We often feel we’re at the pointy end of body corp issues, the time when apartments are put up for sale and the market makes a judgement. There’s no better way of finding out if your body corp fees are too high, your building’s not maintained well enough, the sinking fund’s too low or the AGM and owner relationships are just plain dysfunctional. Buyers can be brutal in their assessment and they’re entitled to be when they’re spending their money. And one issue has been making apartment buyers nervous across Queensland.
We’re delighted to see Fair Trading Minister Peter Lawlor’s move to amend the Act and bring back some predictability to body corp fees. The current Act says lot entitlements must be equal unless you have a good reason and despite knowing the fees when buying in, there’s been a run of apartment owners over recent years going to the Tribunal to ask for a reshuffling of lot entitlements (the numbers used to set your fees). Their own fees have gone down at the expense of their neighbours and in some cases resulted in penthouse owners getting a whopping discount, 1 bedder owners a skyrocketing bill. It made headlines early last year when shots were fired in one Gold Coast building.
The proposed amendments are open for public consultation until September 23rd, and when adopted will lock-in your lot entitlements. Developers will again set interest entitlements according to value of the apartment (as they used to) and we’d expect levies will pretty much follow suit. And importantly the Minister is stopping the ability to move the goalposts later.
Mr Lawlor says, “In the future, the ability to adjust contribution schedule lot entitlements will be limited to all lot owners in a scheme unanimously agreeing to make an adjustment through a resolution without dissent or by unanimous agreement between two or more lot owners to redistribute the lot entitlements for their lots amongst themselves.”
Nice to see some common sense prevailing.
Has your building had its lot entitlements changed? We’d love to hear your experiences.
Tags: Body Corporate and Community Management Act Queensland, body corporate issues Queensland, Brisbane apartments
We are in the process of going through exactly the scenario depicted above. The recent purchaser of a four-bedroom river front apartment is trying to have the existing body corporate entitlements equalised. If such an adjustment was to occur, owners of two-bedroom units would face a 31% increase in body corporate contributions, the owner of the four-bedroom unit a 34% reduction. Based on current rental yields and a benchmark rate of return, this adjustment would reduce the capital value of a two-bedroom apartment by $48,000. Given we ALL signed contracts of sale with full knowledge of the existing arrangement (and therefore presumably paid capital values that reflected the existing arrangement), this is patently unfair. His ultimatum has caused great stress to all two-bedroom unit owners, including aged pensioners and a young family. Bring on the Amendment!
When and how does one find out if this bill is being passed and is there any scope to change current body corporate rules?
I have personally been through the same experience a couple of years ago. The penthouse owners of the Mooloolaba International (now Mantra) sat on the Body Corporate and got legal representation to amend the current body corporate payments.
Archers, the current Body Corporate passed that all unit holders, irrespective of room size or location should pay the same Body Corporate fees. This means that a multi-million dollar 3 bedroom apartment, with expansive Ocean views, pays the same as a $250k ground floor west facing 1 bedroom apartment. Their argument is that the facilities are for all to enjoy, irrespective of how many people can be housed in an apartment.
I don’t personally have the legal funds to challenge the current rules and when I have tried challenging the rules, I have been given the cold shoulder. This seems grossly unfair.
Craig: Here’s the link to the office of the Body Corp Commissioner and there’s heaps of info there on your options.
http://www.justice.qld.gov.au/justice-services/body-corporate-and-community-management
We understand the costs to address an issue like this needn’t be high, and you deserve a voice. No doubt some of the other lot owners feel frustrated as well.
Hope this helps