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The vexed issue of strata title community schedule lot entitlements has again been addressed by the Queensland parliament by the tabling of the Body Corporate and Community Management and Other Legislation Amendment Bill on 14 September 2012.
With the commencement of the Body Corporate and Community Management Act 1997, owners were entitled to challenge the legitimacy of developer imposed CSLEs. Further, owners could at later times, if they were so minded, challenge CSLEs, particularly where there might have been a change in circumstances for their particular schemes.
From 1997 to 2010 challenges concerning CSLEs occurred predominately in the following categories:
• Developer imposed schedules prior to the BCCM Act;
• Combined commercial and residential schemes;
• Schemes with penthouses who were carrying a disproportionate entitlement, and hence financial scheme burden for maintenance.
In April 2011, the Queensland government enacted BCCM Act amendments that had the effect of:
• Permitting eligible owners to require bodies corporate to revert back to CSLEs prior to adjustments made in the 1997 to 2010 period, without the necessity of a general meeting or other approval;
• Preventing further adjustment consideration of CSLEs excepting in limited circumstances.
The result occasioned much unhappiness with many owners because:
• Many owners had purchased units on the understanding that the CSLEs as recorded would apply into the future;
• The CSLEs effected the real estate value of their acquisition;
• The entitlement to revert back to pre-adjustment CSLEs, meant that for many owners the levies increased without owners having any say or input into the process.
It is fair to say that many owners considered the process to be unjust and unfair.
Take, for example, a scheme that may have adjusted their CSLEs in 2001. Doubtless, there were many purchases and sales of units in the subsequent ten year period and those purchasers, adversely affected by a reversion back, undoubtedly viewed increases as unjust and unfair. There was much litigation as owners, bodies corporate, committees and their advisors sought to understand and interrupt the 2011 amendments.
In any event, on Friday 14 September 2012, the attorney general introduced the Body Corporate and Community Management and Other Legislation Amendment Bill 2012.
The effect of the amendment bill, which has received considerable publicity has been the effect that as and from the date of tabling the bill, bodies corporate are no longer required to change their CSLEs.
The attorney-general, Jarrod Bleijie, when tabling the amendment bill acknowledged that because it would be effective from the date it was tabled, that is 14 September 2012, acknowledged that the bill would introduce a degree of retrospectivity but stated that the public interest would be best served by introducing certainty as and from 14 September 2012.
The attorney-general noted that the 2011 amendment that enabled effected owners to seek a reversion of the lot entitlements, had been the subject of much public debate and criticism, the attorney-general said, “The ability of a single lot owner to compel a body corporate to effectively revert orders for the adjustment of contribution schedule lot entitlements obtained from a specialist adjudicator, court or tribunal prior to 2011 amendments were the most odious provisions of the 2011 amendments and would be stopped by this bill.”
The effect of the bill is that reversion of CSLEs that had taken place since the 2011 amendments, could be undone.
Further, pursuant to s.399 of the amendment bill those scheme that had made a decision but had not recorded a community management statement were directed that such reversion decision was taken not to have occurred and a further CMS could not be lodged. In addition to effecting permitting a reversion of CSLEs that had taken place since April 2011, the amendment bill also has removed the requirement that a community management statement must accompany a contract for the sale of a lot in the scheme.
The amendment bill is not the last that will be heard of changes to the Body Corporate and Community Management Act 1997 insofar as it relates to CSLEs. The amendment bill did not go so far as to re-establish rights to owners to seek an adjustment of the CSLEs under the just and equitable principles as applied prior to the 2011 amendments.
The attorney-general announced that the Queensland government will be looking at broader issues concerning CSLEs and it can be expected that when government has completed that review, it will announce further changes to legislation it proposes to address that outstanding issue.
Peter George
Short Punch & Greatorix
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