In this video, OMB Solicitors Partner, Juliette Nairn, discusses the body corporate industry and the processes within the body corporate Commissioner’s Office.
In this video, OMB Solicitors Partner, Tom Robinson, talks about amendments that are being proposed to our Body Corporate Act.
In this video, OMB Solicitors Partner, Juliette Nairn, talks about building contract disputes and bodies corporate.
Transcript
Hello, committees and strata managers. Today, I just wanted to touch base with you about a topic which I have been coming across recently from a different perspective, being building contracts.
Now, normally, when I speak about buildings and building contracts, I’m typically looking at it from a residential building defect perspective and dealing with an original owner. I want to actually look at it from a different perspective today because a lot of files and matters that are coming across my desk at the moment are dealing with a dispute.
But the dispute is arising as a result of a building contract entered into by the body corporate and its third party contractor, whether that’s a builder, a painter, an engineer, a superintendent, remedial works, whatever that scope with that third party contract, and the body corporate did not obtain legal advice or other advice prior to entering into the building contract.
A couple of the issues to keep in mind is that when we are talking about a body corporate undertaking painting work, remedial work, concrete cancer repairs, refurbishment of a building, it is a long term program, and the start of the committee and the body corporate manager needs to be a 12 to 18 month preparation.
So the very first thing that I look at when a body corporate committee comes in to see me, or if I’m talking with their strata manager, is I ask, so what are you wanting to do with your building?
The very first thing that I need a body corporate committee to think about is what is the scope of the building work that they are looking at regarding remedial building work, or what is the scope of the program, and once they have their third party contractor being an engineer, or an architect, or a designer, or a project manager.
Someone who is helping them design that scope of works, that they understand exactly what is in the scope of works, what is the methodology, so how is the scope of works going to be implemented, so how is the work going to be done, what is the time frame for the works, and what is not included.
One of the issues in dispute that come across my desk at the moment is a body corporate thinks they’re getting a certain painting job done, and it is done a different way or doesn’t include parts of the building that they thought that was in the scope of works.
So the very first starting point is 12 months before going to a general meeting to consider a job, sit down with the person who’s drafting your scope of works, and walk over the building so you very clearly understand what is included as the remedial work you’re going to do.
Once you understand that, then from that project manager or architect or designer, you might be able to get a best guesstimate regarding price so that your second step is you can start properly considering a budget.
How are we as the body corporate going to raise the funds to do this work? Is it coming from a capital works fund, a sinking fund? Is it a loan? Are we looking at a special levy? Are we going to project it over a 12 month period?
All of those questions are very important because they determine how you’re going to engage your lot owners to get the authority from lot owners as a general meeting, so how are the motions to be drafted?
What are to be included in the motions for you as the committee to sell that product and the remedial project you’re doing to your lot owners so they understand very clearly how it’s going to be funded.
Sometimes we’re in a situation where a body corporate committee will spend a large amount of money in going down a certain pathway, and the lot owners aren’t interested in that design concept for a refurbishment, or they don’t understand the scope of the repairs that are required to the building, and as a consequence, we could get a no vote at a general meeting.
So early preparation avoids those type of no votes. In addition to that, once you have that concept of what is the scope of works, you have a budget for your scope of works, then you can put your project manager or your architect or your engineer in a position where they can go to a tender.
So that what we are comparing when we look at three quotes as a body corporate committee is apples with apples. We don’t get such a great variation in price, or if we have a variation in price, we understand why.
Having those quotations is very important because that’s our final step that sets us up appropriately to going to a general meeting seeking the authorisation from lot owners to make sure that we can enter into a proper building contract.
Now, QBCC says that any remedial building work over $3,000 must have a signed, fully executed building contract. Within a building contract, there are very important things that a body corporate needs to look at, regarding the size, and it can be variable based on the amount of money that a body corporate is going to spend.
If you’re a 200 lot scheme and you’re spending $50,000 on a refurbishment program, maybe that’s a minor building works contract, and doesn’t require the same level of scrutiny.
If you are a 32 lot building and you are spending $200,000 on doing a scope of painting works, which includes remedial works to balustrades or balconies, then you need to have that building contract properly checked to make sure it contains protections for you as a body corporate.
Because what I am seeing at the moment are issues in dispute, either halfway through a project or at the end of the project where we’re dealing with the quotations are incorrect, solvencies of a building company, so a building company does not have sufficient funds to complete the work.
The other side of that, the body corporate has not raised sufficient funds to complete the work. The body corporate ends in dispute with the builder because of the scope of work is being different.
The time frame for the work, because there’s no liquidated damages or delayed damages, or a proper project management company involved in the project, and they are the type of problems that we want to avoid by having manufacturer’s warranties, understanding the scope of work, understanding the budget, understanding the timing of the work, and understanding what is the role of the project management company in the supervision of that work and reporting back to committee members.
Often issues arise when I have a committee come to see me to say, We thought that we could project manage the work ourselves. It is very time consuming and there is expertise required, so we don’t recommend that strategy because there are warranties associated with the work and how we wish to draft the building contract.
My best suggestion that I can give a body corporate is if you are thinking of this type of remedial work or the range of the media work that is valuable to your building, please come and consult with legal advice at first instance.
So 12 months before the project gets started, so you can set up a strategy where you will have a successful result at the end of your remedial building works.
Hopefully, that’s given you a few little tips and tricks in terms of thinking about what is the type of work you want done and how you value that work in your building.
As my next talk that I will be doing, I’ll actually be talking about the next stage of what goes into a building contract and dealing again with remedial building work such as original construction defects.
Thank you for taking the time to listen.
In this video, OMB Solicitors Partner, Tom Robinson, talks about management rights particularly dealing with assignments and variations.
Transcript
Hi everyone, I’m Tom from OMB Solicitors. Today I wanted to have a quick chat to you guys as a bit of a refresher about management rights.
I thought this would be a pretty good topic to discuss mostly because we are seeing some patterns with our management rights that are coming over at the moment and within our bodies corporates, particularly to do with variations and assignments, and why I’m talking about both of them is because a lot of the assignments of management rights we’re seeing are involving and are subject to and conditional upon a variation as well.
So I’m going to break those two down in a real simple form and look at maybe why we’re starting to see that change in management rights and the way that these are being proposed.
So starting with an assignment of management rights, what we’re referring to there, is the right for an existing service contractor to assign the interests in the agreements that form the basis of the management rights and of course the management lot if it’s attached to it to another person or entity.
Whereas a variation of management rights is where the body corporate will enter into a deed or variation to change terms of the existing contractual relationships, and relationship of the caretaking lending agreements.
So what we’re finding is when a request for an assignment is coming over to a body corporate it is subject to a variation and what that means is there needs to be a variation to the terms of the agreements before it can be assigned.
Now these can be done in one way and in one sense simultaneously. But obviously if the variation is not approved by lot owners then the assignment is usually going to fall over to use those words.
The interesting part about this is we are seeing that there is usually a variation request quite close to the end of the body corporate’s financial year and that’s because that’s the submission time for all lot owner emotions to be in, to be put to an AGM.
Whereas when these assignments are happening, they’re happening whenever the management rights are obviously put up for sale and whenever there’s a contract that’s then entered into.
So it’s not necessarily lining always up with the end of financial year dates relating to the variation side of things and the reason that’s an important distinguishment is because what we’re seeing with the requests from the current service contractors when.
They’re submitting the variation and the assignment is they’re also requesting bodies corporates through its committee to call and requisition an EGM, so an extraordinary general meeting and that’s because obviously the time that it might be till the AGM could be many many months away.
Which means it poses a really interesting opportunity for committees to have and give thought to those variations as they’re coming across, whilst there is the other party involved, which is the potential purchaser.
We always like to see and encourage the parties to look at what’s been asked of in those variations and really should be looked at as a bit of a negotiation to make sure that particularly when we’re bringing on a new service contractor as the way through the assignment as a proposed purchaser that there is some sort of communication there that can be opened up and used for the benefit of any future relationship.
So we like to look at it from that perspective to try to open that up from the start and that’s when that first request will come through, usually to your body corporate manager, which relates to the variation and also the assignment.
I think a reason we’re seeing a lot of these packaged management rights coming across with the variation attached to them is because there is obviously a lot of talk in the industry at the moment about changes to our legislation.
Now that’s obviously talking about potentially scheme termination and so forth, but also there’s a lot of talk in the industry about the management rights style in Queensland, particularly with respect to the length of those terms of those agreements.
So as you can imagine, those variation requests that are coming over for the assignments relate to, as we commonly call it, a top up, being a top up to the term of the agreements.
Which is by way of inserting a new clause into those agreements which gives a new option period that can be exercised by the service contractor at the time, and I think maybe with a bit of those murmurs in the industry about management rights and the terms of the agreements and so forth.
We’re seeing a little bit of a push to top these agreements up and then some service contractors may be looking to then move on from those managed rights and sell them.
Which is potentially why we’re seeing a few come across, but it’s always a good opportunity when those first requests come across that obviously your committees look to reach out to get legal advice, and the big reason for that is because whatever documents are being presented will be drafted by the solicitors, usually engaged by the current service contractor or in an assignment, the proposed purchases lawyers, and they are legally binding documents, particularly part of an assignment process.
The legislation does allow bodies corporates to recover their reasonably incurred costs in considering the decision to give consent to the transaction.
So that’s in the assignment and that would include the body corporate engaging a lawyer and having those legal costs reimbursed, and likewise any administrative costs from a body corporate manager’s time, particularly for the consent motion and meeting that the committee will hold or can hold to give its consent.
So there’s protection there for a body corporate in terms of costs and what we like to see with the variation is a bit more of a negotiation there, but I’ll probably leave it at that for today.
I think there’s a lot of information there. Like I say, there’s a lot of these requests coming over, so please do not hesitate to reach out to us if you have any questions about any of those matters.
Did you know that the Body Corporate and Community Management Commissioner’s Office is not the only avenue to enforce a Body Corporate by-law?
In this video, OMB Solicitors Senior Associate, Elisha Quigg, talks about how you can enforce by-laws through the Magistrates Court in a timely and economical way.
Hello, my name is Elisha, solicitor at OMB Solicitors. Today I’m going to be talking to you about enforcement of bylaws. Now you’re probably quite familiar with the process of enforcing bylaws through the adjudication process, through the Body Corporate and Community Management Commissioner’s office.
But there’s also another method of enforcement of bylaws which isn’t as common but just as effective that I’d like to talk to you about today. So that is enforcement of bylaws through the magistrate’s court through a complaint and summons process.
Now as we know, bylaw contravention notices can be issued when a lot owner or occupier does not comply with the bylaws. Now sometimes the response to those bylaw contravention notices is either an owner will start complying with the bylaws or alternatively they might just throw that contravention notice in the bin.
So how do we deal with those owners when they throw those contravention notices in the bin and continue contravening the bylaws? So whether you’ve issued a continuing contravention notice or a future contravention notice, there are two ways in which we can enforce them.
Firstly, through the adjudication process, through the Body Corporate Commissioner’s office. In that process you usually have to complete the conciliation first, which as you know can be quite a painful task, particularly when you just want that owner to start complying with the bylaws, and then if that conciliation is not successful, you then have to go through the adjudication process.
Now that can take anywhere between three to six months, which when we’re talking about bylaw contravention, that’s quite a long time for an owner to be noncompliant. So let’s look at the other option, which is proceeding with a complaint and summons for a breach of a bylaw contravention notice.
So if an owner or occupier does not comply with a bylaw contravention notice, there are maximum penalty units of 20 penalty units that apply that can actually be penalised to a lot owner for their failure to comply with a bylaw contravention notice.
Also, if you go down that process of adjudication and you get an adjudicator’s order and they then don’t comply with that adjudicator’s order, there are maximum penalty units of 400 penalty units which apply to a lot owner as a financial penalty that can be pursued through the magistrate’s court.
Now what are these penalty units that I’m talking about? So with 20 penalty units, that equates to about $2,800 in financial penalties. Whereas if you breach an adjudicator’s order which is about 400 penalty units, that equates to about $57,000.
So why would you go down this process? So what you do is you issue your bylaw contravention notice, they don’t comply. You then engage a solicitor to assist you with filing a complaint and summons in the magistrate’s court, where you will receive a return date before the magistrate’s court, where the owner or occupier will actually have to attend court to enter a plea of either guilty or not guilty and then proceed to sentencing.
Now, the reason why we would go down this process is, number one, it is a lot more timely. You’ll actually get before the court within about four to six weeks, as opposed to three to six months.
Also, it sets an excellent precedent in your scheme to ensure that owners are aware that the committees and the body’s corporate are taking the bylaw contravention seriously. It also attracts the financial penalty, which can be attributed to the body corporate, meaning that you’ll end up actually recovering part of that financial penalty.
In addition, it is also an excellent prompt because owners are really reluctant to want to attend court. So if you file the complaint and summons and serve it on them, nine times out of ten, they’re pretty scared of attending court and they end up complying.
OMB Solicitors has had an excellent track record in proceeding down this course, and it is a lot quicker and more efficient for bodies corporate to do so.
So it’s all about weighing up the options of your matter, you either go down the bylaw contravention notice and proceed to adjudication through the Commissioner’s office, or alternatively, you can jump over to the magistrate’s court and proceed with a magistrate’s court complaint and summons. Both have excellent results, you just have to persevere as a committee when dealing with these nuisance and annoying lot owners.
So if you’d like to learn more about how you proceed down this course, please don’t hesitate to get in contact with OMB Solicitors. As I said, we’ve got an excellent track record of getting great results for bylaw contravention processes, and we’re here to help your schemes today. Thanks.
In this video, Solicitor Rebecca Purcell talks about alternative insurance if bodies corporate are not able to obtain the insurance that they are required to under the strata legislation.
Hello, my name’s Rebecca, and I’m a solicitor here at OMB Solicitors. Today I’m going to be talking about bodies corporate and the alternative insurance that is available if they’re not able to obtain the insurance that they are required to under the Strata legislation.
In accordance with Strata legislation, bodies corporate are required to hold insurance for buildings that form part of their scheme land for full replacement value.
It may be difficult for some bodies corporate to obtain insurance for full replacement value of all of their buildings where they are in locations such as Far Northern Queensland, where severe weather events such as cyclones are common and insurers therefore have increased prices for insurance to be put in place.
Accordingly, the Strata legislation has provided that bodies corporate can make an application to the Commissioner for Body Corporate and Community Management to put in place alternative insurance.
In order for an application for alternative insurance to be made, there are certain requirements that need to be met, such as the fact that the body corporate has taken steps or made attempts to put insurance in place and it is simply too expensive or insurance is not available so that they are not able to put in place the insurance that they need to.
If you’re part of a body corporate who is struggling to put in place appropriate insurance and thinks that an application for alternative insurance may be something that the body corporate needs to explore.
Contact OMB solicitors who can assist in preparing and lodging an application to the Commissioner for Body Corporate and Community Management Office as to the alternative insurance that can be put in place.
In this video, OMB Solicitors‘ Partner, Cameron Marshall, talks about bodies corporate and litigation.
My name is Cameron Marshall, I’m a partner at OMB Solicitors, and I work in the litigation department. I operate in all spheres of litigation, but particularly recently, we have been doing a lot of work in the body corporate sphere.
A couple of matters that has recently come across my desk is, including a reoccurring theme of what to do with some lots that have become left as part of the body corporate scheme after the developer has sold all the lots and down the track, the body corporate is required to deal with these particular lots that were not part of common property, but formed part of lot property.
But the body corporate has become the one responsible with dealing with those lots. I’ll give you an example, one particular lot had a conference room, which had been given to a previous lot owner, as part of the purchase of a restaurant. That lot owner left suddenly from the premises and the scheme, and the body corporate was required to deal with that lot.
It was faced with a situation of, what do we do with it? It didn’t know what to do, it was facing all sorts of barriers from the land title’s office, because, as you would probably know, that a body corporate can only own lot property in very specific circumstances.
So OMB’s solicitors managed to solve that problem, and allowed the body corporate to move on and stop incurring rates, and also body corporate levies that weren’t being paid for that lot.
Another example was one where there was an advertising sign on the top of a large building. Again, the body corporate inherited this lot through the leaving of the scheme from the lot owner and, again, it was faced with a dilemma of what to deal with it.
So, I was thinking, if such a thing comes across your desk, and as a body corporate manager or a committee member, you’re not sure what to do, give us a ring. We’re faced with this quite a bit now, and we have a strategy and plans in place that will be able to resolve the problems that you face.
Thank you.
In this video, OMB Solicitors‘ Partner, Juliette Nairn, talks about restructuring “hotels” in permanent living bodies corporate.
Hello, everyone, today, I wanted to touch base with you on something just a little bit different. In the old days, we used to have a lot of reference to resorts or Strata title hotels.
They were buildings which were created and may have been owned a bit like service apartments where one legal entity might own the entire, all the different Strata schemes within the building so that we have the different lots and it’s all really controlled by one entity.
We have quite a few buildings on the Gold Coast which would have come under that category originally, and as a result of their hotel, motel style of setup, there is typically not a kitchen, but a kitchenette.
What’s occurred is obviously the change of use of those buildings has impacted upon the individual lot owners as well as the overall owner who might have then started and sold the building off to other mums and dads, individual lot owners.
So, we’ve ended up with a situation that in a lot of our hotel, motel, old style, strata title hotels where people are living in them permanently as permanent residences, whether that’s on a leasehold arrangement or as an owner-occupied living in.
These buildings weren’t actually initially designed or zoned by Gulf Coast City Council to deal with that. So, if you have a building in that type of situation, what are the things that you need to consider and deal with?
Firstly, have a look at the bylaws, because often the bylaws are drafted with a range of special rights to give the hotel operator full access to areas of common property and in terms of now mainstreaming that building in a more owner-occupier fashion, we need to have a good look at those bylaws to make sure they’re consistent with the use of the building.
Secondly, talk to Gold Coast City Council. Gold Coast City Council, although from a body corporate perspective, it actually affects more the individual lots and the use of their lots.
It would be a great assistance to those individual lot owners if the body corporate assists them in dealing with council in terms of is it appropriately zoned to being able to use or how do I renovate my kitchen to change it from a kitchenette to a kitchen, where it’s capable of being lived in on a more regular basis?
In addition to that, they’re usually quite large structures, so they have a number of lots involved. Do I need to change from a sort of strata hotel arrangement into a more management rights or caretaker on site management arrangement?
That’s a really important factor to consider, and then finally, where is the common property? Going through and having a good look through the building and looking at what was allocated common property by the original registration of the plans and what was allocated lot property.
Because often in the Strata title hotel, motel style of buildings, we get a situation where maybe the foyer area or certain lifts or basement areas or storage rooms actually aren’t common property, where individual lot owners need access to their buildings, but they’re actually owned by that Strata hotel entity.
So, we’re looking at what is the conversion of that either from lot property to common property or what are the different other mechanisms that can be involved in dealing with it? Is it a leasing arrangement, licensing, deed poles, easement? What needs to be done and what’s the appropriate type of resolution and general meeting?
On the Gold Coast, we’ve probably come across 10-12 examples of large buildings that are looking at doing that type of conversion to make them more like mainstream strata as a result of being built in the ’60s and ’70s, but now have a different owner-occupation type of use right now, and how do the lot owners get the best value and use of their buildings.
I just think that’s a really interesting topic to talk about because it’s something that’s a little bit more unusual, but there are certain legal avenues that we can pursue and look at which make a better situation for the body corporate and how it manages itself.
Thank you for taking the time to listen to me about Strata Hotels.
In this video, OMB Solicitors Senior Associate Elisha Quigg explains the changes to Building Units and Group Titles Act (“BUGTA”).
Within a Community Title Scheme (yes, I am referring to your “body corporate“) this is a very common statement that we hear often from people – “But I don’t use it, so why should I have to pay for it?”. Some recent examples of this statement are:
Looking at that last example, as one of our very astute readers recently commented, not all owners will wash their vehicles and some owners will wash their cars more than others (some owners or occupiers may not even have a car to wash!).
So – with the unfortunate volunteer committee members again having to be the “fun police” – how does a Committee deal with these types of questions?
The scope of a resident’s ability to perform certain activities on common property can be uncertain, particularly if there is no clear regulation with a Body Corporate’s by-laws.
The example we will use today is the ability for residents (owners and occupiers) to wash and clean their vehicles on common property in the car washing bay (ie, in a designated bay).
When we consider the regulation of this activity, we need to consider many aspects including:
Firstly, is there a specified area allocated to car washing by the Body Corporate and secondly, is there a by-law regulating the matter?
If there is no specified area within your building/basement, then it is quite possible that washing your car on common property will cause a hazard. Council issues may arise with the common property not having proper drainage, or a proper system with an arrestor pit to stop contaminants going into the stormwater system. Many complexes will lack proper drainage, a dedicated car washing bay and the availability of water to allow residents to properly wash their vehicles.
If this is your situation, then it may be reasonable for a Body Corporate to refuse to allow residents to wash their cars on common property. The chemicals and substances used to wash/clean the vehicle could cause damage to the common property (pipes, plumbing and drainage) and run off into the stormwater drainage.
If your body corporate does have a designated washing bay for vehicles with a proper drainage system that complies with Council regulations, then the by-laws ought to appropriately regulate the washing of vehicles on common property.
Such regulation will typically deal with:
Once a dedicated car washing bay is identified by the Body Corporate and an appropriate by-law is put in place, we can now deal with the question of “fairness”.
The inclusion of a car washing bay may be seen as a ‘beneficial facility’ to the scheme which can be a selling point for lots or tenancies. Whilst some owners may never feel the need or want to use the car washing bay, that is not to say a potential tenant or purchaser of that lot, would view the car washing bay in the same way.
Yes – washing a vehicle will increase water usage (and maybe electricity), but it is not for the Committee to police the use of common property water and electricity.
All body corporate lot owners must pay their share of body corporate costs, which is an intrinsic part of community living. The owner’s contribution schedule will detail what is their share of body corporate costs, which will include the shared cost of water usage for common property.
Every lot owner is aware that they will need to contribute to all common property expenses – despite the fact of whether or not they use them.
If lot owners have raised concerns about such expenses within your Body Corporate, then the first step is for the lot owners to come together to discuss this amicably. As a Committee, you might do this by putting forward the idea of a regulated car washing bay at a committee meeting. This will allow for the other members of the Body Corporate to be informed of the discussion towards the issue raised.
Obviously, how this is approached will be dependent of the size of your body corporate and the issues that are affecting your specific scheme.
If it is not physically (or legally) possible to allow the washing of vehicles on common property to continue, then it should at least be discussed thoroughly to ensure all parties are aware of the concerns and reasons why restrictions to this activity may be implemented by the Body Corporate.
Alternatively, the discussion might result in an arrangement to ensure car washing is regulated in the by-laws, together with communicating this to all owners and occupiers.
The argument of “I don’t use it, so why do I have to pay,” should have no traction within a community living environment. Living in a “community” requires tolerance, respect and an understanding that community property will be used in different ways by residents (or some residents may choose not to use that property at all). But that is a choice – just in the same way that a resident may choose not to use the swimming pool or tennis court or the communal laundry room.
In this video, OMB Solicitors Partner Tom Robinson talks about the differences between dividing fences, retaining walls and revetment walls.
Hi everyone, my name is Tom from OMB Solicitors. I wanted to talk today about an interesting topic that I seem to be coming across a little bit lately, and that is differences between dividing fences, retaining walls and revetment walls. The way I want to start this, I guess, is by establishing the main differences.
In bodies corporates, we have our framework through the Body Corporate Community Management Act, and that actually deals with other pieces of legislation that it references to deal with matters that we see inside bodies corporates that are also common issues dealt with outside of bodies corporates, and one of them is the Dividing Fences Act.
That actually deals with any person who is any property owner in Queensland who owns property and has a dividing fence, which is defined to be a fence that sits between two properties.
The reason we use that piece of legislation in our bodies corporate is because we apply principles from that in our bodies corporates, which obviously deals with not only our boundary of our scheme land and bodies corporates, but also the individual lots and their boundaries too.
When we think about two freestanding homes not inside a body corporate, a dividing fence is obviously going to be one that is separating those two individual freestanding homes.
But in bodies corporates, we will have a varying degree and type of dividing fences. Then we talk and we see matters regarding retaining walls and revetment walls for that matter, actually, and they are not considered dividing fences.
They have a specific structural purpose, and that means that responsibility of revetment walls or retaining walls is quite different. One of the main differences, just so you know, between a revetment wall and a retaining wall is revetment walls, more or less, relate to maintaining the foundation of land adjacent to water.
So, it’s kind of like a water version of a retaining wall. So, going back to fences, what are the general obligations and responsibility? Well, just quickly, we’ll run through those and then I’ll explain the difference, obviously, responsibility for revetment and retaining walls.
But as some general guide and general principles, if there is a dividing fence between two freestanding homes outside of a body corporate, each owner is responsible for 50%.
In a body corporate, if we have a scheme that has a dividing fence between two individual lots in that scheme, it would be the responsibility of those individual lot owners. If that fence is the boundary of the scheme land, the body corporate would be the responsible entity for that fence, along with whoever is the landowner outside of that body corporate.
Then when we have exclusive use areas, that responsibility can change a bit again, whereby the fence will be solely the responsibility of the individual owner who has the exclusive use, as that is that that gives them the exclusivity.
So there can actually be three different types of responsibilities with fences in bodies corporates. In fact, you could have three different sides of a fence in a body corporate that has a different responsibility. So, it can always get a little bit tricky navigating the responsibility of those fences and bodies corporates.
So, please do not hesitate to reach out if you have any questions on that. Moving on to retaining walls and revetment walls, the responsibility lies usually with one party, and that is because but for that retaining or revetment wall being there, the land that is being retained would not be capable of being developed on.
So you might find that the land, let’s say that is a higher land of a lot that sits below it, that retaining wall may have been built specifically for the lower lot development, and that’s because that land was cut into and that land had to be retained to ensure the higher land didn’t obviously fall into the lower lot.
But that’s not always the case, it could be that the lower land was constructed on first and it was actually the higher land that needed the retaining wall.
So, it’s very important to assess where that retaining wall came from, what it was built for and who it was constructed for. It’s usually not necessarily built on the boundary, but built up to the boundary of the land that is responsible for it.
It can get a little bit tricky, especially in bodies corporates, when we have retaining walls that are contained within our standard format plan lots where you own the surveyed lot area and that retaining wall is also on the boundary of the land, and then on top of that, a dividing fence sits on top.
So, those types of matters can get a little bit complicated and we have to break each part of them down. But I wanted just to give you that bit of a general knowledge about the different types of fences, retaining walls and revetment walls, so we understand that there are differences and that they are regulated and looked at a little bit differently in bodies corporates.
But as I say, if you have any questions on those, please do not hesitate to contact us.
In this video, OMB Solicitors Partner Juliette Nairn shares a story about a recent case in Western Australia concerning the state’s body corporate and strata law.
When driving up and down the Gold Coast Highway, you would be remiss to overlook the many towering high-rise buildings that sprawl the coastline. What may be less discernible, however, is the balconies that extend from these buildings – and which provide a vantage point for owners and occupiers to marvel at the seashore.
However, the responsibility for maintaining balconies and the balustrades that enclose a balcony is a contentious issue in community titles scheme living. The (significant) costs which may be involved in the repair and maintenance of balconies and balustrades only add to the issue.
Is a lot owner responsible, at their cost, for undertaking repairs to a balcony, given they enjoy its use? Or is it the body corporate’s responsibility to complete these repairs?
The responsibility for maintaining balconies and balustrades is largely dependent on the type of survey plan with which a body corporate is registered, being either a:
This is because the survey plan will define the boundaries of a lot, which in turn, determines the responsibilities for maintenance within a lot.
For lots registered under a BFP, lot boundaries are defined by the structural elements of a building, including the floors, walls, and ceilings. In the event a lot is separated from another lot or the common property by a floor, wall, or ceiling, the boundary is the centre of the floor, wall, or ceiling.
Similarly, a balcony area is defined by floors/ceilings, walls and balustrades. Where there is a railing or balustrade, the boundary of the lot will be the outer face of the railing or balustrade.
In the case of a balcony with no upper structural element (i.e. there is ‘open’ airspace above the balcony), the upper boundary will be defined by the extension of the ceiling of the adjoining structure on that lot.
The regulation modules provide that a body corporate is responsible for maintaining, in a structurally sound condition:
There have been adjudicator orders (see Portside Noosa Waters [2019] QBCCMCmr 623) which have confirmed that a balcony that extends over an area of common property or lot property is considered a “roofing structure that provides protection”.
The effect of this is that a body corporate is generally responsible for maintaining, at its cost, the balcony structures for lots registered under a BFP where they provide “roofing protection” to lower level lots.
However, a lot owner is responsible for maintaining all fixtures and fittings within the lot boundary, including the balcony area, which comprises part of the lot property. This may include any balcony tiles and lights.
In terms of maintaining balustrades, the regulation modules provide that a body corporate is responsible for (among other things) railings, parapets and balustrades on, whether precisely, or for all practical purposes, the boundary of a lot and common property.
Where lots are enclosed (i.e. there is a railing or balustrade which encloses or provides a barrier to a balcony area), the boundary of the lot will be the outer face of the railing or balustrade, as confirmed by the Registrar of Titles Directions.
As a result, a body corporate is generally responsible for (among other things):
For lots registered under an SFP, land is defined horizontally using marks on the ground or a structural element of a building. The boundaries of these lots will be defined by the measurements shown on the survey plan. The effect of this is that a lot owner is generally, responsible for maintaining (among other things):
The first step in determining whether a body corporate or a lot owner is responsible for maintaining a balcony or balustrade is therefore to identify the survey plan with which that lot is registered.
OMB Solicitors’ specialist body corporate lawyers team has recently seen a number of committees seek advice on the responsibilities for maintaining balconies and balustrades within community titles scheme living.
To ensure bodies corporate understand their statutory obligations and take appropriate action in maintaining the common property in good condition, including any balconies and balustrades which are the responsibility of a body corporate, strata managers and committees should consult with Gold Coast lawyers at OMB solicitors.
While Queensland Summers are synonymous with beach cricket and barbeques, the warmer weather also brings with it one of the less attractive features of living in a tropical climate… fires.
Before COVID-19 changed the meaning of “hot spots”, the Queensland Government amended the Fire and Emergency Services Act 1990 (Qld) by introducing additional obligations on property owners and managers with regard to the installation and maintenance of fire and smoke alarms in domestic dwellings.
Dwellings refer to any houses, townhouses and units.
Currently, fire and smoke alarms in existing dwellings must:
However, from 1 January 2022, these requirements will apply to dwellings being sold, leased or where an existing lease is being renewed. The new legislation will have the effect of making Queensland properties the safest in Australia with regard to fire safety.
The Queensland Fire and Safety Services (QFES) is empowered to enforce compliance with the new fire and smoke safety standards. The QFES does not differentiate between lot owners in a community titles scheme. This means that a body corporate, as a separate legal entity, is responsible for ensuring the scheme, including all dwellings, complies with the fire and smoke alarm regulations.
There are significant financial costs, which may be issued to the body corporate by the QFES if the scheme does not comply with the appropriate fire safety standards. These fines are often not covered by insurance, including office bearers’ liability.
If not budgeted for, a body corporate may be required to charge an additional levy to strata owners to cover any fines.
In addition, a failure to comply with the fire and smoke alarm requirements also presents potential issues for bodies corporate negotiating competitive insurance premiums.
OMB Solicitors’ specialist strata practitioners have recently seen a number of bodies corporate enquire as to the effect of the new smoke and fire alarm legislation and how a community titles scheme can ensure it is compliant.
Given the significant penalties which apply for non-compliance, it is important that body corporate managers understand the new requirements and the strict timeframes that apply.
To ensure bodies corporate understand and take appropriate action in complying with the new fire and smoke alarm regulations which come into effect from 1 January 2022, body corporate managers should consult with OMB Solicitors.
In this video, OMB Solicitor Rebecca Purcell talks about the options you have if you purchased a property and discovered that it has building defects.
Hello, my name’s Rebecca, I’m a solicitor here in the litigation team at OMB Solicitors. Today, I’m going to talk to you about what options you have if you purchase a property and discover that it has building defects.
So, there are three options that you may consider if you find yourself with a property that has building defects. The first option is to make a complaint to the QBCC, which is a statutory body which regulates the building industry.
The second option may be to take action against the builder or the contractor who constructed the building that has the defects. The third option may be for you to go ahead and fix the defects yourself, although that may be expensive and have costs associated.
If you are unsure what your rights may be and what option you should take, reach out to OMB Solicitors who can help you and give you some advice on what’s the best option for you.
Sometimes it is confusing to understand the difference between repairs, maintenance, improvements and disposal of common property – listen to Tom Robinson as he unpacks the difference.
In this video, OMB Solicitors Partner Tom Robinson discusses what a buy-out in body corporate actually means.
In this video, OMB Solicitors Senior Associate Elisha Quigg tells you five important things you need to know about living in community and strata.
In a year dominated by COVID-19, vaccines and lockdowns, do not be surprised if you missed an equally significant headline from New South Wales’ highest court – the appointment of a building manager in a strata scheme!
When the Strata Schemes Management Act 1996 (NSW) was amended by the Strata Schemes Management Act 2002 (NSW), the legislation restricted a building manager from continuously extending an agreement for more than 10 years after the Amendment Act, including any term or option to renew the agreement.
Previously, a building manager could be engaged by an owners corporation indefinitely.
However, it appears that the recent appeal decision of Australia City Properties Management Pty Ltd v The Owners – Strata Plan No 65111 has, for the time being at least, affirmed the legislature’s intention when it introduced a 10 year limit on the appointment of a building manager in a strata scheme.
In Australia City Properties Management Pty Ltd v The Owners – Strata Plan No 65111, there was a dispute between the building manager and the owners corporation regarding the term of the management agreement (“Agreement”), which was entered into on 30 March 2001 – before the Amendment Act.
While the Agreement, dated March 2001, was for an initial period of ten years, with an option to renew for three (3) additional terms of five (5) years, the building manager and owners corporation entered into two (2) deeds of variation (“Deeds”) in March 2010 and March 2015 – after the Amendment Act took effect.
The Deeds had the effect of extending the term of the Agreement beyond the 10-year limit, such that it had an expiration date of March 2041.
In August 2019, the owners corporation terminated the Agreement, on the basis that the building manager had been “grossly negligent” in performing its caretaking duties. The manager argued that the Agreement was not validly terminated and as such, was entitled to damages in the amount of $2 million. These damages were calculated on the basis the Agreement was for a (total) term of 40 years.
The issue on appeal was whether the Deeds in 2010 and 2015 were considered “caretaker agreements” under the Amendment Act, such that they were limited to a term of 10 years.
In determining whether the Deeds were limited to a term of 10 years, the Supreme Court considered their “text, context and purpose”.
Given the purpose of the Deeds was to grant a further option under the original Caretaking Agreement, the Court held that the Deeds were, in fact, separate “caretaker agreements”, as defined by the legislation.
The effect of this is that the Deeds were “read down” to expire on 29 April 2025, rather than March 2041, such that the Agreement was limited to a term of 10 years.
As a result, any award of damages to the service contractor for unlawful termination of the Agreement would be calculated up to April 2025.
While Australia City Properties Management may ultimately reach the High Court of Australia, for the time being at least, the decision by Chief Justice Bathurst has provided guidance on the term of a management agreement in a strata scheme.
While the term of appointment for building managers in NSW strata schemes is (currently) capped at a maximum term of 10 years, the same cannot be said of schemes across the border.
In Queensland, bodies corporate which are regulated by the Body Corporate and Community Management (Accommodation Module) Regulation 2020 (“the Accommodation Module”) may appoint a service contractor for a maximum term of 25 years, including any terms of extension.
And if you thought snap lockdowns were long…
Bodies corporate regulated under the Body Corporate and Community Management (Standard Module) Regulation 2020 are currently restricted to a term of ten (10) years.
Given the significance of the decision in Australia City Properties Management, it will be interesting to see if Queensland follows the lead of New South Wales and implements a limit on the term of a caretaking agreement for schemes regulated under the Accommodation Module.
OMB Solicitors’ specialist strata practitioners have recently seen a number of building managers attempt to circumvent the 10-year limit by requesting owners corporations extend their management agreement beyond this term.
Owners corporations should consult with OMB Solicitors when reviewing (or varying) the terms of its management agreement, to ensure it complies with the legislation.
In this video, OMB Solicitors Partner Juliette Nairn delves into the requirement of bodies corporate to obtain an expert report for building defects.
Today, I was wanting to speak about some of the changes and one, in particular, that’s occurred in our modules. As we all know in our body corporate industry, our modules changed on 1 March 2021. With respect to one of those changes, it is a requirement for a body corporate at its second Annual General Meeting to put up a motion.
So it’s a motion proposed by the committee that the body corporate lawyers Gold Coast resolves to obtain an expert report of the whole of its building dealing with residential building defects. As a result of that change in the legislation, we’ve had a number of inquiries from body corporates and committees about, well, if the legislation says we have to do it at the second Annual General Meeting, does that mean we can’t do it at the third Annual General Meeting, or can we only get one report? Or if we don’t get that one report, have we missed our opportunity? So we’re going to answer some of those questions.
A body corporate, with respect to submitting a building defects report either to a builder to carry out rectification work or to go to QBCC, can submit any number of reports and make any number of claims to QBCC for the rectification of residential building defects. In addition to that, a body corporate or a committee can make a decision to procure so to facilitate and engage experts to do any number of expert reports regarding their building. And that could happen at the first Annual General Meeting and anywhere up to the 10th Annual General Meeting.
The purpose of the change in the module is simply to bring the matter to the attention of the body corporate and its committee to say you are a new building. During the first three to six years of your body corporate that potentially could be latent defects or in the earliest stages of your building, there could be minor defects while the builder is still around. And we want you to put forward that motion where it’s a legal requirement for you to obtain a defects liability report about residential building defects affecting your building. That’s all that section really deals with.
From my perspective, I wanted the legislators to go further with their change to the module. I wanted the legislators to do what we recommend body corporates do, which is at their first Annual General Meeting.
So this is the first time that a body corporate is in control of the meeting after the initial period from the original owner. But at that time, it consider the type of motions to go on its first Annual General Meeting, and at that time, say we want to hire an independent expert to look over all our aspects of common property and report to us as to whether or not there is any problems within our building. Because at that first Annual General Meeting, it’s quite possible that the original owner, the developer, still exists and that the builder is still attending to other defects pursuant to the building contract it signed with the original owner.
So I would have liked the legislators to have actually made it mandatory at that time for a body corporate lawyers Gold Coast its first Annual General Meeting to specifically deal with those residential building defects. Obviously, this is a very big topic at the moment, particularly when we look at what happened in Miami in the United States with the falling down of that building and we’ll certainly learn a lot in the future with respect to those types of buildings, but particularly here in Queensland where we have substantial building work and new builds going on at the moment which are in the vicinity of the beachfront, they’re built on sand, are affected by weather, are affected by poor building practices and are affected by sinkholes. We are going to really need to focus in the future on residential building defects and we need to start looking at those issues now.
So just a reminder when you’re dealing with a new build and particularly at your second Annual General Meeting, remember the new requirement in the module. But based on my recommendation, take it a step further and deal with those issues at your first Annual General Meeting.
Thank you very much for taking the time to listen to me today. As you are aware, I’m Juliette Nairn of OMB Solicitors and residential building defects and dealing with them from a body corporate lawyers Gold Coast perspective is something that I have done since 1997 and it’s something that I’m quite passionate in making sure that we’re increasing the building standards within our body corporate buildings, particularly in Queensland.
