to challenge that motion, whether it’s on the grounds of unreasonability, or whether it’s on the grounds that it conflicts with the act or the module again. Unfortunately, that’s something that you would need to get some independent legal advice about.
READ MORE ON THIS TOPIC HERE
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What if you don't agree with the Body Corporate's decisions?
Our small scheme may decide to terminate our strata manager and self manage. I’m very concerned about this decision. As a lot owner, what can I do? I am a lot owner in a small complex of 5 units and do not hold a committee position. A majority of owners may decide to terminate the existing strata management contract and instead, self-management. I do not accept that this would provide safe or effective governance and am very concerned about the potential for adverse outcomes. Does the law provide any recourse or protection against body corporate decision making?
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If a body corporate decision is legal and approved by a majority of owners, there aren’t any good grounds to dispute this. If a decision of the body corporate is legal and approved by a majority of owners then there aren’t any good grounds to dispute this. That seems to be the case here. Selfmanagement, as opposed to having a body corporate manager, is the default position for all schemes and many small schemes find this an effective means of management. If it is what the majority wants then you have to go along with it. However, you are entitled to speak to other owners about your concerns and check whether the body corporate will be able to meet all of its obligations under the legislation if it is self-managing. The day to day operations of running a small body
corporate plan can be mostly straightforward. No particular knowledge is required to book a plumber or pay an electricity bill. But, factors such as financial reporting, debt collection, insurance and provision of access to records can be more challenging for self-managed buildings and you are entitled to ask how they will be handled. If self-management is brought in and owners struggle with these aspects then there could be grounds to seek professional assistance.
READ MORE ON THIS TOPIC HERE
William Marquand | Tower Body Corporate willmarquand@towerbodycorporate.com.au
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QIA Group
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Core Project Consulting
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INSURANCE Strata Insurance Solutions
STRATA LAWYERS Mahoneys
Online strata insurance quotes P: 1300 554 165 W: https://www.stratainsurancesolutions.com.au/ E: info@stratainsurancesolutions.com.au
Body Corporate Law & Dispute Resolution Experts P: 07 3007 3777 W: www.mahoneys.com.au/industries/bodies-corporate-strata/ E: info@mahoneys.com.au
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Hynes Legal
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QUS Pty Ltd
Cannon + Co Law
CHU Underwriting Agencies Pty Ltd
Bugden Allen Graham Lawyers
Strata Community Insurance
Mathews Hunt Legal
Protection for your strata property. And you. P: 1300 724 678 W: https://www.stratacommunityinsure.com.au E: myenquiry@scinsure.com.au
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Flex Insurance
Stratum Legal Pty Ltd
Strata Insurance Underwriting Agency P: 1300 814 011 W: https://www.qus.com.au/ E: qus@qus.com.au Specialist Strata Insurance Underwriting Agency P: 1800 022 444 W: https://www.chu.com.au/ E: info_nsw@chu.com.au
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The Experts in Strata Finance P: 1300 785 045 W: https://www.strata-loans.com/ E: info@strata-loans.com
Lannock Strata Finance
The Leading Strata Finance Specialist P: 1300 851 585 W: https://lannock.com.au/ E: strata@lannock.com.au
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Grace Lawyers
Know. Act. Resolve. P: 07 3102 4120 W: https://gracelawyers.com.au/ E: enquiries@gracelawyers.com.au
Holman Webb Lawyers
Body Corporate and Strata Dispute Experts P: 61 732 350 100 W: https://www.holmanwebb.com.au/ E: contact@holmanwebb.com.au
CONSULTING Strata Solve
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Untangling strata problems P: 0419 805 898 W: https://stratasolve.com.au/ E: chris@stratasolve.com.au
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STRATA MANAGEMENT Tower Body Corporate
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Bright & Duggan
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Your local Strata Firm based on the Gold Coast QLD W: http://visionstrata.com.au/ E: info@visionstrata.com.au
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When you build trust, you build a community P: 1300 724 256 W: https://civium.com.au/ E: clientservices@civium.com.au
Northern Body Corporate Management
Specialist Body Corporate Management for North Queensland
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CLEANING Pacific Facility Services
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ELECTRICAL
CLOTHES LINES Lifestyle Clotheslines
Altogether Group
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Providing utility network solutions P: 1300 323 263 W: https://www.energyon.com.au/ E: EnergyServices@EnergyOn.com.au
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Providing Solutions for Embedded Networks P: 1300 000 366 W: https://www.enmsolutions.com.au/ E: info@ENMSolutions.com.au
FIRE SERVICES
Specialist painters in the strata industry P: 1300 HIGGINS W: https://www.higgins.com.au/ E: info@higgins.com.au
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Fire Matters
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Higgins Coatings Pty Ltd
Painting Solutions P: 0423 800 153 W: http://calibrecoatings.com.au/ E: grant@calibrecoatings.com.au
WATERPROOFING The Superseal Group
Trusted Experts in all aspects of Waterproofing P: 07 5519 4916 W: https://supersealgroup.com/ E: admin@supersealgroup.com
WINDOWS & DOORS Windowline Pty Ltd
Australia’s strata replacement window & door specialists
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SUSTAINABILITY & ENERGY The Green Guys Group
Australia’s Leading Energy Saving Partner W: https://greenguys.com.au/ E: sean@greenguys.com.au
LIFTS & ELEVATORS 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
SAFETY & SECURITY Pacific Security Group
Experts in electronic security since 2005 P: 1300 859 141 W: https://www.pacificsecurity.com.au/ E: operations@pacificsecurity.com.au
RECRUITMENT SERVICES sharonbennie – Property Recruitment
Matching top talent with incredible businesses P: 0413 381 381 W: https://www.sharonbennie.com.au/ E: sb@sharonbennie.com.au
PLUMBING Fair Water Meters
Fair water - fair bills P: 1300324701 W: https://fairwatermeters.com.au/ E: info@fairwatermeters.com.au
MARKETING Marketing for Strata
Building Brand Authority & Thought Leadership P: 61 425 232 394 W: https://www.marketingforbusiness.com.au/ E: janette@marketingforbusiness.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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