Showing posts with label lawsuit. Show all posts
Showing posts with label lawsuit. Show all posts

Wednesday, May 3, 2017

Jack Russell beats the body corporate

The body corporate adjudicator recently allowed a dog to reside in an apartment, even though a number of apartments in the building were used for short term or holiday rentals.

See The Mirage [2017].

"Pets are not necessarily incompatible with high density living. No evidence has been provided that this dog is inherently unsuited to predominantly indoor living.

While it is not possible to determine the basis upon which owners in general meeting voted against motion 11, submissions by the committee and two lot owners raised hypothetical concerns. In particular they are concerned that if the dog barks, the body corporate would not be able to take enforcement action, because the applicants only stay in their unit for one or two weeks per year. In my view it is unreasonable to refuse permission to keep a pet based on hypothetical concerns, without a cogent basis to believe the animal will actually cause problems or the lot owner will not comply with conditions of approval. It is appropriate to impose conditions to avoid problems arising, and to withdraw approval if those conditions are not met.

Similarly, it is difficult to see how the body corporate would not be able to take enforcement action in the event that the applicants’ dog causes a nuisance. While there may be a time delay between when a breach of the conditions occurs, and taking of enforcement action, I do not believe this means that the conditions of approval cannot be enforced against the applicants. The applicants are the owners of unit 25, they stay in unit 25 whenever they visit the scheme and the requested approval relates to the keeping of a dog in unit 25 only. It stands to reason that if the applicants are in breach of the conditions of approval, then the body corporate could withdraw the approval and they would not be able to bring their pet dog into the scheme on future visits to their unit. 

While I note the concerns raised by the owners of unit 45 regarding temporary or short term approvals, any such approval must be given by the body corporate in general meeting in accordance with by-law 11. Further, there is no legal basis for owners to be forced to allow short or long-term tenants to keep a pet in their lot. Even if the Body Corporate approves dogs generally, or in a specific case, a tenant still requires the approval of the lot owner under normal tenancy arrangements. If owners in the letting pool do not want dogs in their lots, they do not have to allow them. Potentially the building manager could decline to accept lots in the letting pool where pets are allowed in that lot."

Sunday, April 30, 2017

Trade Marks and Building Names

The Federal Court recently decided in favour of the onsite manager against an offsite real estate agent in relation to use by the offsite agent of a trademark used by the onsite manager.  The trademark was the same as the building name, but this did not allow the offset real estate agent to use the building name as a trademark.

See
Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd 
[2017] FCAFC 56
http://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2017/2017fcafc0056

"243    In our view, the underlying principle reflected in the reasoning quoted above applies to the circumstances of the present case. Apartment owners enjoy the right to describe the location of their apartment by reference to the words “Harbour Lights” and they enjoy the right to let their apartment so described at that place.  Neither they, nor any third parties, enjoy the right to provide the registered services from the building or from any other place by reference to the words “Harbour Lights” based on any notion of invoking, in good faith, the use of the words on the footing that, because the complex is called “Harbour Lights”, the words form part of the common heritage in the nature of a town, suburb or municipality. 
244    The words are, of course, the name of a particular building complex configured in the way earlier described and thus the words necessarily identify (like all names attached to a particular building) a place on the planet as distinct from other places but that does not mean that the words thus become part of the “common heritage” giving rise to a “likelihood” that other traders would want to make honest use of the words in connection with similar services as an expression of the exercise of a “common right of the public”. The primary judge correctly concluded that the trade mark is inherently adapted to distinguish the designated services of the owner from the services of others."

Wednesday, April 26, 2017

Body Corporates in Queensland can't prevent AirBNB in their buildings

This recent decision confirms previous decisions that a bylaw in a Queensland strata titled scheme that prevents short term rentals, such as AirBNB, is invalid.  Not a great result for apartment residents.
See  Macleay Tower & Villas [2017] QBCCMCmr 12 (17 January 2017)
 http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/qld/QBCCMCmr/2017/12.html

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.

Thursday, February 18, 2016

Apartment lawyer in trouble

Well known lawyer, Michael Teys, has been banned by ASIC from being a director.  Mr Teys often advises body corporate committees in relation to issues with onsite managers.  For example, he advised the committee of Admiralty Towers Two not to accept the assignment of the management rights from bank receivers to a professional manager due to the honesty and business skills of the proposed manager.  Very strange.  The pot calling the kettle black.


I suspect many committees have been unduly influenced by Mr Teys' almost religious like views of management rights. 

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, 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.

Tuesday, August 19, 2014

Buyer Misses Out Because Notice sent to real estate agent

A recent Supreme Court of Queensland case shows that it is important to be precise when following contractual provisions.  A buyer and seller sign an REIQ contract of sale.  The contract includes a provision that the buyer must give notice to the seller that the building and pest inspection has been satisfied by 5pm on a particular day, and if such notice is not given by this time, then the seller can terminate.  The contract says that notice can be given by fax to the seller or the seller's solicitor.

The buyer's solicitor gave notice at 4.57pm to the seller's real estate agent, not the seller's solicitor.  So the seller terminated the contract at 5.07pm.  This termination by the seller was considered to be valid.

See Simpson v. Jackson [2014] QSC 191

Saturday, August 2, 2014

Lawsuit over carpark

A long running lawsuit about a car parking space reached conclusion recently, with a decision from the Queensland Court of Appeals.
See Hadgelias Holdings and Waight v Seirlis & Ors [2014] QCA 177
A person purchased an expensive apartment, and was told that there were 3 car parks, but in fact, there were only 2 carparks plus a storage space.  Damages were awarded in favour of the purchaser.

An interesting calculation quoted in the judgment, where it was stated that the value of the apartment at the time was falling at a rate of $45,000 month, independent of the car park issue:

"Using apartment 4404 as a basis for valuing the Seirlis apartment in April 2010, he deducted the following amounts from its January 2010 sale price of $2.65 million: $135,000, to represent the three months which had elapsed to April 2010; $50,000 for its superior fit-out; $60,000 for its additional two floors in height; and $100,000 as the estimated value of the third car space. That brought him to a figure of $2.305 million for the value of Mrs Seirlis’ apartment. From the sale price of apartment 4804 in October 2009, $2.9 million, he deducted $270,000 to represent the passage of six months, $180,000 to reflect the six floor difference, $50,000 for its superior fit out and $50,000 for the value of its storage facility. That gave a value for Mrs Seirlis’ apartment of $2.35 million as at the date of
contract."

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)

Sunday, July 21, 2013

Festival Towers lawsuit

Many owners of apartments in Festival Towers in Brisbane, and the body corporate, are suing Devine Limited and Brookfield Multiplex Constructions for a large amount of damages concerning the construction (and alleged construction defects) in Festival Towers.  Details of the lawsuit can be found here on the Supreme Court website.  I have been told that there have been special body corporate levies to partially fund the lawsuit.

Any prospective purchaser should have their lawyers study the lawsuit paperwork, including the schedule of defects, in detail.

At the time of development and construction of Festival Towers, Devine Limited was run by David Devine, with Ken Woodley as the senior person on the sales side.  Devine and Woodley are now running Metro Property Group, which is a marvellous sales machine.

Festival Towers, managed by Oaks, doesn't have the greatest feeling in my view.  Partly short term accommodation and partly foreign students (packed into small apartments, and sleeping in hallways and living rooms), and a popular place for travelling hookers, Festival Towers has always disappointed me.

In my opinion, purchasing apartments off-the-plan has risks, because you don't know the level of quality that will actually be delivered.  The sales contract is most often in the developer's favour.  In a number of circumstances, I have seen glossy brochures inferring high quality, but the product that is delivered is low quality.  For this reason, I always take that view that off-the-plan pricing should be less than current market pricing to take into account this risk.  Unfortunately, most developers are selling apartments off-the-plan at prices that are higher than you could buy an existing similar apartment -- the only difference being age.

An agent I spoke to recently who was selling off-the-plan informed me that his competition was not other new developments, but resale apartments in recently finished buildings by the same developer.  He said the price of the resale apartments was about 15% less than his almost identical new, under construction apartments.  And buying an existing apartment is way less risky than purchasing off-the-plan.

Sunday, November 4, 2012

To buy or not to buy a Queensland Unit?

See here for a transcript of a conversation with property analysts, as to whether it is too risky to buy an apartment in Qld due to the changing strata laws and levy entitlements.

Sunday, July 22, 2012

Hilton Gold Coast - Huge Number of Crashed Contracts

A number of years ago, I "awarded" the Hilton Residents on the Gold Coast as one of the worst apartment investments in SE Queensland.  See prior posts.  A number of years ago, there were many press releases about how successful the development was, and how many sales were made off the plan to investors.  I could not figure out who was buying these apartments, or why, as this development was not in a prime location, and surrounded by vacant shops and topless bars.

Now it has come to light that many of the investors were from outside Australia, and more than 100 purchasers have failed to settle (or about 25% of buyers).  Values have dropped dramatically, with apartments sold off the plan for $1.4M now valued at about $800,000.  (This book would have been helpful to these buyers.)

A number of purchasers who did settle have not put their apartments into the onsite rental pool with Hilton, and offsite agents are making under the name "H Residences".  This shows that rental returns are likely to be poor.

Many apartments on the Gold and Sunshine Coasts have decreased in value since 2008.  I know of a recent Juniper beachfront apartment that was sold off the plan for over $1.4M, that remains unsold today at $800,000.

See also this article.

Friday, July 20, 2012

Q1 Trademark

A recent interesting Federal Court decision in favour of Mantra, that decides that the onsite manager can own a trademark for its letting business, even if the trademark is similar to the building name.
See Mantra IP Pty Ltd v Spagnuolo [2012] FCA 769 (19 July 2012):
"Like the Chifley Tower, “Q1” was a sign devised by Sunland, a private entity, to, among other things, signify or name its private building development. When it chose the sign “Q1”, it did not adopt or incorporate a geographical name such as that of an established town, suburb or district, like Surfers Paradise, or the Gold Coast.  ... From this history, I do not consider there is any basis upon which any trader could claim to have any “common right of the public” to make honest use of the sign “Q1” as a trade mark. Put differently, there is nothing about the sign “Q1” that could be said to bring it within the “common heritage”..."

Friday, June 15, 2012

Oracle Buyers Loose Appeal

A number of off-the-plan purchasers for The Oracle development at Broadbeach refused to settle.  One reason they gave for their refusal was that Peppers purchased the management rights for the complex.  The purchasers lost their appeals today.  There were two decisions, Gough, and Walsh.  See also Courier Mail.

"... there is little support for the conclusion that, in addition to the role played by the Oracle name in identifying the apartments to be sold and purchased, there was also a promise by the vendor that Tower 1 be known or described as The Oracle at the date of completion. If such a promise existed, it needed to be inferred and the inference, if it could be drawn, was far from obvious.  ...  For the above reasons, I would order that the appeals be dismissed and that the appellants’ pay the respondent’s costs of the appeals, including reserved costs if any, on the indemnity basis."

The main reason the buyers did not settle was because the apartments dropped significantly in value between contract signing and settlement.  That is a risk of buying off-the-plan, and is not a ground to refuse to settle.

Friday, April 13, 2012

Another Big Loss For Off-The-Plan Buyer

Many buyers in Niecon's The Oracle development at Broadbeach purchased off the plan and failed to settle.  A recent court decision shows the losses that an off-the-plan buyer may suffer if the buyer does not settle.

Purchase price for apartment 601 - $1,010,000
Plus holding costs & interest from settlement until court judgment - $196,631
Less estimated net proceeds if sold today - $700,000
Plus agents fees to sell - $29,645
Plus legal fees to sell - $2,200
Less Deposit - $101,000
Total owed = $437,476, plus interest at 12% until this is paid, plus legal costs of the lawsuit.


So this buyer lost a total of at least $538,476, which is more than 50% of the contract price for the apartment, and didn't get the apartment.  Note that the valuation of the apartment dropped 30%.  Take care when buying off the plan.  (And read this book first!)

Wednesday, December 21, 2011

Off-the-plan craziness at The Oracle

Here is an interesting but sad story about a teacher's aid, who signed an off-the-plan contract in 2006 to purchase an apartment in The Oracle at Broadbeach for $940,000, plus stamp duty.  Unsurprisingly, she was unable to settle and then unsuccessfully sued the developer (Niecon) to get out of the contract.

"She explained that she did not have the funds to settle and that the matter had cost her $7,500 in bank guarantee fees. She explained that she had a mortgage of around $100,000 on her $300,000 townhouse, was in her mid-50s and earned about $550 per week as a teacher’s aide. She asked to be let out of the contract and explained the difficulties that she had in meeting the required deposit of $94,000. She explained that she had brought up her children without maintenance from her former husband and saw the investment in The Oracle as a way of finally getting ahead by using the equity in her home as the deposit."

In early 2010, before completion of the development, she listed the property for sale at a price of $1.28 million. "This price was selected because it would enable her to cover the purchase price, stamp duty and agent’s commission. However, the price of $1.28 million was unrealistic in the light of the global financial crisis and its impact on property prices, even though Ms Ryan had the hope that such an iconic building would not be affected as other parts of the market had been."

What a crazy thing for this person to do.  Why would anyone in their right mind who was earning $550 a week sign a contract to purchase a Gold Coast apartment for about a million dollars?!

See Decision, at paragraph [326] and following.

Sunday, December 4, 2011

Short Term Only

Some apartment buildings are built for residents, but are used for short term stays (hotel style accommodation) that causes problems for residents.  Some apartment buildings are only built for short term stays, and are trying to keep out long term tenants and owner occupiers.

"Quest on Story resident Cameron Green said that unless he and the owners of another eight apartments in the inner-city Kangaroo Point building could find the money to fight a legal battle, they would be out on the streets.

The residents bought their homes unaware that under the town plan they could only be used for short-term stays.

In many cases the apartments were advertised as suitable for first home buyers, the new owners received first home buyer's grants and in all cases solicitors carried out all the relevant searches."

Saturday, August 20, 2011

Tennyson Reach Contract Cancelled Due to Flood

Mirvac lost a legal battle in the Queensland Court of Appeal this week, in relation to an apartment at Tennyson Reach that flooded in January. Mirvac had two senior counsel to argue this appeal - it flew up Alan Myers QC from Melbourne and also used a local Senior Counsel -- both very expensive barristers. But that did not assist. The buyer was allowed out of the contract. See Judgment and The Australian.