Showing posts with label body corporate. Show all posts
Showing posts with label body corporate. Show all posts

Thursday, July 13, 2017

Body Corporate Laws - New Report

The Attorney General Yvette D’Ath has released the Property Law Review Final Recommendations titled Procedural issues under the Body Corporate and Community Management Act 1997.

Download a full copy of the Property Law Review Final Recommendations – Procedural Issues under the BCCMA: http://www.justice.qld.gov.au/__data/assets/pdf_file/0008/529784/final-recommendations-procedural-issues-paper.pdf

Wednesday, February 1, 2017

Solicitor Assaults Neighbour - Then Sells House

Last year, it was reported that controversial Brisbane solicitor, Robert Hynes, assaulted his neighbour, who happens to be a barrister.  The Hynes family house is now for sale.  The house, in 18 Ormond Street, in Ascot, Brisbane, is in Hynes' wife's name.  She purchased the house in 2009 for $2M.  Hynes Lawyers went through a restructure in 2013, and not everyone was happy.  Restructured and now Hynes Legal, this firm is well known for its aggressive body corporate and management rights practice.

The advertorial in the AFR and The Domain, without some of this detail, is below.


Thursday, October 13, 2016

Air Space and Common Property

A recent High Court decision supports a decision by a body corporate that did not allow an owner of an apartment in Noosa to join two balconies.  Doing so would appropriate air space which is common property.  The law in Queensland requires such an appropriation of common property to be approved by a vote of all owners without dissent.  If the body corporate in a vote denies that approval, and such a decision is unreasonable, then it can be overturned.  Here, the High Court said it was not unreasonable to deny an application by an owner to appropriate common property air space.

See High Court decision and this good article.

In contrast, see this recent decision where a body corporate's denial was found to be unreasonable.

Friday, October 17, 2014

Legal Claim Against Meriton

A Meriton construction company is being sued by a body corporate for building defects.

"BILLIONAIRE developer Harry Triguboff is at the centre of a legal battle with a body corporate over who should foot a $2 million repair bill for one of his Southport residential high rises."

Meriton is also the developer of the Infinity and Soleil towers in Brisbane.

See Gold Coast Business News

Thursday, October 9, 2014

High Court said builder not liable to body corporate

The High Court has unanimously held that listed developer Brookfield ­Multiplex, the builder of the $60 million Chelsea apartment tower in ­Chatswood Sydney, did not owe a duty of care to the Owners Corporation (in Queensland terminology -- the body corporate) which lost money from defects.  The Owners Corporation, which includes Mantra, appealed an earlier decision in the Court of Appeal in the Supreme Court of NSW and had won.  However, the full bench of the High Court has overturned that decision.

Lawyer Emanuel Confos, for Brookfield Multiplex, said the result would have significant consequences for the building industry.  "This is a landmark decision for the construction industry because it ­clarifies an issue that has been around for many years and that is whether a builder owes a duty in contract and tort for a commercial development," Mr Confos said.  "And I believe the High Court has unanimously decided that no duty in tort is required only duty in contract," he said.

Decision is here.

Friday, March 14, 2014

A victory for miniature dachshund dog ‘Sebastian’ over the Committee

It seems that Body Corporate Committee members are officiously and uncaringly trying to prevent apartment owners have pets, even though there is no legal or other justification to do so.  A recent case involving a miniature dachshund dog called Sebastian highlights these issues.  The apartment owner was allowed to keep Sebastian in her apartment.

See Bougainvillea [2013] QBCCMCmr 448 (11 November 2013)

"Both the Committee and many submitted appear to believe that By-law 11 prohibits pets in the scheme. That is not correct. Adjudicators have consistently held that by-laws like By-law 11 are ‘permissive’ in that they allow the keeping of pets, albeit with prior consent. 

Adjudicators have further held that where there is a permissive by-law, the body corporate cannot impose an automatic ‘no-pets policy’. A body corporate may have a preference against pets, but it cannot override the potential in the by-law for consent to be given by imposing a policy of banning all animals. Under a by-law of this nature, the committee must consider each request for a animal on its merits and exercise discretion in whether to approve an animal or not. Accordingly the Body Corporate must consider each request on its merits.

Some schemes have tried to adopt by-laws that ban all animals, but this has been found to be contrary to section 169 of the Act. Section 169 provides for by-laws to regulate the use and enjoyment of lot, but does not authorise a by-law prohibiting such use and enjoyment."

"One submission notes that some tenants may have phobias to dogs. Another is concerned that some children could be frightened by the dog. While there may be some basis for genuine concerns about larger dogs, it is more difficult to perceive such difficulties with such a small breed of dog. In any event, if the applicant were to always ensure that the dog was carried or adequately restrained during its brief transits across common property, there seems to me to be little risk of any adverse impact."

See also Sunwaves [2013] QBCCMCmr 433 (30 October 2013)

Tuesday, August 27, 2013

Apartment Body Corporate Fees

"Apartment buyers should avoid paying for lifestyle amenities already on their doorstep.  Minimising strata fees is increasingly a priority for apartment buyers eager to make sure the quarterly payments for the upkeep of their buildings don't take too much of a chunk out of their income.  So where there's a public gym or pool near a block, developers will often avoid including them in their plans for the complex to keep costs down."
Source:  Domain Advertorial

Here are some example body corporate levies for a random selection of apartments in Brisbane and the Sunshine Coast:
  • City, one bed - $5,200 a year
  • South Bank, two bed - $6,000 a year
  • City, two bed - $7,000 a year
  • City, two bed - $5,800 a year
  • Suburbs, one bed - $4,400 a year
  • Suburbs, two bed - $4,000 a year
  • Suburbs, two bed - $4,900 a year
  • Noosa, one bed - $5,129 a year
  • Mooloolaba, two bed - $11,820 a year

Saturday, August 10, 2013

Rental Returns

I have conducted a review across about 20 apartment rental properties in Brisbane and S.E. Queensland, comparing the 12/13 FY with the previous financial year.  The analysis is done before depreciation and tax is taken into account.  Some of my conclusions, from this limited review:
  • rent increases in the past year have been minimal, and I suspect below inflation
  • vacancy periods between tenants have increased slightly
  • body corporate fees have increased dramatically, and well more than rents and inflation
  • council charges and water rates are slightly higher
  • long term rental properties do much better than vacation or short term rental properties
  • net returns, before interest, have decreased compared to the previous financial year (mostly due to body corporate increases being more than rent increases)
  • fees and charges from rental agents are high, especially when considering the work done and value received -- self managed properties do better than agent managed properties for this reason,  even if the rent received is slightly below market rent
  • if interest rates had not decreased, then the overall picture would not have been rosy.  
  • because of decreases in interest rates, the overall cash position (not taking into account depreciation and tax) improved in the 12/13 FY compared with the previous financial year.

Saturday, June 1, 2013

Pet Disputes

It is becoming common for owners to seek permission to have a pet, for the body corporate committee to refuse, and for the body corporate committee to be overruled.  See recent cases:
  • Cat allowed in Eden by the Bay
  • Cat allowed in Horton Apartments
  • Decision not to allow dog by body corporate suspended for further review
  • Dog allowed and bylaw prohibiting animals struck out

Sunday, August 5, 2012

Uncertainties, Risks and Body Corporate Fees

I feel that now is probably a good time to buy an apartment in Brisbane.  Prices are down, and there are many good apartments for sale.  However, there are uncertainties that are holding me back:
  • What will happen if the mining boom comes to an end?
  • Will Newman's retrenchment of 20% of the public service kill any chance of growth for the next 3 years?
  • Will Newman increase land tax rates and lower land tax threasolds in Queensland?
  • What will Newman and the Attorney-General do in relation to the complex issues regarding lot adjustments (that impact the percentage of body corporate fees an individual unit owner will pay)?  If I buy now, will the unit entitlements be adjusted up in the near future so that my body corporate fees will increase?  Will there be costly legal action between the body corporate and various interest groups in the buildings.  See here and here for example.  Changes to this are a priority for the government it seems, to reward penthouse owners for voting for the Liberal party.
So, for the time being, there is too much uncertainty and risk to buy an apartment (or an investment property) in Brisbane or Queensland.

Regardless, body corporate fees and council rates are becoming prohibitively high, and make investing in apartments less attractive.

I looked at an older apartment on the river recently.  It has been on the market for more than 6 months.  It is a 2 bedroom (with a small second bedroom), with river views.  The facilities are moderate -- no doorman, onsite manager, reception desk or the like.  The list price has come down, and is now $455,000.  But the body corporate fees are $8,830 a year, and council rates are $2,000 a year.  So more than $10,000 a year in these expenses.  The rent for this apartment would be about $400 a week, or about $365 a week after real estate agent's fees.  So that is 30 weeks, or more than half a year's rent, just to cover body corporate levies and rates!  Clearly, this is not a good investment, even if the price drops another $100,000.

Post-script -- comment from a reader after this post was published:
Your sentiments re purchasing a unit or apartment in Brisbane reflect my own also, very valid points.
Another is upcoming or planned or approved “future” capital works such as painting, under-pinning, structural repairs, landscaping, tree removals and the like. At a number of units I have looked at, the agents got very cagy when put the question. Pressing one very hard got I wind of a complete paint job coming up within 2 years,  approx $250,000k across 80 units, and unit titles re-appropriation may also make some owners rather unhappy as well. Ouch! Another had $30,000K in quotes not yet voted on (but very necessary since drains were becoming repeatedly blocked by roots) for tree removal. Ouch!  Many units 10 years and over now need a lot of work, much of which has been delayed or put back but  it’s coming. New buyers beware.
Article in AFR, 7 August, P38: Newman at a get together of banks and bizo’s was playing pretend Reserve Bank Chief and instructing banks to start lending. Banks won’t (as we all know), denying they should take risks just for Newman et al. Last para of article states : At a meeting of people from the big four banks recently, one person from one of the big four proclaimed  “We’re not lending anything into Northern Australia. Northern Australia begins at Nundah in Brisbane.”

Saturday, April 14, 2012

Readjustment of contribution schedule lot entitlements

"Much of the animosity between the applicant and the body corporate committee has arisen following his submission to the committee of a motion to reverse contribution lot entitlements to the “pre-adjustment level”. Based on advice that it had obtained from MBA Legal, the committee declined to lodge a new community management statement reflecting “pre adjustment lot entitlements”. As a result, the applicant issued a number of circulars to other lot owners regarding his request for a reversion of lot entitlements.

Within bodies corporate, few issues have been more polarising than the adjustment and/ or readjustment of contribution schedule lot entitlements (CSLE’s) which set the proportion each owner contributes to body corporate expenses. The Body Corporate and Community Management Act 1997 previously provided that in certain circumstances, an owner could apply to the District Court or a specialist adjudicator for an order to have the original entitlements adjusted. Where such an order was made, levies payable by some owners decreased while others increased.

In November 2010 the Minister for Tourism and Fair Trading introduced into parliament a bill to amend the Body Corporate and Community Management Act 1997This bill was passed by parliament in early 2011 and changed the criteria for adjustment of contribution lot entitlements. These amendments also include a procedure for certain owners to seek a reversal of previous adjustment orders. Except in limited circumstances, such as where the adjustment order merely formalized an agreement made by the parties, or there has been a material change such as further subdivision, the body corporate is obliged by the legislation to lodge a new community management statement reflecting the original lot entitlements. Where such action is taken, levies payable by some owners decrease while others increase.

Given that all lot owners are members of the body corporate, it is important that they have an opportunity to air any grievances and have input into the management of the scheme. Owners often have opposing views on various matters, but in my view robust discussion and debate is an important part of body corporate decision-making. This requires that, within reason, all owners feel free to express their point of view without unreasonable threats of defamation proceedings."

See Q1 Decision

Tuesday, December 6, 2011

Rent Money is Dead Money - part 3

Another interesting comment from a reader regarding the prior post Rent Money is Dead Money:

I am a number of months into my apartment owning experience, and your colum on buy versus rent this weekend was very interesting. 
 
It has surprised me how relatively expensive apartment living is in comparison to houses.   Unencumbered by the facts, you would think that apartment living would be cheaper due to massive economies of scale:
 
·         Two pools supported by 400 units not one pool by one house
·         Four large garbage collections from four points rather than traversing a neighbourhood with 400 different pickups – council gets the benefit of this one – and nobody would use tip vouchers.
·         Maintenance of larger grounds, but offset by 400 units supporting, versus grounds per house
·         Economies of scale on hot water heating by using much larger units
·         Economies of scale on water requirements
·         Economies of scale on heating and cooling due to insulation from two sides, roof and floor not being open to environment.
 
Obviously the above benefits are eroded by the cost and maintenance of elevators, the onsite manager, profit margin for developer, security, etc.
 
For my apartment, annual fees for rates etc are not $5k per your note but $9k, comprising $6k body corporate and insurance, $2k rates, and $1k water.
 
The $6k for the body corporate was not particularly out of line for similar units when I was looking around.
 
The $2k for rates is just as a result of robbery by Brisbane City Council.  My home rates are only $1.4k.  Rates for my apartment should be only $1k but a 2.1 parity factor was put on by the Council when they went through that rate adjustment exercise.
 
Obviously at home in a house, I have no body corporate, but realistically I should consider the $45 I pay a fortnight for lawns mowed as equivalent, and I look after my own pool.
 
So I am paying $1.2k/yr for lawns mowed, if I got the pool looked after I am guessing that would be $40 per month or so.  Say that’s $2k per year.  Home insurance is probably $600 per annum, can't tell as it is bundled with contents.  There are other costs with the pool, all the chemicals, the pumps/chlorinators etc and some provision for outdoor maintenace , say another $1k per year.  So in fact that is $3.6k per year, maybe a bit higher than I thought it would be.  And there are probably other episodic costs that I haven’t been quite fair to my unit on.  I just had to spend $3k to get my home pool fence up to spec.  Maybe the comparison is not as bad as I first thought.  If I am honest there would be other expenses on my house that would be covered by Body Corp for equivalent unit.
 
But still, even with all this, it seems evident that the apartment is still more expensive than house and all those economies of scale are eroded.
 
Obviously the other cost savings that you really need to be taking with an apartment are as follows:
 
·         Dropping Gym memberships and using shared facilities at the common areas.
·         Dumping at least one car – that would give a pile of savings, that are only going to get higher.
 
I don’t see the power bill for my unit, but this is an area where I suspect apartments are losing out to houses.  I've had for over a year solar hot water and solar panels for elec gen on the roof.  These have paybacks of around 5 years or so based on current elec price and are only going to get shorter payback as power bills increase.  How are apartments getting onto the bandwagon of sustainability.  I am sure it is impossible to get a pile of owners to cough up more money to install solar hot water or solar panels.

Saturday, November 13, 2010

Pet Friendly Apartments

A resident of an apartment recently filed a dispute resolution request to an Adjudicator within the Body Corporate Commissioners Office in Brisbane, disputing the current status of the by-law in the residential high-rise building 212 Margaret Street, BRISBANE QLD 4000. The resident was protesting the total pet ban in the buildings by-laws.

Basically, the Adjudicator has upheld the protest that the 212 Margaret by-laws, which did not permit any pets at all, were invalid and unenforceable, and has ordered them changed to a permissive by-law. This dates back to a CCT ruling in 2008 (Tutton v Body Corporate for Pivital Point Residential) where the CCT magistrate ruled that total pet bans were unreasonable since certain species of animal could on no rational basis cause any difficulty to any other lot owner.

The Adjudicators have been ruling that total pet bans are invalid since that time (there are quite a few decisions it seems), and have forced Body Corporate's in every case since to alter their by-laws back to standard (animal/pet) permissive ones when an owner applies for Adjudication.

In addition, it appears there has been a further QCATA ruling in September 2010 -- McKenzie v Body Corporate for Kings Row Centre 28/09/2010 -- in which the tribunal decided that even by-laws that attempt to ban only a certain type of pet (cats and dogs) are also so unreasonable as to be effectively invalid and unenforceable. In that case, the disputed by-law was permissive of pets in general but attempted to outright ban only 'cats and dogs' specifically.

Essentially this all comes together to mean that a (or any! within a Community Titles Scheme) Body Corporate can no longer expect to ban pets (or any kind of pet) outright, even if they have already done so by voting in a ban/restrictive by-law, or even if the building was originally set up with a pet ban/restrictive by-law.

It also means that if anyone protests such a restriction, the Adjudicators will uphold their protest, allow the pet (if it's a reasonable request and there is no evidence of a reasonable reason the pet would be unsuited to the property), and forcibly change the by-law back to a permissive one. Just like they just did with 212 Margaret.

The flow on outcome from these rulings are clear: the face of Community Titles Schemes must now change - pets can no longer be banned, and Committees and Body Corporate's can no longer expect to stop people from bringing their pets to live with them in apartments, units or townhouses - unless they can provide reasonable grounds or evidence that the particular pet would be unsuited to the lot. From what I understand, this new thinking has already been tested multiple times in the Appeals process and the Adjudicators subsequent interpretation of this has also been made abundantly clear.

212 Margaret is now (forcibly) pet friendly.

Which is probably a good thing, because statistics I have seen show that apartment buildings that are pet friendly have more owner occupiers and have greater capital appreciation.

Saturday, August 21, 2010

Changes to Lot Entitlements in Queensland

This is edited from an email from Archers. This law, if passed, may impact the value of apartments in buildings where the lot entitlements were recently changed, and where there was a big difference in the initial sales prices of various apartments in the building.

"Now that you are all aware of the Body Corporate and Community Management Amendment Bill 2010 lets spend some time explaining, if passed, what it is going to mean for you.

Open for public consultation until 23rd September 2010 the Bill proposes to outline new concepts and principles for the setting of Contribution Schedule Lot Entitlements (CSLE), along with a provision for lot owners who were disadvantaged by adjustment orders to have the amended CSLE changed back to their original schedule prior to any change. We have provided a brief summary of the main areas of the Bill below but urge anyone who believes they will be affected to review a copy of the Bill at www.deedi.qld.gov.au and make a submission to bccm.policy@deedi.qld.gov.au.

1. Introduction of the following Principles for deciding CSLE:

  • Equality Principle -The CSLE must be equal except to the extent which it is just and equitable in the circumstances for them not to be equal.
  • Relativity Principle - The CSLE must take into account factors such as the nature, features and characteristics of the lots, the purposes for which the lots are used, how the scheme is structured, the impact the lots may have on the costs of maintaining the common property and the market value of the lots.
  • Unimproved Value Principle - Where the CSLE must be proportionate to the unimproved value of the lots.
  • Market Value Principle - Interest Schedule Lot Entitlements must reflect the respective market values of the lots, except to the extent which is is just and equitable for the lot entitlements not to reflect the respective market values.

2. Adjustment of CSLE

A Body Corporate is still entitled to change its CSLE by passing a Reolution Without Dissent. The notice of meeting must be accompanied by a written document outlining the changes and the reasons for the changes.

An owner is still able to apply to have the CSLE changed either through Specialist Adjudication or the Queensland Civil & Administrative Tribunal (QCAT), however there are restrictions. For an existing scheme, the scheme must have been affected by a material change since the last time the CSLE were decided. For schemes established after the commencement of the Bill, the owner making the application must believe the CSLE are not consistent with the deciding principle.

3. Previous Decisions

The proposed Bill will allow an owner (who must have been an owner at the time an order was made) to submit a motion to the Body Corporate to revert back to the CSLE before any order to change them was made. There will be a three (3) year time limit for an owner to submit such a motion. If the Body Corporate receives a motion from an owner, it must identify the CSLE pre-adjustment and call a general meeting to allow owners to vote, by Resolution Without Dissent, whether to change the CSLE back to what they were pre-adjustment. Special provisions will apply to Lots that have been subdivided or amalgamated.

4. Applications already made

If an application is being heard by a Specialist Adjudictoar or QCAT and a decision has not been made or has not been given effect at the commencement of the Bill, it will cease to have effect when the Bill commences.

Some other relevant changes proposed include:

  • A buyer may terminate a contract if it is entered into but before settlement, a new Community Management Statement (CMS) is recorded and:
    • the seller does not give the buyer a copy of the new CMS within 14 days (or longer if agreed by both parties) after the new CMS is recorded; and
    • the buyer would be materially prejudiced given the extent to which the new CMS was different to the previous CMS; and
    • the buyer gives the seller 14 days notice (or longer if agreed) that they wish to terminate the contract.
  • A buyer may terminate a contract if they are buying from the Original Owner for the Scheme if they reasonably believe that the CSLE are inconsistent with the principle on which they were decided and the buyer would be materially prejudiced if they completed the contract. There is a 90 day time limit to terminate after the buyer (or a person acting for the buyer) receives a copy of the contract."

Sunday, February 21, 2010

Body Corporate Levy Rules to Change

From a SSKB Newsletter:


The share that each owner pays to their body corporate levies may change, yet again, when the government commences new laws about how contribution lot entitlements are calculated.

In a major omission that the changes to body corporate lot entitlements made in 1997 were unfair to many, the Queensland Minister responsible for body corporate law, Peter Lawlor, today announced that the basis for setting lot entitlements will revert to the principles used prior to 1997.

Under the 1997 principle the entitlements must be equal unless it is just and equitable for them to be otherwise. This principle changes under today’s announcement.

For standard format plans contribution entitlements will be based on the unimproved capital value of the land – so it will be similar to land tax and your council rates.

For building format plans (apartment style dwellings) the system will be a combination of factors that the minister describes as “market conditions and property value”. The impact of this will need to be considered once the legislation is finalised.

It appears clear that this new “old system” will apply to new developments. However, it is unknown what will happen to developments that are currently being sold off the plan.

Any body corporate where the lot entitlements have already changed from the pre 1997 system to the 1997 system because an owner made an application to have the entitlements altered are in for some more substantial upheaval as the Minister has stated the new law will see the entitlements revert to the way they were before.

At this stage the announcement lacks detail. It is unclear what happens to developments that were completed under the 1997 system and have used that principle for calculating entitlements instead of the new principles.



Saturday, June 13, 2009

Maintenance Fees

Interesting comment from another blog:

"I must admit I had no idea what I was doing when I bought my first apartment; Low fees meant I liked the building, without knowing anything financially about the building, I have since researched the other buildings I was also interested in, and to be honest I was just plain LUCKY I bought in the building I did, only after joining the committee did I realize we actually have a huge surplus as well as low fees ( that have actually gone down further since I bought)
I also think it's a huge mistakes for people who purchase an apartment or unit with a strata title, but fail to join the committee or even attend the AGM, Its probably their biggest investment they will ever make, but they don't care how, or who is running it."

Domain Blog

Friday, April 3, 2009

Body Corporate Levy Defaults

There are some buildings where there are a large number of owners who have not paid their body corporate levies for some time. Typically, the owner is trying to sell the apartment, and so stops paying body corporate fees. When buying, I recommend that it is good to search to see if the seller is behind on body corporate fees -- as this may indicate that the owner is desperate to sell. I would also avoid buildings where there are a large percentage of owners behind in payments. For example, there are a number of apartments in Aurora where body corporate levies have not been paid.

Friday, February 20, 2009

Disputes over Body Corporate Fees

Many buildings are changing the way body corporate fees are allocated amougst unit owners, causing disputes when penthouse apartments end up with lower fees.

See Courier Mail