The QLD Strata Magazine | October 2023

The QLD

STRATA MAGAZINE OCTOBER 2023

How do I submit a motion to reduce levies?

Page 4 | Tower Body Corporate

The right to end smoking in QLD body corporate buildings?

Page 8 | Chris Irons, Strata Solve & Frank Higginson, Hynes Legal

Electric vehicles, fires and body corporate buildings

Page 32 | Strata Insurance Solutions

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.

Meet the team

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, a body corporate company in SEQ. Nikki is also known for presenting regular strata webinars, where LookUpStrata hosts a strata expert to cover a specific topic and respond to audience questions.

Nikki Jovicic Owner / Director

Liza came on board in early 2020 to bring 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.

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.

Liza Jovicic Sales and Content Manager

Learn more here → https://www.lookupstrata.com.au/about-us/ You can contact us here → administration@lookupstrata.com.au 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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Contents 4 How do I submit a motion to reduce levies?

20 Majority votes when there are four voting members Chris Irons, Strata Solve

William Marquand, Tower Body Corporate

6 Insurance Premium Funding in Strata Management

22 Strata sector faces perfect growth storm Frank Higginson, Hynes Legal

Lannock Strata Finance

8 The right to end smoking in QLD body corporate buildings?

24 Cleaning deposit to access the community room Chris Irons, Strata Solve

Chris Irons, Strata Solve & Frank Higginson, Hynes Legal

10 Can a committee member get a quote without committee approval?

26 How much detail should the agenda include?

Holly Dunne, Mahoneys

William Marquand, Tower Body Corporate

12 Is a by-law about no parking of commercial vehicles (a ute) reasonable?

Todd Garsden, Mahoneys

14 Strata Scheme Renewals and Collective Sales: A Blueprint for Success in Queensland Asset Strata Valuers

16 Does a strata insurer handling a claim have a ‘duty of care’ to the lot owner?

Tyrone Shandiman, Strata Insurance Solutions

18 Who is responsible for each lot’s water pressure limiting valve?

28

recent inspection indicates our fire A doors are no longer complaint. How? Stefan Bauer, Fire Matters

30 Overspend (by more than double) on an unfinished pool improvement Frank Higginson, Hynes Legal

32

lectric vehicles, fires and body E corporate buildings Tyrone Shandiman, Strata Insurance Solutions

34 Scheme Termination - Rights, Wrongs and Honesty Strata Community Association QLD

36 The QLD LookUpStrata Directory

Todd Garsden, Mahoneys

Thanks to our sponsors

SC Seymour Consultants

STRATA COMPLIANCE REPORT SPECIALISTS

How do I submit a motion to reduce levies?

To present an alternative motion, you should also present an alternative budget. However, it will be hard for most owners to put a credible budget together without the help of the treasurer or body corporate manager. If you can do it, great.

Perhaps your body corporate manager can give you some documentation on the current budget to assist, but if you can’t put an alternative budget together with the proposal, any motion you present may struggle to get traction.

That being the case, you should consider alternatives.

As a starting point, you could contact the committee or your body corporate manager to see what they think about your proposals. The situation sounds complicated, and they are probably looking at different options. It may be helpful to them to have an idea of what owners are thinking.

I’d like to submit a motion to reduce levies by $100 per quarter.

How do I word the motion so it’s not ignored?

Due to poor construction work, court action has resulted in $150,000 unallocated in our sinking fund. As owners are generally experiencing a significant rise in costs and are under financial pressure, I’d like to submit a motion proposing we reduce levies by $100 per quarter. How do I phrase the motion so it’s not ignored or thrown out?

To present an alternative motion, you should also present an alternative budget.

It’s tricky for individual owners to make propositions like this because the levy motions should be associated with a budget.

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Perhaps you could submit a motion that doesn’t look to change the whole budget but just some aspects related to the construction works done.

You ask about specific wording around this, but that is not the kind of thing that we can really advise on here – if you need help, it might be worth contacting a strata solicitor.

Otherwise, if the budget is presented to owners at the AGM and you don’t like it, you can always vote “no” to the relevant motions. If enough owners agree with you and the motions presented in the notice are defeated, owners at the meeting can vote to raise or lower the presented budget by up to ten per cent. Of course, to get an action like this through, you need other owners to agree with you, so you might have to be in touch with other owners before the AGM. You may also consider nominating for the committee. Ultimately, it is easier to influence this type of discussion as a committee member than a regular owner. It might not change this budget, but you can influence future decision-making.

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

Insurance Premium Funding in Strata

As strata insurance premiums continue to skyrocket, is Insurance Premium Funding the timely solution for strata communities?

Insurance Premium Funding: What is it?

Insurance Premium Funding (IPF) is a financial solution designed to help Bodies Corporate manage their insurance costs more effectively. It allows the Body Corporate to spread the cost of insurance premiums over time, typically in monthly instalments, instead of paying a lump sum. IPF ensures that the Body Corporate can maintain comprehensive insurance cover without straining lot owners’ cash flow. Lannock’s IPF provides the funding for 100% of the annual premium upfront. This eliminates cancellation risk for the Body Corporate due to unpaid levies.

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Changing dynamics of the global insurance market Rising inflation, supply chain constraints, catastrophic weather, scarce materials and labour shortages are all factors driving the rising cost of insurance in strata. Add in changes to global reinsurance markets and we have a perfect storm (somewhat literally). The statistics are telling: • Premium increases: Insurance premiums have increased sharply over the past few years. Buildings with defects are experiencing premium hikes of over 40%, while those with no identified defects have seen increases of more than 15%. These escalating premiums are putting financial pressure on lot owners in a market where delay in paying premiums can mean loss of insurance cover.

• Peace of mind: Unlike traditional IPF, Lannock will NEVER cancel your insurance policy if you miss a payment! There’s no risk of policy cancellation due to late or missed payments – no more worries about unpaid levies compromising your insurance cover!

• Dedicated support: Lannock gives you dedicated Relationship Managers, transparent rates and personalised guidance.

Our Insurance Premium Funding is a timely solution for strata communities struggling with skyrocketing insurance premiums.

• Reduced cover for defective buildings: Buildings with defects now have an increased risk of reduced cover and worse still, denial of cover. Insurers no longer put up with delays to remediation works where the cover is contingent on carrying out those works – they simply pull out. This places additional strain on strata managers who must react quickly to arrange other, often unattractive coverage of their clients’ property.

How does Insurance Premium Funding help?

IPF offers a practical solution to these challenges. Here’s how IPF makes a difference: • Smooth the financial impact: Lannock’s IPF spreads the financial impact of premium increases over 12 months, making it easier for lot owners to manage their own cash flow.

• Flexibility: IPF gives the Body Corporate a flexible funding tailored to specific needs. It is a fast and secure way to access 100% of the premium required at the time it is needed.

• Low administrative burden: Managing Lannock’s IPF is straightforward and comes with minimal administrative strain.

Lannock’s funding also complies with strata legislation and the National Credit Code, ensuring a smooth process and no compliance problems.

Jason Triplett Business Development Manager QLD P 0467 777 272 E jason@lannock.com.au W www.lannock.com.au

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The right to end smoking in QLD body corporate buildings?

I think it’s fair to say this bill effectively gives a body corporate the right to end the days of smoking in a strata scheme.

We all thought, “you can’t stop smoking”.

Then an adjudicator said, “what about smoking as a hazard?” Yes, good call.

The government always has a problem regulating what goes on behind closed doors.

It’s your property – your domain – you do what you want with it.

The words matter when you really sit down and spend time reading them. What they’ve done with smoking is two things. First, they’ve expanded the definition of nuisance to specifically include smoking. The words really matter here. This now extends to where someone ‘regularly’ uses a smoking product, and that’s a lot less than chain smoking. What proof will be needed? What is ‘regular’? Is it the start and end of every day? Those are going to be the fights. No matter what, there’s now a standard for nuisance in strata if this legislation is passed in the form that it’s presented, that is actionable by people, regardless of what the by-laws say.

The difficulty with smoking is that the residue of smoking is this nebulous thing that creeps in. If someone is smoking just inside the door, it doesn’t mean smoke will be contained behind it. Let’s look back to the Artique decision, where an adjudicator decided to limit smoking in relation to Section 167. Let’s skip over the nuisance and talk about it being a hazard. It’s funny how we all focused on nuisance over the years. In Norbury vs Hogan, it was basically held that for smoking to be a nuisance, it needs to be chain smoking.

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There’s no penalty with any of this, by the way.

While the government has moved to allow the effective prohibition of smoking in pretty much every circumstance, they haven’t attached a penalty to it, which is interesting.

Surely, one begets the other, but not in this case, seemingly.

To clarify, we’re talking here about smoking in an open area. If someone is smoking and it is interfering with the use and enjoyment of your lot, then you may have something actionable with respect to the provisions of nuisance.

They’ve lowered the standard that was previously required there.

On top of that, they have given the ability for bodies corporates to prohibit smoking on the common property and outdoor areas of a lot that are common property or exclusive use. They still haven’t gone inside that front door, but they’ve gone outside that into what might be your property. That, in a sense, is as close as they’re going to get to interfering with people’s individual rights to engage in a lawful activity within their home because the balcony is probably going to be part of their home, but that activity affects other people.

By-laws, as a rule, can’t prohibit things. All they can do is regulate things. That’s why, from a pet perspective, a no pet by-law has always been invalid, but they’ve made pet by-laws black and white. What they’ve also done with this particular provision of the legislation is specifically say that the by-laws can prohibit smoking. That is new.

How does it get enforced? The same way as a by-law breach contravention gets enforced now. Either through the Magistrates Court or, far more commonly, through the Commissioner’s Office and that raises a big issue. If every person and their dog is now going to seek to enforce smoking by-laws, the Commissioner’s Office will find themselves inundated very quickly.

It is interesting to note that ‘smoke’ here is tied to a definition of a ‘tobacco product’. So, while that would capture cigarettes and vaping, it would not capture smoke from barbecues, word burners or smokers. In those cases, the existing provisions for nuisance and hazard would apply. That definition might be expanded later, but who knows at this stage.

It’s also retrospective, and it is very unusual for legislation to do this. Usually, there’s the line in the sand where here’s the date it commences.

That’s when things kick off. What they’ve done is specifically include a section that says to the extent the body corporate has a no smoking by-law that complies with the new law, that’s going to be valid. It’s not valid today, but when this legislation commences, it will be valid.

That’s allowing the will of the people – as much as it might not be enforceable now, to be enforced when the legislation comes into existence that would give it that right.

If you’ve got a smoking issue, you will need to review the by-laws considering this. Indeed, one of the key messages arising from these proposed amendments is that a review of bylaws and their careful, consistent application thereafter will be vital in ensuring scheme harmony and protecting property values.

Chris Irons | Strata Solve chris@stratasolve.com.au

Frank Higginson | Hynes Legal frank.higginson@hyneslegal.com.au

READ MORE HERE

Importantly, a body corporate must still pass a by-law, or an individual can pursue a nuisance or hazard proceeding in relation to smoking, but the enforcement process has not changed.

That is the same.

9

Can a committee member get a quote without committee approval?

Can a committee member seek quotes without first obtaining the approval of the committee members?

Yes, any owner can seek quotes, but some quotes may need input from the committee.

Yes. Any owner can seek quotes and put them forward to the body corporate for consideration.

This might be relatively straightforward if you wanted to obtain a quote for a new gardener at the scheme. No special access or knowledge is likely to be required. The owner can contact and meet the gardener, obtain the quote and make their submission.

However, some issues could be quite hard to get quotes for. For something like repairs to the roof, it might be necessary to work with the committee or facilities manager/ 10 www.lookupstrata.com.au

caretaker to get access to the area so you get an accurate quote. Sometimes, this is easier said than done. In that case, the owner may have to write to the committee requesting either the committee seek the quote, facilitate access or provide the information required. If the committee agree, no problem. It can be harder for the individual to progress if the committee aren’t keen. Depending on the rationale of the committee, you may have to take the matter to the Commissioner’s Office or deal with the matter by seeking to pass a vote that requires the committee to get a quote.

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

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Is a by-law about no parking of commercial vehicles (a ute) reasonable?

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A resident received an email saying our by-laws prevent parking of commercial vehicles.

He owns a ute. Is this by-law reasonable?

My friend has a work ute. He does not carry anything in the back tray. He parked the ute on his neighbour’s driveway, and then he and his neighbour received an email saying the by-laws prevent parking of commercial vehicles. Is this by-law reasonable and enforceable?

“No commercial vehicle, truck or recreational vehicle, including a boat or trailer (other than a four wheel drive), is allowed to be parked anywhere that is visible from another lot or the common property, i.e. in a lock up garage is acceptable, but on a driveway or a parking pad within a lot is not.”

Use right aside, the by-law is capable of being reasonable. Prior adjudicators have upheld such by-laws in circumstances where there has been a focus on a consistent and well-kept visual amenity. One example is Champagne Boulevard, which prevented a caravan from being parked on a lot’s driveway that was visible from the street.

Todd Garsden | Mahoneys tgarsden@mahoneys.com.au

First, check whether the area of driveway forms part of the common property or the lot.

READ MORE HERE

The first thing to check here is whether the area of driveway forms part of the common property or the lot.

If it is on the common property, there is a separate and probably more difficult issue, in that the common property cannot be used for parking on an ongoing basis without some form of use right.

Experts in Body Corporate Law and Disputes Mahoneys has a dedicated team of lawyers with experience in assisting bodies corporate with: management rights assignments and variations

debt and levy recovery

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by law enforcement and by law reviews

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Brisbane office L 18, 167 Eagle Street Brisbane Qld 4000

Gold Coast office L 2, 235 Varsity Parade Varsity Lakes Qld 4230

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Strata Scheme Renewals and Collective Sales: A Blueprint for Success in Queensland Written by James Bouteris

The transformational success of strata scheme renewals and collective sales in New South Wales (NSW) has set a precedent worth emulating in Queensland. In 2016, legislative changes reshaped the landscape of property ownership in NSW, fostering cooperation among strata owners and unlocking new opportunities for property development. Now, as Queensland considers similar legislation, there’s excitement about the potential benefits for community title owners and developers. Let’s look at what has worked well in NSW and areas where potential improvements can be made.

WHAT’S WORKING WELL IN NSW: 3. Negotiation and Mediation Platform:

1. Increased Participation: The introduction of this legislation has stimulated strata owners in NSW to seriously consider collective sales. This newfound enthusiasm has fostered cooperative agreements among owners to sell their properties collectively, a pivotal success factor.

2. Unlocking Land for Development: One of the standout achievements of the legislation has been the unlocking of prime land in sought-after suburbs.

This has enabled the sale of larger strata schemes as a single entity, thus paving the way for significant development projects.

CONTACT US

P: 1800 679 787

The legislation has established a robust platform for negotiation and mediation.

This has led to the majority of involved parties reaching mutually beneficial agreements without resorting to the complexities of court involvement, thus ensuring successful contractual outcomes in most cases.

4. Reduction of “Holdout” Cases: Before the legislation was enacted, a single owner’s objection could derail a collective sale. With the introduction of the 75% support threshold, more sales are being accomplished, effectively curbing the prevalence of holdout cases.

W: www.assetstratavaluers.com.au

E: workorders@assetstratavaluers.com.au

POTENTIAL AREAS FOR LEGISLATIVE IMPROVEMENT: 1. Addressing Leaseholder Concerns: Currently, the legislation does not comprehensively address the rights and concerns of tenants within strata schemes, particularly in the context of commercial leases with extended terms. A recommendation is to empower the Court to disregard any lease with unreasonably onerous terms that obstruct a collective sale.

2. Streamlining Valuation Requirements: The existing legislation mandates two costly valuations: one during the consideration of the strata renewal plan and another when applying to the Land and Environment Court. Simplifying this process by requiring a single valuation assessing the market value of each lot and ensuring that each owner receives a predefined amount above this value would greatly streamline the procedure.

3. Clarifying Court Discretion: The legislation’s stringent time constraints can inadvertently lead to minor and inconsequential issues triggering automatic plan disapproval. To address this, it is suggested that the Court’s discretion be clarified to accommodate minor events that do not significantly impact dissenting owners.

By drawing inspiration from the NSW experience and embracing these improvements, Queensland’s proposed legislation has the potential to offer significant benefits for strata owners, developers, and the broader real estate market. The hope is that these proposed changes will effectively address the identified areas for enhancement, and lead to successful and cooperative renewal of community titles and collective sales throughout Queensland.

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Does a strata insurer handling a claim have a ‘duty of care’ to the lot owner?

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The remediation of damage from an incident requires the lot owner to vacate their premises for repairs. Does the strata insurer handling the claim have a ‘duty of care’ to the affected lot owner?

In the context of an insurance claim, insurers and their contractors have a duty of care.

Duty of care is an obligation imposed on individuals and organisations to take reasonable measures to prevent foreseeable harm or injury to others.

In the context of an insurance claim, insurers and their contractors have a duty of care.

Legal claims associated with duty of care and negligence can be highly nuanced and are considered on a case-by-case scenario by legal professionals and judges (if the claim ends up in court). Claims are never black and white, and legal liability will vary based on the circumstances. The outcome of such claims depends on various factors, including policy terms and conditions, foreseeability, reasonable care, proximity, breach of duty, causation, statutory duty and contributory negligence.

It’s crucial to understand that while the standard of care imposed on insurers is high, it is not unlimited. Policyholders also bear a responsibility to take reasonable measures to

prevent foreseeable harm or injury and mitigate damage to the best of their ability.

If you believe the insurer has breached their duty of care, depending on the severity of the issue, you should first raise concerns with the insurer. In some cases, referring your concerns through the dispute resolution process may be appropriate. In more complex or severe circumstances, it may be appropriate to seek legal advice.

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

Who is responsible for each lot’s water pressure limiting valve?

This would be the lot owner’s responsibility.

Section 180(4)(a) of the Standard Module (which is mirrored in the Accommodation Module) provides that:

180 Duties of body corporate about common property a. t he owner of the lot is responsible for maintaining, in good order and condition, utility infrastructure, including utility infrastructure situated on common property to the extent the utility infrastructure— i. relates only to supplying utility services to the owner’s lot; and ii. is 1 of the following types— a. hot-water systems; b. washing machines; c. clothes dryers; d. solar panels; e. air-conditioning systems; f. television antennae; g. another device providing a utility service to a lot; and It would appear that the pressure limiting valves on levels 1-10: 1. s olely service the lot in which they are located; and

Who is responsible for water pressure limiting valves installed in some lower level lots in our high rise building?

Our building is 30 levels high, and the hot water system is on the top level. The system is recirculating, so there is no hot water pressure reduction valve on the building infrastructure like on the cold water infrastructure. Pressure limiting valves have been installed on each lot from level 10 down. Are these limiting valves the responsibility of each owner? They are inside the lot boundary even though they replace what would be on the building infrastructure.

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2. i s part of the hot water system.

Accordingly, it would be a lot owner’s responsibility. If there were evidence that the reduction valve for a particular lot benefitted the entire system, it could be argued that the valve does not just service one lot, and the body corporate would be responsible (as the valve would then not meet the above requirement and fall within the definition of common property in section 20 of the BCCMA).

Todd Garsden | Mahoneys tgarsden@mahoneys.com.au READ MORE HERE

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We’re passionate about creating sustainable communities. Leaders in the utility industry, we continuously lobby the government on matters to help improve customer protections.

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That’s why we’re here to help with the Altogether Academy.

Altogether Academy is a program that will educate, empower, and support all strata managers, while covering education topics such as: • Energy fundamentals • Embedded networks • Sustainable technology such as electric vehicle charging capability • Utility data and metering • 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.

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Majority votes when there are four voting members For a committee of four voting members in a VOCM, is the majority three (i.e., half of four plus one)? What about abstentions or non-votes?

What is the correct understanding of the VOCM voting process as outlined in section 69(2) of the BCCM Act, specifically regarding the definition of the ‘majority of all committee members entitled to vote’?

For a committee of four voting members, is the majority three (i.e., half of four plus one)?

According to section 69(2), a motion would pass with at least three ‘yes’ votes or fail with at least two ‘no’ votes. Abstentions or nonvotes aren’t factored in; only ‘yes’ and ‘no’ votes are considered.

Can you clarify the outcomes for the following scenarios with the correct understanding of the VOCM voting process?

Case 1:

Voting Committee Members: 4 Yes: 2 No: 0

Abstain: 1

Non-Vote: 1 Outcome: Pass or not?

Case 2:

Voting Committee Members: 4 Yes: 2 No: 0

Abstain: 0

Non-Vote: 2 Outcome: Pass or not?

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In both cases and subject to s69(2) of the Standard Module (equivalent provisions elsewhere), the vote fails.

These types of matters can be heavily contested and need an adjudicator to finally determine, taking into account a range of factors. So, I want to clarify, I am not providing legal advice or in a position to provide definitive answers.

You’d be surprised how often one keystroke wrong in an email address causes drama.

My response is general information and not legal advice.

Chris Irons | Strata Solve chris@stratasolve.com.au READ MORE HERE

In that context, my views are that in both cases and subject to s69(2) of the Standard Module (equivalent provisions elsewhere), the vote fails.

Again, there may be several factors at play here which would at least give pause for thought on the above. For example, were members contacted at the correct email address for service?

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.

Get in touch to find out more.

email: chris@stratasolve.com.au web: stratasolve.com.au

HYNES LEGAL

Strata sector faces perfect growth storm THE YEAR MAY FEEL LIKE IT’S STARTING TO WIND DOWN, BUT STRATA ACTIVITY IN THE SUNSHINE STATE IS ONLY RAMPING UP. If demographics is destiny, then the strata sector in Queensland is about to face a frenzied few months ahead.

Twin impacts from continued record migration inflows as well as significant changes to strata legislation will have far-reaching effects for all those who work and live in strata communities across the state.

New schemes of scale will be required, with all the complexities which that entails.

Add to this the natural confusion that legislative change can bring, with uncertain knock-on effects and unintended consequences, and the sector is particularly vibrant at the moment.

Already we are seeing increased inquiries about the impact of changes to legislation governing smoking in strata schemes, pet ownership and towing of cars, as well as some confusion over the changes to scheme terminations.

Before a body corporate contemplates making any changes to bylaws or to start termination procedures, it is vital they first seek legal advice.

The consequences for embarking on a decision path without the proper advice at the outset are potentially severe.

We are already seeing investors buy into properties with the ultimate plan to terminate a scheme and redevelop the site, unaware that the new arrangements require a scheme to be economically unviable to qualify for the 75% vote needed to terminate.

As ever in the strata space, nothing is straightforward.

The most recent population figures announced by the Australian Bureau of Statistics point to Queensland continuing to be the destination of choice for people leaving NSW and Victoria.

For a specialist legal provider such as Hynes, the time was right to make a strategic move to increase our capacity to service the growing demand from the strata community in Queensland.

In the 12 months to March 31, Queensland’s net population grew by 124,197 people – equivalent to a city the size of Cairns being added to the state’s roster of residents. More than 30,000 of them came from other states, 22,000 from natural increases and 70,000 from overseas.

Last month we announced that Brisbane commercial law firm Redchip Lawyers had acquired Hynes Legal in a strategic expansion of its service offering.

The result can be seen in queues for rental inspections and queues to inspect lots for sale.

Apartment living in major population centres across the state is becoming the norm for many new arrivals, bringing with it the natural stresses that come from increased sale and rental activity.

It’s a sobering thought that population projections have another million people living in south-east Queensland by the time of the 2032 Brisbane Olympics.

All those people won’t be housed in existing six-pack unit developments.

By Frank Higginson | Hynes Legal

The acquisition adds strata, body corporate and management rights expertise to Redchip’s existing practices in commercial law, property, litigation and succession planning.

Hynes Legal will continue to trade under its current name and branding, operating as a wholly-owned subsidiary of Redchip Lawyers. I will continue in my role as Hynes’ long-standing strata lead.

The new arrangement provides the flexibility and bandwidth for us to respond quickly and efficiently to the growing demands brought from a growing sector.

Hynes coming under the Redchip umbrella opens growth opportunities for the combined businesses and enables greater service for our clients at a time when the sector most needs it.

FREE BY-LAW ASSESSMENT THE TIME TO ACT IS NOW With legislative reform on its way and the strata sector thriving, review your by-laws to ensure they remain relevant & enforceable.

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hyneslegal.com.au/by-laws

Cleaning deposit to access the community room

We have a common property community room. Our caretaker manages a booking system that controls access. Can the caretakers insist residents pay a cleaning deposit with the booking form?

If this is part of a by-law, this is, generally, not ok.

It would be useful to know what arrangements are in place here. While one might assume the booking system is contained in your by-laws, it is also reasonably common (and generally ok) that there be a booking system.

Putting a monetary liability alongside it is, generally, not ok. Refer to section 180(6) of the BCCMA for the prohibition on this. It may also depend on whether the cleaning ‘deposit’ is refunded (e.g., if you leave the place looking spotless), as that might technically mean no ‘liability’ arises. If the arrangement is part of a ‘house rule’ or ‘policy’, those two things are not enforceable.

Perhaps, though, it is not a by-law arrangement. It may be a contractual matter, a service level agreement, or another arrangement the onsite manager has as part of their management agreement. Some clarity is required here from the onsite manager and committee, and I suggest you ask both parties for some details about the nature of the deposit and on what basis it is being requested. This may be contained in meeting minutes or your community management statement.

I will add that if there have been issues with the use of the community room that have necessitated the ‘cleaning deposit’, then that’s a slightly different matter and one which the committee and all owners and occupiers (tenants) will need to be involved in. While the body corporate, via its committee, has a responsibility to manage common property, owners and occupiers also have an obligation to use common property appropriately and can be held liable for damage.

This is general information only and not legal advice.

Chris Irons | Strata Solve chris@stratasolve.com.au READ MORE HERE

24 www.lookupstrata.com.au

How much detail should the agenda include?

Our body corporate manager provides different committee meeting agendas for committee members and owners. Why are there different versions? Are owners allowed to know what’s to be discussed at the meeting?

Our body corporate manager provides different committee meeting agendas for committee members and owners.

Owners are sent a ‘notification’ of the meeting, with generic agenda items that never change and don’t have any specific information, e.g. business arising, ratifying VOC’s, general business, etc.

The committee’s agenda includes dot points of the specific topics and motions to be discussed at the meeting.

Why are there different versions? Are owners allowed to know what’s to be discussed at meeting?

26 the www.lookupstrata.com.au 26 www.lookupstrata.com.au

It is accepted that the issues do not need to be listed as motions, but the agenda must detail the subject to be covered at the committee meeting.

The notice to call a committee meeting must include an agenda stating the substance of issues to be considered.

It is accepted that the issues do not need to be listed as motions, but the agenda must detail the subject to be covered at the committee meeting.

In Coronation Gardens [2007] QBCCMCmr353 the adjudicator relevantly provided: “Fine detail is not required, but enough information for any lot owner to see that a subject in which he or she has an interest will be discussed eg. ‘Lot 12, application for pergola…”

It has similarly been accepted that the committee is not required to submit explanatory notes to accompany the motion, except where specifically provided for in the legislation.

Alternatively, if the subject of the motion is not included on the agenda, the committee may consider issues raised at the meeting itself (ordinarily noted as ‘other general business’).

In 212 on Margaret [2010] QBCCMCmr163 the adjudicator relevantly provided (our emphasis): “…I am of the opinion that there is no legislative requirement for all motions considered at a committee meeting to be ‘nominated’ or ‘submitted’ prior to the committee meeting.

Rather, it is permissible for a motion to be determined at a committee meeting without first being ‘nominated’ or ‘submitted’ to the committee meeting agenda.”

There is an exception to this position, pursuant to section 57(3) of the Body Corporate and Community Management (Standard Module) Regulation 2020 (Qld), which provides that the agenda must include the substance of the following motions:

1. i f there has been a previous meeting of the committee- a motion to confirm the minutes of the preceding meeting; and 2. i f the committee has passed, a resolution other than at a meeting of the committee— a motion to confirm the resolution.

Accordingly, unless the motion considers the above exceptions, there is no legislative requirement to list the precise terms of the motion in the agenda. There need only be sufficient detail to identify the substance of the issue to be considered.

Holly Dunne | Mahoneys hdunne@mahoneys.com.au READ MORE HERE

A recent inspection indicates our fire doors are no longer complaint. How? Our small scheme was built around 2000. It has passed all fire inspections, but the most recent inspection indicates many fire doors are not compliant. How can this be?

Have Standards changed?

The recent annual inspection has indicated many of the fire doors (from apartments to internal stairwell) no longer comply with the 10mm gap from the bottom of the door to the floor. How can the doors be compliant for 20 years, and now they are not? The doors have not changed.

I am Chairman of a small strata scheme with seven lots in a two-story, Class 2 building built in the early 2000s. The building has passed fire door compliance checks for the last two decades without issue.

The building was certified for occupancy in 2003, so presumably, it met existing fire ratings at that time. Has there been an update to building codes or legislation recently requiring doors to be retroactively brought into compliance?

28 www.lookupstrata.com.au

If the original code was met at the time of certification, isn’t this for the life of the building?

There have been no changes to the building in this time, i.e. DA’s or other modifications.

Our committee is concerned we may not need these costly upgrades.

If the doors have passed since 2003, we must consider what has changed.

It is correct that the fire doors need to comply with the Australian Standard of the day of construction or the manufacturer’s approved design. It comes down to having the baseline data for the building available for the service technician so a correct assessment can be done during routine maintenance. Any changes to a fire safety installation may be completed to a more recent Australian Standard.

If the doors have passed since 2003, we must consider what has changed. How much do the doors differ in size since the last inspection?

Has the floor covering changed? Has the service technician undertaken the correct assessment? Some manufacturers have approval for measurements outside the ones set out in AS1905. The service records of the last years may give an indication.

To confirm compliance, you may need to source the approval documents from the day of construction.

Most fire doors are made of wood and respond to the weather conditions, i.e. if we had a prolonged period of dry weather, fire doors have been known to shrink a few mm. This may not occur in air conditioned buildings.

Stefan Bauer | Fire Matters sbauer@firematters.com.au READ MORE HERE

Overspend (by more than double) on an unfinished pool improvement

The body corporate decided to improve our swimming pool. The committee’s spending limit was increased to $99,000 to complete the work.

The committee spent $205,000 without consultation with owners. Only half the work has been carried out. Owners won’t agree to the additional funds required to finish the pool.

The pool area looks like a building site.

Does our body corporate manager share any responsibility for not managing the project’s budget?

Can the body corporate take action against the building manager overseeing the project?

I’m not a committee member. Can I put forward a grievance to the Commissioner’s Office regarding the committee’s behaviour? If not, what happens now?

The job needs to be finished, and then the assessment of what went wrong can begin.

We would need a lot more factual investigation before we could start pointing fingers, but it all starts with the contract for the works. What was included? What was excluded? Who was responsible for cost overruns?

Our committee was given an increased spending limit to improve the pool. Costs exceed the spending limit, and the pool still looks like a building site.

Who is to blame?

30 www.lookupstrata.com.au

I don’t think the Commissioner’s Office can really help yet. I think the job needs to be finished and then the assessment of what went wrong can begin. You certainly cannot leave the pool as just a hole in the ground, and the body corporate actually has a statutory responsibility to keep common property in good repair and condition – which is not maintaining what seems to be the status quo at the moment. Someone needs to take control, close it out, and then see if blame can be laid at anyone’s feet.

Frank Higginson | Hynes Legal frank.higginson@hyneslegal.com.au READ MORE HERE

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Electric vehicles, fires and body corporate buildings The chairman of another body corporate has told me their insurance won’t cover a fire in the building if it is started by an electric vehicle. Is this correct?

33 www.lookupstrata.com.au

I have just been told by the chairman of another body corporate that their insurance won’t cover a fire in the building if it was started by an electric vehicle. I don’t know the precise details, but is this correct? It is a worrying time, given the growth in electric vehicles. Our body corporate has received enquiries from owners about installing electric vehicle charging facilities.

How concerned should we be?

This is a potential “emerging risk” that may, in the future, attract policy exclusions, conditions, premium loadings or higher excesses in the future if insurers suffer major losses.

Notwithstanding, this is yet to impact the insurance industry.

This is a potential “emerging risk” that may, in the future, attract policy exclusions, conditions, premium loadings or higher excesses in the future if insurers suffer major losses.

We are unaware of any strata insurer who has added exclusions to their policies for fires originating from electric vehicles. From an insurance perspective, there are currently no restrictions/compliance issues to raise with body corporates for storing electric vehicles or installing charging stations.

We recommend you follow all regulations, laws and manufacturer’s guidelines concerning charging stations if you do have them installed and (where possible) consider any risk management, such as placing the charging stations in areas of the premises that would be less affected by fire from the charging stations.

We are aware:

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

• Some issues (fires) are being experienced from electric vehicle charging and storage,

READ MORE HERE

• We are also hearing some electric vehicles may weigh significantly more than nonelectric vehicles and compromise structure if it is not designed for vehicles over a certain weight.

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Scheme Termination Rights, Wrongs and Honesty Currently, the Queensland Parliament is scrutinising legislation to allow bodies corporate to be terminated in specific circumstances where only 75% of owners agree. It is important to understand that this is not a blanket rule, and as an industry, we need to collectively work together to ensure that the public understand what is actually being proposed.

The process to terminate a scheme for economic reasons is a lengthy and thorough one if the proposed legislation is passed unaltered. It is important for the nuances of this discussion to be understood and ventilated so that people are not fearful or concerned with by this important reform.

In the first instance, a body corporate may still terminate by resolution without dissent. If they choose to pursue termination where there are owners are dissenting, they must go through the extensive process which SCAQ believe is rigorous and equitable.

In the first instance, terminating for economic reasons ( the only circumstance where you can do so with less than 100% of votes in favour) you must prepare a pre-termination report with the input of several professionals, including a quantity surveyor and structural engineer. Having received the pre-termination report from these consultants, who the proposed legislation also requires to be independent and free of conflicts of interest. If this is completed and there is a view amongst owners that termination is the most economically viable option, owners must pass an economic reasons resolution by majority resolution. This resolution is the first step in moving down the substantive process of terminating. Following this they must pass a termination plan resolution must be passed which allows the body corporate to begin examining the process of termination and how proceeds and responsibilities are divided amongst lot owners. Once prepared, the body corporate may then examine the proposed plan and pass a termination resolution which requires a 75% vote. If this is successful, the body corporate may appoint a facilitator to help give effect to their plans for termination.

After this, a dissenting owner may apply to a specialist adjudicator (at the cost of the body corporate) to dispute the economic reasons. They may then seek to overturn the termination resolution at the District Court. In addition to these protections, it is important to note that there is a minimum compensation amount for each lot owner. So the point is, every lot owner, including dissenters have their rights protected very thoroughly and have multiple free opportunities to dispute the termination.

Given this well structured process, which brings independence and rigour to discussions about the life of the scheme, we can see that it is likely, if run through from go to woe, to take a year. However, it is the view of SCAQ that this process will rarely be run through to conclusion, this is because independent reports on the viability of the scheme will inevitably drive many rational, but dissenting owners to the conclusion that their best option is to “ take the money and run.” This change is about encouraging people to have a more realistic approach to how they manage bodies corporate at the end of their life.

It is important to understand these protections for dissenting owners are appropriate and balanced. It is not appropriate that at present, one owner, behaving irrationally can overthrow the will of a super majority, often in a scheme which may become dangerous to continue to inhabit. Equally, it is absolutely critical there are protections for dissenting owners at every single stage and SCAQ is comfortable this has been built into the process. It is important for all of us to not get caught up in the headline figure, and promote a truthful, rational discussion to this positive change in legislation.

Laura Bos General Manager

www.qld.strata.community

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Untangling strata problems P: 0419 805 898 W: https://stratasolve.com.au/ E: chris@stratasolve.com.au

FACILITY MANAGEMENT LUNA

Building and Facilities Manager P: 1800 00 LUNA (5862) W: https://www.luna.management/ E: info@luna.management

Elite Building Managers Australia Education for Building Managers P: 0420 520 976 W: https://www.elitebma.com/ E: matt@elitebma.com

RFM Facility Management Pty Ltd

Strata and Specialist Cleaners P: 1300 402 524 W: https://www.rfmfacilitymanagement.com.au/ E: nathan@rfmfacilitymanagement.com.au

Specialising in Strata recruitment P: 0448 319 770 W: https://www.essentialrecruitmentsolutions.com.au/ E: maddison@essentialrecruitmentsolutions.com

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

The Lift Consultancy

Trusted Specialised Advice P: 07 5509 0100 W: https://theliftc.com/ E: sidb@theliftc.com

ABN Lift Consultants

A team of friendly, open minded professionals P: 0468 659 100 W: https://www.abnlift.com/ E: andrew@abnlift.com

VALUERS Asset Strata Valuers

Leaders in Strata Property Valuations P: 1800 679 787 W: https://assetstratavaluers.com.au/ E: workorders@assetstratavaluers.com.au

Adelaide StrataVal

Strata & Community Insurance Valuations P: 08 71112956 W: https://www.strataval.com.au/ E: valuations@strataval.com.au

ROOFING Leaf Shield

PRINT YOUR DIRECTORY HERE

Leafshield Gutter Protection Specialists P: 1300 362 246 W: https://leafshield.net.au/why-leafshield/ E: info@leafsheild.net.au

Advertise with VIEW OUR MEDIA KITS: As of April 2022, The Strata Magazines received a national audience engagement of around 20,000 views within one month of their release.

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LookUpStrata’s Newsletters have a national audience of over 16,000 subscribers.

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administration@lookupstrata.com.au

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