Why do I need to update my details?

In the case of a transfer of ownership, the purchaser (new lot owner) is required to supply the details relating to their purchase of the property. This will usually be supplied by the solicitor acting for the purchaser. The body corporate is required to maintain a roll (a register of all lots including information detailing the address for each lot owner).

The Body Corporate Manager is the Committee??

False

Each year at the Annual General Meeting (AGM), a Body Corporate must elect a committee of at least 3 and no more than 7 members to implement the decisions of the Body Corporate and act on certain issues in regards to the day to day running of the Body Corporate. The Body Corporate Committee is made up of volunteer owners and the positions are Chairperson, Secretary, Treasurer, and Ordinary Committee Member(s)

What does ‘acting reasonably’ mean?

If you’ve spent any longer than five minutes in strata land, you come to realise that the single most important aspect of any body corporate is its requirement to act reasonably. We have written repeatedly about that, with the most recent newsletter here.

In October last year, you may recall the story of a man who was denied exclusive use of a small area of common property airspace to join his two decks together. On Friday, the Queensland Court of Appeal decided that the owner wasn’t so far off the mark in asking the question in the first place. The Court of Appeal (the highest Court in Queensland) has overturned QCAT’s decision that the Body Corporate was acting reasonably in opposing the amalgamation of the decks.

So what does this mean, and how does it impact body corporate decision making?

A summary of the history of this matter (which is much shorter than those contained in the various judgements) is:

1. A lot owner wanted to join two decks together.
2. Those works required the approval of the body corporate at general meeting by a resolution without dissent (meaning that a single vote against the motion would defeat it).
3. Votes were cast against the motion so it was not approved.
4. The lot owner made an application to the Commissioner’s Office have the body corporate’s dissent set aside on the basis it was an unreasonable decision. That application was successful – and the order can be read here.
5. The dissenting owners appealed that decision to the QCAT. The dissenting owners were successful and that judgement can be foundhere.
6. The lot owner then appealed the QCAT decision and the Qld Court of Appeal pronounced judgement last Friday.

What did the Court of Appeal say?

The lead judgment was given by the President of the Queensland Court of Appeal, Justice Margaret McMurdo. Justice McMurdo, ostensibly recognising the importance of the question of reasonableness of body corporate decision making, gave a very methodical judgment which analysed in great detail the history of the dispute from the start of the adjudication right through to the arguments on appeal.

In short, the two competing arguments were as follows:

1. The lot owner argued that the QCAT appeal tribunal (QCATA) was wrong to disturb the approach of the adjudicator – that is, that the adjudicator was correct in concluding that the question of reasonableness is an objective question requiring a consideration of all relevant circumstances; and
2. The dissenting owners contended that the decision of QCATA was correct and that the various elements described by QCATA in paragraphs 84 to 85 of its decision should remain in force.

One can never accuse the President of leaving any part of her reasoning off the table. Her Honour, in the first 79 paragraphs of the decision, methodically summarised the arguments of the parties in the initial adjudication, on appeal to QCAT, and in the appeal to the Court of Appeal.

Thankfully (for those with a short attention span) there is a succinct summary at the end of the decision. At paragraph 90, President McMurdo found:

“The respondents contended that the adjudicator applied an incorrect test … [t]hat contention is not made out when the adjudicator’s reasons are considered as a whole.

…

[The adjudicator] rightly … accepted that the question of reasonableness was objective, requiring a consideration of all relevant circumstances; and that determination of whether opposition to the motion was unreasonable required a consideration in an objective and fair manner of all the relevant facts and circumstances.”

Her Honour then applied this reasoning to the actual findings of the adjudicator in paragraph 91:

“The adjudicator’s reasons make clear that she conscientiously considered all of the material and submissions relied upon by the applicant and the respondents, made findings of fact, all of which were open on that material, and was ultimately satisfied as a matter of fact that the applicant’s motion was not passed because of the respondents’ opposition to it that in the circumstances was unreasonable.”

There’s not much ambiguity in that.

What does that mean?

Surprisingly it is all rather simple.  The question of whether a body corporate has acted reasonably is:-

1. an objective test (i.e. what an ordinary person would consider reasonable); and
2. one which requires a consideration of all relevant facts and circumstances.

What does that mean practically?  For us it is:-

1. For a decision of a body corporate to be reasonable, all circumstances surrounding a decision must be considered.  That means both sides of any argument should be reviewed and issues that a body corporate has with any proposal should be ventilated with the proposer.
   So that would never mean a cursory look at the material and a decision based on what might be the immediate vibe.  After all – how can it be said that all of the circumstances were considered if the body corporate had questions but didn’t ask them?
2. Those matters must then be considered objectively – that is, not through the rose-coloured glasses of a naïve or self interested body corporate.  In our day to day personal dealings we can all be as unreasonable as we like.  Bodies corporate simply cannot.
3. For us, it follows that if a body corporate is going to reject a proposal it must set out why that decision was taken.  A body corporate must be able to explain its position rather than simply say ‘no’.

Failing to follow those rules is going to leave any body corporate decision open to review.

Bodies corporate should be open, transparent and honest in their decision making.  If not, they need to be ready to be able to explain any particular decision to affected lot owners via the Commissioner’s Office.

We are only an email away from helping anyone with guidance around decision making and the processes that should be followed when considering potentially contentious matters.

You can find the Court of Appeal decision here.

*Source:-

Hynes Legal. 2009. Hynes Legal. [ONLINE] Available at: http://hyneslegal.com.au/news/what-does-acting-reasonably-mean-nar-366. [Accessed 13 November 15]

Deck, Balcony and Window Safety

Building maintenance is essential for all buildings and now that the weather is warming up & the festive season is fast approaching more people are enjoying the outdoors, whether it is sitting on the front steps drinking a morning coffee or having a BBQ with friends and family on the balcony.  But as owners have you ensured your structures are safe.  Queensland Government have developed a guideline to help you identify risk areas and maintenance issues you should consider. If you have any areas within your Body Corporate that you think should be inspected by a qualified trades person please submit a maintenance query through our Resources section on our website.

A guideline for the use, inspection and maintenance of decks, balconies and windows

Are your Body Corporate levies paid to your Body Corporate Manager?

False

Your levies are not paid to your Body Corporate Manager.

All Bodies Corporates are required to have a bank account in the name of the Body Corporate and all levies and contributions must be paid into this account.
The Administrative Fund portion of your levies is used to pay for your day to day expenses, for example: lawn mowing & gardening, Insurance, common electricity, Body Corporate Management fees.  The Sinking Fund portion of the levies is used to pay for long term and mandatory expenses, for example: Gutter Replacements, roof repairs, painting.

How are Body Corporate By-Laws made?

Making by-laws

By-laws are a set of rules that a body corporate makes to control and manage:

• the common property
• body corporate assets, services and facilities provided by the body corporate
• the use of lots.

A body corporate can choose to adopt the standard by-laws that are set out in Schedule 4 of the Body Corporate and Community Management Act 1997 (QLD)(PDF) or it can make its own.

The by-laws for a body corporate are in the community management statement which is recorded for each community titles scheme.

The body corporate committee may want to give copies of the by-laws to owners and occupiers, so they know their rights and responsibilities.

Making and changing by-laws

A body corporate can make new by-laws, or change its existing ones at any time.

To do this a body corporate must pass a motion to record a new community management statement that includes changes to the by-laws.

Usually a motion agreeing to change the by-laws must be agreed to by a special resolution at a general meeting. If the change includes a new or amended exclusive use by-law, a resolution without dissent is needed.

The body corporate must register its new community management statement with the Titles Registry Office it has 3 months, from the date the motion to change the by-laws is passed, to do this.

A by-law starts on the day the registrar records the new community management statement that contains the by-law (unless the by-law sets a later date).

Recording by-laws with the Titles Registry Office does not automatically make them valid.

Invalid by-laws

A body corporate can only make a by-law on a matter allowed under the Body Corporate and Community Management Act 1997 (PDF).

By-laws cannot:

• be inconsistent with the Act or any other legislation
• stop or restrict a sale, lease, transfer, mortgage or other dealing with a lot
• discriminate between types of occupiers
• be unreasonable, when the interests of all owners and occupiers in the scheme and the use of the common property are considered
• restrict the type of residential use of a residential lot
• impose a monetary liability on an owner or occupier (except in an exclusive use by-law)
• stop an owner or occupier from installing solar hot water or solar power on their lot because it affects the look of the building
• stop a person with a disability from having a guide, hearing or assistance dog on the scheme.

If a by-law does not comply with the legislation, it may be invalid.

If an adjudicator decides that a by-law is invalid, they may make the body corporate record a new community management statement—removing or amending the invalid by-law.

However a body corporate’s recorded by-laws apply unless and until an adjudicator decides a by-law is invalid.

Examples of invalid by-laws

Not consistent with the Act

A by-law would be inconsistent with the Body Corporate and Community Management Act 1997 if it said that the body corporate did not have to hold annual general meetings.

Discriminates between types of occupiers

A by-law that only allows owners and not tenants to use the common property pool, may be discriminating between different types of occupiers.

Monetary liability

A body corporate could not make a by-law that made an owner or occupier pay a bond before moving in, because it would be imposing a monetary liability.

* Source:-

Queensland Government. 2015. By-laws. [ONLINE] Available at: http://www.qld.gov.au/law/housing-and-neighbours/body-corporate/by-laws/making-by-laws/. [Accessed 28 August 15].

What is a Community Title Scheme?

A Community Title Scheme (CTS) consists of individually owned lots or units and a common property. This could include complexes such as a duplex, residential unit block, high rise accommodation complex, shopping complex and/or business parks. It makes it possible for an individual to privately own an area of land and also share in the common areas with other owners.

What is a strata scheme?

A strata scheme is a system of multiple ownership of a building or collection of buildings. Each owner owns a portion (called a ‘lot’), which is usually an apartment or townhouse, but every owner shares ownership of any common property (e.g. foyers, driveways, gardens) if it is indicated on the title.

The multiple ownerships are combined in a legal entity called the owners corporation — or body corporate, strata company or community association, depending on your state or territory of residence. Although the term for an owners corporation varies across Australia, the role of an owners corporation is essentially the same in every state and territory.

The owners corporation is responsible for the good management of the strata scheme. All owners can vote on management decisions at an Annual General Meeting (AGM), but decisions are usually made on behalf of the owners corporation by a committee of owners who are elected at the AGM.

Some strata schemes also manage the day-to-day financial, maintenance, and other administrative duties themselves, but given these are complex, most choose to use the services of a professional strata manager.

Body Corporate Committee Spending

This page is for community titles schemes registered under the:

• Standard Module
• Accommodation Module
• Small Schemes Module.

See other regulation modules if these don’t apply to you.

Spending limits

How much money a committee can spend (called the relevant limit for committee spending) can be set by ordinary resolution of the body corporate (i.e. a motion voted on by the owners at a general meeting). There is no minimum or maximum limit that the body corporate can set.

If no amount is set by a general meeting resolution the relevant limit is calculated by multiplying the number of lots in the scheme by $200.

For example, in a body corporate with 6 lots, the relevant limit is $1,200 ($200 x 6).

If the committee wants to spend more than its relevant limit, it must propose a motion to be considered at a general meeting.

Spending limits in a layered scheme

The relevant limit for committee spending in a layered scheme can be set by ordinary resolution of the body corporate. There is no minimum or maximum spending limit that can be set.

If no amount is set, the relevant limit is calculated by multiplying the number of layered lots in the scheme by $200.

For example, a body corporate consists of 5 lots and common property. Four of the 5 lots are also community titles schemes with 20 lots each. These lots are referred to as the layered lots.

In this example the relevant limit for committee spending for the principal body corporate is $16,200.

This is how the figure is calculated —1 lot + 20 lots + 20 lots + 20 lots + 20 lots x $200 = 81 lots x $200 = $16,200.

GST included

The committee must allow for any goods and services tax (GST) in its spending.

For example, the committee spending limit for a scheme made up of 12 lots is $2,400 (12 x $200).

The committee has a quote for maintenance of $2,300 plus GST. The total amount, including the GST is $2,530. This is more than the committee’s spending limit of $2,400.

The committee would need approval by ordinary resolution at a general meeting to accept this quote.

Spending over the committee spending limit

Committee spending is limited and money must be available in the budget. The committee can call a general meeting to amend the budget or raise a special levy if not enough money is available.

The committee can only spend over its relevant limit if:

• the spending is authorised by an ordinary resolution of the body corporate
• the owners of all lots in the scheme have given written consent
• an adjudicator has authorised the spending to meet an emergency
• the spending is needed to comply with a statutory order or notice given to the body corporate, or the order of an adjudicator, or the judgment or order of a court.

Spending in stages

The committee cannot divide a single project into smaller parts in order to bring the project within its spending limit.

For example, the committee for a scheme made up of 25 lots is limited to spending $5,000 (25 x $200). The committee wants to renovate the main foyer and has obtained quotes.

The costs are:

• tiles $2,800
• light fittings $3,000
• paint $1,200.

Even though each quote is below the committee’s limit, it cannot do the renovations because the whole project is over the spending limit.

The committee would need approval by ordinary resolution at a general meeting.

Quotes for spending

The number of quotes that a committee needs to consider when making decisions is determined by the relevant limit for major spending.

The body corporate can set the relevant limit for committee spending higher than the relevant limit for major spending by the scheme.

The committee must have at least 2 quotes for any spending that is more than the relevant limit for major spending by the scheme.

For example, if the committee spending limit is $12,000 and the major spending limit is $10,000, any spending over $10,000 but under $12,000 can be approved by the committee if it gets and considers at least 2 quotes.

Spending that is not permitted

The committee cannot spend more than its relevant limit for spending.

It can only spend on items provided for in the budget.

If there is no provision in the budget for the expense, the committee cannot authorise the spending even if the amount is within its spending limit.

A committee cannot spend on items that can only be approved by a general meeting resolution.

For example, a general meeting considered a motion on roof repairs costing $50,000 and the money was allocated in the sinking fund.

The motion passed and the work was done. However, the contractor sent an invoice for $53,500. (We will assume the body corporate is obliged to pay the invoice as the contractor has performed the work).

The committee cannot authorise payment of the extra $3,500. Further approval by ordinary resolution at a general meeting would be needed because the cost of the project is above the amount approved by the body corporate at a general meeting.

Improvements to common property

A body corporate committee can organise improvements to the common property if:

• the cost of the improvement is not more than the basic improvements limit for the scheme
• the improvements are within the ordinary resolution improvement range for the scheme and are authorised by ordinary resolution (only 1 such motion can be approved in each financial year)
• the improvements are authorised by special resolution
• the improvements are ordered by an adjudicator as reasonably necessary for the health, safety or security of people using the common property.

Basic improvements limit

The basic improvements limit is calculated by multiplying the number of lots by $300.

If the cost of the proposal is less than the basic improvements limit, the proposal can be approved by the committee or by an ordinary resolution at a general meeting. This will depend on whether the cost of the proposal is within the committee spending limit.

Committee spending limits can be set by ordinary resolution of the body corporate. The default limit (if the limit is not set by ordinary resolution) is the number of lots multiplied by $200.

Improvement range

The ordinary resolution improvement range is an amount that is more than the basic improvement limit and less than $2,000 multiplied by the number of lots.

Approvals for spending

For help working out the spending approvals needed, see authority to spend for:

• committee
• general meetings.

Other regulation modules

Schemes registered under the Two-lot Schemes Module do not need to have a committee and therefore have no committee spending limit.

Schemes registered under the Commercial Module must elect a committee but the committee does not have a spending limit.

The committee can spend as much as needed, if it authorises the spending at a meeting of the committee or by voting outside a meeting of the committee.

* Source:-

Queensland Government. 2015. Committee Spending. [ONLINE] Available at:http://www.qld.gov.au/law/housing-and-neighbours/body-corporate/financial-management/authority-to-spend/committee-spending/. [Accessed 28 August 15].