SCA Report

Consumer Interests at the Centre of Law Review

New statistics are out and they prove that the trend to move into strata communities is continuing with 1000 lots added to the Queensland market every month.

ABS census figures released in December 2013 suggest a mixture of reasons for this choice of lifestyle. More than 200,000 people migrate to Australia every year, with a growing proportion of those choosing Queensland as their home. Even more intriguing is the fact that the baby boomer generation is growing rapidly with over 65 year olds now a group of 899,000 out of the 4 million Queenslanders. This 2 per cent increase in that age group is reflective of a general increase in demand for community title living.

Naturally, there is a need now to tackle the issues that exist in strata communities by way of a legislative framework that protects the interests of property owners and gives them powers to self regulate their properties as they wish. It is likely that consumers will form the focus of the comprehensive 2014 property law review announced by the attorney-general Jarrod Bleijie, who is partnering with an experienced QUT panel of legal experts. The most recent release of the first two issues papers on lot entitlements and seller’s disclosure reflect that hands-on approach to the legislation.

As one of the biggest stakeholders in the industry, representing at least 70 per cent of the lots under management, SCA (Qld) has been asked to bring a practical view on the real strata living issues to the table. The review seems to be on the right track with some critical governance issues at the forefront of the debates and SCA (Qld) has no objection to this approach.

Allowing self-governing by-laws in schemes is on top of the list of the review from an owner’s perspective. Nuisance such as illegal parking in strata schemes, having pets and excessive balcony smoking have been emotive issues for decades that have clogged up our courts, ending up in QCAT with varying adjudicator rulings, none of them binding. It is a frustrating experience for residents in strata as well as bodies corporate who would like to resolve it but effectively don’t have the power to.

Those 1 million residents in Queensland’s strata communities deserve to have legislative powers to adopt by-laws that can restrict some activities and the right to enforce these by-laws, even by way of penalties if owners or tenants breach them. This is how it works when you buy a stand alone house: Council sets the rules for that whole community and if you breach them, you’ll be fined. The review is an opportunity to eliminate this unfair differentiation between strata and stand alone properties and empower bodies corporate to determine how their building “lives”.

The way a building lives contributes to the happiness of owners and it shouldn’t be underestimated how difficult it is to live in a scheme that no longer satisfies the wishes of the owners. When it comes to a point where the building is no longer enjoyable and it has reached its use-by date, SCA (Qld) has previously advocated that the procedure to knock down and rebuild a scheme should be one based on reasonableness, not on emotional considerations. The current provision that even one owner in hundreds can object to a sale of a building that is run down and costs too much to upkeep is undemocratic and unreasonable and SCA (Qld) are not the only stakeholders that feel this way.

Instead, a model as adopted in New South Wales and Singapore where the age of the building and the economic necessity to terminate the scheme are considered, is a view that we feel may be part of the legislation review that really will impact positively on strata residents.

Making the top three of consumer focussed issues that the property law review is likely to address would have to be the issue of body corporate debt. The new Woolcock ruling clarified the recoverability of a body corporate debt but we would see this taken to the next level. The courts are still full of strata owners fighting against levies that solely serve to maintain their own assets and provide for a nice home environment. Levies are raised by the body corporate itself based on forecasts of maintenance and improvement works on the property.

We have seen it many times: one single owner decides all they want is within their four walls, they argue perpetually about the democratic share and accrue more and more costs that eventually all other owners have to pay for. Currently that process is costly and continues indefinitely.

Our expectation is that the attorney-general will have a focus on freeing up the courts, keeping the body corporate solvent and put a final stop to this practice. The indication is that owners in strata will be at the centre of the review and that, apart from cutting red tape, it is about making their lives in a strata community happier. While SCA (Qld) couldn’t agree more we have also brought up some sector specific issues and we are confident that many of them make sense and will be up for the review.

Simon Barnard
Hartleys Body Corporate

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