Queensland Property Law Review – Recommendations for Strata Reform

An Options Paper has been released by QUT’s Commercial and Property Law Research Centre, containing a series of recommendations on body corporate governance issues.

The report, which forms part of the broader Queensland Government Property Law Review, provides 29 recommendations for reform of the current framework under the Body Corporate and Community Management Act 1997 (QLD), and focuses on the operation and enforcement of body corporate by-laws, debt recovery and scheme termination.

The findings of the Options Paper are particularly significant in relation to the termination of community titles schemes, where the implementation of a prescribed termination procedure is recommended. The procedure would require the collection of ‘relevant information’ (reports, valuations and accounts relating to the scheme), periods of consideration of the relevant information by lot owners, and the appointment of a facilitator to oversee the preparation of a scheme termination plan.

A termination plan would be capable of approval (following expiry of the relevant consideration periods) by either resolution of the body corporate without dissent, or, in cases where following consideration of the relevant information it is agreed (by majority resolution of the body corporate) there are ‘economic reasons’ for the termination of the scheme, with the support of 75% of the owners of lots in the scheme. Lot owners opposing a termination plan would be afforded rights of appeal under the proposals.

A summary of some of the key additional recommendations is set out below.

• Towing: Bodies corporate would be permitted (assuming appropriate by-laws have been adopted and signage erected) to arrange for vehicles parked on common property without consent to be towed either immediately (in urgent circumstances) or following reasonable notice (in non-urgent circumstances). A body corporate would be able to delegate this power in urgent circumstances to a body corporate manager or resident committee member.
• Pets: By-laws against pets in a lot or on common property would be both permissible (and not unreasonable or oppressive) and enforceable where the prohibition forms part of the original community management statement (CMS) when the scheme is created, or is later adopted by body corporate resolution without dissent. The removal of, and any changes to, a no-pets by-law would also require resolution without dissent.
• Smoking: By-laws against smoking on common property and on outdoor areas forming part of a lot (balconies, courtyards etc) where the smoke drifts to an adjacent lot would also be permissible (and not unreasonable or oppressive) and enforceable where the prohibition either forms part of the original CMS or is adopted by body corporate resolution without dissent. The removal of, and any changes to, a no-smoking by-law would also require resolution without dissent.
• Disclosure and fines: By-laws would be required to be included as part of the disclosure regimes for sales and leases of lots within a scheme and would be deemed to be binding as between the body corporate, lot owners, tenants/occupiers and mortgagees. Body corporates would also have the ability to issue fines to owners and occupiers, who continue to breach particular by-laws.

The Queensland Government has invited further submissions on the recommendations until 5 May 2017.

Authored by:

Brad Marland, Partner