Showing posts with label decision. Show all posts
Showing posts with label decision. Show all posts

Monday, December 26, 2016

Short term letting and Airbnb

It appears that in Queensland, it is difficult, if not impossible, to prevent lot owners in a strata titled building from renting their apartments via short term rental services such as Airbnb.

A recent decision of Lynkim Lodge [2016] QBCCMCmr 419 (14 September 2016) supports this.  See decision here.

However, most residential buildings prohibit the use of lots for commercial or business purposes.  When does renting an apartment on Airbnb stop being a residential purpose and become a commercial purpose?

In NSW, there is an action group trying to protect residents of apartment buildings from the dangers of short term rentals.  See NeighboursNotStrangers.  See also here.  They report that apartments in buildings with high short term rentals will drop in value and that there are higher body corporate costs.

Wednesday, January 20, 2016

Failure to settle an off the plan contract was a costly decision

The Queensland Supreme Court recently decided a case involving an off the plan apartment contract in the Soul building at Surfers Paradise.

The case is Juniper Property Holdings No 15 P/L v Caltabiano (No 2) [2016] QSC 005 

Mr Caltabiano purchased the penthouse in Soul in July 2006 for $16.85 million, a lot of money for a 519 sqm apartment.  Mr Caltabiano failed to settle upon completion of the building in 2012.  So the developer forfeited the deposit, and sued Mr Caltabiano for damages.  The developer resold the penthouse in April 2015 for $7M.  So the claim for damages was $8.8M plus interest under the contract for failure to settle for over $3M.

Mr Caltabiano claimed that the sales agent was misleading -- it was claimed that at the request of Mr Caltabiano, the sales agent provided information in an oral discussion regarding supposedly comparable sales in Jade and Q1.  Mr Caltabiano never checked whether this information was correct.

The judge decided that the sales agent did not make the alleged misleading statements.  Even if they were made, they were not relied up by Mr Caltabiano.

  1. "The defendant submits that the fact that he did not obtain external advice as to the value of the Soul penthouse or the prudence of the purchase only serves to emphasise his reliance on the alleged representations. However, in my view, it is commercially illogical and inherently improbable that in deciding upon a $16.85 million purchase the defendant would not have obtained such advice because of reliance on the alleged representations made by the plaintiff’s sales consultant comprising comparisons with properties that the defendant did not know anything about. This is where the defendant’s story is incredible." 
See http://www.sclqld.org.au/caselaw/QSC/2016/005

This shows one of the many dangers of buying off the plan.  Values may go down substantially between contract and settlement, but you still have to settle.  And if you don't, then you are in big trouble.

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)

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

Thursday, May 24, 2012

Sam Vecchio

An interesting decision regarding Sam Vecchio, who is the developer of the Rive apartment complex at Breakfast Creek.  Sam Vecchio's prior development was Fresh at Taringa.  A bad job was done on the stippling, and a few years later, it is still not fixed.  Vecchio has stacked the body corporate committee with family members, some of whom do not turn up to meetings.  Vecchio's business practices have been called into question.  As the Commissioner has found:  "The applicant disputes the committee resolution on the basis there is a conflict of interest between the committee member, Sam Vecchio, and Phoenix Drywall (the individual selected to perform the repairs). The applicant says Phoenix Drywall is currently working for Sam Vecchio. ... I am satisfied a serious legal question exists as to whether the costs involved in the resolution dated 16 March 2012 are reasonable."  See decision.

Sunday, April 15, 2012

Dog Allowed, Yet Again

"Based on the material presented, I am not satisfied the committee’s decision to deny the applicant’s pet request was reasonable in the circumstances. This is particularly the case given that no evidence has been provided to suggest the dog barks excessively or otherwise causes a nuisance which interferes with other owners use and enjoyment of a lot or common property. Accordingly, I consider the applicant should be granted permission to keep her dog in her unit pursuant to by-law 11. "

See Gateway Gardens Decision

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

Monday, April 2, 2012

Decision Making Tips

When buying or selling an apartment, it often gets down to a negotiation on price, with the agent repeatedly ringing buyer and seller, trying to get an increase in the offer or decrease in price. It is not uncommon for the agent to bully, flatter and confuse both parties to get a deal done.  Research shows that in such circumstances, a person may get decision fatigue, and make a bad decision.  My practice is not to make a buying or selling decision after lunch, but to sleep on it, and decide in the morning, without influence from the agent.

The more decisions you make, the worse they get to a marked degree -- you are more likely to make crucial mistakes or, put off a decision and miss an opportunity. One solution is an unbending set of investing rules, which minimise the need to make decisions.  Making fewer decisions improves willpower so much that it should have a major effect on investing performance.

For the same reason, decisions made earlier in the day are much better than those made later.  Rather than implying that you should hurry decisions, however, this indicates that in investing, you should get better results from a systematic process of studying an investment until you have enough evidence, then actually making the decision the next morning. The "sleep on it" principle.

In today's market, there should be no rush for a buyer to close a deal.
See article in NY Times Magazine.