How to switch to the Queensland Body Corporate Two Lot regulation

How to switch to Queensland’s Two Lot Regulation Module – DIY

If you want to switch your body corporate to the new regulation module, and do it yourself, Tracsafe recommends the following process.

Step 1 – Check eligibility

Your body corporate must satisfy all the following criteria –

  • There are only two lots forming part of the Body Corporate
  • The lots are used for residential purposes
  • There is no letting agent for the scheme
  • The Body Corporate is not part of a layered arrangement of schemes
Step 2 – Review reasons

Make sure you understand the reasons for changing to the Two Lot Module.  Have you seen our analysis of the Two Lot Regulation?.

Step 3 – Prepare your first Lot Owners Agreement

A typical agreement will cover –

  • Who will be the ‘record keeper’ (one or both lot owners can jointly perform this function)
  • All your agreed expense items such as –
    • Gardening and cleaning services
    • Insurance and Building valuations
    • Body Corporate Manager (if you intend to have one)
    • Stationary, Printing and Postage expenses
    • Banking fees and Taxes
  • Your mechanism and trigger for raising instalment contributions

Before you go any further, now is a good time to talk to your other lot owner and confirm agreement.  Get the agreement signed (to eliminate uncertainty) before proceeding to call an Extraordinary General Meeting (EGM).  Once in force, the agreement can only be amended or revoked by a duly signed new Lot Owners Agreement.  Have a look at our example lot owners agreement to get your ideas.

Step 4 – Develop your motions for an Extraordinary General Meeting (EGM)

The following motions are typical.

  • Motion to approve minutes of previous general meeting
  • Motion to identify the first lot owners agreement (created in Step 3)
  • Motion to change the regulation module governing the Body Corporate
  • Motion to terminate the existing Body Corporate Manager (if you have one)

You could also wait for the next AGM before submitting these motions but having an EGM asap may deliver savings earlier.  If you have a contract with a Body Corporate Manager, many of the services that were being provided are no longer valid and you could seek to terminate the engagement by agreement or negotiate a reduced fee.  Look at this voting paper attachment which has a typical set of motions you might need to propose.

Step 5 – Issue a notice of Extraordinary General Meeting (EGM)

Attached is a sample Notice of EGM and proxy form that you will need to send out to each lot owner.  Make sure you attach a voting sheet with your motions and your Initial Lot Owners agreement.  Post the documentation to the other lot owner so they receive it at least 21 days before the meeting is held.  Ideally, you should ask the Committee Secretary (or Body Corporate Manager) to perform this task.  However, you are entitled to call it yourself if the Secretary does not send the notice of EGM within 14 days of your request.

Step 6 – Hold your EGM

Your EGM meeting is valid even if you are the only attendee.  The other lot owner may choose to not be represented, to be represented by proxy, or to return the voting form with their selections.  However, unless the other lot owner has signed the initial Lot Owners Agreement and voted YES to all motions, we do not recommend that you proceed any further at this time!  If the other lot owner votes ‘NO’ to changing the Module, you can not proceed any further at this time.

Step 7 – Submit your new Community Management Statement (CMS)

You need to complete two Title Office forms (Form 14 and Form CMS) and submit them to the Titles Office within 3 months of your EGM.  Using your previous Community Management Statement and just changing the Regulation module at Item 2 of the CMS Form to ‘Two Lot’ is a conservative approach if you choose to prepare and submit this form yourself.  The seal of the Body Corporate must be affixed to both documents.  If you are very organised, these documents could be prepared before your EGM ready for signature if your motion is successful.  The Titles Office charges ~ $100 to submit these documents by post.

Step 8 – Receive Titles Office Approval

The changeover day is the day that the Titles Office records the new CMS.  Confirmation of this date will be sent by the Titles Office to the Body Corporate.  From this date, the existing sinking and administration funds can be considered one pool and shall be used to pay Body Corporate expenses until such time as the residual amount is exhausted or reaches some agreed minimum level.

Step 9 – Steady State

Make new lot owner agreements as and when circumstances change.  Pay your bills when they arrive.  Issue contribution statements as per your lot owners agreement.  Tracsafe’s DIY-BC self managed software service makes all this so easy!  Contribution statements are automated; expenses and contribution payments are tracked, recorded and reported.  Lot owner agreements are electronically agreed and constantly at hand.

Tracsafe can help

Tracsafe has an option to complete the CMS conversion for you.  Review all of our Duplex Body Corporate services.