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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.

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