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Quorum

What is a Quorum?

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In the world of Strata, a quorum is the minimum number of voters who must be present at a General Meeting in order to have a valid meeting.

In this article written by Frank Higginson of Hynes Legal, Frank explains what a Quorum is and the outcome if you do not get a Quorum at a General Meeting.

Frank also goes on to describe who a voter at a General Meeting is and the requirement of that voter to ensure their vote can be counted.

Click on this link to read more!

 

 

 

 

 

 

 

 

Using Direct Debit to pay your Body Corporate Levies

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Did you know that you can pay your Body Corporate levies via Direct Debit?

This can be a very viable option for those lot owners whom travel and are away from home, or are just sometimes forgetful.

The  Direct Debit is set up through ‘Stratapay’.

There are two options for lot owners to select when setting up a Direct Debit through Stratapay;

  1. Autopay – The payment for your levies is taken from your bank account approximately 5 business days from the due date of the levy.  The amount taken is the exact amount of the levy that is due.
  2. A reoccurring payment amount of your choice, reoccurring on a date and interval you choose.

Option 1 is often utilized by lot owners as it is ‘Set and Forget’ .

As long as the funds are available to debit from your nominated bank account or credit card, your levies will always be paid by the due date.  This ensures you will always meet discount dates (if applicable to your Body Corporate), avoid penalty interest (if applicable to your Body Corporate) and avoid overdue fees which are processed on overdue notices and final notices.

If Direct Debit is something you would like to establish for payment of your Body Corporate levies then please follow the steps set out hereunder;

  1. Click on this link to obtain the Stratapay Direct Debit form for completion.
  2. Phone our office on 07 5450 5300 or email [email protected]  and request your ‘Stratapay reference number’.
  3. Complete the Stratapay form and then post the form to the address at the bottom of the first page.

Once your direct debit is set up with Stratapay, your future levy notices will have Direct Debit notated on them.

 

 

 

Balustrades and Railings

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In Queensland there are strict requirements when it comes to balustrades

Where a deck or balcony is one meter or higher above the ground then balustrades are required to be at least one meter high.

The openings in balustrades cannot be greater than 125mm.

If a deck is more than four meters above the ground, balustrades cannot have elements located between 150mm and 76omm from the floor.

Balustrades must be constructed so they can resist forces that can reasonably expected to be placed upon them, including people leaning against them and strong winds.

Retaining walls do not require a balustrade unless they are associated with a path of travel to and from or between buildings, however it is still a good idea to provide a balustrade or barrier where there is a risk of people falling.

Balustrades are required on stairs and are just as important as they are used as support for people ascending and descending the stairs.  For stairs, a barrier of at least 865mm high above the nosing of the stair treads is required.  For stairs more than 4m in height, a railing must also not have any climbable elements such as horizontal rails located between 150mm and 760mm from the floor.

Repair or Replacement of a Balustrade

You are only required to comply with the standard that the dwelling/building was constructed to, in relation to repair or replacement of the balustrade; however if the replacement is part of a substantial renovation exceeding 20% of the system then the certifier may request a replacement construction to current standard.

The above information does not relate to pool fencing requirements.

*Information taken from Queensland Building and Construction Commission

items covered by residential strata building insurance

Items Covered by Residential Strata Building Insurance

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Residential strata building insurance provides general insurance cover for the building, shared or ‘common’ areas, common property and common area contents. There are several items covered by residential strata building insurance. We’ve listed these below.

Items covered by residential strata building insurance:

BUILDING i.e. Fixtures inside a lot that are covered under the Body Corporate Insurance

  • Baths, hand basins and toilets
  • Ducted air conditioners
  • Windows
  • Fixed tiling
  • Stoves
  • Doors
  • Paint
  • Wallpaper

COMMON AREA CONTENTS i.e. Contents items covered that are in common areas NOT in lot owner’s units

  • Carpets, floating floors, other temporary wall, floor and ceiling coverings within hallways and lobbies
  • Pot plants, mirrors and other decorations within common areas
  • Appliances such as washing machines and dryers owned by the Body Corporate and used by all unit owners and housed in common laundries
  • Any barbeque equipment, gardening equipment and garden.

Lot owners often misunderstand that their personal contents will be covered under the strata building insurance when in fact they are not.   Lot owners are strongly advised to have contents insurance and for those lots tenanted, landlords insurance, to ensure that in an event where an insurance claim is required to be placed their assets are correctly covered.

ITEMS COVERED BY CONTENTS AND LANDLORD POLICIES i.e. Items NOT covered by strata insurance

  • Carpets, floating floors, other temporary wall, floor and ceiling coverings
  • Light fittings
  • Curtains, blinds
  • Personal equipment and valuables such as jewellery and watches
  • Clothing
  • Furniture
  • Household appliances
  • Loss of rent

 

*information taken from CHU’s Residential Strata Insurance Plan

Levy Recovery Time

Levy Recovery Time Limitations

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Bodies Corporate are urged to commence levy recovery action against lot owners with outstanding levy payments within 2 years.

A recent ruling made by a Queensland District Court Judge ruled that Bodies Corporate must start legal proceedings to recover a lot owners debt within two years and two months of the debt becoming due; otherwise the Body Corporate will be unable to take recovery action.

What happened for this ruling to occur?

The Body Corporate for Mount Saint John Industrial Park CTS v Superior Stairs & Joinery Pty Ltd – This case involved a Body Corporate that raised a special levy to lot owners in 2009 to rectify works on a road that was on the common property.  A lot owner disputed the contribution and insisted that they would not pay the levy raised.    The Body Corporate then commenced recovery proceedings about 3 and a half years after the special levy first fell due.

The lot owner defended that part of the recovery claim was made out of the two year time limit established in the BCCM (Standard) Module Regulation 2008 (Qld).

In this regulation it states:  ‘If the amount of a contribution or contribution instalment has been outstanding for 2 years, the Body Corporate must, within 2 months from the end of the 2 year period, start proceedings to recover the amount.’

The way it has been done in the industry in the past is to treat the above provision as compelling the Body Corporate to take recovery action to ensure the continued financial viability of the Body Corporate, but not stopping recovery action being taken outside of that period.  This means that:

  • Lot owners could compel a committee to take recovery action as that two year period approached.
  • A Body Corporate Manager could refer to the two year period as justification to a committee why a tough decision has to be made against an owner that may be experiencing hardship.
  • A claim to recover outstanding contributions was not considered to be barred until six years has passed pursuant to the Limitations of Actions Act 1974 (Qld).

Instead a District Court Judge found:

  • The general time limit in the Limitations of Actions Act does not apply in the face of the two year two month period set out in the BCCM regulation module.
  • There would be no point to the two year two month period set out in the BCCM regulation module unless it was taken to be a time limit on when the action must be taken.

So what happens now?

If a debt to the Body Corporate is identified that is more than 18 months overdue, then urgent action is required to be taken.  A letter of demand or negotiating a payment plan is not sufficient.

The Body Corporate is now required to make a claim in a court or tribunal to recover the contribution before two years and two months pass otherwise the Body Corporate will have lost the right to recover the contribution.

To assist in managing the above it is suggested that;

  • Committees are regularly reminded of outstanding levy contributions
  • A resolution is passed to adopt a debt management policy to establish timeframes in which the Strata Manager may issue reminder notices, letters of demand and refer arrears to a lawyer for debt recovery
  • Carefully consider must be made for any payment plan that would draw out a contribution for more than 12 months.

 

Source: Jason Carlson – Grace Lawyers

 

 

 

 

Aluminium Composite Cladding

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Action has been taken by the Queensland State Government to tackle an issue that directly impacts the safety of strata property owners: flammable cladding.  This issue has dominated the media since the tragic fire at the Grenfell Tower in London and in the first week of July the State Government has appointed a special Audit Taskforce to investigate the use of substandard building supplies.

The Palaszczuk Government has established an Audit Taskforce to conduct a targeted audit with a primary focus on buildings constructed between 1994 to 2004 using aluminium composite cladding, after a potentially non-conforming cladding product was found on the Princess Alexandra Hospital at Buranda.

Mr de Brenni said that the Audit Taskforce would begin examining buildings built from 1994 – 2004, focussing firstly on hospitals and aged care facilities, accommodation buildings, high occupancy public and private buildings and high rise office buildings.

 “Queensland has a strong and robust system of fire safety and certification for our built environment, which has been successful in discovering and rectifying recent cases on non-conforming products.

 “The Audit Taskforce will begin by examining buildings constructed when use of these products was relatively new.

 “Fifteen officers from across QFES and QBCC will be assigned to the Taskforce, led by a senior officer from HPW.”

The full media release can be read here

The Strata Community Australia (Queensland) is very supportive in the action taken by the State Government to see testing measures introduced.

Body Corporate Insurance Premiums And Excesses

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A Body Corporate must take out body corporate insurance for its Community Title Scheme.  Each owner must pay part of the costs for that insurance.

The Body Corporate collects money for the insurance premiums as part of levy contributions.  Levy contributions are collected each year.

Body Corporate Insurance Premiums for Building Insurance

How much you pay as an owner toward the building insurance premium is determined by what type of survey plan your Body Corporate scheme is registered under.

If your scheme is registered under a Building Format Plan then your share of the insurance premium is based on the interest schedule lot entitlement.

If your scheme is registered under a Standard Format Plan the Body Corporate has to insure buildings with common walls.  Your share of the insurance premium relates to the cost of reinstating the building on your lot.

If your Body Corporate sets up a voluntary insurance scheme and you decide to take part, then you must pay and amount that relates to:

  • the value of your building as a part of the total replacement value of the buildings insured under the policy;
  • What you do on your lot and how that affects the total risk covered by the policy (e.g. if you store chemicals which could be a fire risk)

Adjusting Building Corporate Insurance Premiums

In some cases the Body Corporate can change the amount an owner pays towards to  insurance premium.

The Body Corporate can do this if…

  • The lot has better fittings and fixtures than other lots that affects the premium
  • Improvements have been made to the common property which benefit the lot and affects the premium
  • What is done on the lot increases the total risk covered by the insurance policy

Excesses

The Body Corporate can decide to take out an insurance policy where an excess has to be paid on an insurance claim.  An excess is an amount of money paid towards a claim you make on the insurance policy.  The excess may be the Body Corporates responsibility to pay or the lot owners responsibility to pay.

Who Pays The Excess?

This depends on a number of things.  For example, if the Body Corporate claims on its insurance because a lot has been damaged by water from a leak in that lot, the lot owner would normally pay the excess.  However, if the damage to the lot happened because the Body Corporate did not properly maintain the common property, it would be reasonable for the Body Corporate to pay the excess.

The general rule is if an event affects:

  • One lot – the owner should pay the excess unless the Body Corporate decides that it is unreasonable for them to do so.
  • Two or more lots – The Body Corporate should pay the excess unless the Body Corporate decides it is reasonable for the excess to be paid by one or more of the affected lots
  • One or more lots and the common property – The Body Corporate should pay the excess unless the Body Corporate decides it is reasonable for the excess to be paid by 1 or more of the affected lots.

 

 

Committee Spending

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*The following information is for community titles schemes registered under the Standard, Accommodation and Small Schemes module.

Committee Spending And Spending Limits

The relevant limit for committee spending (how much a committee can spend without having to go to a general meeting) can be set by Ordinary Resolution in a motion in either an Annual General Meeting or Extraordinary General Meeting.  There is no minimum or maximum limit that a Body Corporate can set.

If no amount is set by a general meeting resolution then the relevant limit is $200 x the number of lots in the scheme.  For example $200 x 20 lots = $4,000 committee spending limit.

The committee must allow for goods and services tax (GST) in its spending.  For example for a scheme with 20 lots the committee spending limit would be $4,000.  If the committee obtained a quotation that is $4,400 this can not be approved at committee level as it goes over the relevant spending limit.  The committee would need approval by a resolution at a general meeting for the quotation to be accepted.

The relevant limit for committee spending in a layered scheme is calculated by multiplying the number of layered lots in the scheme by $200.

For example: The principal scheme = 5 lots.  4 of these lots have 20 lots inside of them (these are referred to as layered lots).  The spending limit is calculated as: 1 (principal scheme) + 20 (layered lots) + 20 (layered lots) + 20 (layered lots) + 20 (layered lots) x $200 = $16,200.

Available Funds

The committee is not allowed to divide a single project into smaller parts to bring the project within its spending limits.  For example the project is the renovation of the foyer and there is quotations for tiles $8,000, light fittings $4,000 and painting $6,000.  Each quotation comes under the committee spending limit of $16,200 however the renovations cannot be done at committee level as the whole project is over the spending limit.  The committee would have to seek approval by resolution at a general meeting.

When can the committee spend over the committee spending limit?

The committee can only spend of its relevant limit if:

  • The spending is authorized by a resolution at a general meeting
  • The lot owners of all the lots in the scheme have given written consent
  • An adjudicator has authorised the spending to meet an emergency
  • The spending is needed to comply with a statutory order or notice given to the Body Corporate.

 

strata inspection report

Why Do I Need A Strata Inspection Report?

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When buying a unit it is very important to obtain a Strata Inspection Report.  A Strata Inspection Report does not replace a building report however it provides important information about what is happening within the scheme that you should be aware of before you take the leap of purchasing the property.

A Strata Inspection Report should provide the following details but may include more information not listed below;

  • Who the current owners is
  • What the levies are for the property, when they are paid to and is their any special levies for major works
  • What your unit entitlements are
  • How much is in the Sinking Fund and the Administrative Fund and are any of these in deficit
  • Is there a Sinking Fund Forecast Report
  • Are there any legal matters or disputes
  • Does the scheme comply with fire requirements
  • Are pets permitted
  • Is there building defects
  • What are the By-Laws
  • Is there any major expenditure planned or has there been any over the past three years
  • What is the current value of the building
  • Is the building insured
  • Copies of the meeting minutes
  • Copies of building reports

A Strata Inspection Report can cost as little as $250-$350.  This is not a huge outlay when you consider you may be about to make one of the biggest financial commitments of your life.  The information you receive in the report will be far more valuable to you than the cost of the report.

For further queries regarding strata searches or to order a strata inspection report for a building on the Sunshine Coast or Brisbane contact:

Inside Out Legal Services

Sun City Legal Services

REMINDER: Changes to DEFT Payments at Australia Post

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There Have Been Changes to DEFT Payments At Australia Post.

You may be aware that on 1st October 2016 a $2.75 processing fee was introduced for DEFT payments made at Australia Post outlets.

When you pay your levy via DEFT at Australia Post, you will be charged this processing fee at the time of payment.

For example, if your levy is $100.00, $2.75 will be added to your levy payment amount at point of payment at Australia Post, so your total payment due will be $102.75.

It is important to note that if you choose not to pay the $2.75 processing fee at time of payment, this amount will be deducted from your levy payment.

This will result in a shortfall in the actual amount outstanding to your Body Corporate.  Please note that the processing fee is applied by DEFT Payment Systems, and not Sunstate Strata so if you are unaware of the changes to DEFT payments you may fall behind in your body corporate payments.

Alternative payment methods are;

  • A direct credit into the Body Corporate’s bank account.  This can be done via the internet through your internet banking or in person at your bank.  You will need to contact Sunstate Strata for your Body Corporate’s bank account details prior to using this option.
  • Send a cheque to DEFT at GPO Box 141, Brisbane QLD 4001
  • Use one of the other options on the bottom of your levy notice
  • Set up a direct debit through DEFT or Stratapay

There is no $2.75 processing fee on the above options.