OMB Solicitors

The Difference Between the Two Types of Registered Plans in a Body Corporate and how the obligations of maintenance differ between them.

In this video, Body Corporate Solicitor, Elisha Quigg discusses the differences between a Standard Format Plan and a Building Format Plan in a Body Corporate and how the obligations of maintenance differ between these two types of registered plans.

Contact our Gold Coast Lawyers team for more information here Body Corporate Enquiries.

Section 163 of the Body Corporate and Community Management Act 1997

In this video, OMB Solicitors‘ Partner, Juliette Nairn discusses Section 163 of the Body Corporate and Community Management Act 1997.

Contact our Gold Coast Lawyers team for more information here Body Corporate Enquiries.

In this video, Tom Robinson, Associate at OMB Solicitors within the Body Corporate team talks about the different types of resolutions that may be considered at General Meetings including how they are calculated and when do they apply.

Contact our Gold Coast Lawyers team for more information here Body Corporate Enquiries.

Transcript

Hi, I’m Tom from OMB Solicitors, I’m an Associate here in our body corporate team and today I thought we’d talk about general meeting resolutions, what are they? Which ones? How many do we have? When do they apply, and also how do we calculate them?

But I also wanted to touch on poll voting as that tends to form part of the types of resolutions that are considered at a general meeting. Now, it may seem like a simple topic, the general meeting resolutions and the types that we have, but I do get quite a few queries from lot owners and committee members about when those types of resolutions apply, but also how they’re appropriately calculated and I guess the reason we tend to get a lot of these queries is when there obviously is a disputed motion.

So how many of these resolutions do we have for a general meeting? Keeping in mind that a general meeting is either your annual general meeting, which must be held once a year, or an extraordinary general meeting which can be called at any time throughout a body corporate’s financial year. There are four types of resolutions for a general meeting.

The first and the most common is an ordinary resolution. The second that we tend to hear about more commonly is a special resolution. Then we have resolutions without dissent, and the most uncommon resolution being a majority resolution.

So starting with an ordinary resolution being our simplest form of resolution, it is our starting place for all general meeting resolutions is put at an AGM or an EGM. Specifically, you start with any motion that goes to a general meeting being an ordinary resolution, unless the legislation specifically states otherwise.

So, an ordinary resolution applies to pretty much anything unless it’s specifically stated otherwise and it’s calculated by determining that there are more yes votes than no votes. So pretty simple, if we use a basic example of 20 people vote on a motion, we need 11 or more votes in favour of the motion for it to pass.

Moving on to resolution without dissent, this is a type of motion that cannot have a single dissenting vote against it. So using our example of 20 people vote on a motion.

Now, extensions don’t apply to any motions, they are not calculated, they are recorded that an owner has decided to not vote on a motion, but they do not go towards yes or no votes, and assuming that all these votes are valid, if we look at a resolution without dissent and 20 people vote on the motion, you’ll need all 20 of those votes to be in favour of the motion.

If you have a single dissenting vote, the motion will fail. So when do our resolutions without dissent apply? Is the most common time is when we are recording the allocations of exclusive use or long term leasing or licensing of areas or the whole of common property.

That disposal of common property will require a resolution without dissent and of course, our legislation specifically states when a resolution without dissent is required for those types of matters.

One important thing to remember about a resolution without dissent is that even if a lot owner is unfinancial, keeping in mind that if an owner is unfinancial, they are restrained from exercising their vote, but on a resolution without dissent, they can actually exercise a vote.

But it’s the only time that they can exercise it whilst they’re unfinancial and only if it is a resolution without dissent. So that moves us on to majority resolutions, sounds very similar to ordinary resolutions, but is actually quite different.

It’s also the most uncommon type of resolution we come across, and it’s really only used in very, very limited circumstances. The most common circumstance that it is used is when a letting agent is transferring its management rights.

Now, that’s not a usual sale or transfer of management rights, but rather when the letting agent is transferring its management rights. That requires a majority resolution at a general meeting. Now, to calculate a majority resolution, it requires at least 50 % of the total number of lots of owners entitled to vote, to vote in favour of the motion.

So sounds pretty confusing when we say it out loud like that. But basically, if we take an example of having 20 owners vote on the motion, we need at least 50 % of the lots to vote in favour of it.

So let’s say the scheme is 20 lots, or let’s say they’re 50 lots actually, let’s say we’ve got a 50 lot scheme, but only 46 lots by way of their owners can vote on the motion, assuming, let’s say in this example, four of those owners are either unfinancial or haven’t submitted their corporate company nominee forms, then you need at least 50 % of the total number of lots entitled to vote being 46.

So in this instance, we’d need more than 50 % of 46 being more than 24 votes in favour of the motion. That is how we determine a majority resolution, now, that doesn’t matter how many dissenting votes there are, even if there are none, you still need to have more than 50 % of the total number of lots.

So the main difference here between a majority resolution and an ordinary resolution is we’re talking about lots in a majority resolution versus the actual votes cast in an ordinary resolution. That now leads us on to special resolutions.

Now, the reason I’ve left this one last is because it is generally the most complicated one to calculate, mostly because there’s three aspects to it, and each of those aspects must be achieved in order for the motion to be passed.

A special resolution is most commonly used when we record a new CMS recording new bylaws. Now, that’s not recording exclusive use bylaws as that requires a resolution without dissent, but just your general day to day bylaws. How do we calculate it? There are three aspects, as I said. We’ll use an example of a hundred lot scheme this time.

The first aspect is you must have two thirds of all votes cast in favour of the motion. The second aspect is you cannot have more than 25 % of the number of lots voting against the motion, and the third aspect is you must not have more than 25 % of the combined contribution lot entitlement of the dissenting votes being more than 25 % of the total contribution and entitlement for the entire scheme.

Now, I’ll explain that through the next example using 100 lots. So looking at the first aspect and our 100 lots example, let’s say 50 votes were cast in the motion. So if another 50 owners didn’t vote, only 50 out of 100 lots voted on the motion. We need two thirds of 50 votes to be cast in favour of the motion, so we need 34 or more votes in favour of the motion.

If we get that, that’s the first aspect ticked. The second aspect is we can’t have more than 25 % of the number of lots. Now, again, we’ve shift from votes cast to lots. So 25 % of 100 lots is 25. So we can’t have more than, in other words, 26 in this example, votes against the motion.

Assuming we don’t get that again and we’ve ticked that requirement, the last one is the contribution requirement. What we need to do is we need to calculate the combined contribution lot entitlements for all dissenting votes, if there are any, and make sure that that total combined contribution of those dissenting votes do not total more than 25 % of the scheme’s contribution total.

As a real basic example, let’s just assume that this 100 lots scheme, all 100 lots have an equal contribution of one. Then again, you couldn’t have more than 26 %… Sorry, 26 contribution lot entitlements totalling the dissenting votes cast against the motion.

So it can be quite a complicated resolution to calculate. I also hear quite a few variations of a special resolution, I hear the 75 % rule and other aspects for three quarter rule, which is actually quite incorrect. So it’s important to know not only how we calculate this motion, but obviously when it also applies.

Those are the four types of resolutions. What also sometimes complicates matters even more is when we’re at a general meeting and someone decides to put their hand up when a motion has failed and they say, I want a poll vote.

So what is a poll vote? When can it apply and how is it exercised and calculated? So a poll vote can only be exercised on an ordinary resolution, so our most common resolution, as long as it is not by secret ballot.

So it has to be an open ballot, ordinary resolution motion, and the person who requests the poll vote must not only be entitled to vote on motions at that meeting, but they must also physically be present at the meeting.

Now, the way that it’s calculated is to whether or not a poll vote will overturn a motion. Use an example, again, of 20 lots, if a motion is defeated because there was 12 no votes versus eight yes votes, if one of the owners who are in the minority being one of the eight owners who voted yes, request a poll.

If the eight owners who voted yes, if their total combined contributions are more than the total combined contributions of the 12 owners who voted no to the motion, then the motion will actually be overturned and deemed passed. So the poll vote can also put a bit more of a spanner in the works when we have our general meetings, especially when we’re dealing with the different types of resolutions.

But if you ever have any questions about your resolutions, when they apply, how they’re calculated, and some of them are complicated, please do not hesitate to contact myself or another member at OMB Solicitors, and we’d be pleased to help.

What are 5 of the most frequently asked questions regarding Building Management Statements?

In this video, Body Corporate Solicitor Elisha Quigg talks to us about the BMS document and what it all means for Body Corporates.

Contact our Gold Coast Lawyers team for more information here Body Corporate Enquiries.

Transcript

Hi everyone, my name’s Elisha Quigg (Hodgson), a solicitor at OMB Solicitors. Today I’m going to be talking to you about five frequently asked questions in relation to building management statements.

Now, this topic is particularly relevant for our body corporate managers and our lot owners who pick up this document called a BMS and ask the question, what is this document? So the document is a recording of all of the information and the relationship between the commercial and residential components of a building.

Now, there could also be other components such as retail, which would have separate BMS’s. But what I’m going to be talking about today is the relationship between a building which has both residential and commercial components.

Now, the first question probably is, what is a BMS? So the building management statement is a document which sits over the top of those two schemes, the residential and commercial and what it does is it records the relationship and all the management covenants, which both benefit and burden those schemes.

Now, some of the management covenants include both insurance obligations in respect of the building, services utilities, such as electricity, plumbing, shared facilities such as storage facilities, or even car parking or garages, and any other management of that particular building.

Now, with the BMS, it is important to note at the outset that this document isn’t governed by the Body Corporate and Community Management Act. It’s actually governed by the Land Titles Act. So if you pick up your building management statement, you’ll see on there at the top left hand corner, it will show you that it is registered pursuant to the Land Titles Act.

Now, the BMS is essentially a contract, it’s a contract between the residential component of the building and the commercial component of the building.

Now, there are a lot of management covenants that you need to consider in the BMS, which can be quite particularly onerous for individuals to try and understand and manage, and this is what leads me to the first question is, who manages the BMS?

So the BMS is managed by generally representatives of both the commercial and the residential component of the building. Those representatives have particular guidelines in the BMS in relation to how to raise levies, how to appoint contractors, how to call meetings, and as well as how to resolve any dispute resolution, disputes within that building.

Now, it can be quite onerous for those two individuals to manage the entire scheme on behalf of those two entities. Now, that’s why it leads me to my next question in relation to, can you get any assistance with appointing perhaps a body corporate management company or a building management services to actually assist with that process?

Now, the answer to that question is yes, however, it’s not a particularly straightforward answer. So with the building management group, which is the two representatives appointed from those two schemes, there is no actual ability for those two individuals to go ahead and sign contracts, enter into administrative agreements in their individual capacity and the reason being is that they’re not actually a separate legal entity.

So the building management group is not a separate legal entity that is capable of entering contracts, capable of suing, or capable of being sued. The only way in which a decision to appoint a body corporate management company or a building management company to assist with the management of the BMS is if you get the agreement and you get the stamped, sealed, signed administrative agreement by both the residential and the commercial component.

So all of your agreements need to be agreed to unanimously by the two entities. So this sort of leads me into the next frequently asked question, and that’s in relation to opening a bank account. Now, it’s all well and good for the two representatives of the building management group to trot along down to the bank.

Now, the bank’s going to ask them, okay, so who’s the entity who’s opening up this bank account? They’re going to look at each other and go, oh, can we open it in our name? Well, that’s great, but that means all the funds are going to be going into those individual representatives.

So the way in which the bank account actually needs to be opened, is it will be opened in the name of the Body Corporate for residential and the Body Corporate for Commercial trading as the building management group, because that gives the actual entity being those two individual schemes, the residential and the commercial.

So it isn’t entirely straightforward and it’s important that you can understand that it’s not just the two representatives forming the building management group. It is actually the individual schemes entering into these agreements as well as opening these bank accounts.

Another way that you can get around opening up a bank account is if the building management group, so the representatives of the BMS, come together and make a decision in relation to incorporating the building management group into a separate legal entity.

Now, this can be achieved, but is only recommended in circumstances where you have quite onerous obligations under the building management statement, because there are quite a number of requirements to comply with if you are going to incorporate your building management group into an incorporated association.

So another frequently asked question that we get is in relation to dispute resolution under the BMS. This is quite a complicated issue and as a first point of call, we always tell our body corporate managers or our lot owners to go to the BMS and to read the terms.

If there is a disagreement about, for example, the apportionment of who’s paying for the cleaning of the garage, then simply the first point of call is always to read the overriding document, as that is the contractual agreement between the residential and commercial.

Now, if there is a dispute, there are specific dispute resolution provisions provided for under the BMS. However, it depends on the circumstances of the matter. But in some instances, if there is a dispute, generally what will happen is we will send a notice of dispute and then it will be referred to adjudication.

Now, the parties need to agree on who the adjudicator is, and my opinion is, if they’re already in dispute, how are they going to agree on anything else?So quite, quite often we see circumstances where the matters referred to dispute resolution, but they end up butting heads and they can’t agree on a particular issue and the matters then referred to a court of competent jurisdiction.

So that is just the general process that we see. It is all well and good if you have two representatives that form the building management group, making these decisions and trying to resolve matters amicably.

But quite often what we see, what happened is even if an adjudicator makes the decision, it then has to be enforced and the only court that is able to actually enforce an adjudicator’s decision is in a court competent jurisdiction.

So you might find yourself in either a Supreme Court, District court, Magistrate’s court, depending on the circumstances. But in any event, we always recommend the starting point is read your BMS and try and resolve the dispute and if you’re having any trouble, contact a solicitor to give you some advice and some guidance about how to enforce or how to enforce the BMS, or also how to resolve any disputes involved.

So some of the issues that we’ve discussed today in the frequently asked questions included, well, what is a BMS? Who can manage the BMS? Can you enter into agreements in relation to the BMS? Dispute resolutions and how to deal with that? And also setting up the BMS generally.

Now, there are a whole range of issues in relation to BMS’s, which I won’t go into detail today. But if you do have some specific questions or you have a funny circumstance or there’s some type of interpretation of your BMS you’d like some clarity on, please don’t hesitate to contact our office, we’d be more than pleased to have a quick review and to to give you some advice or some guidance if required.

So if you’d like to contact OMB, please do so, our number is (07) 5555 0000. Thank you.

What are the steps Bodies Corporates can take to deal with Nuisance Communication

In this video, Body Corporate Solicitor Elisha Quigg talks about a case law to illustrate the issues for Bodies Corporate when facing Nuisance Communication.

Contact our Gold Coast Lawyers team for more information here Body Corporate Enquiries.

Transcript

Hey guys, Elisha here from OMB Solicitors. Today, I’m going to be talking to you about nuisance communication, particularly with respect to the day to day management of a body corporate.

Now, quite often, volunteer committee members and our wonderful body corporate managers come across a nuisance lot owner, there’s a lot of things that you can complain about living in a body corporate; your neighbour’s got the TV up too loud, or the child downstairs is screaming in the hallway.

But there’s a fine line between when that communication and the complaints made to your volunteer committee members and body corporate managers become nuisance in itself. A couple of cases that have been handed down by the Commissioner in the Body Corporate Community Management Commissioner’s office deals particularly with this area.

So I thought, what a good opportunity to have a video podcast today to give you an idea of, what is nuisance communication and how can we deal with it? So with nuisance communication, it’s best to first look at the recent case law.

So there’s a couple of cases which can help us out in identifying what is nuisance communication. The first being Tank Tower, now, that is a little bit of an older case, but it’s quite important.

In that case, there was a lot owner who was sending voluminous amount of material to the body corporate manager and the caretaker, often several emails in a particular day and that communication was not only repetitive but also quite threatening and offensive.

So when we’re thinking about, okay, this communication has come in and it’s becoming quite repetitive, or the tone is not very nice, or it’s quite threatening in nature, have a think about what you might be able to do with that.

Another case is Deagon Village, now, that’s a more recent case. This case in particular, involved a lot owner who was sending, again, voluminous amounts of material to the body corporate manager that was both aggressive, threatening, and really the allegations that were made in that correspondence was quite baseless.

Now, often in that position, you have to think to yourself, well, what can I do about that and how can I deal with this sort of communication? Now, those cases both found that nuisance communication had occurred, and the adjudicator eventually found that certain restrictions would be imposed on that particular lot owner as to that communication.

Now, if you’re in this position and you find that you’ve got a nuisance lot owner that’s consistently harassing you, sending both voluminous, repetitive, and threatening email correspondence or telephone correspondence communications, then these are some of the things that you might need to think about.

Number one, so if you are receiving this type of communication, what can you do about it? Well, there’s a couple of tips and tricks that we recommend that you implement into your own practice as the daily management of a body corporate to ensure that you can deal with this effectively and not to utilise all the resources of the body corporate in dealing with this sort of communication.

Now, firstly, it’s important to note that in the adjudicator’s office, the ability to bring an action against an individual lot owner for nuisance communication can arrive in a couple of ways, and that is either enforcement of a bylaws.

So for example, in Tank Tower, there was a bylaw in there that said that if there was any nuisance communication, then they would essentially be in breach. Now, the body corporate relied upon that bylaw to actually commence an action.

But in that case, the Commissioner also considered the Section 167 of the Body Corporate and Community Management Act in relation to nuisance. Now, the application of that specific section is quite narrow, it basically says that if a lot owner causes nuisance or interferes unreasonably with the use or enjoyment of another lot included in the scheme, or if that nuisance communication was within or lawfully on common property, then they would be found in breach of the legislation.

However, what happens if this communication isn’t occurring in the lot property or common property, but rather, let’s say, an investor from overseas who’s got a property in the scheme. Well, their communication isn’t technically within the scheme, but it is directly related to it.

So in Tank Tower specifically, there was an issue in relation to whether or not that section actually applied. Now, this is where Deagon Village, the new case handed down by the Commissioner’s office is quite important because in Deagon Village, this was a case where there was no body corporate bylaw relating to nuisance.

So essentially the body corporate had to rely upon the provision of Section 167 of the Body Corporate Community Management Act in order to bring an action, and given the communication in that case was between a lotter and who was off site and also a caretaker, well, there was some question about the actual enforceability of that section of the act.

Nevertheless, it’s important that I identify it to you that this case was quite successful because even though the Section 167 wasn’t necessarily applicable in this situation and there was no bylaw, the adjudicator still found that number one, nuisance had occurred, and number two, that to ensure that the resources of the body corporate were being used in a way that would achieve the overall objectives of the legislation.

Then they actually found that restrictions should be imposed upon that lot owner, and these restrictions included things like the minimum word count on an email when communication can be made to the body corporate or their representative and the like, so Deagon Village is a really important authority which can really help us assist our body corporate managers and volunteer lot owners if they come into this situation.

Now, we don’t like going into adjudication if we can avoid it. So here are a couple of tips that can help you in ensuring that you avoid having to go to adjudication, but you can still deal with these nuisance lot owners.

So number one, we would recommend that if it’s not already included in your community management statement, just update your bylaws to include a nuisance bylaw, it just makes the process a lot easier. Number two is implement a communication policy within the body corporate.

If you circulate this communication policy, it’s going to give your lot owners an understanding of how you wish to communicate and what is acceptable or not.

That’s also going to assist us in any future adjudication if we need to go down that step, and of course, in the worst case scenarios, there is an option there by virtue of Deagon Village, that if you do need to take steps further, then you can seek some orders that are made in the adjudicator’s office, the Commissioner’s office.

So there’s a couple of tips to help you with dealing with these lot owners. If you have any questions at all about how to deal with nuisance lot owners, or you would like some assistance with drafting motions or amending bylaws, then we’ll be more than happy to assist you with that process.

I hope you have a wonderful day.

What are these new developments for Levy Recovery?

In this video, Body Corporate Associate Elisha Quigg talks about legislation as it was applied to a case matter to illustrate the issues for Bodies Corporate when facing Levy Recoveries.

Contact our Gold Coast Lawyers team for more information here Body Corporate Enquiries.

Transcript

Hi, everyone. My name is Elisha Hodgson, I’m a solicitor here at OMB Solicitors. Today I’m going to talk to you about body corporate levy recovery, and specifically, I’d like to touch on the litigation process and when we institute proceedings, what are the steps that are taken in our process?

The legislation surrounding the recovery of contributions owed to a body corporate is the Body Corporate and Community Management Act and the applicable standard accommodation and small schemes modules applying to that scheme.

The legislation indicates how we can recover contributions, and we need to follow that meticulously in our processes. At OMB Solicitors, we have prepared and we have perfected a process in recovering outstanding contributions owed to a body corporate and I’m going to explain to you how that process works.

When we receive initial instructions from the body corporate, it is usually in the form of instructions requesting a letter of demand to be issued. This is always our first port of call and we always review the matter entirely before we issue that letter of demand.

It’s important to understand who the lot owner is, what their financial status is, and a bit of the background about where they’re currently residing, and any contact that has been made prior to the matter being referred to our office.

Once a letter of demand is issued, we then allow an opportunity for that debt to be paid. If the debt’s not paid, a quick phone call doesn’t go astray, and we also touch base with the body corporate manager and the committee, if need be, to get an indication of whether or not they’ve had any contact with the lot owner.

It’s always our recommendation, though, that if the lot owner does reach out to the body corporate or the body corporate manager when it is gone to legal, that they refer all that correspondence to our office to deal with appropriately.

Once a letter of demand has expired, the next step is a claim and statement of claim. Now, the claim and statement claim is always lodged in the magistrate’s court, which is the court that has jurisdiction to hear the matter.

If the claim and statement of claim is not responded to within 28 days, then a default judgment can be applied and the body corporate can then go ahead and enforce that judgment. Often we find some issues in relation to service, so once a claim and statement claim is filed, we then have to proceed with service.

We’re finding more and more regularly across our desk issues in relation to service, which we either progress to an application for substituted service, where we substitute serving the claim and statement of claim personally by instead doing it by way of another method that will bring it to the attention of the defendant.

So once the claim and statement of claim is filed and served, we can then progress to default judgment, and that is usually how the process works. In the middle, sometimes we get contact from lot owners in which we would try and facilitate payment plans if the circumstances allow for it.

What happens then if we do file a claim and statement of claim, it’s then served on the defendant and we don’t hear from them, but instead we get a defence filed in the proceedings. Well, that’s when it comes across my desk, so defendant levy recovery is a process in which I manage here at OMB Solicitors with the watchful guidance of Juliette Nairn.

In that process, once the defence is filed, the body corporate then has 14 days to file a reply, and essentially what that reply is, it is a document which responds to any new allegations raised in the defence.

Once the reply has been filed, we quickly set the matter down for a compulsory settlement conference in the court to see if we can resolve the matter in a practical sense. Nine times out of 10, the matter is finalised either prior to a final hearing or at the settlement conference stage.

But if it does have to progress forward, there are a number of steps that need to be taken, including disclosure, and then a request for trial date and trial. That is a short snippet of the process in relation to the recovery of contributions from a lot owner and what you can expect in the court resolution process.

If you do have any questions about our processes and how it works and what we’re required to comply with in terms of our rules with the court, please don’t hesitate to ask us any questions that you may have, or if you have any particularly difficult matters.

For example, you can’t arrange for service or you’re having trouble contacting the defendant or you don’t know where they are, we’re very good at locating those defendants and trying to resolve the matter in a commercial manner with the most minimum cost to the body corporate.

What are Body Corporate Assignments & Variations of Management Rights?

In this video, Body Corporate Associate Tom Robinson talks about Assignments & Variations of Management Rights and what it means to ‘vary and ‘assign’ them.

Contact our Gold Coast Lawyers team for more information here Body Corporate Enquiries.

Transcript

Hi, I’m Tom Robinson from OMB Solicitors, I’m an Associate here, and today we’re going to talk about assignments and variations of management rights. I thought a good starting point would be identify exactly what we’re talking about when we talk about management rights.

Specifically, when we mention management rights, we think of them as a bit of a package deal. So, usually, management rights consist of a caretaking agreement, a lending agreement, and then also a caretaker’s law. Now, an assignment or variation of those management rights essentially happens when a request comes through from usually the current caretaker.

Starting with assignments, the legislation framework deals with how assignments can occur and the rights are behind that with respect to a caretaker being able to assign those rights, and essentially that’s exactly what it is, it’s a transfer of the ownership of the management rights from one or the current caretaker to a proposed purchaser.

So there’s normally three parties involved in that transaction; the body corporate, the current care taker being the seller, the proposed new care taker being the purchaser. What usually occurs in the first instance is the caretaker solicitors, so the seller, will send a covering letter to the body corporate, which will enclose certain documents.

That request will be a formal request for the body corporate to consider giving its consent to that transaction. That consent can’t be unreasonably withheld by the body corporate, but the body corporate can certainly have consideration to a number of of factors.

What usually comes behind that letter is also a deed of assignment, a motion, and then some resumes and references. Once that comes across, it’s important for the body corporate to consider getting its own independent legal advice.

The reason this is so important is not only because the caretaker and the seller or the purchaser are both represented by their own independent lawyers. The documents are therefore drafted by those lawyers and they’re legally binding on the body corporate, but also because the cost associated with the body corporate considering an assignment transaction are actually paid for by the outgoing caretaker.

So there’s no real reason why a body corporate would not get legal advice to ensure that what they’re voting on and the terms of that deed of assignment are in the best interests of all owners. So taking that into consideration, those documents have come across, the body corporate’s got their lawyers engage in the due diligence process starts.

Part of that process will usually be obtaining further information. Such documents might include police checks, bankruptcy searches, letting licences, and any amendments to the terms of that deed of assignment.

Now, the reason that’s so important is to make sure that the body corporate, when it’s going to determine that motion to consent to the assignment, they have all that information that they believe they reasonably need.

That can also include, obviously, an interview occurring. An interview can occur between the committee and the proposed purchaser, but it can also be done by an independent facilities management company, and that’s a decision for the committee to make.

On that point, it’s always important to remember, in an assignment matter, the committee can make the decision on behalf of all owners, they don’t have to, it can actually go to a general meeting, but it’s very common for a committee to make that decision because it’s quite easy, they can do it, and they normally get all the information they need.

Now, once that process has gone through, all the information is received, they’ve had an interview, the committee is happy and there’s no concerns, then the next step is preparing for settlement, and that starts with the consideration of the motion. So the committee will then determine that motion subject to it being resolved.

Then, the deeds and so forth will then be prepared and the committee can execute those deeds. They’ll then go through a process of stamping, settlement will be scheduled and the body corporate will obviously ask for either the caretaker’s solicitors or the purchaser’s solicitors to act as their own paid agent, and then settlement will occur.

At that time, checks will be drawn and provided to the body corporate along with a signed deed, and that’s your assignment transaction in a very simple nutshell. The main difference between though an assignment and then a variation is that the variation is obviously that varying the rights and the terms of the agreements themselves.

When we think about these variation matters, similar process as where they start is the same as the assignment matters, whereby a request by the current caretaker will come across and that will include the covering letter, a deed of variation, and a motion.

There might be some other documents provided as well, depending on what is required for that specific type of variation. But again, the transaction is only going to be between the current caretaker and the body corporate. So there’s only the two parties in this instance and the body corporate is requested to consider entering into that deed of variation.

That motion must be put to a general meeting, though, so it’s considered a lot owner’s motion. So one thing to always check is whether or not the motion is submitted by the caretaker, if they are a lot owner, or if they’re not a lot owner, who is the lot owner that’s submitting that motion?

Once that motion is put forward, it must be put to the general meeting and it will ultimately be determined by the owners. The deed of variation can be an important time for a body corporate to consider any other amendments, and that is obviously going to be a negotiation with the caretaker and of course, that means both parties need to agree.

Ultimately, if the motions put by the caretaker, it will be put in the form that it’s submitted and the owners will determine that motion. The important thing to remember is obviously in these transactions, when that advice or that initial letter comes across to the body corporate, the body corporate should consider getting its independent legal advice.

The reason that’s so important is, again, this is a legally binding document that’s drafted by the caretaker solicitors and the body corporate has a responsibility to obviously act reasonably and act in the best interests of all owners.

So costs and the variation are a little bit different to assignments, there’s no requirement for those costs to be paid by the caretaker, but it’s common that they are.

At the end of the day, it’s a relatively small fee for a body corporate to get that independent legal advice to make sure that the motion, the deed of variation, that anything else that is circulated with those documents are appropriate and valid.

So if the motion is resolved, then the body corporate is obliged to enter into those documents. Same sort of situation, the general meeting will occur, the motion will be voted on, and then ultimately the body corporate will be obliged to enter into that deed of variation if the motion is resolved and that would be the end of a variation matter, and that simply forms part of a historical document for the management rights.

Quite a lot to take into consideration with respect to variations and assignments, obviously, two different types of transactions, but very common.

They can occur simultaneously at the same time and they can occur separately. OMB solicitors, obviously, we deal a lot with these types of transactions, we act exclusively for bodies corporates. So if you are going through one of these processes at the moment, please do not hesitate to give us a call.

What are some of the issue facing the Body Corporate in regards to Insurance – Workers Compensation Related?

In this video, Body Corporate Associate Tom Robinson talks about these insurance-related issues when Body Corporate Committees are dealing with caretaking arrangements.

Contact our Gold Coast Lawyers team for more information here Body Corporate Enquiries.

Translate

Hi, I’m Tom from OMB Solicitors, I’m an Associate in our OMB Solicitors body corporate team and today I thought we’d have a bit of a discussion about body corporate insurance.

Specifically, though, I’d like to focus on workers compensation insurance or work cover and volunteers workers insurance or voluntary workers insurance. The reason I wanted to bring up these two types of insurances is because we’ve had a few queries from some committees recently about the types of caretaking that they’re now undertaking at their schemes.

Now, the reason we’re talking about different types of caretaking is because we’re starting to see a lot of our long term management rights agreements come to an end. Now, these are the long term agreements that the developers entered into originally when they were the original owner on behalf of the body corporate 20, 30, 40, 50 years ago, and now they’re starting to come to an end.

So our body corporate is in the position especially with our smaller schemes, where they have an opportunity to explore other types of caretaking arrangements. So what we’re starting to see is a lot of these smaller sized schemes are developing and exploring these alternative options for caretaking of their body’s corporate common property.

Now, the reason this is coming about is, like I say, because a lot of these longer term agreements are coming to an end. But what they’re exploring is your shorter term engagements, some of them of which are actually on up to only a month to month basis.

So what this results in is your individual people like your Joe blogs down the road who’s coming in to maintain certain areas of common property. That’s how this comes into your workers compensation insurance, your work cover, and your voluntary workers insurance.

Now, the reason we’re bringing these insurances up is because when we look at our work cover insurance, which is under our Workers Compensation and Rehabilitation Act, is basically if you engage a person under a contract of service to do anything, then work cover insurance is required.

Now, whilst it’s usually only applicable to employees, it’s not necessarily a be all and end all in the sense that you can still include subcontractors and contractors in that arrangement depending on the specific type of engagement that is there.

Now, the reason I mentioned that is because a lot of our contractors, especially on a shorter term basis, might be under an individual and under an ABM, and in that instance, work cover insurance will need to be taken out, it won’t apply to your companies or organisations, hence why this is mostly applicable to our smaller schemes.

But what that does is essentially if someone comes onto the body corporate’s common property and performs work under a contract of service, the body corporate’s common property becomes a workplace and with that, we need to make sure the body corporate is protected in case there is an accident or injury or anything like that that happens on site.

That’s what the workers compensation or work cover insurance will protect the body corporate from. So the starting point is contact our insurer, contacting our insurer or our insurance broker and identifying, do we have workers’ compensation insurance in place? And if not, asking for a quotation for that amount of cover, which is usually a pretty nominal fee.

So there is no reason why a body corporate shouldn’t be looking at getting workers compensation insurance. Our advice is find out if you’ve got it, if you haven’t got it, get it unless you have a very good reason why you don’t need it. Now, what that leads into is then our voluntary workers insurance.

So voluntary workers insurance is a little bit different. It’s basically to protect the body corporate from anyone who attends on our common property and performs work or tasks that are of voluntary nature.

So that might be our keen activist lot owners who like to go out on site, do a bit of gardening, maintain the pool, change a light bulb in the stairwell, and things like that where we’re not asking them to do it and they’re not getting paid to do it, it’s completely voluntary.

But of course, that may set the body corporate up for liability for injury or worse if that person happened to injure themselves on the common property.

Now, voluntary workers insurance is usually included with the body corporate schemes insurance, but I have seen instances where it’s not, so it’s very important to contact our insurer again or our broker and make sure that we have that as an absolute minimum insurance in place.

Again, it’s normally just chucked in as part of your insurance policy, unless it was specifically requested not to be in there, which would be quite strange, then it should be included. But if it’s not, again, having it included, there shouldn’t be a situation where we don’t have voluntary workers insurance.

It’s a very nominal fee to have it included, like I say, it’s normally just part of your policy anyway, starting point, contact your insurer here and find out whether or not we have that insurance.

So I guess just in summary about these two types of insurances is with especially our smaller schemes where they might be employing or contracting individuals, or you’ve got committee members or owners who are quite keen to maintain areas of the common property, we have those appropriate insurances in place and that they’re sufficient to protect our scheme and our body corporate.

So as a starting point, contacting our insurer, finding out whether or not we have those insurances in place and if we do, if we don’t, sorry, why haven’t we is the question we need to ask and basically getting it and only not having it if there is a sufficient reason as to why.

Your broker should be happy with that if we obviously have brokers available, if you do have any questions about your insurance, of course, though, you can contact OMB Solicitors.

We’d be happy to have a look at those policies and let you know and provide your advice as to whether or not you have those insurances in place and guide you to the right areas to make sure that we have those insurances.

What are some of the By-Law Body Corporate Questions we get asked?

In this video, Body Corporate Associate Tom Robinson addresses some of the questions we are asked regarding Body Corporate By-Laws.

Contact our Gold Coast Lawyers team for more information here Body Corporate Enquiries.

Transcript

Hi, I’m Tom from the OMB Solicitors team here, and I’m an Associate in our Body Corporate team. Today, we were going to talk about bylaws and also the five frequently asked bylaws that we deal with.

Later on in the video, I’ll also be supported by Annaka Faulkner, who’s a paralegal in our Body Corporate team, to go through those questions. But I thought before we get started, we’d also look at a bit of the history of where we find our bylaws and why bylaws are so important.

Our current legislation is the Body Corporate and Community Management Act, otherwise known as the BCCMA. It came into effect in 1997, as part of that legislation change, it was a requirement that all bodies corporates in Queensland, registered or recorded with Queensland land titles a new Community Management Statement.

Now that CMS is the one and all document that is to include all information of a body corporate that’s generally required at any time, being the specific details of the lots of the body corporate, the survey plans, if there’s an exclusive use plans attached, contribution and interest schedule lot entitlements, but also, most importantly, our bylaws.

Before that, we were regulated under another legislation which is known as a BUGT or Building Units and Group Titles Act, where it didn’t really have community management statements, which means when we transitioned to our current legislation.

There was a three year interval that bodies corporates in Queensland, being every body corporate, was required to record this new CMS, and if they didn’t do that within three years, so by the year 2000, then the Queensland Land Titles Office would record a standard or default CMS.

That default CMS is only about a page long, doesn’t include a lot of information and has limitations with respect to the actual bylaws that are applicable to the schemes. But whereas those CMSs that we record since that time in the appropriate forms include your bylaws and are usually valid and forcible under the legislation.

When we have to look at those standards, one page CMSs, usually to actually be able to identify those bylaws, we have to do a number of searches, including a historical title search and then identifying if there have been any change of bylaws.

This can be quite a timely, long and costly process because there can be up to 10 or 20 of these change of bylaws documents, and even then, if we do all those searches and we piece together all of those bylaws, it can still be a matter of missing documents and things like that being the time that has passed.

So it’s very important for a body of corporate to check to see what is their current registered CMS, and then if we need to record a new one and move away from that default one page CMS, that is a priority for the body of corporate.

So we have that nice and new compliant one and all document of a new community management statement. So with all that information in mind, we thought we’d now discuss the five frequently asked questions that we come across in our working day to day basis.

One of the most common questions that comes across my desk and in our office is to do with the short term letting increase that we have in Queensland, specifically, Airbnb. What we usually come across is, are owners allowed to use their lot for a short term accommodation purpose? Or or can a body corporate restrict that?

The short answer to the body corporate’s question is no. A body corporate cannot restrict an owner renting or letting their lot on a short term basis. So the answer to the owner is yes, they can do that and they can operate their lot through Airbnb.

There are obviously council requirements that owners must ensure that they comply with when they go through a short term accommodation process. But that doesn’t mean the body corporate doesn’t have any ability to regulate the use of someone using their lot through Airbnb.

Specifically, what a body corporate might look at doing is putting bylaws in place that take into account the increase in nuisance or noise or use of recreational facilities in the body corporate due to that increase in short term letting.

Another question that comes across my desk quite often from owners and committees and body corp managers is how do we regulate alterations to lots and or common property?

Dealing with the common property aspect first, depending on the way the scheme is subdivided, we usually have two types of subdivisions in Queensland, being a building format plan of subdivision or a standard format plan of subdivision.

Under a building format plan or BFP, generally speaking the alterations to common property, which is generally the whole exterior of the building or buildings, is regulated under the legislation.

What we can look at regulating in the bylaws is just a bit of a replication of what’s in the legislation and taking it a little bit further to make sure that the aesthetics and the appearance of the scheme do not change without getting the appropriate consent required under a body corporate.

When we deal with lot renovations, that’s when it becomes a bit more specific, and again, dealing with it from a building format plan subdivided scheme, that’s the buildings and the bodies corporates that generally have more impact from lot renovations.

Specifically, your BFPS are more your townhouses that share joint walls or your high rises that have ceilings and floors that are obviously dividing lots. So, renovations to floor types, so hardwood flooring is always going to be an issue in terms of acoustic levels.

So as part of that, your bylaws are where you need to look at regulating how those types of renovations can occur. For example, dealing with hardwood flooring, you might need to get acoustic reports from the owner and so forth, certificates of certification, and all those matters can be included in the bylaws itself.

When we look at the legislation, it’s very limited in what it requires for any alterations to lot property. Rather, it only regulates that an owner must keep it in a clean and tighter condition. When we look at your standard floor plan lots, they are different from the perspective of usually the aesthetics or the exterior of the scheme is actually the lot owner’s responsibility.

So, they’re responsible for painting, replacing their roofs and all those matters because it’s contained within their surveyed lot area. From a bylaw perspective that, that exterior of the lot is an alteration to lot property and again is covered from that perspective of making sure that we don’t have a bunch of multi-coloured lots within our bodies corporate.

What I might do now is hand you over to Annaka Faulkner, who’s one of our paralegals, to talk about the other types of frequently asked bylaws that come across our desk in our office.

Hi, I’m Annaka Faulkner, and I’m one of the paralegals here in the body corporate team. One of the frequently asked questions that we get here at OMB Solicitors in relation to bylaws is whether a body corporate can legally tow a vehicle that has been parked illegally on common property.

The answer is yes, but under certain circumstances. The body corporate must obtain an order from an adjudicator in relation to towing. If you do not have an order from an adjudicator, you will not be able to tow the vehicle, your CMS needs to include a towing bylaw, which the adjudicator may rely upon when seeking an order in relation to towing.

Another frequently asked question that I get in relation to bylaws is regarding pets and how body corporate can regulate owners keeping pets within their lots. So a body corporate can regulate them through their CMS.

So the bylaws cannot be prohibitory in relation to pets, but they can set out specific conditions that lot owners must comply with in order to keep a pet inside their lot. Another frequently asked question that I get in relation to bylaws is communications.

We get a lot of questions in relation to owners sending copious amounts of correspondence, whether it’s to committee members, whether it’s to body corporate managers. A lot of them, they might send 10, 20, 30 bits of correspondence daily, weekly, so they are ways that you can regulate this.

You can regulate owners sending correspondence via your community management statement again, you have to make sure that you have a nuisance by law and a correspondence by law, which sets out certain conditions that owners can comply with in relation to sending in correspondence. In the instance that a owner breaches these bylaws, then you can issue contravention notices.

Those are our five frequently asked questions about bylaws that have been coming across our desks at the moment. But stay tuned for further podcasts and articles which will deal with how do we create enforceable bylaws that are not prohibitory or oppressive or unreasonable and valid and enforceable under our legislation.

But if you have any questions in the meantime, please do not hesitate to contact myself, Tom or Annaka from our office, and we’d be happy to assist you with any needs regarding your CMS and your bylaws. Thank you.

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