Thursday, June 28, 2012

Holiday letting - another nail in the coffin

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.


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

Tuesday, June 12, 2012

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.

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.

Tuesday, May 15, 2012

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


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.

Saturday, May 5, 2012

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.


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.

Tuesday, April 3, 2012

Unit owners fight huge increases in body corporate charges

An article in the Courier Mail dated April 3rd refers to the fact that unit owners plan to fight supposedly "huge increases" in body corporate charges.

The article tells half the story. Following changes to the legislation to overturn the equalisation of levies some Bodies Corporate have reverted back to the original lot entitlements that were set by the Developers. This came about as a result of a huge number of complaints about penthouse owners who took action to greatly reduce the levies that they paid.

Campbell Newman says "Sorting out the mess left by Labor in the area of body corporate law is going to take some time, but I expect my minister to sort it out."

If he seeks to change the legislation again, he will have to deal with a huge backlash from unit owners who have already said that the levies should remain as set by the Developers.

This is a no win situation. The debate about levies has created conflict and massive costs to Body Corporate communities and is likely to continue for years to come.

The end result is that investors are turning away from buying units in Queensland. Anyone contemplating purchasing a unit would have to consider the continuing uncertainty about Body Corporate Lot Entitlements.

Sunday, January 15, 2012

New regulations - do you comply?

It has been reported that on 1st January 2012, new regulations came in to force requiring all pre 2004 Bodies Corporate buildings to comply with new Asbestos regulations or risk heavy fines and/or prison terms.

Apparently, the regulations require Bodies Corporate to have an Asbestos Inspection and report completed. If any Asbestos is found in the building, a register needs to be completed and the BC should ensure follow up reports are completed every twelve months.

The reason this is being done is presumably because Bodies Corporate Buildings are considered a work place and any health hazards would need to be disclosed to anyone working on the property.

Many will be asking why "pre 2004". Surely Asbestos was phased out long before then? Well, Amosite and Chrysotile (white asbestos) was used up until 2003 so that is why the new regulations have been introduced.

The interesting thing about this is that a previous regulation was in place for buildings built prior to 1990 but it seems to have been largely ignored. Many Bodies Corporate have no idea or knowledge of the legislation and inspections have not been made despite the fact that Asbestos has been present in many buildings.

You have to wonder whether disclosure statements picked this up and whether there may be the possibility of legal action down the track based on the fact that Bodies Corporate have failed to have the reports and inspections carried out.

Body Corporate Committees rely on their Body Corporate Managers to update them on their requirements. At the moment, some BC Managers are advising their clients that they should have the report done and inspection completed asap. Others are not. Those BC Communities without BC Managers are unlikely to be aware of the new regulations.

There is currently some debate about whether the regulations have actually come into force despite the published date 1st Jan 2012.

You should seek advice in relation to the new regulations from your Body Corporate Manager.


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. also present a radio programme on Jazz Radio 94.1fm Monday - Friday afternoons on the Gold Coast.