The Queensland Government is currently considering new ways to terminate strata title schemes which are seen as uneconomic.
Proposed reforms, under the Body Corporate and Community Management and Other Legislation Amendment Bill 2023, aim to make it easier to terminate ailing community titles schemes and facilitate redevelopment.
Introduced to Parliament in August, the bill arose directly from the Palaszczuk Government’s 2022 Queensland Housing Summit. It is part of a raft of reforms to body corporate living.
Key proposals under the new bill
Under the proposed legislation, a community titles scheme can be terminated with the support of 75% of lot owners.
This can only be done where the body corporate has agreed on key economic reasons for termination, which meet defined thresholds.
Economic reasons for termination apply where the body corporate is not economically viable, or will not be economically viable within the next five years.
In other words, the body corporate is not able to carry out repairs or maintenance to those parts of the property it is responsible for.
A comprehensive process to protect lot owners
The proposals recognise that some lot owners may not wish to sell and terminate their community titles scheme. Their rights will be protected with some key provisions.
Safeguards for lot owners, under the new bill, include:
- Requiring professional reports and other necessary information to inform all decisions about economic reasons.
- Permitting lot owners to ask for key termination decisions to be reviewed.
- Providing minimum compensation requirements for lot owners.
These proposed review and dispute resolution pathways are designed to reduce lot owners’ exposure to costs associated with any termination process. It’s important to note that the 75% of owners approval apply only to terminations based on defined economic reasons.
In all other situations, a community titles scheme can only be terminated where the body corporate passes a resolution without dissent, or an order of the District Court is granted.
Problems addressed by the new bill
According to Queensland Attorney General Yvette D’Ath, the amendments aim to meet the needs of lot owners who face “excessive and exorbitant costs” to maintain, repair and renew buildings in their schemes.
“Our new laws recognise that it might not make economic sense for lot owners to have to pay large body corporate levies to repair and maintain their buildings, when a significant majority of the lot owners would rather the scheme be sold for redevelopment.”
Many of these uneconomic schemes are located on sites ripe for development. They have the potential to offer more productive housing and investment opportunities for Queenslanders, Ms D’Ath said in a press release.
Yet the bill aims to balance development opportunities with the rights of property owners, which is why the raft of protection measures is included.
Bill proposes raft of other changes
The bill also aims to make it easier for lot owners to keep pets. It includes the application of reasonable conditions to keep pets, to reduce the potential for disputes. Bodies corporate and owner/occupiers will find it easier to reach agreement about keeping animals within the building.
It will also clarify rules around the power of body corporates to tow motor vehicles. This will make it easier to deal with problem vehicles in a timely manner.
Where to from here?
Smarter Communities Strata Community Consultant New Development, Sean Dumigan, is keeping a close eye on the bill’s progress.
“If passed, the changes to the laws will provide a further option to Bodies Corporate where a significant majority of owners may be able to decide to terminate the scheme with a 75% agreement threshold,” he says.
“If implemented in the current form, the proposed changes include processes, timeframes and documentation that the Body Corporate will need to follow.”
As he points out, the proposed changes could still be amended.
“Smarter Communities is monitoring this closely, so our team is ready to assist our clients where needed.”
To discuss your property’s strata management needs or receive a FREE management proposal contact our friendly team. We also offer more helpful resources and community living news in our FREE newsletter.
