{"id":434,"date":"2017-02-22T00:41:32","date_gmt":"2017-02-22T00:41:32","guid":{"rendered":"http:\/\/www.theonsitemanager.com.au\/news\/?p=434"},"modified":"2017-02-22T00:44:53","modified_gmt":"2017-02-22T00:44:53","slug":"proposed-bccm-act-review-recommendations-announced","status":"publish","type":"post","link":"https:\/\/theonsitemanager.com.au\/news\/proposed-bccm-act-review-recommendations-announced\/","title":{"rendered":"Proposed BCCM Act review recommendations announced"},"content":{"rendered":"<p>Hot on the heels of the <a href=\"http:\/\/hyneslegal.com.au\/news\/lot-entitlements-can-you-unscramble-the-egg-nar-429\">lot entitlement review recommendations<\/a>, we now have the recommendations paper in response to another of the BCCMA <a href=\"http:\/\/hyneslegal.com.au\/news\/body-corporate-governance-issues-bccm-discussion-paper-issued-nar-324\">option papers<\/a>.<\/p>\n<p>What is in this recommendations paper is not law, although it is what the QUT professors are suggesting should become law.\u00a0 Responses to the paper can be lodged as detailed <a href=\"http:\/\/www.justice.qld.gov.au\/corporate\/community-consultation\/community-consultation-activities\/current-activities\/review-of-property-law-in-queensland\">here<\/a> and close on 5 May 2017.<\/p>\n<p>The recommendations paper (amongst other things) relates to:<\/p>\n<ul>\n<li>Towing of cars;<\/li>\n<li>Pets;<\/li>\n<li>Smoking;<\/li>\n<li>Overcrowding;<\/li>\n<li>Fining occupiers for breaching by-laws;<\/li>\n<li>Debt recovery costs;<\/li>\n<li>Australian addresses for service; and<\/li>\n<li>Scheme termination.<\/li>\n<\/ul>\n<p>Can anyone else smell an election coming on?<\/p>\n<p>There are 84 pages of recommendations which we distil down into this:<\/p>\n<h3>Towing<\/h3>\n<p>The current legal position is summarised in this <a href=\"http:\/\/hyneslegal.com.au\/archived-news\/can-abody-corporate-tow-acar-nar-316\">article<\/a>.\u00a0 This will change if the recommendations are given effect.<\/p>\n<p>Bodies corporate will have the ability to tow cars without a Commissioner\u2019s order.\u00a0 If urgent circumstances exist that right will be immediate.\u00a0 Otherwise, statutory notices must be given and a reasonable period pass before a car can be towed.\u00a0 Signage will have to be in place as well as a proper by-law.<\/p>\n<p>A body corporate will be able to delegate the decision-making on towing to a third party.\u00a0 A third party cannot be forced to accept that delegation.<\/p>\n<p>Assuming all of the statutory processes are followed, the body corporate will be the one liable if anything goes wrong with the towing.\u00a0 What that says to us is that if you don\u2019t follow the rules, the person making the decision to tow is going to be liable for any loss or damage (i.e. towing fees).<\/p>\n<p>The tow truck industry\u2019s market is about to get far larger.<\/p>\n<h3>Pets<\/h3>\n<p>We have written more about pets than any other strata topic.\u00a0 You can read some of the old newsletters <a href=\"http:\/\/hyneslegal.com.au\/body-corporate\/services\/by-laws\">here<\/a>.\u00a0 Pets remain about the most emotive topic in bodies corporate.<\/p>\n<p>Part of the problem with reviewing strata laws and changing the status quo is that you are in part trying to unscramble a very scrambled egg.<\/p>\n<p>It is easy for buildings yet to be built.\u00a0 The recommendations paper suggests that a developer will be able to create a lawful by-law prohibiting pets.\u00a0 This will then allow developers to market buildings as pet free (which is impossible under the current statutory regime).<\/p>\n<p>It is obviously harder for existing buildings.\u00a0 It is proposed that existing buildings can adopt a no pet by-law by a resolution without dissent.\u00a0 That is a resolution which has no votes cast against it.\u00a0 Even if there are votes against a resolution, they can be overturned in certain circumstances which we wrote about <a href=\"http:\/\/hyneslegal.com.au\/archived-news\/how-to-make-an-offer-abody-corporate-cannot-refuse-nar-375\">here<\/a> and also <a href=\"http:\/\/hyneslegal.com.au\/news\/opposing-resolutions-without-dissent-the-final-say-nar-430\">here<\/a> relating to that High Court deck decision.\u00a0 Those matters were in a different context, but you get the drift.\u00a0 Votes against resolutions with dissent can be overturned.\u00a0 Applying that discretion with respect to pet by-laws will be very interesting.<\/p>\n<p>If a building adopts a no pets by-law all existing pets will be allowed to live out their approvals.\u00a0 If a building has an existing (invalid) <a href=\"http:\/\/hyneslegal.com.au\/archived-news\/can-aby-law-prohibit-pets-nar-44\">no pet by-law<\/a> they will still need to adopt it by resolution without dissent to make it enforceable.<\/p>\n<p>In theory, we will have pet-friendly and non-pet friendly buildings.\u00a0 It will take some time to work through the existing schemes which we think may become quite a tussle.\u00a0 We will no doubt see committee members nominating in upcoming AGMs to drive whatever their preferred pet agenda is.<\/p>\n<h3>Smoking<\/h3>\n<p>We covered the current legal position on smoking <a href=\"http:\/\/hyneslegal.com.au\/news\/smoking-in-strata-nar-397\">here<\/a>.<\/p>\n<p>The recommendations paper does not suggest any changes to the laws relating to smoking inside a lot.\u00a0 People can still do that.\u00a0 What the paper does suggest is that smoking on common property or outdoor areas that are part of a lot (i.e. balconies etc) should be capable of being regulated by bodies corporate.<\/p>\n<p>A building will be able to be smoke-free or smoke friendly based on the same decision-making process as pets.\u00a0 A resolution without dissent to create a no-smoking by-law will be required to prohibit smoking in existing buildings.\u00a0 Developers will again be able to put a no-smoking by-law in place from the first day of registration of new buildings and then be able to sell lots as externally smoke-free.<\/p>\n<h3>Overcrowding<\/h3>\n<p>This was really kicked into touch as being a local authority issue. There is a suggestion that bodies corporate should be able to consent on behalf of recalcitrant lot owners to having their lot inspected for overcrowding.\u00a0 This will almost certainly be necessary.\u00a0 After all, if you are jamming more people than allowed into your lot, you are hardly likely to consent to have your lot inspected by an authority looking to prosecute you!<\/p>\n<h3>Fines<\/h3>\n<p>Fines may be allowed for breaches of certain by-laws and would be <a href=\"http:\/\/www.dilgp.qld.gov.au\/newsletters-and-brochures\/bulletin-04-16.html\">two penalty units<\/a> (with one penalty unit currently a very precise $121.90).\u00a0\u00a0 A by-law must be in place for this.<\/p>\n<p>Interestingly, fines given to tenants will be debited against the owner of the lot if they remain unpaid.\u00a0 It will mean changes to the standard terms and conditions of tenancy agreements to allow recovery of fines from bonds.<\/p>\n<p>This might also finally make owners with terrible tenants accept some responsibility for them.\u00a0 It may also drive some property managements back to onsite managers who can more actively manage tenant activity and behaviour through their onsite presence.<\/p>\n<h3>Debt recovery<\/h3>\n<p>It is proposed that there be a scale of costs and charges for debt recovery matters.\u00a0 Anything a body corporate is charged that is more than the scale will not be recoverable from lot owners.\u00a0 Whether <a href=\"http:\/\/hyneslegal.com.au\/archived-news\/are-recovery-costs-abody-corporate-debt-nar-300\">recovery costs<\/a> are a body corporate debt is also dealt with.\u00a0 Costs in accordance with the scale will be recoverable.<\/p>\n<p>Unpaid levies will be a statutory charge on a lot, similar to rates and land tax.\u00a0 This means there will be some security for bodies corporate getting paid on transfers of title.<\/p>\n<p>The required time for commencing proceedings to recover overdue levies will be trimmed by 12 months to 1 year and two months from when the debt came due.<\/p>\n<p>There will be a new garnishee process created where a body corporate can require a letting agent for a lot owner who has a judgement against them to pay the rental income to the body corporate as opposed to the owner.\u00a0 The Property Occupations Act does not allow that at the moment. A tighter working relationship looms between bodies corporate and resident managers that are letting agents.<\/p>\n<h3>Address for service<\/h3>\n<p>Everyone will need an Australian address for service.\u00a0 If you don\u2019t have one, your address will be deemed to be at the lot.\u00a0 This will apply for levy notices but will not apply to actual service of proceedings for any unpaid debts.\u00a0 You still need to be served personally for those.<\/p>\n<p>We suspect there will be some very surprised owners getting served with claims for levies they haven\u2019t paid because they haven\u2019t given the right address.\u00a0 Conveyancing lawyers without the proper attention to detail will also be in the frame here if they don\u2019t provide an Australian address for their clients.<\/p>\n<p>The letting agent for the lot is probably going to have to step up here for these communications.<\/p>\n<p>This may all be cured when we have lawful electronic strata communications.\u00a0 This was raised in a subsequent\u00a0<a href=\"http:\/\/hyneslegal.com.au\/archived-news\/the-next-body-corporate-consultation-paper-is-out-nar-369\">options paper<\/a> which we have not seen a response to yet.<\/p>\n<h3>Scheme termination<\/h3>\n<p><a href=\"http:\/\/www.lpi.nsw.gov.au\/__data\/assets\/pdf_file\/0009\/25965\/Termination_of_a_strata_scheme_by_RG.pdf\">New South Wales<\/a> charged headlong into this late last year allowing schemes to be wound up with a 75% vote.\u00a0 The first results are already in with 32 lot owners across four buildings sharing $54 million in this <a href=\"https:\/\/www.domain.com.au\/news\/cronulla-apartment-owners-sell-four-unit-blocks-in-a-row-for-54-million-with-the-help-of-new-strata-laws-20170209-gu926j\/\">collective sale<\/a> at Cronulla.<\/p>\n<p>This discussion is the last third of the recommendations paper, and it makes for\u00a0heavier reading.\u00a0 It probably should, given that anything less than 100% support means someone is going to be dispossessed of their property against their will.\u00a0 That\u2019s definitely against the <a href=\"https:\/\/www.youtube.com\/watch?v=gls09kO-8DE\">vibe<\/a> of property ownership (thanks, yet again, to The Castle).<\/p>\n<p>There is a suggested step by step process for any scheme wanting to wind itself up.\u00a0 The first is to gather structural and valuation information and circulate it.\u00a0 That information needs to demonstrate the economic reasons that justify the termination of the scheme.\u00a0 We look at this as being similar to writing off a car.\u00a0 It needs to make more financial sense to write it off than repair it.<\/p>\n<p>This\u00a0is different from the NSW position.\u00a0 In Queensland, unless you have a resolution without dissent there must be economic reasons to terminate.\u00a0 If the building is structurally sound these economic reasons are far less likely to be made out.<\/p>\n<p>Assuming this is digested and given support (and yes there are rights for objectors) the scheme needs to come up with a termination plan.\u00a0 We can see a new breed of expert popping up for this type of thing to herd the cats that are a disparate bunch of lot owners and other interested parties into a consolidated plan. \u00a0The termination plan will need to deal with all of the assets and liabilities of the body corporate (such as service contracts like management rights and body corporate management contracts along with leases etc)<\/p>\n<p>Owners then need to approve the termination plan by a 75% vote.\u00a0 No matter the outcome of that vote, there will be rights to apply to the District Court for approval of or to oppose a termination plan.<\/p>\n<p>Distribution of proceeds will be proportioned as against the respective market values of the lots, not the interest schedule lot entitlements.\u00a0 This acknowledges the reality that there are interest lot entitlement schedules out there that are out of line with valuation reality.<\/p>\n<p>Summary<\/p>\n<p>One of our oft-repeated themes is that strata living involves compromise.\u00a0 These legislative tweaks are just more examples of that.<\/p>\n<p>We have previously written articles dealing with the current position of most of what is being discussed.\u00a0 To us, that shows that the recommendations paper is addressing the things that matter.\u00a0 We wouldn\u2019t be writing about the issues unless they were topical and came across our desks every other day.<\/p>\n<p>Have a read, have your say, and let\u2019s see what pops out of government after we have our next state election.\u00a0 And by government, we probably should seek a policy position from <a href=\"http:\/\/www.abc.net.au\/news\/2017-02-11\/pauline-hanson-one-nation-gains-support-in-qld-opinion-poll\/8262182\">One Nation<\/a> on all of this given they seem likely to hold the balance of power!<\/p>\n<p>The full recommendations can be accessed <a href=\"http:\/\/www.justice.qld.gov.au\/__data\/assets\/pdf_file\/0007\/508714\/qut-recommendations-by-laws-debt-recovery-and-scheme-termination.pdf\">here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hot on the heels of the lot entitlement review recommendations, we now have the recommendations paper in response to another of the BCCMA option papers. What is in this recommendations paper is not law, although it is what the QUT professors are suggesting should become law.\u00a0 Responses to the paper can be lodged as detailed here and close on 5 May 2017. The recommendations paper (amongst other things) relates to: Towing of cars; Pets; Smoking; Overcrowding; Fining occupiers for breaching by-laws; Debt recovery costs; Australian addresses for service; and Scheme termination. Can anyone else smell an election coming on? There are 84 pages of recommendations<a class=\"more-link\" href=\"https:\/\/theonsitemanager.com.au\/news\/proposed-bccm-act-review-recommendations-announced\/\">Read More &rarr;<\/a><\/p>\n","protected":false},"author":1074,"featured_media":436,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mbp_gutenberg_autopost":false},"categories":[8,2],"tags":[],"_links":{"self":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/434"}],"collection":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/users\/1074"}],"replies":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/comments?post=434"}],"version-history":[{"count":1,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/434\/revisions"}],"predecessor-version":[{"id":435,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/434\/revisions\/435"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media\/436"}],"wp:attachment":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media?parent=434"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/categories?post=434"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/tags?post=434"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}