Many investors have been finding that the return from holiday letting their apartments does not match the return that they would achieve from long term rentals.
Whilst there are times when the returns for holiday rentals are high eg Christmas and holiday periods, the net return over a full year is often a disappointment to owners. Fees and charges associated with holiday letting are high and the upcoming hike in electricity charges will be the final straw for many investors.
Owners who use holiday letting pay for all electricity charges. However, if they rent their apartments out with a long term lease, the tenants pay for the electricity.
Electricity providers are writing to owners advising of the increases in charges. One such provider clearly blames "the impact of the Federal Government's carbon price" as one of the factors influencing the increases.
Astute owners will be doing their sums and many will be making the decision to take their units out of the holiday pool and rent them out on a long term basis. This will be a huge blow to Caretakers who rely on holiday lettings in Body Corporate Communities.
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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. I am the owner of http://www.moviemem.com/
Showing posts with label Queensland. Show all posts
Showing posts with label Queensland. Show all posts
Thursday, June 28, 2012
Friday, April 30, 2010
Body Corporate Levy Equalisation Farce
On February 19th Peter Lawlor announced changes in the legislation so that "millionaire penthouse owners" would no longer be able to exploit a loophole to have their Body Corporate Levies slashed at the expense of smaller unit owners.
In recent years there have been a number of applications for equalisation of levies in Bodies Corporate based on the premise that the levies go towards the maintenance of the common property. As every owner has an equal share of common property the theory was that every owner should pay the same amount irrespective of the value of the unit.
The original calculation of levies set by the Developer is often based on the size of the unit and the floor level ie the units on higher floors usually pay higher levies.
I interviewed Peter Lawlor on my radio programme on Jazz Radio 94.1fm shortly after he made the announcement. He argues that owners should be able to rely on the levies that were set by the Developer and an owner of a penthouse should pay more than an owner of small ground floor apartments.
There are obviously good arguments on both sides but there are currently applications to equalise the levies before QCAT formerly CCT that have been left in the "too hard basket" for more than a year.
Since Peter Lawlor's announcement, QCAT has not communicated the progress of at least one application, presumably waiting for the legislation to go through. This is a farsical situation. One applicant has argued that a court can not and should not hold off making a legal decision because the legislation "might" change. He argues that the current law applies and that a ruling should be made on that basis.
Of course, others argue that it would be ridiculous for QCAT to rule on the current law only to have their ruling overturned months later when the legislation changes.
Either way, QCAT should communicate the current status to all owners who are embroiled in these expensive and ongoing applications.
_____________________________________
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.
In recent years there have been a number of applications for equalisation of levies in Bodies Corporate based on the premise that the levies go towards the maintenance of the common property. As every owner has an equal share of common property the theory was that every owner should pay the same amount irrespective of the value of the unit.
The original calculation of levies set by the Developer is often based on the size of the unit and the floor level ie the units on higher floors usually pay higher levies.
I interviewed Peter Lawlor on my radio programme on Jazz Radio 94.1fm shortly after he made the announcement. He argues that owners should be able to rely on the levies that were set by the Developer and an owner of a penthouse should pay more than an owner of small ground floor apartments.
There are obviously good arguments on both sides but there are currently applications to equalise the levies before QCAT formerly CCT that have been left in the "too hard basket" for more than a year.
Since Peter Lawlor's announcement, QCAT has not communicated the progress of at least one application, presumably waiting for the legislation to go through. This is a farsical situation. One applicant has argued that a court can not and should not hold off making a legal decision because the legislation "might" change. He argues that the current law applies and that a ruling should be made on that basis.
Of course, others argue that it would be ridiculous for QCAT to rule on the current law only to have their ruling overturned months later when the legislation changes.
Either way, QCAT should communicate the current status to all owners who are embroiled in these expensive and ongoing applications.
_____________________________________
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
Schoolies Ban!
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.
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.
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.
Sunday, April 5, 2009
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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