Water run off from the upstairs tenant’s balcony garden Page 20 | Strata Solve Why are our admin levies more than our sinking fund levies? Page 24 | Tower Body Corporate The QLD STRATA MAGAZINE AUGUST 2022 Application to install an EV Charger denied. What do I do now? Page 6 | Stratum Legal
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Among other daily tasks, Liza is involved in scheduling and liaising with upcoming webinar presenters, sourcing responses to audience questions and assisting strata service professionals who are interested in growing their business.
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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 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.
Disclaimer: The information contained in this magazine, including the response to submitted questions, is not legal advice and should not be relied upon as legal advice. You should seek independent advice before acting on the information contained in this magazine.
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Liza came on board in early 2020 to bring some structure to LookUpStrata. She has a passion for processes, growth and education. This quickly resulted in the creation of The Strata Magazine released monthly in New South Wales and Queensland, and bi-monthly in Western Australia and Victoria. As of 2021, LookUpStrata now produce 33 state based online magazines a year.
Thanks to our sponsors Contents 4 Is now the time to review your flood cover? Tyrone Shandiman, Strata Insurance Solutions 6 Application to install an EV Charger denied. What do I doMichaelnow?Kleinschmidt, Stratum Legal 8 Capital works / maintenance plans: getting it right Sedgwick 10 If windows are missing flashing but not leaking, are we required to carry out repairs? Gary Stevenson, Windowline 12 Who maintains the roof top garden?WilliamMarquand, Tower Body Corporate 14 Do we need to supply quotes with our submitted motion? Todd Garsden, Mahoneys 16 Dealing with relentless bylaw breaches Chris Irons, Strata Solve 18 BUGTA amendments Mahoneys 20 Water run off from the upstairs tenant’s balcony garden Chris Irons, Strata Solve 22 Can we make a claim against the certifier for building defects? Francesca Barnes, Mahoneys 24 Why are our admin levies more than our sinking fund levies? William Marquand, Tower Body Corporate 26 Restricting lot owner access to common property Frank Higginson, Hynes Legal 28 Should the BC be paying for regular termite inspections? William Marquand, Tower Body Corporate 30 Lather, rinse and repeat - an effective advocacy strategy that delivers more than clean hair SCA (Qld) 32 The QLD LookUpStrata Directory
www.lookupstrata.com.au4 Is now the time to review your flood cover? How regularly should we be reviewing our flood cover with respect to current market changes and buildingescalatingcoststo mitigate risk? Is this considered under flood cover? If there has been a flooding event in your area since the last review, there might be cause for a review.
Likewise, if you’re a new committee member or a new committee and you don’t know if there has been a review done recently, this is also a good opportunity and a good time to consider whether you need flood cover.
Tyrone Shandiman Strata Insurance Solutions tshandiman@iaa.net.au READ MORE HERE
The main thing you’ve got to understand is whether there is flood exclusion in your policy. In terms of how often you should be considering your flood cover, that depends on a case by case scenario. If you’ve been on the committee for 10 or so years and you looked at the flood exposure years ago, there may have been no changes to flooding events in your area. The previous review as it might still be relevant. Obviously, if there has been a flooding event in your area since the last review, this changes things and there might be cause for a review.
www.lookupstrata.com.au6 Application to install an EV Charger denied.
Like most questions, this one involves so many variables that all I can offer is a ‘hypothetical’; that is, what follows is a constructed set of facts to illustrate some of the principles. So, to the facts of my hypothetical; the area into which a charger is to be installed is an exclusive use area in a basement. Power is not too far away in the basement area, but has to cross some other exclusive use areas to get to the charger. Finally, the by-laws say nothing relevant In this scenario, using the principles in the Supreme Court case of Katsikalis, the lot owner needs a. authority to install and b. authority to keep the improvement in place. If the exclusive use by-law contains a permission to install, then that is all that is needed for (a), for the charger. If not, then approval under s193 of the Standard Module would be required. If the charger is under $3000 (GST inc) installed, then committee approval is enough. Otherwise an ordinary resolution will be required. Of course, that is just for the charger. For the cables to bring the power to the charger, an improvement is being made to
Having just ordered a Tesla, I submitted an application to the body corporate to install an EV charger in our exclusive use area basement carpark. My request has been knocked back. We have a Standard CMS. Is my only option to pursue the matter through QCAT? Any lot owner can challenge a decision of the body corporate, but there may be a better way! Firstly, well done for taking the leap into the next generation of transportation. Secondly, you should get legal advice, tailored to your situation.
What do I do now?
the common property for the benefit of a lot; s187 of the Standard Module. If the cables are less than $3000, they don’t detract from the appearance of the common property and installation of them is not likely to promote a breach of the owners duties as an occupier, then approval can be given by the committee. Otherwise, an ordinary resolution is required.
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Next, to satisfy (b), the statutory easement in s115O of the Land Title Act permits the electricity cables and the charger to stay in the common property once they are installed but only if the car is being used as a backup battery for the owners unit. Why? Because the statutory easement is in favour of a lot, against the common property, for supply of utility services (electricity) to the lot – not the supply of electricity to the common property. Now, of course, power can flow both ways if the set up permits it – the car can be charged or the car can discharge and supply power to the lot. If the supply is one way – lot to car – then the compliance pathway (and winning any challenge to a refusal for approval) becomes very hard. On the other hand, if the charging arrangement is ‘tweaked’ so that the car is being used as a backup battery for the unit and the proposed cabling arrangement can be practically made to suit this (with cables, meters, credit arrangements etc), then the compliance pathway is much more well-trodden. It would, in my view, be very hard for a body corporate to refuse approval for such an arrangement, where, for example, the car is being charged during the day at work (from solar panels), driven home at night, connected to the charger which has a direct link back into the circuit for the lot (and is ‘behind’ the electricity meter for the lot), all of the cabling, charger and installation is top notch and performed by quality licences tradesman at the lot owners cost. Of course, the astute reader is saying ‘but what about running the power cables through other lot owner’s exclusive use areas?’ – to that, in my view, an argument can be made that the statutory provisions about improvements and utility infrastructure easements take priority over the exclusive use by-law, which operates only as a covenant between lot owners and not a statute or statutory instrument. In direct answer to this readers question, any lot owner can challenge a decision of the body corporate, but in my view, the battle is won or lost before the first shot is fired – the ‘set up’ is crucial, and too many lot owners seek help after things have gone the wrong way, which at best means a harder job for their lawyer (read – it costs more) and at worst means the whole process has to start again (read – it costs even more again).
Michael Kleinschmidt | Stratum Legal info@stratumlegal.com.au
ACCUR AC Y IN C APTURING DATA ON ASSETS
An ongoing challenge in the residential and commercial property industry is the inadequate allowances in existing capital works budgets to address the replacement of critical services in buildings. Requirements for an in-depth sinking fund is vital in the overall works, maintenance and longevity of strata assets. The cost of repairs and replacement is dependent on the location, type and access restrictions. Current building defects and delays in undertaking capital works can potentially: • Increase physical damage to the asset
• And result to an increase in costs and raising of additional funds.
There are a number of considerations for implementing a 10 year capital works/maintenance plan:
require the implementation of a 10 year capital works/ maintenance plan for strata complexes to ensure upkeep, ongoing maintenance and overall longevity of strata assets in all states of Australia.
CAPITAL WORKS / MAINTENANCE PLANS: getting it right
old school traditional desktop maintenance plans have limitations in collecting data on assets and their condition. Basing long term plans on old, historical and outdated information can often result in failure to identify all assets and adequately financially plan for the future. RISK OF ADDITIONAL FINANCIAL BURDENS shortfalls in generating appropriate funds for potential large and more complex programs can be avoided without the need for raising special levies or acquiring strata loans.
PROACTIVE MAINTENANCE, SERVICING AND MANAGEMENT of the physical building and mechanics of its assets is vital to ensure the building will function well into the future. Often failure to schedule regular maintenance and repairs may deteriorate the asset sooner. Initial upfront investment is important in ensuring the property and value of the asset is maintained.
NATIONAL CHANGES TO STRATA LEGISLATION/REGULATIONS
• Decrease the longevity on various building elements
IMPLEMENTATION AND EXECUTION OF PL ANS focus is often put into planning and preparation, but execution is fundamental when generating funds for future repairs and maintenance. Often taking a reactive approach can result in larger and more complex programs of work which in turn will cost significantly more.
Reducing physical risk, financial risk and liability for owners will ensure: Build assets are sustained Finances are kept in check The risk to health and safety of all those living on and/or attending site will be kept to a minimum Minimising the flow on impacts
NEXT STEPS Sedgwick is experienced in strata and suggests owners work with a trusted partner to establish and regularly review plans, complete maintenance, repairs and capital works programs in line with the 10 year maintenance plan. This will ensure your strata plan meets current requirements and is a valuable reference resource for the longevity of your strata asset.
COMPLEXITY IN BUDGETING AND FORECASTING
In large and complex strata plans and Building Management Committee’s (e.g. mixed use commercial, retail and/or residential lots) budgeting and forecasting the individual elements of the building requirements, shared facilities and/or special features of an asset can often be overlooked or incorrectly accounted for.
on insurance and property valuations. APPROPRIATE COVER In recent years obtaining strata insurance as a regulatory requirement has become more difficult. Owners are • Avoid special levies to be raised for unforeseen works. • Long term reduction in maintained cost by addressing defects and maintenance related to works. • Reduced lability from injury. • Realistic risk assessment for insurers. • New owners can purchase with more confidence • Potentially increase in property value from maintaining the level of quality and function in aging buildings. • The owner has a realistic overview of future costs. • Capital works can be planned, packaged, and tendered to reduced costs. • Reduced annoyance with daily operation of the buildings. BENEFITS OF IN-DEPTH 10 YEAR MAINTENANCE PLANS/SINKING FUNDS For more information on our services, contact: E. sales@au.sedgwick.com Edwina Feilen, Manager, Business Solutions P. 0424 750 900 E. edwina.feilen@au.sedgwick.com
required to disclose large defect issues, maintenance items etc. This may impact policy terms or in some cases if insurance can be obtained. You may be required to provide an accurate 10 year maintenance plan/sinking fund to your insurer in the future.
MITIGATING RISK
If some windows are missing flashing but not leaking, are we required to rectify this problem so the building is compliant? We live in a complex of 4 townhouses, built in 2003. As the building code has changed over time, our windows no longer comply. There is no flashings on the windows and a few of the units have experienced rainwater coming inside. Is it a requirement that all windows have to be brought up to new code compliance?
If there are windows that you believe do not have flashing, but there are no water issues,penetrationthereis no rectifyrequirementcompliancetothesituation.
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Good building practice would always have required flashing to be installed at the time of construction. While I don’t have the specific details of your building, flashings are typically independent of the window, as they are bricked in. Cavity construction requires the installation of flashing above and below the window and it’s the failure of the head [above] flashing that typically is the cause of water penetration issues. If there are windows that you believe do not have flashing, but there are no water penetration issues, there is no compliance requirement to rectify the situation.
Gary Stevenson | Windowline info@windowline.com.au MORE HERE
If windows are missing flashing but not leaking, are we required to carry out repairs?
READ
READ MORE HERE
Our apartment block’s roof garden can be accessed by the 6 top floor units. The body corporate has always maintained this space, but recently said they will no longer pay for this. How have the BC got it wrong for so many years? For around 15 years, the body corporate has maintained our roof gardens of our 6-floor apartment complex. This roof protects all 40 units. Only the 6 top floor lots have access to this area. The body corporate manager recently advised owners that the bc was no longer maintaining the roof space. How have our committees and body corporate managers got it wrong for so many years? How does something like this happen? All too easily. How does something like this happen? All too easily. Plans and documents aren’t always 100 per cent definitive and the people interpreting them don’t always have the full range of knowledge needed to make an absolute determination. The first year or so of a building when decisions like this tend to get made also tend to be the most chaotic. There’s a rush to get things done and errors get made. Once a decision gets made, people think it is set in stone and no one thinks to challenge it. There are all sorts of human reasons why this kind of situation can arise. The question is, what happens when you do become aware?
In this case, at least you seem to have a body corporate manager with the alacrity to see the mistake and to bring it to your attention. If you wanted any verification of the opinion you could seek the advice of a strata solicitor. The new understanding then needs to be assimilated and management of the plan, particularly levies will change. There are going to be some winners and losers from that, but that’s how it goes. A mistake may have been made in the past but once the body corporate is aware of it, it can’t continue to perpetrate the same error in the future. Can there be any adjustment for payments made in the past? You can’t put the toothpaste back in the tube once it is out and unless there has been a deliberate cover-up of information it is hard to rectify past events. You might also ask whether the body corporate can prevent this kind of thing happening in the future? Probably not 100%, but there are some steps you can take. Active Committees can help stay on top of issues like this. Owners need to make sure they are aware of all aspects of their scheme and read carefully though distributed documents such as AGM notices. To assist them, the Body Corporate should look to work with managers who are knowledgeable and have capacity to put time into your scheme – it sounds like you have one –they may cost a bit more but they can help save you from critical errors. Ultimately, there are no guarantees, but with diligence and commitment this kind of situation can be avoided.
Who maintains the roof top garden?
William Marquand | Tower Body Corporate willmarquand@towerbodycorporate.com.au
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If quotes are not submitted, even if the motion is approved, the works will not be fully approved. It will just be an indication of the support for a project. This was confirmed in Redlynch Grove Apartments [2009] QBCCMCmr 195 (our emphasis) by relevantly providing:
Are lot owners required to submit quotes along with their submitted motion if the proposal is less than the major spending limit?
Do we need to supply quotes with motion?submittedour
If a Queensland lot owner submits a motion for the AGM, are they required to obtain quotes if the cost of giving effect to the motion/proposal is more than the relevant limit for major spending for the community titles scheme?
Thus, where the major spending limit is say $300,000 and the cost of giving effect to the owner’s motion is, say $50,000, does the owner need not obtain quotes? Or is it sufficient to include, in the motion, a statement that the cost be capped, or not be more than, say $60,000? If quotes are not submitted, even if the motion is approved, the works will not be fully approved.
To properly authorise a scope of works or similar, it is important that quotes are considered irrespective of the cost. If insufficient detail is included, the motion will be ruled out of order. This is so that owners are made aware of what they are actually approving. Adjudicators have supported this position in Cairns Aquarius [2018] QBCCMCmr 447 by relevantly providing: “Firstly, I consider the principles adopted in Katsikalis are relevant to the proposition put to owners in Motion 3. As stressed by the Court of Appeal, “It is important that the rights to common property of bodies corporate are not removed unheedingly or inadvertently and to the detriment of their members”. In this context, it is significant that the motion did not detail: the improvements proposed to be made to common property; how those improvements would affect common property; or whether the making of those improvements would amount to a disposition of common property”
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• It does not name a legal adviser or provide a mechanism for choosing a legal adviser;
As mentioned above, Motion 3 was that independent legal advice is to be obtained by the body corporate to investigate the past conduct of the current committee but this motion was ruled out of order on the following grounds:
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• It did not include quotes to enable the body corporate to approve the expenditure; There is no provision for this expenditure in the current budget and there was no mention of a special resolution to raise funds for this proposal.
I believe it is quite plausible that the purpose of this motion was to make a preliminary decision as to whether or not legal advice should be obtained and was not an expenditure motion. In the event that the motion was carried, a further motion to engage legal representatives could be placed on the agenda for the next general meeting. Accordingly, I do not believe that this motion should have been ruled out of order. If a total cost is approved but there is insufficient detail as to who is being engaged and on what basis, a further quote would need to be considered. Todd Garsden | Mahoneys tgarsden@mahoneys.com.au
So, what to do? As a tenant, you are known as an ‘occupier’ under strata legislation and you have rights. One of those rights is to have by-laws enforced, as well as issues relating to nuisance. You would have to think what is going on here, based on your description, would be a nuisance and he is likely breaching several by-laws. The body corporate is supposed to enforce by-laws. If there’s no committee to do that, then you as an individual can take action
The committee has disbanded. As a tenant in the property, what can I do?
I am a tenant in a building of six units. An owner’s husband, who doesn’t live here, is continually breaching the bylaws. The Body Corporate Committee disbanded, as it was too difficult to deal with him. He sells used cars on the street, parks multiple used cars out the back of the property, keeps the security doors wedged open, keeps the security garage door open, let’s their cat urinate and defecate in common areas, and stores flammable materials in his garage space, which is now overflowing. What can we do now that there is no body corporate?
Dealing with relentless bylaw breaches
In our small building, a visitor continuously breaches bylaws.
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First up, you have my empathy. This sounds like a really unpleasant situation.
The body corporate is supposed to enforce by-laws. If there’s no committee to do that, then you as an individual can take action directly against the offending person.
Get in touch to find out more. email: chris@stratasolve.com.au web: stratasolve.com.au
Chris Irons | Strata Solve chris@stratasolve.com.au
Finally, start talking to the other residents, be they owners or occupiers. The things you describe would surely be bothering them. If you are on good terms with your landlord or real estate agent, you could also bring it up with them. While I totally appreciate that things are seemingly happening there because of the apathy involved, there are things you can do to make it different.
Strata Solve helps people untangle and resolve their strata issues. Sounds simple when you put it like that, doesn’t it? Director Chris Irons (pictured, with his strata-approved greyhound Ernest) has an unrivalled strata perspective. As Queensland’s former Body Corporate Commissioner, Chris has seen and heard virtually every strata situation and nuance. He knows that while legislation provides a framework, there are many ambiguities to navigate through and in which pragmatism, commonsense and effective communication are vital. As an independent strata consultant, Chris provides services which are all about empowering owners, committees, managers, caretakers, and others, to protect their strata interests. With a high-profile media and online presence, and as an accredited mediator, Chris is also able to carefully ‘read the room’ and craft the right narratives in even the most complex strata situation. Strata Solve is not a law firm. Chris instead thinks of steps you can take before you embark on lengthy, costly, and stressful legal proceedings. Regardless of the client, all people in strata have one thing in common: their substantial investment in the strata scheme. Strata Solve prioritises that investment in each tailored solution we provide.
17 directly against the offending person. There is a set process for you to follow to do this and I suggest you contact the Office of the Commissioner for Body Corporate and Community Management to get some assistance to do that. Put that to one side for a minute and think about this: not everything that happens in strata, is a strata problem to solve. You could raise issues about the fire doors with Queensland Fire and Emergency Services. You could raise issues about the cars with the local Council. You could also raise issues about flammable issues with the relevant authority. My point is, try to address the problem from other angles, including speaking with agencies such as the Residential Tenancies Authority or Tenants Qld.
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Circulating minutes and notices – to include an obligation for notices of committee meetings and for meeting minutes to be circulated to owners.
Payment of levies – to allow payment of levies through alternative means such as offsets with specific protections in place (such as requiring approval of the body corporate at general meeting).
However, the Queensland parliament is now considering a bill with proposed changes to BUGTA that would see it more closely align with the BCCMA.
More support for information services – to allow more access to owners for information around the operation of BUGTA (similar to the existing services for the BCCMA).
A summary of the updates includes:
Committee eligibility – to exclude proprietors (or associates of proprietors) who owe a body corporate debt or service contractors from being eligible to be on the committee.
Dispute resolution applications – to increase access to, and the powers for, orders available from a referee.
in Body
Recovering levies – to include an obligation on bodies corporate to actually take steps to recover outstanding levies.
Given that there have been a number of updates to the BCCMA over the last 20 years, BUGTA was somewhat disregarded.
Subsidiary representation – requiring a BUGTA subsidiary representative to be a member of the subsidiary committee (for those schemes that are part of a layered arrangement).
Liability limited by a scheme approved under Professional Standards Legislation
An obligation to act reasonably – significantly, such that bodies corporate regulated by BUGTA must act reasonably in making decisions (an obligation that does not presently exist).
Experts Corporate Law
General advice / by laws Off plan (BMS / CMS) Assignments
Amalgamation/terminationresolutionDispute
and Dispute Resolution www.mahoneys.com.au
BUGTA amendments
These changes are sensible and common sense. They help BUGTA align with the BCCMA and are generally intended to protect lot owners. There are no new concepts that are being imposed that would shift a body corporate manager’s understanding of how a scheme should operate.
The Building Units and Group Titles Act 1980 (Qld) ( BUGTA) is now more than 40 years old. Although the Body Corporate and Community Management Act 1997 (Qld) ( BCCMA) replaced the operation of BUGTA for the majority of schemes in Queensland, BUGTA still applies to several larger resorts and mixed use developments.
Disclosure of conflicts of interest – requiring committee members to disclose conflicts of interests and refrain from voting on such matters where a conflict exists for committee decisions.
Mahoneys (instructing counsel), led by Ben Seccombe and Francesca Barnes successfully defeated the application by demonstrating to the Court, amongst other things, that: our clients’ plans complied with the relevant bylaws; and the body corporate’s approval and development application were both valid. The application was dismissed and our clients are permitted to continue the building works without reservation. Furthermore, our efforts meant that our client suffered no material delay to the building works as a result of the application brought against them. Further details on the matter, and the Court’s ruling, can be found here.
Although generally the existence of more disputes is not necessarily a positive outcome, the disputes will be centred on the rights of owners who have had unreasonable decisions made against them. Our view is that this is a positive outcome for owners when the previous position was that an unreasonable decision can be made against that lot owner without any available recourse. 167 4000 07 3007 235 4230 07 5562
2959 www.mahoneys.com.au Your Body Corporate Experts www.mahoneys.com.au
Brisbane L 18,
3777 Gold Coast L 2,
General advice / by laws Off plan (BMS / CMS) Assignments Amalgamation/terminationresolutionDispute Liability limited by a scheme approved under Professional Standards Legislation
Varsity Parade Varsity Lakes Qld
Mahoneys successfully defends Supreme Court Application Mahoneys has successfully defended an application in the Supreme Court that alleged that body corporate approvals obtained by our client were invalid and sought to: prevent building works being carried out by our clients at Sanctuary Cove; and require our client to: demolish any works already carried out; and make significant amendments to building works.
Eagle Street Brisbane Qld
However, the most significant of these changes is the introduction of the obligation to act reasonably –something that is an easily understood and accepted concept for a BCCMA scheme. Despite this being generally understood and accepted in the industry, it is also the source of a significant number of disputes for a BCCMA scheme. We expect that this source of dispute, along with the expanded access and scope to a referee’s order, will have the impact of a higher number of dispute resolution applications being made to the Office of the Commissioner for Body Corporate and Community Management.
Water run off from the upstairs tenant’s balcony garden
Chris Irons | Strata Solve chris@stratasolve.com.au MORE HERE
READ
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The tenant upstairs waters her plants and the run off fills my balcony, damaging my items. The landlord has been contacted but the behaviour has not changes. What should the body corporate do about this?
One thing you don’t say in your query is whether the tenant has been directly approach about the issue. If that hasn’t happened, I would suggest doing so (if it is safe and appropriate to do so of course).
The landlord has been contacted repeatedly to ask his tenant not to do this and to cease the behaviour, but nothing changes. I have sent videos of the water coming down as well. It is not up to the landlord to regulate this activity, its is up to the body corporate. It is not up to the landlord to regulate this activity, its is up to the body corporate.
I have a tenant above me who keeps watering her plants on her balcony until the water flows down to my balcony. The water can be filthy and contains fertilisers. It affects my belongings on my balcony and I’m concerned about water entering my light fitting. What can the body corporate do about this?
A body corporate has a direct relationship with a tenant (known as an ‘occupier’ under body corporate legislation) and part of that relationship means enforcing by-laws directly against the tenant. While it would be good for the landlord to be engaged in this, it’s not compulsory and if it is causing a problem as you say it is, then it is up to the body corporate to take action. You can request they do so or you can take the action directly against the tenant (the former is the usual approach). This may well be a by-law enforcement issue but it might also come under the terms of s167 of the Body Corporate and Community Management Act 1997, namely, a nuisance or hazard. Again, you can pursue this yourself or you can request the body corporate do so (and again, with or without the involvement of the landlord).
• Embedded networks
• Energy fundamentals
the
water. data
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• Government reform and utility regulation The program will give you the opportunity to learn from some of the energy industry’s most experienced voices, learn soft skills and take part in networking opportunities. Take control of your career, embrace Altogether Academy and talk to a Senior Energy Consultant today.
• Sustainable technology such as electric vehicle charging capability
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• Utility data and metering
www.lookupstrata.com.au22 Can we make a claim against the certifier for building defects? Our body corporate has just willinconcretediscoveredspallingthebuilding.Thiscostaround $1.2 mill to fix. The builder went broke and wonderingwe’rewhether we can make a claim against the Certifier?
A body corporate has a number of options to pursue a certifier for defects at the Scheme. Like with builders, a body corporate has a number of options to pursue a certifier for defects at the Scheme. These include: 1. a complaint to the QBCC for unsatisfactory conduct or professional misconduct of the certifier; 2. commencing proceedings against the certifier; and 3. commercial negotiations with the certifier. These claims can be more difficult to pursue, however, READ MORE HERE
Two years ago we purchased an apartment in Brisbane. Our body corporate has just discovered the building has concrete spalling. The Engineer Report states that the spalling is due to insufficient concrete cover at the edges of the balconies. Isn’t this something the Certifier should have picked up? The cost of the repairs is expected to be around $1.2m. We have 98 units in the two affected buildings, so that’s a significant cost to each owner. We’ve been advised that the builder went broke and we’re wondering whether we can make a claim against the Certifier? as the body corporate will need to be able to demonstrate that the building defect was so obvious at the time of certification that the certifier should have reasonably identified it. Like with all building defect claims, the appropriate approach to be taken by the body corporate will be determined by a consideration of the cost of the repairs, urgency of the repairs and progress being made with the certifier (or any other responsible party) regarding the defects.
Francesca Barnes | Mahoneys fbarnes@mahoneys.com.au
Is it common for the admin fund contributions to be for a higher amount than the sinking fund contributions?
It’s not unusual to see admin fees fluctuate and the totals contributed to the admin fund usually exceed the amount to the sinking fund. However, every building and owners group is different and the structure of any individual budget will depend on the needs of the Thebuilding.AGM notice and minutes should give you an idea of why costs may be increasing, but if that doesn’t answer the question, you can always ask the body corporate manager or committee for an explanation.
Why are our admin levies more than our sinking fund levies?
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William Marquand | Tower Body Corporate willmarquand@towerbodycorporate.com.au
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We are a 4 lot complex of 1 bedroom older units – no lifts, no pool. Just a shared driveway.
I have noticed our admin fees have gone up quite a bit this year, around 20%, while the sinking fund less so. In addition, we pay around $488 per qtr for the admin fund, and around $270 per qtr for the sinking fund. Is it common for the admin fund to be more than the sinking fund?
It’s not unusual to see admin fees fluctuate and the totals contributed to the admin fund usually exceed the amount to the sinking fund. With levies, the key factor to remember is that they are determined by owners at the AGM. At that stage, a budget is presented based on the anticipated current and future needs of the plan and owners vote on whether to approve that budget or amend it. At most AGMs, there is usually some discussion as to the general finances of the plan, spending plans for the future and why there may be changes to the rates so that owners can make an informed decision about the levy rates they are determining.
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So, on the below:-
Frank Higginson | Hynes Legal frank.higginson@hyneslegal.com.au
car parks and courtyards. That attaches to a lot and is only granted by a resolution without dissent. That means no one votes against it. After that, a body corporate can grant the rights to use common property areas by lease or licence. Depending on which module you are in, a grant of anything longer than 3 years is usually a special resolution but if it is for more than 10 years, you are in exclusive use territory. You don’t normally see these grants to owners but to third parties on commercial terms – like a telecommunications provider or the like.
The last way is to grant an occupation authority. This can only be granted to the holder of management rights for purposes associated with the management rights business and then it attaches to the management rights agreement. It comes to an end when the agreement does and a grant of this nature isn’t necessarily always exclusive.
Can a committee change a common property area to a “restricted” area preventing lot owner’s access? Can a committee, when drawing up new by-laws, change a common property area to a “restricted “ area preventing lot owner’s access? Should this be decided as a motion vote without decent? If the motion passes, does the committee have a right to restrict lot owner access to this area? In our situation, this is to increase the caretaker’s area to store ever-increasing piles of junk and his nursery. Besides carrying out work for our body corporate, the caretaker also contracts his services out to other landscaping businesses and uses this area for his storage.
Restricting lot owner access to common property
1. I think it highly unlikely the committee can grant the right to use the area; and 2. I doubt that any grant can extend to the caretaker under an occupation authority if the area is being used for purposes not associated with the management rights business.
Common property is ‘common’ to all owners and taking away the rights of some to use it is very heavily regulated. There are a few moving parts to this one. I think the fundamental starting point is that common property is ‘common’ to all owners and taking away the rights of some to use it is very heavily regulated. The traditional way to grant the rights to some to use common property ahead of others is a grant of exclusive use – which you usually see for
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More importantly, is the body corporate allowed to pay for this? In a standard format plan, the lot owner is responsible for the cost of pest control at their unit, however, the Body Corporate should want to do what it can to minimise the risk.
In a standard format plan, who should pay for regular termite inspections of the dwellings? Is this the responsibility of the body corporate or the lot owner?
Should the BC be paying for regular inspections?termite
In a site where the risk of termites is high –most of Queensland – it makes sense that the Body Corporate should want to do what it can to minimise the risk. If it doesn’t and termites enter a scheme, they can quickly do large scale damage that won’t be covered by the scheme’s insurance.
In a standard format plan, the lot owner is responsible for the cost of pest control at their However,unit. when it comes to termites, placing that responsibility on the owner might not be in the best interests of the Body Corporate.
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William Marquand | Tower Body Corporate willmarquand@towerbodycorporate.com.au MORE HERE
Probably the best thing Body Corporate can do is to make sure they are having a clear and open conversation with owners about what is required at the site and the best way to control it. Work with your pest controller to establish your risk levels and make sure owners are aware of the situation. Raise the issue regularly and work through the issue until you get to a framework that protects your site.
Risk mitigation usually means checking all lots on a periodic basis as the start point. If the body corporate pays for this, they can guarantee the risk is minimised. If they leave it to owners, as the legislation indicates, some might do it and some might not and the risk to the body corporate as well as individual owners, increases. Is there a way out of this dilemma? It’s not easy to do it and remain within the boundaries of the law, even though strict adherence to the legislation can produce a sub-optimal outcome. The simplest solution here would be for a legislation change to occur to accommodate this kind of situation. Don’t hold your breath waiting for this to happen – legislation change tends to be glacier slow at the best of times. In the interim owners have to make real life decisions. As such, some schemes just have the body corporate pay for the inspections regardless. It’s not technically allowed, but it may be hard to say that the body corporate is acting unreasonably – bearing in mind that ‘reasonability’ is one of the standard tests of body corporate decision making. If a scheme wants to do this, I think they may be OK provided they have established the risk, clearly advised owners of the situation and that there are no major objections from owners. You have to acknowledge that this solution is not technically correct, but is it better than having termites attack the scheme? Otherwise, schemes might need to look at whether owners can be required to conduct the testing. The risk level would probably have to be high to the point that safety was endangered to make this a requirement. Perhaps owners could be advised that they would be considered negligent in the event that termites attacked their building and that the body corporate would pursue them for costs in that event. However, while warnings like this might provoke some owners into action, they don’t stop the termites who are not known for respecting body corporate boundaries.
Lather, rinse and repeat - an effective advocacy strategy that delivers more than clean hair an extra full staffequivalenttime and millions of dollars in extra funding over the next 3 years
SCA (Qld) engaged with Government at every opportunity for more resourcing for the Office, speaking to politicians on all sides of the chamber and on the cross bench about the critical need to appropriately resource what is an essential service for the 1.2 million Queenslanders who live and work in Queensland strata.
The SCA (Qld) board received consistent member feedback that the services of the Office were under constant strain and this naturally was having an impact on the harmony of strata communities. Applications for conciliation and adjudication were taking longer and longer.
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For the past 18 months SCA (Qld) has been diligently advocating for increased resourcing for the Office of the Commissioner for Body Corporate and Community Management. The work of the Office is central to the success of the strata sector in Queensland and for the last 7 years, despite the enormous growth in lots and disputes, no additional staff were granted to that Office.
On Wednesday August 3, the Attorney-General Shannon Fentiman responded to our consistent calls with an announcement in Parliamentary estimates of an extra 9 full time equivalent staff and millions of dollars in extra funding to the Commissioner’s Office over the next 3 years.
As a leader in business with 30 years of experience, I have learned two things about transformational change. One, you always need to have one eye on the future - and two, you can never lose sight of delivering the best you possibly can now.
To say we are ecstatic as an organisation is a tremendous understatement.
SCA (Qld) has placed a huge emphasis on positive reform to the sector over the past couple of years, however, such a process takes time. The mechanics of the Office of the Commissioner are like oil in the engine of our industry, without appropriate levels of resourcing, we grind to a halt.
SCA (Qld) made this important point to Government at every opportunity over the past two years.
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The lesson for us out of this is twofold. One, strata is getting a seat at the table. This is a testament to the work and diligence of SCA (Qld) members, volunteers and boards over many years. We are glad Government has sat up and taken notice of our sector. Two, we must be persistent in our advocacy for our sector. A coherent case for change or funding isn’t enough. Like shampoo, to make our advocacy most effective, we must lather, rinse and repeat. The lessons out of this huge win are things we will carry forward as we push for modernisation of our legislation. For better or worse, repeating ourselves is a necessity to deliver outcomes. SCA (Qld) will continue to advocate in the interest of the entire sector and seek to put consumer protections at the core of any and all reform proposals we put forward. It has been a whirlwind first couple of months for me in my new role as General Manager of SCA (Qld). We have seen the first large change to strata law in 5 years come in the form of a bill to reform BUGTA. We have seen the most substantial increase in resources to the Office of the Commissioner for Body Corporate and Community Management in many years. These are great achievements. They are, however, merely steps in the right direction. The process of reform is never over, and SCA (Qld) will take the lessons from these successes and seek to apply them diligently to our future endeavours. Success begets success, and we hope more industry players see these outcomes and join us on the journey to lead Queensland strata into the 21st century.
Over dozens of meetings with politicians, written submissions to Government and appearances before Parliamentary Committees our advocacy directors communicated this point clearly and most importantly, repeatedly. Not a meeting went by and not a submission was written without strong and clear communication about the importance of increased resourcing to the Commissioner’s Office. Whilst we desire and advocate reform of our sector in the future, we will of course advocate at every opportunity to make the best of now.
Laura Bos General Manager
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