Want Change but Hamstrung by the Legislation?

There may be light at the end of the tunnel

In August 2013, QUT via its Commercial and Property Law Research Centre (Centre) initiated a review of Queensland property law, most relevantly a review of the Body Corporate and Community Management Act (BCCMA). The review focused on key reoccurring issues with Schemes, including, enforceability of by-laws, the subject matter of by-laws (including parking, pets, smoking and overcrowding), debt recovery mechanisms and scheme termination.

In December 2014, the Centre sought submissions on the Options Paper by the public. Only recently the Queensland Government has released the QUT Report, Property Law Review: Options Paper Recommendations Body Corporate governance issues: By-Laws, debt recovery and scheme termination.

QUT has made 29 recommendations to the Queensland Government and the government is now seeking for public consultation prior to making any decisions about possible changes to the laws.

In our opinion the big-ticket recommendations are as follows:

By-Laws

Towing of Vehicles

  1. Where a body corporate has adopted appropriate by-laws and erected appropriate signage on the common property, that body corporate should have the express ability to engage a licensed tow truck operator to remove a vehicle parked without the body corporate’s consent from the common property:
  2. at a reasonable time after sufficient notice in the prescribed form has been given in non-urgent circumstances; and
  3. immediately, and without notice, when the vehicle is parked in a way that blocks ingress and egress to a lot, the scheme land, fire doors or other critical infrastructure (urgent circumstances).
  4. In certain circumstances, a body corporate should be able to delegate decision making authority to the body corporate manager, resident manager, or an elected committee member to tow a vehicle;
  5. If the correct procedure is followed, the body corporate should not be held liable to the owner or person in control of the vehicle for any loss or damage.

Pets

  1. A by-law prohibiting the keeping of pets in a lot or on the common property should be enforceable against lot owners and occupiers if:
  2. the original owner includes the by-law in the schedule of by-laws attached to the first community management statement (CMS) for the scheme; or
  3. the body corporate adopts the by-law by a resolution without dissent.

Smoking

  1. A by-law prohibiting smoking in an outdoor area that is part of a lot (including balconies, courtyards, etc) or on common property (including common property subject to an exclusive use by-law) should be enforceable against lot owners and occupiers if:
  2. the original owner includes the by-law in the schedule of by-laws attached to the first CMS for the scheme; or
  3. the body corporate adopts the by-law by a resolution without dissent.

Fines for breach of by-laws

  1. The BCCMA should allow bodies corporate to issue a fine of up to two penalty units to lot owners and occupiers who continue to breach particular by-laws after receiving a contravention notice. The ability to issue fines will not be automatic. The body corporate in a general meeting must approve a by-law authorising the imposition of fines for breach of particular by-laws before any fines can be issued.

Debt Recovery

Scale of Costs

  1. The BCCMA should provide an itemised scale of costs for debt recovery actions taken by or on behalf of the body corporate to recover unpaid contributions and penalty interest from defaulting lot owners. The scale should apply to debt recovery actions taken prior to the commencement of legal proceedings (if any). Costs incurred in recovery of body corporate debt after the commencement of legal proceedings should continue to be determined by a court in accordance with its usual procedures. The ‘reasonably incurred’ test will continue to apply to such applications.

Debt recovery time

  1. The body corporate should be required to act to recover unpaid contributions within two months after any contributions have been outstanding for one year.

Address for service

  1. The Regulation Modules should require all lot owners to provide an address for service that is in Australia. If an Australian address is not provided or has been determined to be inaccurate, the address for service will be deemed to be the address of the lot.

Garnishee rental income

  1. Where there is a judgment against a lot owner for unpaid contributions, penalty interest and recovery costs, and the lot is generating income from being rented or leased, the body corporate should have a simple method to garnishee the rental income until the judgment has been satisfied. Where the garnishee order is not directed against the lot owner, it may be directed against an agent of the lot owner (if any) who is receiving rental income on behalf of the lot owner.

It goes without saying that the above recommendations only touch the surface of the submissions made by interested parties in the community title schemes industry. However, in our opinion the above recommendations are reoccurring issues that our office sees time and time again. While we agree with the position taken in most of the above, we can foresee the difficulties that the Queensland Government is going to face in the implementation process. Some, if not most, of the above recommendations will require a change in the power of the body corporate under the BCCMA. Further, we require a dramatic overhaul of bodies corporate by-laws.

In any event, our office is pleased to see such a positive and influential review and report being undertaken by QUT. We will eagerly await the Queensland Government’s next step and of course keep you all informed. However, in the meantime if your Schemes are experiencing some of the above issues please contact our office as we have developed by-laws which we believe tackle these issues and are still enforceable under the parameters of the current BCCMA and Regulations.

We hope to hear from you soon.

Jessica Cannon