One of our schemes was recently asked to remove a tree that was impacting a neigbour. The neighbour had filled out the relevant QCAT forms and submitted their request to the body corporate that we manage. However, this scheme was defined by survey as a standard format plan of survey (SFP) and not as a building format plan of survey (BFP). The tree was within the boundary of one of the lots and in this instance the ‘treekeeper’ was the lot owner and not the body corporate. Consequently, we advised the neighbour to resubmit the paperwork and direct it to the lot owner.

In a reverse situation, and in a different scheme, the tree of a neigbour was impacting more than one lot owner within a scheme that we manage. The scheme we manage was again a scheme defined by a standard format plan of survey (SFP). Two lot owners were directly impacted by the tree and the body corporate also had a portion of common property that was being impacted. In this case, a single letter was sent to the neighbour that was jointly written and signed by the two lot owners together with the body corporate. The three parties may end up filing a joint QCAT application if the neighbour does not take action in regard to their tree. Interestingly, you do not need to be a ‘directly adjoining’ neighbour to raise a tree dispute. If you are impacted by a tree, you have the right to raise a dispute with a tree keeper.

The reconstruction was complex for a number of reasons. Firtstly, there were 26 lots but the lot numbering according to titles was 1-28 with no lot 9 or lot lot 20. This does happen from time to time and is usually as a cosequence of a staged development of the scheme. Additionally, the lot owners used a different numbering scheme for their physical and postal address. For example lot 18 was actually known as unit 25. This also happens from time to time and is usually a consequence of the allocation of postal addresses by local council differing from the titling numbering. Fortuately, Tracsafe’s DIY software copes with both these situations.

The next issue was the requirement for a water levy as the body cororate is billed in bulk and must recover the cost from lot owners using the water meters that are read on site by the committee. The prior body corporate manager was unable to cope with this requirement and was issuing separate invoice to lot owners for the water. Tracsafe’s DIY software was able to incorporate these lot expenses into the lot ledgers so that lot owners had a single levy notice and lot ledger to review.

The scheme was using both discounts and penalties on levies. Seemingly arbitrary remission of interest and approval of discounts made the rebuild very difficult. Tracsafe’s DIY software correctly implements the legislative requirement for discounts and penalties and was able to address the prior manager’s actions.

In summary, Tracsafe’s DIY software has seen nearly all possible scenarios in Queensland strata and is able to address most.

The BCCMA prohibits by-laws that restrict the leasing of units or restrict the type of residential use that can be made of the unit. By-laws seeking to prohibit the short term letting of units are therefore invalid.   Whilst other legislation (Planning Act 2016) may mandate no short-term accommodation on your scheme, a by-law to directly enforce the correct usage has been found to be invalid on multiple occasions.

As part of the development approval of a scheme, the permitted use of scheme land will have been determined by the applicable local council with regard to their specific local planning code. For example, in Sunshine Coast Council, a scheme may be approved as ‘Multiple dwelling’ or ‘Short term accommodation’. Short term accommodation is defined in the Sunshine Coast Planning Scheme 2014 as ‘Premises used to provide short-term accommodation for tourists or travellers for a temporary period of time (typically not exceeding three consecutive months) and may be self-contained’.

For a fee, a local council will supply a letter that identifies the usage permitted by your scheme.  If the reply identifies that short-term accommodation is not permitted on your scheme, then there is a pathway for the Committee to enforce. If short-term accommodation is permitted, the pathway is limited to investigating with local council whether a Material Change of Use of the development could be contemplated.

We have worked with UOAQ (Unit Owners Association Qld) and their legal experts to craft a by-law that we consider may not fall foul of the Body Corporate police.  

1. All owners acknowledge that ‘short term accommodation’ is not a permitted use of lots within this scheme’s development approval (as identified and as such term is understood in the attachment marked ‘XX’), and that the body corporate and all owners must comply with all applicable laws and regulations, at all times. 
2. If the committee becomes aware that a lot is being used for ‘short term accommodation’, the committee may, by resolution, carry out any or all of the following actions:
a) advise the relevant owner of the lot that ‘short term accommodation’ is not a permitted use of a lot within this scheme’s development approval (as identified and as such term is understood in the attachment marked ‘XX’) and demand an immediate cessation of the use of the lot in such manner;
b) report the usage of the lot to the XYZ Council requesting enforcement action;
c) issue a notice of breach of this bylaw to the relevant lot owner;
d) obtain necessary body corporate approvals to commence (or defend against) proceedings in a court, tribunal or forum of competent jurisdiction, including (without limitation) the Queensland Planning and Environment Court and/or the Magistrates Court in relation to the enforcement of the provisions of this by-law and/or any other applicable law and/or regulation.

One lot owner objected to the decision of the body corporate and raised a dispute with the BCCM Commissioner’s office. The committee wisely held off actioning the relocation since any order reversing the body corporate decision would be very expensive for all lot owners.

Although the dispute was lodged with the BCCM office in early May, it was not until the end of June that the BCCM office requested submissions about the dispute from the lot owners and committee. Respondents had until the end of July to make a submission.

After all submissions were received, the applicant to the dispute then had a further three weeks to respond to the submissions made about the dispute.

Finally, an adjudicator was appointed to the case, and a written decision upholding the body corporate resolutions was issued at the end of September. Again, the committee held off actioning the resolutions as an appeal was anticipated.

An applicant to a dispute is entitled to appeal the decision to QCAT and has six weeks in which to do so. The applicant waited the full six weeks before appealing at the end of November.

The committee have been advised that the QCAT appeal will take approximately four months … so a decision around March 2020 is expected.

We tell this story so that committees and lot owners are aware that these dispute processes do not happen quickly. This is a typical case, which will take almost a year to resolve, and further appeal processes are possible although it does start to get expensive when appealing beyond QCAT.

The BCCM regulations require that they must take action if the debt owed is more than two years old, but there is nothing to preclude a committee starting earlier.

The most cost effective way to do that is through the small claims tribunal which is administered by QCAT. You can apply online. Make sure you have a committee resolution to approve the process before you start and to approve the cost of the application for which there is a filing fee of approximately $350 and a baliff service fee of ~ $50. These outlays can be recovered from the lot owner as permitted by the Act.

QCAT will review your application and return to you copies of your application which have been stamped with the QCAT seal (official stamp). You can then contact the baliff to have the documentation served on the lot owner.

Our experience is that once a lot owner is advised that this process is about to be commenced, levies are suddenly paid. For this reason, we suggest a final registered letter and email of demand to the lot owner advising that the QCAT application will be commenced in fourteen days time, that the cost of the action will be at the lot owner’s expense, and that the baliff will soon be knocking on their door … will have the desired impact in many cases … without requiring any further committee actions.

The committee included a special motion in the AGM notice of meeting since the proposed course of action was an improvement to the common property by the body corporate.  At the AGM, the votes were – three in favour, one against and one abstain.

According to the BCCM Act, in a special resolution, at least two-thirds of the votes cast have to be in favour of the motion and the number of NO votes must not exceed 25% of the number of lots or 25% of the total contribution lot entitlements.  At first glance, it might appear that the motion had not been lost – since 3 out of 5 does not make the threshold of two-thirds.  However, a careful reading of the Act with help from an adjudication –
http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/qld/QBCCMCmr/2007/451.html
– identifies that abstentions do not count towards the number of votes cast.  Therefore, the special resolution passed with three-quarters of votes cast in favour.  The lights were not replaced.

We are not lawyers, but we do think that the court has got it wrong.  In the Body Corporate Act and the associated regulations there are many clauses where the Body Corporate, Committee, lot owner, or other individual “must” do some action.  Where the action is not taken within the timeframe, there is usually a penalty associated with the inaction which has the potential to be enforced through the courts.  However, in all cases, the expectation remains that the action will still have to be completed.  Body Corporate Commissioner Adjudications make this very clear through their orders.

In this clause 145, no penalty for the inaction has been stated.  To say that the Body Corporate is no longer permitted to pursue the debt seems contrary to the entire regulation when read in the context that the Body Corporate must do many things and there are some ‘penalty sticks’ that can be used when the fail to do their duty but despite any imposed penalty, they will still need to complete their tasks.  We really hope that this case is overturned.

We do not have exit fees in our contracts, nor do we think that they are appropriate.  The work required to finalise a Body Corporate is very simple since most Body Corporate Managers use computer programs that keep all records up to date.  Finalising a Body Corporate can be completed in a couple of clicks of a mouse.

In truth, the biggest expense for a Body Corporate Manager is when a new client is onboarded.  Everybody wants a new client!  It can be very time consuming to recreate all the client’s records in a new system.  Matters are worsened when trying to recreate lot ledger balances when penalties, discounts and lot expenses are in play.  When transferring from another Body Corporate Manager, sadly the records are often passed over in a paper imaged format.  Unnecessary data entry is then required when the records could have been passed over in a simple spreadsheet format.

In order to win business, most Body Corporate Managers do not charge an entry fee when a new client is onboarded.  When they leave, some Body Corporate Managers try to make up for that with exit fees.

Tracsafe charges no entry or exit fees for our full service clients.

It is the experience of many schemes where lots are rented, particularly in the tourist areas, that tenants are prone to losing keys which provides access to the building and unit.  For this reason, most bodies corporate in buildings where a large number of lots are let charge a standard fee for providing replacement or additional keys.

This practice makes sense where the key has a function providing access to a common entry door.  The Body Corporate needs to control the copying of the key and if necessary the storage and integrity of the master key that is used to make the copy.

However, where the key is unique to the lot and has no other function, it does not make practical sense.  In these cases, the lot owner will usually have the authority to have the key copied.

In our case, the key only gave access to the lot.  Additionally, in this complex, the lot key can only be copied by the manufacturer.  A local locksmith places an order (referencing the number found on the key head) and the key is cut after the name and signature is found to match the manufacturer’s records.  In cases where there is no match, the lot owner will need to provide proof of ownership such as a rates notice.

We came away with an understanding of why we often come across schemes with only two lots where it would been much simpler for the lot owners if the two lots had been created as independent titles.

One part of the answer is that a development application follows a different path and is subject to different impact assessment when an existing lot is subdivided into two lots compared to undertaking a ‘material change of use’ of the lot and then creating two duplexes under a Body Corporate scheme.  The other part relates to the creation of utility infrastructure above and below the ground to support the dwellings.  In both cases, these issues can impact timing, cost, bureaucratic process and ultimate sale price.  Developers weigh these issues up together and will generally make a decision that is in their best interest but not necessarily in the best interest of the ultimate lot owners.