Body Corporate and Strata Law - Community Titles Schemes, discussion of the Body Corporate and Community Management Act Queensland, plans and related issues (September 3 2015, Sunshine Coast Strata Learning Group, Session 1)

1. Legislation
CMSs
Plans

2. History
BCCM Act 1997
Regulation Modules
…………
CMS
Lot Entitlements
By-Laws
………….
Plans
Introduction

3. History
• The Torrens System of title registration was
introduced into Queensland by the Real Property
Act (Qld) 1861
• Prior to 1965 Queensland did not have a
statutory system of title for units or flats
• Ownership was achieved through:
- “company titles schemes”
- “lease schemes” or
- “tenancy in common schemes”

4. History
• 1965 - Building Units Titles Act
• 1973 - Group Titles Act
• 1980 - Building Units & Group Titles Act 1980
• 1985 - Sanctuary Cove Resort Act
• 1988 - Retirement Villages Act
• 1983 - Mixed Use Development Act
• 1987 - Integrated Resort Development Act
• 1989 - South Bank Corporation Act
• 1997 - BCCMA and Regulations
• 2008 - new Regulations

5. BCCMA
Body Corporate and Community Management Act 1997
• Took effect from 13 July 1997
• Introduced Community Management Statements (CMS)
• Basic requirements for CTS:
• 2 or more lots
• Common Property
• CTS established by recording CMS and Survey Plan
• Regulation Modules

6. BCCMA
• Primary object of the Act:
The primary object of this Act is to provide for
flexible and contemporary communally based
arrangements for the use of freehold land,
having regard to the secondary objects.

7. BCCMA
• How the primary object is to be achieved:
For the achievement of its primary object this
Act provides for –
(a) the establishment of community titles
schemes; and
(b) the operation and management of
community titles schemes.

8. BCCMA
• The secondary objects are:
(a) to balance the rights of individuals with the
responsibility for self management as an
inherent aspect of a CTS;
(b) to promote economic development by
establishing sufficiently flexible administrative
and management arrangements for a CTS;
(c) to encourage the tourism potential of
community titles schemes without diminishing
the rights and responsibilities of owners, and
intending buyers, of lots in a CTS;

9. BCCMA
• The secondary objects are:
(d) to provide a legislative framework
accommodating future trends in community
titling;
(e) to ensure the body corporate for a CTS has
control of the common property and body
corporate assets it is responsible for managing
on behalf of owners of lot in the CTS;
(f) to provide bodies corporate with the flexibility
they need in their operations and dealings to
accommodate changing circumstances within
a CTS;

10. BCCMA
• The secondary objects are:
(g) to provide appropriate level of consumer
protection for owners and intending buyers of
lots included in a CTS
(h) to ensure accessibility to information about
CTS issues;
(i) to provide an efficient and effective dispute
resolution process

11. BCCMA
The Act and the Regulation Modules are regulated by the
Office of the Commissioner for Body Corporate and
Community Management, which:
• has exclusive jurisdiction to determine disputes that are not
Complex Disputes
• provides an information service for the public
• provides a conciliation service for the resolution of disputes
• provides an adjudication service for the resolution of disputes

12. Regulation Modules
The Regulation Modules contain guidelines about:
• Composition and operation of the committee
• Meeting procedures and requirements
• Engaging Body Corporate Managers and Building Managers
• Financial management
• Property Management
• Insurance
• Administrative (roles and records)

13. Regulation Modules
Standard– default (no particular requirements)
Accommodation – lots predominantly for
accommodation
Commercial – lots predominantly commercial
Small Schemes – must be a basic scheme, no more
than 6 lots and no letting agent
Specified Two-Lot Schemes - only 2 lots, not part of a
layered arrangement, no letting agent, residential lots
only

14. Regulation Modules

15. Regulation Modules

16. Regulation Modules
• If the body corporate was created prior to 13 July 1997 it
had 3 years to adopt a regulation module and record a new
CMS, failing which it was deemed to have adopted the
Standard Module and a standard CMS was generated for
the scheme.
• A change of regulation modules requires:
• Special Resolution
• BCCM Form 19
• New CMS recorded at titles office

17. Example of automated CMS

18. Community Management Statement
• A CMS is defined by Section 12 of the Act as a document that:-
(a) identifies land;
(b) complies with the requirements of the Act.
• A CMS is a statutory contract between the body corporate and
the owners and occupiers of Lots within a CTS.
• A CMS must be recorded to create a CTS.
• A CMS has no effect unless it is recorded.
• A CMS can not be changed. Any approved amendments to a
CMS must be incorporated into a new CMS for recording at the
Titles Office.

19. Community Management Statement
CMS - Includes components to identify the scheme land:
• Identifying information – name, unique number (allocated by the
Titles Office when the CTS is registered), address for service
• Regulation module
• Contribution schedule and interest schedule (Schedule A)
• Future Development (Schedule B)
• By-Laws (Schedule C)
• Statutory easements; service location diagrams; landscape and
architectural codes (Schedule D)
• Exclusive Use allocations and plans (Schedule E)

20. Community Management Statement
• Recording of CMS takes effect under Section 115 of the Land
Titles Act 1994
• Lodged with the General Request Form 14
• CMS must comply with format required by registrar (e.g. EU
plans)
• Registrar is not required to check whether CMS is compliant
(e.g. by-laws)
• First CMS must be signed by the original owner (i.e. the owner of
the land which is being subdivided to form the CTS)

21. Community Management Statement
• New CMS must be approved by the body corporate
• New CMS must be dated, signed and sealed by 2 committee
members, one of whom must be the chairperson or secretary
(unless otherwise approved) – make sure the seal is legible!
• Must be lodged within 3 months of approval

22. Community Management Statement
• Section 62 of the BCCMA provides:
(a) the body’s corporate consent must be in the form
of a resolution without dissent;
(b) however, consent may be in the form of a special
resolution if the difference between the existing
CMS and the new CMS is limited to the following:
(i) differences in the by-laws (other than
exclusive use by-laws); or
(ii) changing to a different regulation module
for the CTS.

23. Community Management Statement
• Section 62 of the BCCMA (continued):
(c) consent to the recording of a new CMS need not
be in the form of a resolution without dissent or
special resolution if the new CMS is different from
the existing CMS only to the extent necessary for
one or more of the following:
(i) compliance with a provision of the Act
under which the body corporate is required
to lodge a request to record a new CMS
for a purpose stated in the provision;
(ii) compliance with the order of an adjudicator
or District Court made under the Act for the
lodging of a request for the recording of
the new CMS;

24. Community Management Statement
• Section 62 of the BCCMA (continued):
(iii) changing the CMS to give effect to an approved
reinstatement process;
(iv) changing the CTS to reflect formal acquisition
affecting the CTS;
(v) recording the details of allocations of common
property made under an exclusive use by-law;
(vi) implementation of any development proposed
under the existing CMS or under the provisions of
a CMS to which the existing CMS is subject;

25. Community Management Statement
• Section 62 of the BCCMA (continued):
(vii) showing the location of a service easement by a
services location diagram;
(viii) amalgamating or subdividing Lots in the CTS
(provided there is no effect on common property or
contribution or interest entitlements for existing
Lots); or
(ix) reproducing the CMS without any change of
substance.

26. Community Management Statement
Schedule A – Lot entitlements
• The original owner determines the lot entitlements when preparing the
first CMS for the scheme.
• There are two schedules of lot entitlements recorded in the CMS:
• Contribution Schedule Lot Entitlements; and
• Interest Schedule Lot Entitlements
• Since 2011, new schemes are required to adopt one of the following
deciding principles when determining lot entitlements:
• Interest Schedule Lot Entitlements
• Market Value Principle
• Contribution Schedule Lot Entitlements
• Equality Principle; or
• Relativity Principle

27. Community Management Statement
Interest Schedule Lot Entitlements
• Generally required to reflect the market value of each lot
• Used to determine:
• each lot owner’s share of the common property
• each lot owner’s share in the scheme land and body corporate
assets in the event the scheme is terminated
• government rates, land tax and other statutory charges based on
land value
• any levy raised for the purpose of insuring the buildings on
scheme land

28. Community Management Statement
Contribution Schedule Lot Entitlements
• Used to determine the proportion of the administrative and sinking fund
levies that are to be paid by the owner of a lot
• Used to determine the value of a lot owner’s vote when voting on an
ordinary resolution by poll vote

29. Community Management Statement

30. Community Management Statement
• A resolution without dissent is required to change the contribution
schedule lot entitlements.
• The relevant motion must:
• include the proposed new entitlements;
• include the reason for the new entitlements;
• ensure the new entitlements are consistent with a deciding
principle.
• Owners of two or more lots can agree in writing to redistribute amongst
themselves the lot entitlements for their lots. The committee can
approve a new CMS that changes the lot entitlements in this way, as
long as the total entitlements do not change and no common property is
affected.

31. Community Management Statement
• An owner is only entitled to make an application to QCAT (or specialist
adjudication) to challenge the contribution schedule lot entitlements in
the following circumstances:
• A material change has occurred at the scheme since the
contribution schedule lot entitlements were decided;
• The new contribution schedule lot entitlements approved at a
general meeting are inconsistent with the relevant deciding
principle; or
• The scheme was established after April 2011 and the
contribution schedule lot entitlements are not consistent with the
deciding principle

32. Community Management Statement
A resolution without dissent is required to change
the interest schedule lot entitlements.
An owner can apply to QCAT or a specialist
adjudicator to change the interest schedule lot
entitlements to ensure they are consistent with the
Market Value Principle.

33. Community Management Statement
• The Body Corporate is required to enforce the by-laws
• By-laws may only provide for the following:
• The administration, management and control of the common
property and body corporate assets
• The regulation of, and conditions applying to, the use and
enjoyment of:
• lots included in the scheme;
• common property, including utility infrastructure;
• body corporate assets, including easement areas relevant to
common property; and
• services and amenities supplied by the body corporate.
• Other matters the BCCMA permits to be included in by-laws.

34. Community Management Statement
• By law will be invalid if it:
• is inconsistent with BCCMA, regulation module or another Act;
• restricts the type of residential use in circumstances where a lot
can be lawfully used for residential purposes;
• restricts or prevents a transmission, transfer mortgage or other
dealing in relation to a lot;
• discriminates between types of occupiers;
• imposes a monetary liability on an occupier or owner of a lot;
• is oppressive or unreasonable.

35. Plans
• The Land Title Act 1994 explains the available types of Plan Format
• The plan is created by a licensed surveyor under the directions issued
by the Registrar
There are 3 common types of Plans:
• Standard Format Plan - Defined by land boundaries (previously Group
Titles Plan)
• Building Format Plan – Defined by boundaries of buildings structures
(previously Building Units Plan)
• Volumetric Format Plan –subdivided air space – 3 dimensional

36. Plans
• Section 48B LTA
• A standard format plan of survey defines land using a horizontal plane
and references to marks on the ground.
• Example of marks—
Survey pegs in the ground.

37. Plans

38. • Section 48C LTA
• A building format plan of survey defines land using the structural
elements of a building including, for example, floors, walls and ceilings.
• “structural elements”, of a building, includes projections of, and
references to, structural elements of the building.
• Projections might be used to define a lot that includes a balcony,
courtyard, roof garden or other area not bounded, or completely
bounded, by a floor, walls and a ceiling.
Plans

39. Plans

40. Boundaries
• On building format plans, the boundaries of a lot are represented by
hard black lines.
• In the previous diagram, the plan of level A shows the common property
and part of the 4 lots (units) that together make up the scheme land.
• The plan of level B shows the balance part of the 4 lots and a common
property balcony running along the eastern side of the building. The thin
line that outlines the balcony indicates that the balcony is common
property.
• Note the balcony attached to the western side of Lots 2 and 3. The
hard black lines define the boundary of Lots 2 and 3. The thin line
shows that each balcony is within the boundary of Lots 2 and 3, and
consequently the owners have the responsibility to maintain the
balconies in good condition.
Plans

41. Section 48D LTA
A volumetric format plan of survey defines land using 3-dimensional
located points to identify the position, shape and dimensions of each
bounding surface.
Plans

42. Plans

43. Question Time!
Question 1: the chairperson, Terry, hates the
building manager. Terry instructs you to draft a
motion for the AGM to amend the CMS by
changing the regulation module from
Accommodation to Standard. Can that be
done? If so, what resolution is required? What
affect will the change have on the building
manager’s business?

44. Question Time!
Question 2: Bob enters into a contract to sell his
unit. The complex was constructed in 1981. The
purchaser’s solicitor conducts a search of the
CMS and the plan and discovers that the large
rooftop area, which Bob claims is for his exclusive
use, is recorded on the plan as common property.
Bob is certain the rooftop area is his and contacts
you to sort out the mess. What other searches
might you conduct? If it is that the rooftop area is
not Bob’s, what will need to happen to rectify the
issue?

45. Question Time!
Question 3: The CMS includes a by-law that
provides “an owner or occupier must not keep
a dog in their lot”. Mrs Hinkerboomer recently
lost her husband, sold the family home and
moved into lot 42 with her two pet German
Shepherds without seeking body corporate
approval. The committee want the dogs
removed. What is your advice to the
committee?

46. Question Time!
Question 3: The CMS includes a by-law that
provides “an owner or occupier must not keep
a dog in their lot”. Mrs Hinkerboomer recently
lost her husband, sold the family home and
moved into lot 42 with her two pet German
Shepherds without seeking body corporate
approval. The committee wants the dogs
removed. What is your advice to the
committee?

47. Question Time!
Question 4: The owner of a large industrial
warehouse wants you to help her to subdivide
the lot into 2 lots as part of a community titles
scheme. She is particularly interested in
adopting the specified 2-lot module to keep
administrative costs down. What steps are
required to establish the community titles
scheme? Is the specified 2-lot scheme the
way to go?

48. Question Time!
Question 5: Anna owns a ground floor apartment
in a five storey apartment block in Ascot. The
garden in her exclusive use courtyard is the pride
of the building. The exclusive use by-law provides
that Anna is responsible for the maintenance and
operating costs in relation to the exclusive use
area. At this years AGM the body corporate
resolved to repaint the building. The committee
directs you to seek reimbursement from Anna for
painting the wall between her lot and her
exclusive use courtyard. What advice do you give
the committee?

49. Question Time!
Question 6: Dennis is developing an eco-
estate in the rainforest near Mapleton.
Although the lots will comprise stand-alone
houses with enough distance from each other
to feel very private, it is cheaper for Dennis to
establish the scheme under a building format
plan of subdivision. However, Dennis wants
every owner to be responsible for the
maintenance of their own homes and to pay
equally for the common facilities. What advice
do you give Dennis?

50. Question Time!
Question 7: Cavrim is a developer that has acquired
a large site on Brisbane Rd at Mooloolaba. It wants to
establish a mixed-use development including an
exclusive hotel, which it intends to sell, and,
downstairs, an entertainment precinct with
restaurants, bars, clubs and a live music hall. The
building’s extensive carpark is to be located between
the hotel and the entertainment precinct to ensure
adequate sound separation. Cavrin wants to retain
the entertainment precinct for itself and requests your
advice about the best structure to ensure the
entertainment precinct operates completely
independently of the hotel.

51. Question Time!
Question 8: Faulty Towers community titles
scheme is a staged development. Stage 1
comprised 20 standard format plan townhouses
which didn’t sell too well and the developer
went into liquidation. The mortgagee sold the
development lot to a new developer who
completed stage 2 as 20 building format plan
townhouses. All the entitlements are equal.
What problems is the scheme likely to
encounter? How can the potential problems be
alleviated?