Strata community living gaining momentum?
Our objective to be part of the decision making process for key strata issues is becoming a reality as we engage with a range of stakeholders.
We were recently invited to the briefing for the Queensland government’s response to the independent Commission of Audit Final Report that our Secretary Ian D’Arcy attended. At the budget lockdown on 3 June, I was part of a confidential stakeholder briefing before the Queensland budget was released to the public. This was the first time that SCA (QLD) had been invited to the lockdown and, while it crystallised that there are stimuli for the tourism sector, residential housing will be facing increased costs. The attorney’s budget has increased marginally but it is uncertain whether this will be of benefit to us as an industry.
The Queensland attorney-general has indicated a full review of the current body corporate legislation to start at the end of June and we are looking forward to being a key driver in shaping the amendment bill.
While the budget is providing $15 million for tourism campaigns to attract visitors in short-term letting, it will without a doubt put a slight dampener on market growth by introducing an increase in stamp duty on strata building insurance. This hike will have a negative impact, especially on North Queensland households where many strata title owners have experienced 200-300% higher insurance premiums over the past two years after damage to the buildings.
Hence it is a welcome move that government will inject $4.2 billion in flood and disaster recovery and improved infrastructure projects to minimise disaster damage that owners have to foot the bill for. At the same time these infrastructure investments create pre-conditions for a stronger property market and, in combination with the development plans for South-East Queensland, there is a confidence that medium to high density housing will rise.
The signals are switched to “growth” as we see the positive initiatives in Queensland that aim to support the property sector. Last month the Sunshine Coast Regional Council announced the Build and Benefit scheme that cuts council fees for developments by 50%.
The Queensland government has announced an all-encompassing reform of the planning legislation to simplify the state’s land use planning, and development approval regulations and prescriptions. Approvals for new schemes are slowly increasing and many sustainability features for new buildings have been scrapped which means less financial strain as well as less compliance requirements. The initiatives to help the current market and the growth stimuli for the future markets all indicate that in the long term we will get back to healthy growth levels.
It can be expected that with the steady influx in strata living, there will be more crucial reforms tackled and common law will determine more and more what we do now in strata.
Earlier this year we saw a decision in QCAT that contravened long standing practices and SCA (QLD) welcomes that new way of understanding strata community living. The Appeal Tribunal of QCAT delivered a decision that will leave new owners in a strata scheme open to a potential liability for debts incurred by a previous owner. Under the BCCM legislation outstanding body corporate debts can be recovered from either the previous owners who incurred the debt or the current owner.
The exception to that was when the body corporate sued the previous owner and obtained judgment for that debt. However, in a recent QCAT ruling (The Body Corporate for 399 Woolcock Street CTS 34770 v Sexton & Ors case), the tribunal found the exception no longer applied and ruled that a new owner was responsible for the outstanding contributions incurred by the previous owner notwithstanding that the body corporate had obtained a judgment.
What that means is that every strata title buyer should double check the debt against any property before taking on ownership. New owners will need to be extra careful when buying into strata now. This decision puts a higher onus on the new owner to discover any debt realities that may exist veiled in the background of their purchase. Anybody looking to buy into a strata scheme is being urged to engage a solicitor to conduct accurate and complete searches of records that list existing unpaid body corporate levies, rates and charges against a property.
This QCAT decision should lead to a better practice in making owners understand what they buy into. In the decision, Member Brabazon QC gave little insight into whether or not the new owners were responsible for the value of the judgment debt, including outstanding contributions, penalties and recovery costs, or for the outstanding contributions and any penalties only. Further guidance is required in order to make this decision clear for all involved, new owners, bodies corporate and old owners alike.
While it is now clear that it is the new owners who suffer the loss when a lot owner cannot pay the body corporate bill, it has given rise to a whole new set of issues. Many new strata owners will be first home buyers. It is not likely they will have the tools or experience to think to look for a hidden sink pit of debt that may have been left by the previous owner.
Name change
Your membership with Strata Community Australia (Qld) Ltd will expire on 30 June 2013 and you will be eligible to join SCA (QLD) Ltd from 1 July 2013.
What does that mean?
Currently, the SCA-RTO is integrated in Strata Community Australia (Qld) Ltd’s structure as it was initially established in Queensland, running training within the state. As you have all noticed since 2012 the RTO has commenced national delivery. On 1 July 2013 the SCA-RTO will become a national stand-alone entity retaining the name Strata Community Australia (Qld) Ltd. The new industry body representing strata professionals and affiliated service and product providers is called SCA (QLD).
As you are most likely aware, Strata Community Australia (QLD) Ltd has, to date, comprised two operating segments which conduct the following functions:
a. the provision of services to the community titles industry in Queensland; and
b. a registered training organisation (RTO) – accreditation training for the industry.
The board of Strata Community Australia (Qld) Ltd has resolved for various strategic reasons to restructure these two operating segments so as to make the RTO operations independent from the Queensland community titles operations. As it is legally difficult to transfer the RTO operations to another entity, the Queensland board has decided to transfer the Queensland community titles operations to another entity and retain the RTO operations in Strata Community Australia (Qld) Ltd.
The Strata Community Australia (Qld) Ltd board has registered a new company for this purpose. The new company is called SCA (QLD) Ltd. The initial directors of the new company are the same as the directors of Strata Community Australia (Qld) Ltd. The objects of the new company are solely focused upon promoting the strata community sector, and they are aligned with the objects of the national body, Strata Community Australia Ltd.
It is the intention of the Board to eventually change the name of the new company to Strata Community Australia (QLD) Ltd, and change the name of the existing company – Strata Community Australia (Qld) Ltd – to SCA-RTO.
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