Revamping The Rules – Queensland Body Corporate Reform

On 14 November 2023, the Body Corporate and Community Management and Other Legislation Amendment Act 2023 was passed by the Queensland Government (‘Act’). The Act officially commenced on 1 May 2024 and made several notable changes to the Body Corporate and Community Management 1997 (‘BCCM Act’) and other related legislation. In this article, our property and commercial law team explores the changes to the BCCM Act made by the recently introduced Act and what these changes will mean for body corporates and lot owners alike. 

TERMINATION OF A SCHEME – BODY CORPORATE

Buying a property within a community title scheme (‘CTS’ or ‘Scheme’) can be an attractive housing and investment prospect, with this sector seeing significant growth in past years. However, buying in a CTS is not always without issue and budgetary and other financial issues have only been exacerbated with recent inflation.

Under the BCCM Act, a Scheme could only previously be terminated by:

• a resolution without dissent (i.e. with no objections) of the body corporate, supported by an agreement between all lot owners and tenants about termination issues; or
• an order of the District Court.

However, the changes brought about by the Act now mean that a Scheme can also be terminated for ‘economic reasons’. Under the Act, this includes where:

• all the lots in the CTS are used for a commercial purpose and it is no longer economically viable for the Scheme to continue; or
• the CTS will not be economically viable in five (5) years’ time to carry out repairs or maintenance to parts of property that it is required to maintain under the Scheme.

While the first limb only applies to commercial schemes, being a CTS comprised purely of commercial lots, the second applies to all Schemes including residential Schemes. Where a body corporate wishes to terminate an uneconomic Scheme, they must follow a strict procedure, which includes preparing a comprehensive pre-termination report, and 75% or more of lot owners must vote in favour of termination for it to proceed.

PET REGULATIONS

Previously, a body corporate could restrict pet ownership or even ban lot owners from owing pets within a Scheme. Under the changes to the BCCM Act, body corporates will now be prohibited from making or enforcing by-laws that ban pets outright or restrict the number, type or size of pets that a person can have.

Moreover, if a lot owner requires the approval of the body corporate to keep a pet in their lot or on the common property, a body corporate must within twenty-one (21) days of the lot owners request provide a response either approving or rejecting the request (‘Prescribed Period’). Such approval must not be unreasonably withheld.

If the body corporate:

• agrees to the request, they may impose any conditions that are reasonable and appropriate in the circumstances;
• does not agree to the request, they must set out reasons for the refusal (albeit such reasons must be within the scope of the Act); or
• fails to respond within the Prescribed Period, the pet will be deemed approved.

Examples of when a body corporate could refuse a pet ownership request may include where keeping an animal would: pose a risk to health and safety, contravene a law or interfere with other lot owners use and enjoyment of common property.

SMOKING RESTRICTIONS

Another change introduced by the Act is in relation to smoking, and a body corporate can now completely prohibit or restrict smoking of certain products (‘Smoking Products’) on common property and outdoor areas of lots, such as balconies. This change was brought about to combat the issue of second-hand smoke which was not only described by the Queensland Government as hazardous but can also be considered a nuisance.

Notwithstanding the above, a body corporate cannot under these new laws restrict smoking:

(a)   on common property used by a lot owner under an exclusive use by-law; or of course
(b)   in the inside area of a lot (e.g. within a dwelling).

Smoking Products are not only limited to cigarettes and includes tobacco products, herbal cigarettes, loose smoking blends and personal vaporisers (i.e. vapes).

SUNSET CLAUSES

As considered in our recent article, which can be found here, the Land Sales Act 1984 was also changed to limit the circumstances in which a developer can terminate an off the plan contract. Accordingly, a developer can now only terminate an off the plan contract with consent, an order of the Supreme Court or in other limited situations.

These changes apply retrospectively and will affect all existing off the plan contracts entered into (but not settled) before 22 November 2023. While these changes do not apply to CTS land this position may change in the next few years after industry consultation and noting that the government has already committed to reviewing these reforms in the next year.

OTHER CHANGES

Finally, other notable changes introduced by the Act include:

• Seal – body corporates are no longer required to have a seal;
• Towing – the law is clarified to note that a body corporate can tow a vehicle from common property where parked in contravention of by-laws;
• Insurance – the adjudicator may now approve alternative insurance arrangements (i.e. where insurance is not available or the body corporate cannot comply with the required insurance levels for certain buildings) in place of the commissioner;
• Determination of Financial Year – body corporate may change their financial year by ordinarily resolution once every five (5) years without the need to obtain an adjudicators order; and
• Layered Arrangements – enforcement of by-laws in layered Schemes and access to certain records has been made easier.
• RAMSDEN LAWYERS – HOW WE CAN HELP

In light of recent amendments to the BCCM Act, it is important that body corporates review their by-laws to ensure they are compliant with legislation and their rights are protected. Conversely, lot owners should take note of these changes and how they will affect their rights. If you are seeking legal advice or assistance with your body corporate matters, Ramsden Lawyers can assist you. We are happy to arrange an obligation-free initial consultation to assist you in navigating the procedures set out under the relevant legislation for your circumstances.

The content of this article is intended to provide general guidance to the subject matter and must not be relied on as legal advice. Specific advice should be sought about your circumstances.