Interesting to hear that the committee of Q1 in Surfers Paradise are looking at ways to prevent schoolies from staying in the states tallest highrise. The Courier Mail reports that up to 500 students may have already been booked for the week. Apparently, the committee at Q1 are investigating legal avenues and possible changes to the by laws to prevent schoolies from staying in their building.
Perhaps the committee at Q1 might take their cue from Palm Springs Residences who recently voted to restrict all letting to a minimum of 42 days in their building. No doubt this will be open to challenge but it is an example of how residents and holiday rentals do not always mix.
It will be interesting to see how the committee for Q1 deals with this situation.
_____________________________________
The opinions expressed in this blog are personal and not intended in to be advice in any way. I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
Monday, November 16, 2009
Wednesday, November 4, 2009
Why would you holiday let your apartment?
A large resort complex is currently advertising a special on luxury one bedroom apartments with beach views, separate lounge and kitchen, spa, etc etc, for $115.00 per night - no minimum stay. The complex is obvioulsy managed with hefty Body Corporate levies to go towards maintaining the extensive grounds, pools, gyms, tennis courts, etc.
The units were sold as "investments" with a "guaranteed return" for a set time frame. If you do your calculations, $115.00 a night will not leave very much at all for the owner of the unit after deducting cleaning and linen fees (often at $80.00 per clean), management fees/commission, Body Corporate levies, rates, etc etc. By the time all that is taken into account there is no possible way an owner can make a viable return.
The managers of the complex argue that they have to compete with other resorts but all they really care about is having high occupancy.
Many owners have had to liquidate their investments for far less than their purchase price because they were misled into believing that the holiday rentals would cover their repayments.
Bottom line is that you should think very carefully about purchasing an apartment for holiday letting.
_____________________________________
The opinions expressed in this blog are personal and not intended in to be advice in any way. I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
The units were sold as "investments" with a "guaranteed return" for a set time frame. If you do your calculations, $115.00 a night will not leave very much at all for the owner of the unit after deducting cleaning and linen fees (often at $80.00 per clean), management fees/commission, Body Corporate levies, rates, etc etc. By the time all that is taken into account there is no possible way an owner can make a viable return.
The managers of the complex argue that they have to compete with other resorts but all they really care about is having high occupancy.
Many owners have had to liquidate their investments for far less than their purchase price because they were misled into believing that the holiday rentals would cover their repayments.
Bottom line is that you should think very carefully about purchasing an apartment for holiday letting.
_____________________________________
The opinions expressed in this blog are personal and not intended in to be advice in any way. I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
Illegal Parking or a free for all?
Bodies Corporate often have to deal with vehicles that have been illegally parked and they usually go through a combination of the following steps:
- notify the owner of the vehicle
- place a notice on the vehicle requesting that it be moved.
- give a further notice if the vehicle is not moved within a set time frame
- have the vehicle towed if it is not moved within a reasonable time frame
Well, it seems that a recent decision might prevent Bodies Corporate from taking these steps without:
- issuing a formal contravention notice
- obtaining an order from the commissioners office which might take months to receive
There has been a report that one Body Corporate was ordered to retrieve a car that had been towed away and pay expenses to the owner.
Many committees will feel that it is not worth the aggravation of going to the trouble of lodging applications to the commissioner and issuing contravention notices over a perceived illegally parked vehicle.
This is another example of how the system fails owners by being unnecessarily complicated.
_____________________________________
The opinions expressed in this blog are personal and not intended in to be advice in any way. I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
Monday, July 27, 2009
Problems with the CCT
The CCT (Commercial and Consumer Tribunal) has jurisdiction to deal with the following in relation to Body Corporate matters:
- Lot Entitlement Adjustments
- Complex matters.
- Appeals of adjudicators' orders
I have had recent experience with two applications and I have to say that I am left with the impression that the CCT has serious administrative problems that reflect very badly indeed on the organisation.
I was amazed and disappointed to find today that important correspondence for two applications has been misfiled and ignored. The CCT consequently sent orders of a hearing to an unauthorised recipient and it was only by luck that the order eventually found its way to the correct recipient. I have not received an explanation despite promises of a written response today. This is bureaucratic bungling at its best. Watch this space for further developments.
A major concern is that the CCT appears to me to defy and ignore the BCCM Act both in making orders and in giving instructions to respondents.
The CCT requires that the applicant deliver copies of the application to the respondent. This seems to me to be likely to create problems in itself. Leaving that aside, the "Respondents Kit" has a cover sheet with instructions on how to deal with the Application.
The two kits I have received state:
You MUST (the word MUST is in bold letters and underlined for emphasis) complete the Defence (Form 3) and deliver a copy within 14 days of the application to the CCT.
This is misleading and deceptive bearing in mind that the person receiving the "kit" is often a committee member who, in many cases, would be intimidated into thinking that they have to rush out and file a defence for the Body Corporate.
The fact that the CCT is ruling on matters relating to the Act surely means that they should not suggest that respondents breach the Act.
In many cases the respondent does NOT and should not need to complete the Defence within 14 days but there is no mention of this whatsoever on the cover sheet.
There are cases where The Body Corporate is the respondent. Applications are usually a restricted issue for one person. Anyone who responds to an application must comply first with the BCCM Act. The CCT knows this but makes no attempt to point this out on their instructions.
The following are some considerations when dealing with applications to the CCT.
1. The Committee does not need to arbitrarily make a decision on how to respond to these applications bearing in mind that the respondent is often "The Body Corporate". If the respondent is The Body Corporate, the Committee may decide to first call a meeting to discuss the matter and decide on how best to respond.
2. The Committee may also decide that the owners should be notified of the application and be given an opportunity to provide their input on how best to respond to the application. This could result in a general meeting.
3. The Committee is entitled to request legal representation but they may decide to seek the approval of owners at a general meeting as to whether or not to take legal representation.
The CCT are (hopefully) well aware of the requirements of the Act in calling committee meetings and general meetings. It could realistically take 6 weeks before the Body Corporate can even decide on how to deal with such an application and they are then entitled to make separate application for legal application.
Committees are usually made up by volunteers and they should not be subjected to unrealistic demands by the CCT.
_____________________________________
The opinions expressed in this blog are personal and not intended in to be advice in any way. I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
Monday, July 6, 2009
Caretaker Termination - The Palm Springs decision
On July 3rd Specialist Adjudicator Kiernan Dorney handed down a ruling that is likely to send shock waves to Caretakers throughout Queensland.
The Body Corporate for Palm Springs Residences voted at an EGM in 2007 to terminate the Caretaking agreement. The Caretakers lodged application numbers 0135-2007 & 0309-2007 to the Commissioner in an attempt to rule the termination invalid. Specialist Adjudicator, Gary Bugden ruled in favour of the Caretakers. However, his decision was appealed by the Body Corporate for Palm Springs.
Judge McGill referred the matter back to the Commissioner to be re heard and Kiernan Dorney Q.C, the Specialist Adjudicator, dismissed the Application on Friday 3rd July 2009. Mr Dorney's orders were accompanied by 42 pages of "reasons for final decision in specalist adjudication".
The entire process has taken more than two years to reach its current stage.
One of my impressions of the decision was that Mr Dorney's ruling reinforced the Yedway findings that Caretakers are obligated to maintain reasonable communication with elected Committee representatives.
Another aspect of the ruling that I found interesting was that it appears that the Caretakers were deemed to have a responsibility for the general maintenance of unit entry doors and frames. Palm Springs Residences is a unit complex on the beach comprising owner/residents, long term tenants and holiday rentals. The door frames had begun to show signs of rust which was probably caused by a buildup of salt residue. Regular maintenance and cleaning of the frames is likely to prevent rusting.
The problem is that the Caretakers would need to regularly enter owners' units to gain access to clean the door frames. They would not be able to rely on owners to clean the frames themselves because of the potential liability in the event of rusting. The logistics of arranging to enter individual owners units on a regular basis would be difficult to organise and probably impractical. Some owners would be likely to find this an unwelcome intrusion, particularly in the case where owners did not have a good relationship with the Caretaker.
As always, the decision is subject to possible appeal.
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I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
The Body Corporate for Palm Springs Residences voted at an EGM in 2007 to terminate the Caretaking agreement. The Caretakers lodged application numbers 0135-2007 & 0309-2007 to the Commissioner in an attempt to rule the termination invalid. Specialist Adjudicator, Gary Bugden ruled in favour of the Caretakers. However, his decision was appealed by the Body Corporate for Palm Springs.
Judge McGill referred the matter back to the Commissioner to be re heard and Kiernan Dorney Q.C, the Specialist Adjudicator, dismissed the Application on Friday 3rd July 2009. Mr Dorney's orders were accompanied by 42 pages of "reasons for final decision in specalist adjudication".
The entire process has taken more than two years to reach its current stage.
One of my impressions of the decision was that Mr Dorney's ruling reinforced the Yedway findings that Caretakers are obligated to maintain reasonable communication with elected Committee representatives.
Another aspect of the ruling that I found interesting was that it appears that the Caretakers were deemed to have a responsibility for the general maintenance of unit entry doors and frames. Palm Springs Residences is a unit complex on the beach comprising owner/residents, long term tenants and holiday rentals. The door frames had begun to show signs of rust which was probably caused by a buildup of salt residue. Regular maintenance and cleaning of the frames is likely to prevent rusting.
The problem is that the Caretakers would need to regularly enter owners' units to gain access to clean the door frames. They would not be able to rely on owners to clean the frames themselves because of the potential liability in the event of rusting. The logistics of arranging to enter individual owners units on a regular basis would be difficult to organise and probably impractical. Some owners would be likely to find this an unwelcome intrusion, particularly in the case where owners did not have a good relationship with the Caretaker.
As always, the decision is subject to possible appeal.
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I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
Sunday, July 5, 2009
To Pay or not to Pay ....
One of the basic fundamentals of Community living is that the owners usually control and manage the Body Corporate. They do this through an elected committee who make decisions on expenditure and policy. The problem with all of this is that many owners who buy into Body Corporate communities never have even the remotest intention of ever contributing in any way, let alone serve as committee members.
The bottom line is that a great many owners expect someone else to do the work - in fact, anyone but themselves.
Some owners have reasons why they cannot nominate for the committee. These reasons can include the fact that they are elderly, live interstate or overseas, have work committments, etc etc. The reality is that everyone can come up with a reason why they should not nominate.
It could be argued that owners actually have a responsibility to serve as a committee member at some point during their ownership of the property - if not a legal responsibility there is certainly a moral responsibility.
Body Corporate Committees are finding that they have an increasingly higher workload as the various regulations become more complex. The workload can be extroadinarily high for a voluntary position, particularly if the committee members take their role seriously.
Of course there are some Bodies Corporate Committees who do very little. I know of one that has not had a committee meeting at all in the last year and will probably just wait for the AGM to resolve anything. They are really a committee in name only. However, these committees can often lead a Body Corporate into a potential minefield where important issues like insurance coverage, fire regulations and other requirements can be neglected to the point where the Body Corporate and the Committee can be exposed to liability.
The position of committee member is voluntary and often unpaid. Many long serving committee members are now saying that they are sick and tired of representing other owners who have no intention of ever making a contribution. It is a little ironic that some of the owners who will never nominate as committee members often have the gall to criticize those who do serve on the committee.
Three of the properties I am involved with are certain to have problems forming a committee at the upcoming AGM. At one unit complex, no one is prepared to nominate as Chairman. If a Chairman is not elected an EGM will need to be called to try and coerce, cajole or coax someone into nominating.
Of course the position of Chairman always carries an additional responsibility because the Chairman should be familiar with the Act and his/her repsonsibilities. In fact the Act actually requires that committee members are familiar with the regulations and lack of knowledge is not seen as an excuse. The end result is that this discourages owners even more from nominating as Chairman. Why expose yourself to the potential aggravation when there is no reward and little thanks. It is far easier to pass the buck to someone else.
The end result is that more and more committee members are deciding that they will not serve unless they are paid. The Act allows for remuneration either for expenses or a set payment. Owners must declare that they will be seeking remuneration at the time written nominations are submitted and owners either approve or reject the payment.
I have received payment at one Body Corporate. A number of owners said that they were happy to pay to save having to be involved themselves. However, other Bodies Corporate look at anyone seeking payment with shock and horror as if work as a Committee member should be a noble deed on a purely voluntary basis. There is a strange sort of moral stigma associated with anyone seeking payment.
I have been told that there are some Bodies Corporate where committee members are paid what amounts to a significant wage. As long as the amount is approved at an AGM then the payments are in order but, of course, there are some Bodies Corporate where very few vote at the AGM. Apathy rules and payments to committee members are often passed without the majority of owners reading the agenda let alone voting.
If Committee members are paid, there is always the possibility that there may be some additional scrutiny of their performance, particularly when one committee member is paid and another is not.
However, many Bodies Corporate are having to face the fact that if they do not pay Committee members they will not have a Committee. They have to weigh up the overall cost of payments to Committee members against payments to an adminstrator.
The end result, either way, is that Body Corporate levies will rise. I believe that it is inevitable that more and more committee members will seek payment as the role becomes more time consuming and complex.
Body Corporate committees are not charities set up to look after the interests of those who cannot or will not contribute.
My view is that anyone who nominates as a Committee member has a right to seek whatever remuneration he or she sees fit and those owners who make no contribution should be thankful that someone is prepared to take on the role.
------------------------------------------------------------
I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
The bottom line is that a great many owners expect someone else to do the work - in fact, anyone but themselves.
Some owners have reasons why they cannot nominate for the committee. These reasons can include the fact that they are elderly, live interstate or overseas, have work committments, etc etc. The reality is that everyone can come up with a reason why they should not nominate.
It could be argued that owners actually have a responsibility to serve as a committee member at some point during their ownership of the property - if not a legal responsibility there is certainly a moral responsibility.
Body Corporate Committees are finding that they have an increasingly higher workload as the various regulations become more complex. The workload can be extroadinarily high for a voluntary position, particularly if the committee members take their role seriously.
Of course there are some Bodies Corporate Committees who do very little. I know of one that has not had a committee meeting at all in the last year and will probably just wait for the AGM to resolve anything. They are really a committee in name only. However, these committees can often lead a Body Corporate into a potential minefield where important issues like insurance coverage, fire regulations and other requirements can be neglected to the point where the Body Corporate and the Committee can be exposed to liability.
The position of committee member is voluntary and often unpaid. Many long serving committee members are now saying that they are sick and tired of representing other owners who have no intention of ever making a contribution. It is a little ironic that some of the owners who will never nominate as committee members often have the gall to criticize those who do serve on the committee.
Three of the properties I am involved with are certain to have problems forming a committee at the upcoming AGM. At one unit complex, no one is prepared to nominate as Chairman. If a Chairman is not elected an EGM will need to be called to try and coerce, cajole or coax someone into nominating.
Of course the position of Chairman always carries an additional responsibility because the Chairman should be familiar with the Act and his/her repsonsibilities. In fact the Act actually requires that committee members are familiar with the regulations and lack of knowledge is not seen as an excuse. The end result is that this discourages owners even more from nominating as Chairman. Why expose yourself to the potential aggravation when there is no reward and little thanks. It is far easier to pass the buck to someone else.
The end result is that more and more committee members are deciding that they will not serve unless they are paid. The Act allows for remuneration either for expenses or a set payment. Owners must declare that they will be seeking remuneration at the time written nominations are submitted and owners either approve or reject the payment.
I have received payment at one Body Corporate. A number of owners said that they were happy to pay to save having to be involved themselves. However, other Bodies Corporate look at anyone seeking payment with shock and horror as if work as a Committee member should be a noble deed on a purely voluntary basis. There is a strange sort of moral stigma associated with anyone seeking payment.
I have been told that there are some Bodies Corporate where committee members are paid what amounts to a significant wage. As long as the amount is approved at an AGM then the payments are in order but, of course, there are some Bodies Corporate where very few vote at the AGM. Apathy rules and payments to committee members are often passed without the majority of owners reading the agenda let alone voting.
If Committee members are paid, there is always the possibility that there may be some additional scrutiny of their performance, particularly when one committee member is paid and another is not.
However, many Bodies Corporate are having to face the fact that if they do not pay Committee members they will not have a Committee. They have to weigh up the overall cost of payments to Committee members against payments to an adminstrator.
The end result, either way, is that Body Corporate levies will rise. I believe that it is inevitable that more and more committee members will seek payment as the role becomes more time consuming and complex.
Body Corporate committees are not charities set up to look after the interests of those who cannot or will not contribute.
My view is that anyone who nominates as a Committee member has a right to seek whatever remuneration he or she sees fit and those owners who make no contribution should be thankful that someone is prepared to take on the role.
------------------------------------------------------------
I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
New Fire Regulations for Bodies Corporate
From 1st July 2009 Bodies Corporate will be required to comply with new Fire Regulations depending on the classification of their building.
I believe that many Bodies Corporate have no idea of what their requirements are and many will not even be aware that new regulations exist.
There has been considerable concern about many buildings in Qld which are classified as Class 2 buildings but operate as Class 3. Fire regulations for Class 3 buildings are generally more stringent and, consequently, more costly. The problem is that the interpretations of the classifications can be blurred and enforcement of the regulations is less than it should be with various authorities preferring to pass the buck.
There have already been some tragic incidents in buildings which have had less than adequate fire systems in place.
It is time that the goverment actually enforced the regulations before another tragedy occurs. Unfortunately, I doubt that this will happen because there are clearly many buildings that do not comply and many others that prefer to bend the rules or interpretation of their building classification.
If you are a member of a Body Corporate committee you should contact http://www.dip.qld.gov.au/for more details.
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I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
I believe that many Bodies Corporate have no idea of what their requirements are and many will not even be aware that new regulations exist.
There has been considerable concern about many buildings in Qld which are classified as Class 2 buildings but operate as Class 3. Fire regulations for Class 3 buildings are generally more stringent and, consequently, more costly. The problem is that the interpretations of the classifications can be blurred and enforcement of the regulations is less than it should be with various authorities preferring to pass the buck.
There have already been some tragic incidents in buildings which have had less than adequate fire systems in place.
It is time that the goverment actually enforced the regulations before another tragedy occurs. Unfortunately, I doubt that this will happen because there are clearly many buildings that do not comply and many others that prefer to bend the rules or interpretation of their building classification.
If you are a member of a Body Corporate committee you should contact http://www.dip.qld.gov.au/for more details.
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I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
Tuesday, April 28, 2009
Caretaking and Letting Agreement terminated.....
On 15th April 2009 the CCT ordered that a Caretaking and Letting Agreement had been vaildly terminated. The ruling makes interesting reading, particularly regarding the behaviour of the Caretaker.
http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/qld/QCCTBCCM/2009/14.html?query=MAXINE%20SEATON
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I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/qld/QCCTBCCM/2009/14.html?query=MAXINE%20SEATON
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I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
Tuesday, April 21, 2009
All Levies are equal but some are more equal than others......
I can't help but think of the words of George Orwell when the subject of equalisation of levies is raised. This refers to the view that all unit owners should pay the same or a similar amount in levies irrespective of the type of apartment that they live in.
Traditionally, and with no relation to logic, owners have paid levies that can be variously dependent on the size of their unit, the number of bedrooms or the floor of their apartment.
It is possible that the owner of a penthouse could easily be paying double the levies of an owner on a lower floor, despite the fact that the levies for both owners are supposedly set in place simply to contribute to maintenance and upkeep of the common property.
Generally speaking, the higher the floor and the greater the size of the unit, the higher the levies.
Some owners felt this "system" was unfair and a series of disputes have been lodged in recent years. The theory was that levies were based on the maintenance of the common property and had no relation to the size of the units or the number of bedrooms. If you owned the penthouse, you paid substantially higher levies than someone on the floor below but both owners were supposedly contributing to the common property so why should one owner pay more than antoher. Of course, the owners in the ground floor units argue that they have no use for the elevators so why should they have to pay for their maintenance.
There are some exceptions but rulings of Specialist Adjudicators have often favoured an equalistation of the levies, providing a good case is made.
Gary Bugden, a Specialist Adjudicator in one case, told me that he was reluctant to change the structure of levies unless presented with the report of an expert. These are easy enough to obtain. The report needs to jusify that all of the apartments should contribute equally to the Body Corporate irrespective of size.
This is not always an easy task. There are often variables that can mean one unit owner should, in fact, contribute more than another. An expert report can indicate that the contribution schedule needs to be changed but it is not necessarily a given that all reports will favour equal contributions.
The rulings of Adjudicators are supposedly based on an interpretation of Law and The Act.
A recent report indicated that State Tourism Minister Peter Lawlor has pledged to get rid of what he describes as 'unfair' body corporate laws. Good luck to him!
"It's completely unfair," he said, when referring to the equalisation of levies.
That's interesting. Is he saying that the judgements of the Specialist Adjudicators are wrong?
It is true that in some buildings the levy contributions have been challenged. Owners who purchased units on lower floors have found that they have had to pay significant increases while owners of penthouses have had their contributions slashed.
The reason for this is that the levy contributions in these complexes were often inequitable in the first place. Often, they were set by a Developer more through guesswork than any form of logic.
Frankly, I dont see that Mr Lawlor will have much success in changing the laws. The system needs to be based on logic not on the fact that some people would like to pay less than others simply because the market value of their apartments is lower.
Minister to act on unit laws
Regards to all
John
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I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
Traditionally, and with no relation to logic, owners have paid levies that can be variously dependent on the size of their unit, the number of bedrooms or the floor of their apartment.
It is possible that the owner of a penthouse could easily be paying double the levies of an owner on a lower floor, despite the fact that the levies for both owners are supposedly set in place simply to contribute to maintenance and upkeep of the common property.
Generally speaking, the higher the floor and the greater the size of the unit, the higher the levies.
Some owners felt this "system" was unfair and a series of disputes have been lodged in recent years. The theory was that levies were based on the maintenance of the common property and had no relation to the size of the units or the number of bedrooms. If you owned the penthouse, you paid substantially higher levies than someone on the floor below but both owners were supposedly contributing to the common property so why should one owner pay more than antoher. Of course, the owners in the ground floor units argue that they have no use for the elevators so why should they have to pay for their maintenance.
There are some exceptions but rulings of Specialist Adjudicators have often favoured an equalistation of the levies, providing a good case is made.
Gary Bugden, a Specialist Adjudicator in one case, told me that he was reluctant to change the structure of levies unless presented with the report of an expert. These are easy enough to obtain. The report needs to jusify that all of the apartments should contribute equally to the Body Corporate irrespective of size.
This is not always an easy task. There are often variables that can mean one unit owner should, in fact, contribute more than another. An expert report can indicate that the contribution schedule needs to be changed but it is not necessarily a given that all reports will favour equal contributions.
The rulings of Adjudicators are supposedly based on an interpretation of Law and The Act.
A recent report indicated that State Tourism Minister Peter Lawlor has pledged to get rid of what he describes as 'unfair' body corporate laws. Good luck to him!
"It's completely unfair," he said, when referring to the equalisation of levies.
That's interesting. Is he saying that the judgements of the Specialist Adjudicators are wrong?
It is true that in some buildings the levy contributions have been challenged. Owners who purchased units on lower floors have found that they have had to pay significant increases while owners of penthouses have had their contributions slashed.
The reason for this is that the levy contributions in these complexes were often inequitable in the first place. Often, they were set by a Developer more through guesswork than any form of logic.
Frankly, I dont see that Mr Lawlor will have much success in changing the laws. The system needs to be based on logic not on the fact that some people would like to pay less than others simply because the market value of their apartments is lower.
Minister to act on unit laws
Regards to all
John
--------------------------------------------------------
I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
Monday, April 13, 2009
Just sign on the dotted line…….
When Management Rights are purchased, the buyer usually enters into a contract referred to as a Caretaking and Letting agreement or something similar. In many cases the contract was originally drawn up by a Developer and passed on to the original Caretaker.
In an ideal world, the Body Corporate and the Caretaker will enter into a symbiotic relationship where both parties benefit from the terms and conditions of the contract. The Caretaker looks after the maintenance of the property for a fee and makes money from letting those apartments that are in the rental pool.
There are a number of variables that can affect this relationship that are too numerous, and probably too obvious, to mention here.
One of the basic fundamentals of these Contracts, or Agreements, is that they have a legally binding time frame ranging generally from 10 – 25 years depending on the Module of the CTS scheme and, to a certain extent, the whim of the Developer.
Many contracts in Queensland are now reaching their expiry dates. Bear in mind that Caretakers who own Management Rights consider that they have an asset that is usually worth a considerable amount of money. They naturally become concerned when they realise that the term of their contract is drawing closer to expiration.
If the contract is allowed to expire, the once valuable asset can become worthless. The obvious solution is to ask the Body Corporate to draw up a new contract with as long as possible time frames as they can get away with.
That is all fair and reasonable. There is nothing to stop the Caretakers from making a request to the Body Corporate.
The thing that I find amazing is that so many Bodies Corporate agree to a new contract with a lengthy time frame without getting anything in return.
Before you start to raise objections, I know that a Body Corporate cannot make a profit from a Caretaking and Letting agreement but the fact is that the Body Corporate has an asset. That asset is the ability to either accept or reject a new contract that could mean the difference between a Caretaker making a huge profit or losing their investment entirely.
So, if you cannot make money from allowing a new contract to be drawn up then why should the Body Corporate care whether a new contract is granted or not?
The fact is that the Body Corporate should be run like a business. Owners contribute levies towards the maintenance of the property. They are entitled to expect that their money is spent wisely.
Caretaking and Letting Agreements vary. There are usually aspects of the contract that a Body Corporate would not be comfortable with. Take one complex where there was no specific requirement for the Caretakers to keep the Office open during business hours.
The Body Corporate wanted the Caretakers to be more accessible to owners but the terms and conditions of the contract were always cited.
When Caretakers ask for a new contract to be provided to them they should expect that as an absolute minimum, the new contract will be revised to suit the Body Corporate. No revisions – no contract. If the Body Corporate wants the Office to be open from 9-5 on weekdays they can stipulate that in the contract. The Caretakers can either agree or have no contract.
There are some, including one fairly well known Gold Coast Solicitor, who seem to think that Bodies Corporate have some sort of moral responsibility to grant the Caretakers an entirely new contract, drawn up by their own solicitor, that will provide the Caretaker with a huge financial windfall. This view is not supported by common sense or even a modicum of business acumen. It is quite simply a deceitful ploy to profit through the apathy of owners.
Bodies Corporate are often governed by apathy. Many owners simply agree to a new contract without considering the implications or benefits that could be gained by negotiation.
I understand that there is a group who have initiated a “Say No” campaign to encourage owners not to agree to a new contract. Owners would certainly be well advised to "say no" until they have all carefully considered the implications of signing a new contract and probably debated the subject at a formal meeting of the Body Corporate.
They should be mindful of the fact that they have an enormous amount of bargaining power. The Caretaker stands to make a small fortune from the decision of the Body Corporate.
It is incumbent on the Body Corporate to ensure that, if a new contract is signed, the owners will benefit. Why anyone would glibly sign sign a contract without getting something in return is beyond me. Remember that the benefit to the Body Corporate does not have to be financial. It can be simply a contract that suits the Body Corporate.
Bear in mind that there are alternatives to having a live in Caretaker who controls the maintenance of the building for the term of the Contract.
I’m sure I don’t need to tell you that there a great many Bodies Corporate who are dissatisfied with the level of service provided by the Caretaker. They are often bound by the terms of the Contract and The Act and, consequently, they are powerless to take any action. However when a contract comes close to expiration there is no obligation whatsoever on the Body Corporate to extend the Contract.
There are some recent cases where the Body Corporate has voted to grant the Caretakers a new contract. I am aware of one case in particular where one vote decided the outcome. The Caretakers were then able to sell the Management Rights for a significant amount of money and the Body Corporate were saddled with a new 25 year contract that was actually drawn up by the Caretakers’ solicitor with conditions that were very generous indeed to the owners of the new contract.
I believe that owners in this building have a case to lodge a dispute with the CCT but that is up to them and it is, ultimately, another story.
Let me say that there are certainly cases where it may be beneficial to the Body Corporate to grant a new contract. I won’t go into the potential benefits as they should be fairly obvious to any one who has lived in a CTS scheme, but the Body Corporate should, at least, ensure that a new contract is drawn up by their own solicitor with conditions that suit the Body Corporate.
Once again, if the Caretakers do not like the conditions then don’t agree to the contract. There are alternatives. The fact is that the Caretakers may well agree to just about anything because they have too much to lose. This should be the basis of the Body Corporate’s position when negotiating a new contract – common sense business practice.
Best regards to you all
John
----------------------------------------------------------
I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
In an ideal world, the Body Corporate and the Caretaker will enter into a symbiotic relationship where both parties benefit from the terms and conditions of the contract. The Caretaker looks after the maintenance of the property for a fee and makes money from letting those apartments that are in the rental pool.
There are a number of variables that can affect this relationship that are too numerous, and probably too obvious, to mention here.
One of the basic fundamentals of these Contracts, or Agreements, is that they have a legally binding time frame ranging generally from 10 – 25 years depending on the Module of the CTS scheme and, to a certain extent, the whim of the Developer.
Many contracts in Queensland are now reaching their expiry dates. Bear in mind that Caretakers who own Management Rights consider that they have an asset that is usually worth a considerable amount of money. They naturally become concerned when they realise that the term of their contract is drawing closer to expiration.
If the contract is allowed to expire, the once valuable asset can become worthless. The obvious solution is to ask the Body Corporate to draw up a new contract with as long as possible time frames as they can get away with.
That is all fair and reasonable. There is nothing to stop the Caretakers from making a request to the Body Corporate.
The thing that I find amazing is that so many Bodies Corporate agree to a new contract with a lengthy time frame without getting anything in return.
Before you start to raise objections, I know that a Body Corporate cannot make a profit from a Caretaking and Letting agreement but the fact is that the Body Corporate has an asset. That asset is the ability to either accept or reject a new contract that could mean the difference between a Caretaker making a huge profit or losing their investment entirely.
So, if you cannot make money from allowing a new contract to be drawn up then why should the Body Corporate care whether a new contract is granted or not?
The fact is that the Body Corporate should be run like a business. Owners contribute levies towards the maintenance of the property. They are entitled to expect that their money is spent wisely.
Caretaking and Letting Agreements vary. There are usually aspects of the contract that a Body Corporate would not be comfortable with. Take one complex where there was no specific requirement for the Caretakers to keep the Office open during business hours.
The Body Corporate wanted the Caretakers to be more accessible to owners but the terms and conditions of the contract were always cited.
When Caretakers ask for a new contract to be provided to them they should expect that as an absolute minimum, the new contract will be revised to suit the Body Corporate. No revisions – no contract. If the Body Corporate wants the Office to be open from 9-5 on weekdays they can stipulate that in the contract. The Caretakers can either agree or have no contract.
There are some, including one fairly well known Gold Coast Solicitor, who seem to think that Bodies Corporate have some sort of moral responsibility to grant the Caretakers an entirely new contract, drawn up by their own solicitor, that will provide the Caretaker with a huge financial windfall. This view is not supported by common sense or even a modicum of business acumen. It is quite simply a deceitful ploy to profit through the apathy of owners.
Bodies Corporate are often governed by apathy. Many owners simply agree to a new contract without considering the implications or benefits that could be gained by negotiation.
I understand that there is a group who have initiated a “Say No” campaign to encourage owners not to agree to a new contract. Owners would certainly be well advised to "say no" until they have all carefully considered the implications of signing a new contract and probably debated the subject at a formal meeting of the Body Corporate.
They should be mindful of the fact that they have an enormous amount of bargaining power. The Caretaker stands to make a small fortune from the decision of the Body Corporate.
It is incumbent on the Body Corporate to ensure that, if a new contract is signed, the owners will benefit. Why anyone would glibly sign sign a contract without getting something in return is beyond me. Remember that the benefit to the Body Corporate does not have to be financial. It can be simply a contract that suits the Body Corporate.
Bear in mind that there are alternatives to having a live in Caretaker who controls the maintenance of the building for the term of the Contract.
I’m sure I don’t need to tell you that there a great many Bodies Corporate who are dissatisfied with the level of service provided by the Caretaker. They are often bound by the terms of the Contract and The Act and, consequently, they are powerless to take any action. However when a contract comes close to expiration there is no obligation whatsoever on the Body Corporate to extend the Contract.
There are some recent cases where the Body Corporate has voted to grant the Caretakers a new contract. I am aware of one case in particular where one vote decided the outcome. The Caretakers were then able to sell the Management Rights for a significant amount of money and the Body Corporate were saddled with a new 25 year contract that was actually drawn up by the Caretakers’ solicitor with conditions that were very generous indeed to the owners of the new contract.
I believe that owners in this building have a case to lodge a dispute with the CCT but that is up to them and it is, ultimately, another story.
Let me say that there are certainly cases where it may be beneficial to the Body Corporate to grant a new contract. I won’t go into the potential benefits as they should be fairly obvious to any one who has lived in a CTS scheme, but the Body Corporate should, at least, ensure that a new contract is drawn up by their own solicitor with conditions that suit the Body Corporate.
Once again, if the Caretakers do not like the conditions then don’t agree to the contract. There are alternatives. The fact is that the Caretakers may well agree to just about anything because they have too much to lose. This should be the basis of the Body Corporate’s position when negotiating a new contract – common sense business practice.
Best regards to you all
John
----------------------------------------------------------
I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
Sunday, April 5, 2009
Another Body Corporate Farce
One of the requirements of living in a Community Titles Scheme is that all owners are required to contribute to the maintenance and management of the building that they live in. The responsibilities vary depending on the type of complex but, basically, all owners have to pay a contribution levy on a regular basis.
Occasionally, an owner will fall behind with their levies. There are times when the Body Corporate has no alternative but to take legal action to recover the outstanding debt. That is where things get complicated.
Up until recently, the Body Corporate would add any legal costs and charges to the outstanding amount. They would then have a number of enforcement options open to them.
On 11th Feb 2009, the Commercial and Consumer Tribunal handed down an adjudication on the treatment of recovery costs associated with the collection of outstanding levies. Whilst the decision may be a fair interpretation of the Act and Law, the end result is that there is now massive confusion as to how to go about recovering a debt.
Perhaps the key phrase in this order was that "such recovery costs are the subject of a judgement in a court of competant jurisdiction."
Legal advisors, Body Corporate Managers and Committees are scratching their collective heads about how to interpret the decision. One legal advisor has suggested that the only way to fairly claim back recovery costs is to lodge a Dispute. Guess what! This process is so complex that a lawyer needs to compile the dispute thus creating a further cost.
Of course that is only one lawyers opinion. The fact is that we are in unchartered waters. Who knows what an Adjudicator might rule. Lodging a Dispute can be time consuming and costly and there is never a guarantee of success. Other Body Corporate Managers and Lawyers have other ideas about how recovery costs should be claimed.
The bottom line is a long drawn out process that will inevitably take up the time of committee members who are unpaid and who dont need the aggravation.
An important part of the ruling is that Body Corporate Managers should separate recovery costs from outstanding levies. This means a separate ledger will need to be kept. Many Body Corporate Managers are unclear about how to calculate outstanding levies. One Body Corporate Manager has had to enlist the aid of a lawyer to actually calculate the amount owing and, surprise, surprise there is a dispute about that.
A Body Corporate Manager recently told me that she has at least 30 cases of unpaid levies at the present time. There may well be hundreds more cases.
Another Body Corporate Manager has said that the ruling now means that owners can get away with not paying their levies. This may well be true because if Committees are not prepared to spend their own time and energy in pursuing the outstanding levies and legal costs then the debt will remain unpaid.
Bear in mind that Committee members are not paid. Many will decide that it is just not worth their time in wading through the legal minefield to collect outstanding levies.
This is another example of a system that is out of control.
Regards
John
------------------------------------------------------------
I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
Occasionally, an owner will fall behind with their levies. There are times when the Body Corporate has no alternative but to take legal action to recover the outstanding debt. That is where things get complicated.
Up until recently, the Body Corporate would add any legal costs and charges to the outstanding amount. They would then have a number of enforcement options open to them.
On 11th Feb 2009, the Commercial and Consumer Tribunal handed down an adjudication on the treatment of recovery costs associated with the collection of outstanding levies. Whilst the decision may be a fair interpretation of the Act and Law, the end result is that there is now massive confusion as to how to go about recovering a debt.
Perhaps the key phrase in this order was that "such recovery costs are the subject of a judgement in a court of competant jurisdiction."
Legal advisors, Body Corporate Managers and Committees are scratching their collective heads about how to interpret the decision. One legal advisor has suggested that the only way to fairly claim back recovery costs is to lodge a Dispute. Guess what! This process is so complex that a lawyer needs to compile the dispute thus creating a further cost.
Of course that is only one lawyers opinion. The fact is that we are in unchartered waters. Who knows what an Adjudicator might rule. Lodging a Dispute can be time consuming and costly and there is never a guarantee of success. Other Body Corporate Managers and Lawyers have other ideas about how recovery costs should be claimed.
The bottom line is a long drawn out process that will inevitably take up the time of committee members who are unpaid and who dont need the aggravation.
An important part of the ruling is that Body Corporate Managers should separate recovery costs from outstanding levies. This means a separate ledger will need to be kept. Many Body Corporate Managers are unclear about how to calculate outstanding levies. One Body Corporate Manager has had to enlist the aid of a lawyer to actually calculate the amount owing and, surprise, surprise there is a dispute about that.
A Body Corporate Manager recently told me that she has at least 30 cases of unpaid levies at the present time. There may well be hundreds more cases.
Another Body Corporate Manager has said that the ruling now means that owners can get away with not paying their levies. This may well be true because if Committees are not prepared to spend their own time and energy in pursuing the outstanding levies and legal costs then the debt will remain unpaid.
Bear in mind that Committee members are not paid. Many will decide that it is just not worth their time in wading through the legal minefield to collect outstanding levies.
This is another example of a system that is out of control.
Regards
John
------------------------------------------------------------
I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
Queensland Body Corporate - A system out of control
In the last twenty years or so there has been an explosion of communal developments in Queensland. These include gated communities, high rise unit complexes, townhouse developments and various other complexes where owners coexist in an environment that is managed by a Body Corporate.
The Body Corporate is usually controlled by owners and is intended to ensure that the common property is maintained, a set of by laws are in place and finances are managed.
So far, so good. The problem with all of this is that each Body Corporate is governed by a complex set of rules and regulations known as the BCCM Act.
Many owners who make the courageous decision to become involved in Committees find themselves embroiled in the tangled web of The Act that can make the smallest decision unnecessarily complicated.
Many Bodies Corporate find that they cannot survive without a Body Corporate Manager who provides a secretarial and accounting service to ensure that they comply with the regulations.
Others rountinely enlist the help of lawyers to unravel the complexities of The Act in dealing with disputes or contractual issues that plague Bodies Corporate.
Perhaps the greatest problem with the system is that the legislation is not properly enforced.
A Government department fronted by The Commissioner for Body Corporate hears and rules on disputes but no one actually polices the regulations unless a formal dispute has been lodged. The result is that many Bodies Corporate simply ignore the legislation usually through apathy and ignorance of the regulations.
Take the case of one complex of six units. Each owner shows no interest in the Body Corporate. They have no Body Corporate Manager. They do not hold meetings or keep records of any substance. One owner banks the levies and organises lawn mowing but little else is done.
This is all fine until something goes wrong. An insurance policy allowed to lapse, structural problems with the building, a dispute about use of the common property, etc etc can all result in a major problem for a Body Corporate who ignores the legislation and yet many Bodies Corporate meander along like an accident waiting to happen.
Other Bodies Corporate, with owners who take more interest in ensuring that their building functions within the law, struggle to cope with the endless amount of work that can result from simply looking after the best interests of the owners.
In many cases, developers install Caretakers into complexes with lengthy contracts to maintain the property. However there are little or no checks and balances as to whether the Caretakers have the ability, experience or desire to actually fulfill their obligations. If Bodies Corporate are not satisfied with the performance of the Caretakers they have to jump through hoops to resolve the issues due to the complexities of The Act.
As is so often the case, the Body Corporate Managers and the Lawyers thrive on all of this, lining their pockets as The Act becomes more complex.
In the coming months I will be highlighting some of the major issues that confront Bodies Corporate, including some Adjudications that can make living in a Community Title Scheme with a Body Corporate a nightmare and threaten to destroy a lifelong investment.
Watch this space
---------------------------------------------------------
I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
The Body Corporate is usually controlled by owners and is intended to ensure that the common property is maintained, a set of by laws are in place and finances are managed.
So far, so good. The problem with all of this is that each Body Corporate is governed by a complex set of rules and regulations known as the BCCM Act.
Many owners who make the courageous decision to become involved in Committees find themselves embroiled in the tangled web of The Act that can make the smallest decision unnecessarily complicated.
Many Bodies Corporate find that they cannot survive without a Body Corporate Manager who provides a secretarial and accounting service to ensure that they comply with the regulations.
Others rountinely enlist the help of lawyers to unravel the complexities of The Act in dealing with disputes or contractual issues that plague Bodies Corporate.
Perhaps the greatest problem with the system is that the legislation is not properly enforced.
A Government department fronted by The Commissioner for Body Corporate hears and rules on disputes but no one actually polices the regulations unless a formal dispute has been lodged. The result is that many Bodies Corporate simply ignore the legislation usually through apathy and ignorance of the regulations.
Take the case of one complex of six units. Each owner shows no interest in the Body Corporate. They have no Body Corporate Manager. They do not hold meetings or keep records of any substance. One owner banks the levies and organises lawn mowing but little else is done.
This is all fine until something goes wrong. An insurance policy allowed to lapse, structural problems with the building, a dispute about use of the common property, etc etc can all result in a major problem for a Body Corporate who ignores the legislation and yet many Bodies Corporate meander along like an accident waiting to happen.
Other Bodies Corporate, with owners who take more interest in ensuring that their building functions within the law, struggle to cope with the endless amount of work that can result from simply looking after the best interests of the owners.
In many cases, developers install Caretakers into complexes with lengthy contracts to maintain the property. However there are little or no checks and balances as to whether the Caretakers have the ability, experience or desire to actually fulfill their obligations. If Bodies Corporate are not satisfied with the performance of the Caretakers they have to jump through hoops to resolve the issues due to the complexities of The Act.
As is so often the case, the Body Corporate Managers and the Lawyers thrive on all of this, lining their pockets as The Act becomes more complex.
In the coming months I will be highlighting some of the major issues that confront Bodies Corporate, including some Adjudications that can make living in a Community Title Scheme with a Body Corporate a nightmare and threaten to destroy a lifelong investment.
Watch this space
---------------------------------------------------------
I have spent many years participating on a number of different Body Corporate Committees. I am a dealer in Vintage Movie Memorabilia specialising in original movie posters and movie art. http://www.moviemem.com/I also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.
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