Articles

A number of lot owners have been asking “are my levies going to be reduced/discounted if the committee closes the gym”?

This question stems from the Government’s decision to close the use of recreation facilities in the public.

So what about a body corporate?

This article focuses on the operation of common property facilities during this Pandemic – that is, pools, gyms, BBQ facilities and surrounding areas.

Government Regulations and Restrictions

Common property facilities are technically considered part of the private property of a body corporate.

The Government imposed regulations and restrictions for public use pools, gyms and other facilities, have recently been amended to apply to bodies corporate and its facilities.

These restrictions are in addition to the Government rules relating to social distancing and prevention of spreading COVID-19. These rules apply to everyone and every household, apartment and in turn, your body corporate.

So what facilities must the body corporate close and are there any facilities or common property that a body corporate may keep open, subject to social distancing?

Regulation of Common Property Facilities in COVID-19 Pandemic

The starting point is that bodies corporate (and its owners and occupiers) should ensure they are each doing their bit to comply with the Government imposed regulations and restrictions to prevent the spread of the virus.

The decision to keep open or close areas of common property requires consideration of many factors.

Queensland Health has published (on 31 March 2020) an extensive list of non-essential business, activity and undertakings that must be closed.

A link to that direction is here.

A number of activities, which are considered facilities within bodies corporate, are now included in this list. We outline the main common property facilities that must be closed below:

1. Swimming pools;
2. Spas;
3. Barbeques;
4. Recreation rooms;
5. Gyms (indoor and outdoor); and
6. Saunas.

Regarding any other social sporting-based activities, these may still operate but that is limited to two (2) people with social distancing observed.

An example of this would be a common property tennis court.

If there are other facilities that are not required to be closed and a body corporate wishes to keep those facilities open, it may need to consider new regulation of the use of those facilities to comply with the COVID-19 restrictions. This is done by updating the scheme’s by-laws.

To amend the by-laws requires the body corporate to hold a general meeting (i.e. AGM or EGM).

If the facilities stay open, it is likely that the body corporate may need to consider additional and professional cleaning/sanitising of the facilities. This will be an additional expense.

Reduced Costs?

If schemes are required to close majority of their facilities – will there be a reduction in levies?

The short of it is that levies must still be paid by owners.

If a body corporate can reduce its maintenance costs of facilities, then it is likely the future levies may reduce due to a surplus evolving from what was budgeted.

Bodies corporate can consider managing any surplus by reducing levies for the next financial year or applying credits to owners’ accounts (especially against owners’ accounts that may have lost employment and are behind in payment of their current levies).

Otherwise, a body corporate can adjust the current levies (resolved at its last Annual General Meeting (AGM)) however, this will require the calling and holding of an Extraordinary General Meeting (EGM) to modify levy amounts. Careful consideration is required when considering this option.

Summary

Each body corporate will need to consider what is in the best interests of the scheme.

Bodies corporate should familiarise itself with the recent direction published by Queensland Health to ensure that they comply with the compulsory closure of facilities.

Fines will issue if there is a breach of these health directions.

Gold Coast lawyers at OMB Solicitors, we can assist those bodies corporate that wish to continue to provide facilities that are not required to be closed by preparing revised by-laws to regulate the use of the facilities in accordance with the Government regulations and restrictions.

Regarding the compulsory closure of non-essential activities/facilities, OMB Solicitors can assist in preparing correspondence to all owners and occupiers outlining that requirement.

Frequently Asked Questions About Levies & the Impact of COVID-19

Owners Corporations are challenged with balancing its statutory obligations with the rights of owners and occupiers (and the broader community) during this unfortunate pandemic. As the uncertainty surrounding COVID-19’s impact on the nation, and the world, continues OMB Solicitors Gold Coast address three frequently asked questions about current levy recovery procedures.

Whilst Owners Corporations and residents must consider the impact of COVID-19 on their buildings, including implementing appropriate steps to limit transmission of the virus, Strata Committee’s need to continue making decisions to ensure the obligations of the Owners Corporation are met.

1. How might a Strata Committee deal with a failure of a lot owner to pay levies considering the impact of COVID-19?

Given the social and economic impacts of COVID-19, Strata Committees need to draw an appropriate balance between compassion for individual circumstances and maintaining a scheme’s healthy financial status. In this regard, it is likely that Strata Committees may be faced with increased hardship and payment plan requests from lot owners. It is important, during these times, for Strata Committees to consider each matter on a case by case basis and (if necessary) ask lot owners to provide evidence of financial hardship (i.e. redundancy letters or a Statement of Financial position) prior to making a decision.

Whilst there is no obligation on a Strata Committee to waive any portion of the debt, circumstances may arise which warrant a waiver of interest or a payment plan that would see the debt satisfied within a reasonable period of time.

In this regard, any payment plan requests need to be considered having regard to the lot owner’s payment history, the future needs of the scheme, how many lots are in the scheme and how the payment plan request may impact upon the day to day running of the scheme i.e. paying for insurance, caretakers or other essential expenses.

If an owner has been in arrears for a significant period of time and prior to March 2020, then the Strata Committee ought to consider a separate strategy of the management of that debt (in consultation with its legal advisors).

2. How is OMB Solicitors dealing with levy recovery processes during the COVID-19 Pandemic

OMB Solicitors have implemented several strategies in dealing with levies moving forward. These strategies include:

1. a compulsory telephone call from our experienced staff to all owners referred to levy recovery to ensure a specific examination of the individual circumstances, which will result in an appropriate management of the debt; NEWS FOR OWNERS CORPORATIONS LEVIES & THE IMPACT OF COVID-19 As at 27 March 2020
2. providing additional advice to the Strata Committee prior to the institution of legal proceedings (if such proceedings are necessary), including advice on hardship and payment plan requests;
3. increasing the timeframes for debt management and exploring the financial options with each individual lot owner; and
4. discussing with the Strata Committee how to manage and meet its financial obligations during the COVID-19 Pandemic.

3. Should the Strata Committee refer a lot owner to levy recovery given the COVID-19 Pandemic?

The short answer is yes.

An Owners Corporation is responsible for looking after common property and attending to all repairs. Accordingly, to ensure the Owners Corporation can meet its financial obligation of insurance, repair, maintenance and cleanliness – contributions must continue to be paid by owners.

Whilst there are legislative change with respect to enforcement of Judgments (i.e. bankruptcy and Statutory Demands), unfortunately there are no amendments to the regulations governing how an Owners Corporation recovers a levy from a lot owner (at this stage). Accordingly, Strata Committees are doing their best to manage the impact upon the financial circumstances of their scheme by operating “business as usual” with the overriding considering of addressing the effect of the virus on lot owner’s individual circumstances.

A message from OMB Solicitors

During these times of uncertainty, OMB Solicitors have implemented an action plan to ensure all levy recovery matters are actioned in a timely and appropriate fashion. We confirm that we are currently running business as usual and are taking steps to continue to minimise any disruption.

Over the last 2 years, OMB has invested heavily in technology which allows us to seamlessly work remotely if required and have been operating electronic Body Corporate files for approximately 12 months.

As this pandemic is ever evolving, our action plan and our levy recovery processes are fluid and will continue to adjust as we monitor the situation via the Australian Government Department of Health and World Health Organisation.

At OMB Solicitors we are all doing our part to minimise the risk of infection including practicing social distancing. In conjunction with this, we ask that all meetings are conducted via phone call or video conferencing. Should an onsite meeting be required, we further request that you advise if you have previously been in contact with the Coronavirus or have travelled within the last 14 days prior to the meeting.

If you have any questions regarding the above, please do not hesitate to contact our Gold Coast lawyers.

Frequently Asked Questions About Levies & the Impact of COVID-19

The Queensland Government recently reported that “Bodies Corporate and their committees have a statutory obligation to act reasonably”, which includes balancing the statutory obligations of a Body Corporate with the rights of owners and occupiers (and the broader community). As the uncertainty surrounding COVID-19’s impact on the nation, and the world, continues OMB Solicitors address three frequently asked questions about current levy recovery procedures.

Whilst Bodies Corporate and residents must consider the impact of COVID-19 on their buildings, including implementing appropriate steps to limit transmission of the virus, Committee’s need to continue making decisions (i.e. by way of VOCM) to ensure the obligations of the Body Corporate are met.

1. How might a Committee deal with a failure of a lot owner to pay levies considering the impact of COVID-19?

Given the social and economic impacts of COVID-19, Committees need to draw an appropriate balance between compassion for individual circumstances and maintaining a scheme’s healthy financial status. In this regard, it is likely that Committees may be faced with increased hardship and payment plan requests from lot owners. It is important, during these times, for Committees to consider each matter on a case by case basis and (if necessary) ask lot owners to provide evidence of financial hardship (i.e. redundancy letters or a Statement of Financial position) prior to making a decision.

Whilst there is no obligation on a Committee to waive any portion of the debt, circumstances may arise which warrant a waiver of interest or a payment plan that would see the debt satisfied within a reasonable period of time.

In this regard, any payment plan requests need to be considered having regard to the lot owner’s payment history, the future needs of the scheme, how many lots are in the scheme and how the payment plan request may impact upon the day to day running of the scheme i.e. paying for insurance, caretakers or other essential expenses.

If an owner has been in arrears for a significant period of time and prior to March 2020, then the Committee ought to consider a separate strategy of the management of that debt (in consultation with its legal advisors).

2. How is OMB Solicitors dealing with levy recovery processes during the COVID-19 Pandemic?

OMB Solicitors Gold Coast have implemented several strategies in dealing with levies moving forward. These strategies include:

a compulsory telephone call from our experienced staff to all owners referred to levy recovery to ensure a specific examination of the individual circumstances, which will result in an appropriate management of the debt;

providing additional advice to the Committee prior to the institution of legal proceedings (if such proceedings are necessary), including advice on hardship and payment plan requests;

increasing the timeframes for debt management and exploring the financial options with each individual lot owner; and

discussing with the Committee how to manage and meet its financial obligations during the COVID-19 Pandemic.

3. Should the Committee refer a lot owner to levy recovery given the COVID-19 Pandemic?

The short answer is yes.

As advised by the Queensland Government, it was confirmed that a Body Corporate must maintain common property in good condition (including the cleanliness of such common property). Accordingly, to ensure the Body Corporate can meet its financial obligation of insurance, repair, maintenance and cleanliness – contributions must continue to be paid by owners.

Whilst there is legislative change with respect to enforcement of Judgments (i.e. bankruptcy and Statutory Demands), unfortunately there are no amendments to the regulations governing how a Body Corporate recovers a levy from a lot owner (at this stage). Accordingly, Committees are doing their best to manage the impact upon the financial circumstances of their scheme by operating “business as usual” with the overriding considering of addressing the effect of the virus on lot owner’s individual circumstances.

A message from OMB Solicitors

During these times of uncertainty, OMB Solicitors have implemented an action plan to ensure all levy recovery matters are actioned in a timely and appropriate fashion. We confirm that we are currently running business as usual and are taking steps to continue to minimise any disruption.

Over the last 2 years, OMB Solicitors has invested heavily in technology which allows us to seamlessly work remotely if required and have been operating electronic Body Corporate files for approximately 12 months.

As this pandemic is ever evolving, our action plan and our levy recovery processes are fluid and will continue to adjust as we monitor the situation via the Australian Government Department of Health and World Health Organisation.

Gold Coast lawyers at OMB Solicitors we are all doing our part to minimise the risk of infection including practicing social distancing. In conjunction with this, we ask that all meetings are conducted via phone call or video conferencing. Should an onsite meeting be required, we further request that you advise if you have previously been in contact with the Coronavirus or have travelled within the last 14 days prior to the meeting.

 

The advent of short-term stay platforms such as Airbnb and Stayz have been a boon both for those looking for extra accommodation options in popular locations and those looking to make some extra income from letting out a spare room or granny flat in their residence, or their entire property.

But this evolution of the internet’s ‘gig’ economy has also brought with it some pertinent legal challenges. For example, what are the implications of short-term letting when you own a property within a body corporate?

Bodies corporate are perhaps naturally predisposed to resisting the trend to short-term letting, worried about the overall effect of itinerant people passing through the property, a concern perhaps enhanced by some media horror stories of properties short-term let by people who use them for raucous, all-night parties.

A couple of court decisions in recent years have helped clarify the issue of whether a body corporate can, through its by-laws, ban owners from letting part of their property through a platform such as Airbnb, which we’ll look briefly at in this article.

The case of Hilton Park CTS 27490 v Robertson

In this 2017 Queensland Civil and Administrative Tribunal (QCAT) case, the position of owners within bodies corporate was clarified when the Tribunal ruled that unit owners were legally entitled to offer their units for short-term rentals. QCAT stated that any attempt made by the body corporate to restrict owners from using their property in this way through a by-law or by other means was invalid and was not enforceable.

The decision relied on s 180(3) of Queensland’s Body Corporate and Community Management Act 1997 (“BCCMA Act”), which essentially states that by-laws cannot restrict the type of residential use of the lot if the lot may lawfully be used for residential purposes. In addition to the above, as the term ‘residential’ has not been clarified or defined, it is to be broadly interpreted and so permits any residential use of the lot.

The decision in this case remains the law for properties which fall under the BCCMA Act.

More recently in 2019, the general view of banning short term letting was challenged by the Fairway Island GTP v Redman and Murray decision, where the body corporate successfully banned short-term letting through the use of a by-law.

The case of Fairway Island GTP v Redman and Murray

In this decision handed down in the Queensland Magistrates Court, a Hope Island resort on the Gold Coast successfully relied on one of its by-laws to ban short-term letting through platforms such as Airbnb by its lot owners.

The key difference with the decision in the Hilton Park case of 2017 is that the resort in question in this case remained governed by earlier legislation, the Building Units and Group Titles Act 1980 (Qld) (“BUGTA”), rather than the BCCMA.

Significantly, BUGTA does not place the same statutory restrictions on by-laws as the BCCMA, the latter ensuring that a by-law cannot be oppressive or unreasonable having regard to the interests of all owners or occupiers of lots and the use of the common property.

The implications

The vast majority of Queensland’s 50,000-plus strata schemes are governed by the BCCMA and so the decision in Hilton Park remains the more applicable law. But the decision in Fairway Park has emboldened managers of strata schemes to urge the state government to reconsider the ability of bodies corporate to restrict short-term letting by unit owners.

The Strata Community Association (Qld), for example, which represents more than 1.2 million Queenslanders who live in apartments, units, townhouses and other strata title property, welcomed the Fairway Park decision for restoring the power of the body corporate to make a by-law that “protects community interests”.

Additionally, some legal commentary has suggested that future applications by bodies corporate regarding short-term letting under the BCCMA may rely on the Magistrate’s interpretation of the term ‘residential’ under BUGTA in the Fairway Park decision.

For the majority of owners in Queensland, though, bodies corporate cannot prohibit the letting of your property through platforms such as Airbnb and Stayz through by-laws.

If you are unsure of the status of your property under the current law, and are interested in either undertaking, or preventing, short-term letting within the property, contact our Gold Coast lawyers today. We are experienced, expert legal professionals on all matters relating to body corporate and strata management. Call our body corporate team today on (07) 5555 0000.

Anyone who has had dealings with strata management and bodies corporate will know that in worst-case scenarios, they can become minefields of petty politicking and administrative overkill. Often, relations between managers and owners/tenants can become so acrimonious as to lead to legal action between the parties, as a number of high-profile court cases demonstrate.

The focus of this article is on the legal action of defamation, where either tenants/owners or strata managers have sued for statements they believe damage their personal or professional reputation.

It’s helpful to begin with a quick look at what constitutes defamation and what the law does to protect those who believe they’ve been defamed. Defamation is designed to protect people from false or damaging statements being made about them that may cause harm to their personal or professional reputation. A successful action for defamation can provide compensation for financial and other losses resulting from a defamatory publication of any kind.

What constitutes defamatory material? Emails, articles, blogs, novels, poems, photos, songs, cartoons, drawings, paintings, online reviews, social media posts and more can be defamatory. Material that is defamatory can also be broadcast or spoken, i.e. on a TV or radio show, or in a public presentation.

Case example 1

In Walden v Danieletto, a Queensland case decided in 2018, Mr Walden, a lot owner, owed overdue levies to the body corporate. He paid this online the day before a general meeting of the body corporate but because the amount he paid did not exactly match the amount owing, the system operated by the body corporate manager – Mr Danieletto – did not pick up the payment.

As a result, the body corporate manager declared at the general meeting that Mr Walden was “unfinancial”, a finding also entered into the minutes.

Mr Walden took exception to this declaration on four grounds, saying it imputed that he was a delinquent payer; could not afford to pay his body corporate levies; had financial difficulties; and was insolvent.

Mr Walden commenced defamation proceedings against Mr Danieletto claiming his reputation had been damaged to the amount of $100,000. The action failed in the Magistrates Court, the judge finding that Mr Walden had not been defamed and that, even if he had been, the matter was trivial and the defence of qualified privilege (that is, Mr Danieletto’s acts were committed in the performance of a legal or moral duty, were properly exercised and free from malice) applied. The magistrate found there had not been malice on the part of the body corporate manager, he’d just been doing his job.

“Do people hate or ridicule one another about overdue bills?” posited the magistrate in explaining why Mr Walden had not been defamed. “Do these cause people’s estimations of one another to be lowered where neither the amount, the period they are late, or the reason are known? Clearly not. Ordinary people accept that other ordinary people are neither infallible or perfect.”

Mr Walden appealed the decision and again lost, with the District Court judge upholding the original decision and again finding that:

• Reputational harm could not have occurred because the matter was so trivial.
• The actions of the body corporate manager were reasonable in giving members of the body corporate information about which they had an interest in receiving.
• The owner had commenced numerous proceedings against the body corporate and if other owners were poorly disposed towards him, it was more likely to be because of this than anything the body corporate manager did.

Case example 2

In the 2019 NSW case of Murray v Raynor, apartment block tenant Ms Murray won an appeal against a NSW District Court decision finding that she had defamed My Raynor, chair of the block’s strata committee, in an email she sent to fellow tenants in response to Mr Raynor’s emails to her insisting that she lock her mailbox.

Mr Raynor was awarded $120,000 in defamation damages, including an amount for aggravated damages, after the District Court judge found Ms Murray had no defence to Mr Raynor’s claim that her email implied he was a “small-minded busybody”.

However, this matter went on appeal to the NSW Court of Appeal where the original decision was set aside on the basis that a defence of qualified privilege was available to Ms Murray. The court also found the award of aggravated damages to Mr Raynor was “manifestly excessive” for an email that was addressed to 16 other people. The decision has also cast doubt on the statutory cap on damages for non-economic loss in defamation cases where aggravated damages are awarded.

In conclusion

As is clear from the cases cited here, the bar is quite high in order to prove you have suffered reputational damage in the context of strata matters.

Understanding the most common defences to defamation can help you understand whether commencing an action against someone you believe has published or said something defamatory about you is a good place to start. Legal professionals experienced in this area of the law can help explain these defences, which may include that:

• the publication was an honest opinion, rather than statement of fact;
• the publication was of public concern or substantially true;
• the publication was obligatory for a legal, social or moral reason;
• you are unlikely to have sustained any real harm to your reputation;
• the person you claim defamed you did not know or ought not to have known that the published material was defamatory;
• the publication was made in a privileged context (parliament, a court, a tribunal, etc).

OMB Solicitors has specific experience in acting for both clients who have been defamed and also defending clients that have been accused of defamation. We have a good understanding of the alternative dispute resolution requirements contained in Queensland’s Defamation Act, as well as how to progress a matter through the court system if the matter cannot be resolved through mediation.

If you consider that you have been defamed or you find yourself in a situation where someone is alleging that you have defamed them, then OMB Solicitors can help. Contact us today on (07) 5555 0000.

Living in a Body Corporate is unlike owning your own freehold land. As a member of a Body Corporate you are required to follow the rules and regulations applying to your Scheme. Consequently, any maintenance or improvements you wish to make to your unit or townhouse ought to be well thought out and planned to keep the Body Corporate, Committee, owners and occupiers happy – after all it is ‘community living’.

To assist you with dealing with your Body Corporate, we recommend that you implement the following five quick tips in your next project:

1. Obtaining Body Corporate approval

Be proactive! In almost all cases, you will require Body Corporate approval before ripping out your kitchen or bathroom. Approvals can be sought from the Committee or at a General Meeting depending on the extent of the renovation. If the total renovation cost is under $3,000 and the renovation will not detract from the appearance of the building or will result in a breach of your duties as an owner or occupier (i.e. cause nuisance), then approval can be granted by your Committee.

In the event your unit renovation will exceed $3,000, you will need to submit a motion at the next general meeting where all owners can decide by ordinary resolution to approve the works. It is best to get this step completed early as your general meeting only comes around once a year.

2. Prepare a Scope of Works

Speak with your Contractors and prepare a summary of the works which are going to be undertaken. Provide the Scope of Works together with your request for Body Corporate approval.

This will save you time when seeking Body Corporate approval i.e. it will avoid the “to-ing and fro-ing” and questions from the Committee.

3. Check your By-Laws

We like to say “the By-Laws is your Bible” – don’t allow it to collect dust! The By-Laws may identify conditions required to be met in order to undertake the renovation. You can obtain a copy of your By-Laws from your Body Corporate Manager.

It is likely that some of the conditions in which the Committee impose on you to grant approval, will already be contained within the By-Laws (i.e. where Contractors can park, whether padding is required for the elevators etc).

4. Engage Appropriate Contractors

It is important that you engage the appropriate licensed Contractors to ensure that the works comply with current building standards. It is likely that the renovation will not be approved in circumstances where you are recommending that the works are carried out by a lay person or the classic ‘handy man’.

5. Communicate, Communicate, Communicate

It is always good practice to keep the Committee or on-site manager informed throughout your project. This is, of course, unless you want a battle on your hands.

It is also prudent to explain to the Contractors the requirements/conditions of the By-Laws in completing renovations at the scheme.

Contact Gold Coast Lawyers for more information.

In 2018 this resulted in the Building and Other Legislation (Cladding) Amendment Regulation 2018 (Qld) coming into effect on 1 October 2018. The legislation and it’s operation is a data collection strategy which will recognise and evaluate the risks involved with cladding products on privately owned buildings in the state of Queensland.

There are a number of obligations under the legislation in which building owners (i.e. Bodies Corporate) need to be aware. These obligations and timeframes are outlined below.

Stages and obligations

Stage 1: Buildings must be registered if they are located in the ‘compliance zone’. A building is considered to be in the compliance zone if:

• It is any of classes 2 to 9 (this includes residential and commercial buildings, excluding houses); and
• between the period from 1 January 1994 but prior to 1 October 2018, a building development approval was issued to build the building or alter the cladding;
• is of Type A or B construction (three storey buildings or taller).

A checklist can be found through the Queensland Building and Construction Commission (QBCC) website and will help to determine whether the building is one of those with non-conforming cladding. A time limit of 29 March 2019 was set for building owners to complete this checklist. If after registration it is identified that the building has a rendered surface finish or combustible cladding or you are unsure of the building materials, you will be directed to complete Stage 2.

Stage 2: Before 29 May 2019, a statement will be required from a building industry professional as to whether the cladding on the building is non-conforming. If you know for a fact that the building has non-conforming cladding, you can simply notify the QBCC directly and by-pass Stage 2.

Stage 3: Before 27 August 2019, buildings which are found to have combustible cladding, building owners must engage a qualified fire engineer to undertake a fire risk assessment to determine the overall fire safety of the building and whether rectification works are needed. The QBCC requires the name of the specific fire engineer by the above date and by 3 May 2021, the QBCC must have received the final report. If you fail to follow these rules, the consequences include a total range of 50 and 165 penalty units, amounting to around $6,527.50 and $21,540.75 in fines.

Obligation to disclose

If a building has non-conforming cladding, it does not necessarily have to be removed if other fire safety mechanisms adequately cover the fire safety requirement. However, the risk that it could still be considered a defect is an issue. A building with non-conforming cladding must be disclosed to interested buyers of the property as a defect they should be aware of. This should be done via providing a copy of the status of compliance with the process outlined above to every owner and tenant of the building, as well as be put on view in a visible area of the building. In the instance that non-conforming cladding is not disclosed, the situation might result in litigation for non-disclosure against all those involved with the selling of the building, including the sellers themselves, the sales agents and the lawyers involved with preparing the contracts for sale.

If an owner of building with non-conforming cladding sells the building prior to completing the above steps, it is required that before the settlement, the current owner provides copies of all relevant documents to the buyer, as well as a notice containing information about the extent to which the seller has complied with the obligations required. The seller must also provide a copy of the notice given to the buyer to the QBCC. From then on, the new owner will take on the responsibility to conform with the remaining regulations.

If you have any questions in relation to the obligations of the Body Caporate or the building owner to comply with this legislation, please do not hesitate to contact our Gold Coast lawyers.