Body Corporate owners angry at Gold Coast Council Rate increase

Unit Owners are up in arms about the recent Gold Coast Council Rate increase that puts many under financial pressure and ultimately contributes to lowering the value of their properties.

In recent years, there has been a steady increase in Gold Coast Council and Water Rates. The increases have coincidentally accompanied the decline in the value of homes in Body Corporate communities on the Gold Coast.

The situation was worsened when the Gold Coast Council Rates and Water Rates were separated and Allconnex was set up in 2010 specifically to handle water. This separation was a recipe for increases and property owners were shocked at the gradual increases in their water rates and Council Rates.

The bottom line for owners is that the value of their investments has declined and the decrease in value must surely have been affected by the Gold Coast Council Rate increase.

I took a sample of Council Rates and Water Rates from five properties and each one had significant increases in rates.

Some owners are now facing the frightening prospect of not being able to afford to live in their homes if the increases continue.

When you add the Body Corporate Levies to the Rates, the amount that Unit owners are paying just to live in their homes is getting out of hand.

Of the five properties in the sample, the cost of rates plus Body Corporate levies amounts to between $175.00 and $200.00 per week. Many other owners face much higher Body Corporate levies which push the overall cost up to $300.00 per week.

Many owners moved to Queensland to retire and they purchased units on the Gold Coast to live out their declining years. They understandably had no conception that increases in Rates and Levies could place their retirement dreams at risk.

Ralph, an elderly owner in Broadbeach, said "My combined Council and Water Rates have more than doubled in the ten years since I purchased the property. When I received the latest notices, I wondered how I would be able to find the money to pay them."

Investors are also upset. Owners with portfolios of properties are facing significant increases. Those who rent out their properties would like to be able to pass on some of the increase in costs to their tenants but the market will not bear the increased costs.

Those owners with Units in a Holiday Letting Pool are also affected. One owner of a luxury unit in Palm Beach gave me the beakup of costs versus rent:

• Body Corporate Levies 115.00 per week.
• Council Rates 35.00 per week
• Water Rates 27.00 per week

That makes a total of 177.00 per week. The owner paid 800,000.00 for his property. Average rent in the holiday pool works out at a gross of 450.00 per week over a year.

He pays for Cable TV, Cleaning, Commissions and has the unit fully furnished. He also pays for Electirity. He has ducted air conditioning in the Unit and the tenants often leave the air conditioning on all the time resulting in high electricity bills.

The bottom line is that the owner is coming away with an appalling return on his investment while his unit is deteriorating through wear and tear.

Investors look at the sums and see that they just don't add up. The reality is that investing in Body Corporate Communities on the Gold Coast is not a wise move at the moment.

Gold Coast Mayor Tom Tate wants people to invest in the Gold Coast. Well, if Council and Water rates continue to increase along with other associated expenses, investors will be bailing out and leaving the Coast in droves.

If you are concerned about the Gold Coast Council Rate increase you should contact the Gold Coast City Council preferably in writing.

Access to BC records for all owners? Not necessarily.

As a general principle owners should be able to expect to have access to BC records after paying a prescribed fee. However, recent rulings by Adjudicators indicate that it is not that simple. If a BC believes that certain records are subject to "legal privilege" then they have the right to refuse access to any owner who may be involved in either actual or threatened legal action against the BC or presumably anyone who claims to be affected by the records.

There are times when it might be prudent to withhold certain documents from an owner on the basis of legal privilege but anyone with an ounce of imagination should be able to see how this ruling could be abused.

It would be very easy for a Committee to deny access to records based on "legal privilege". The owner would then have to decide whether to lodge a dispute. If the records were needed urgently, the process of waiting for the dispute to be heard could prove costly for the owner.

An Adjudicator recently ruled that a dispute with QCAT constitutes legal action. Presumably any dispute that has been initiated or implied also comes under the banner of "legal privilege".

There are other considerations that could lead to abuse of this process. Who decides whether records are subject to legal privilege or not? What if the person who is actually seeking the records is the Chairman, Secretary or another Committee member?

There have been disputes between the BC and the BC Manager in the past. The BC Manager is the custodian of the records. What would happen if the BC decided that the BC Manager could not access records because of legal privilege?

I feel that all BC records should be available for access by owners irrespective of any implied or actual legal privilege.

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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.

No Smoking on Balconies for Unit Owners - coming soon!

Proposed changes to NSW strata laws could result in legislation to ban unit owners from smoking on their balconies.
Smoking Ban on balconies for unit owners


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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.

Commisioner for Body Corporate & BCCM Act. Irrelevant to BC Communities?

The Commissioner for Body Corporate and Community Management Queensland and The BCCM Act are rapidly becoming irrelevant to Body Corporate Communities.

The reality is that many Bodies Corporate ignore the regulations often through lack of knowledge of the legislation but occasionally through indifference. When owners raise concerns they often find that the process of lodging disputes is too cumbersome and costly and in many cases they are forced to accept that their Body Corporate operates by its own rules.

The function of the Commissioner is largely to hear and adjudicate on disputes that are lodged. I have always found it strange that the only way that the legislation might be enforced if a dispute is lodged.

I know of Bodies Corporate who do not hold AGM's. I know of others who don't keep proper records and do not communicate with owners. However, the only way that a Body Corporate would ever be accountable would be if someone lodged a dispute. In many cases, the BC know that there is little possibility of a dispute even if they knowingly ignore the legislation.

The fact is that many owners are intimidated by the entire process and The Commissioner has done little to help make the process user friendly. I think it is fair to say that the process is designed to generally discourage owners from lodging disputes in the hope that they will sort out problems "in house".

In the recent adjudication of Dispute Number 0010-2012 Palm Springs Residences, the Adjudicator made two interpretations of the Act that only accentuate the fact that the Act is becoming irrelevant.

1. The Adjudicator, M.A.Schmidt stated: "as a general proposition, a body corporate may validly resolve to ratify past irregular conduct".

This comment sets an  extraordinary precedent. Firstly there is no time limit specified by M.A.Schmidt so presumably, the comment which is part of the overall ruling allows a BC to come back and "ratify irregular conduct" any time after the event. The implications of how this could be manipulated and applied make a mockery of the Act.

M.A Schmidt goes on to say that there could be legal implications for the BC in doing this but they would be outside the jurisdiction of the Act and, once again, owners would find the process of taking legal action against a BC daunting.

2. The Adjudicator, M.A.Schmidt stated that the applicants did not "complain of any detriment suffered as a result of having received notification 7 days after when they thought they should have been notified". The implication is that if a Body Corporate does not comply with time limits in notification of meetings, etc anyone who lodges a dispute would have to show that they suffered a "detriment" or some form of hardship.

These "rulings" only continue to demonstrate why so many Body Corporate Communities ignore the Act. The likelihood of an owner lodging a dispute is small. If an owner does happen to decide that there is no alternative but to lodge a dispute the chances of having the application upheld are a lottery.

It is time that the BCCM Act and the Office of the Commissioner for Body Corporate and Community Management were completely overhauled by the Government.

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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.