Body corporate investment and living – what to do when it doesn’t stack up

The increasing popularity of living and investing in medium to high density housing has brought increasing enquiries on community titles law. This area of law is not exclusively for residential apartments. The legislation[1]  applies to a wide range of property development projects – for example, residential units, hotels, business parks and commercial offices, or a mixed use of all of these.


Dealing with disputes – the wrong approach can be expensive

The legislation provides for the “exclusivity of dispute resolution provisions” and a process to be followed in the resolution and determination of a dispute. With only some limited exceptions, any dispute in regard to property registered as a community title scheme (CTS) must at first instance be referred to the Commissioner for Body Corporate and Community Management. Where a matter has been brought to a Court at first instance, it may well be referred back to the Commissioner with costs brought against a plaintiff for bringing proceedings in the wrong jurisdiction.[2]

Not only is this a very expensive and unnecessary process causing delay to the resolution, but had the dispute been brought to the Commissioner at first instance the dispute resolution provisions outlined in the legislation provide a far less adversarial approach. This is particularly important in community title matters where often there is a need for an ongoing relationship between the parties.

Unpaid levies – being late does matter

The issues of unpaid levies by a lot owner is a matter which we frequently see. Any irregularities on the calculation of quarterly levies on a contribution notice needs to be resolved immediately the discrepancy arises. In one extreme matter, unpaid levies totalling $15,664.31 developed into a matter where the lot owner failed to make payment of 38 levy notices resulting in the imposition of penalties and the recovery of legal costs totalling $106,792.22.[3]

Management rights disputes

Equally, disputes concerning management rights need to be addressed early and expert advice sought. Often the holders of management rights of schemes have invested heavily in purchasing the rights and are prepared to expend considerable funds to defend their position. Not only is a body corporate not obtaining value from the non-performing managers, but more importantly lot owners’ asset value is being diminished by poorly maintained common property.

What you need to do

To understand when you can refer an issue directly to Court; your rights in relation to unpaid levies; and how to deal with management rights disputes without eroding value, the appropriate person to contact for advice is a lawyer experienced in body corporate law.

For more information

Contact Helena Mrmos at helenam@redchip.com.au or phone +617 3223 6100.

 


[1] Body Corporate and Community Management Act 1997 (Qld), and the applicable Regulations.

[2] Penberg Pty Ltd v. Body Corporate for  Market Town  [2007] QDC 20 (25 January 2007).

[3] Body Corporate for  Sunseeker  Apartments CTS 618 v. Jasen [2009] QDC 162 (18 June 2009).

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