Body corporate reforms strike the right balance, says REIQ

The Real Estate Institute of Queensland (REIQ) is commending changes to a number of contentious body corporate matters that were previously placed in the “too hard basket”, and have now been bought into line with modern community expectations.

The Body Corporate and Community Management and Other Legislation Amendment Act 2023 was passed by the Queensland Government yesterday, overhauling several Acts that regulate community title schemes in Queensland.

In summary, the body corporate changes will:

• Allow body corporates to make by-laws to prohibit smoking (including vapes) in outdoor areas and communal areas of strata communities,
• Prevent body corporates from making by-laws with blanket pet bans in community title schemes, and introduce a mechanism for pet approvals,
• Clarify and enhance the ability for body corporates to tow vehicles from common property in a timely manner, and
• Reduce consensus for scheme termination from unanimous to 75% of lot owners in limited circumstances.

REIQ CEO Antonia Mercorella said the reforms would help modernise apartment and unit living.

“The REIQ certainly supports the viewpoint that quiet enjoyment of people’s homes is a right that should be upheld and not restricted as much as possible,” Ms Mercorella said.

“However, we recognise that due to the nature of sharing a title and being in close quarters, there needs to be laws that govern communities with clarity and necessary protections to keep everyone within them safe.

“As our population grows, living in apartments and units is becoming more common place, and it’s important to ensure our laws keep pace with changing community standards and expectations, and are balanced so that this lifestyle remains attractive in our state.”

Ms Mercorella said the ability for body corporates to self-regulate and potentially prohibit smoking in outdoor areas such as balconies, courtyards, patios and verandas had attracted a high level of debate.

“When moving into a unit or apartment complex, people generally go in eyes-wide-open and understand that there are certain limits that apply to common use areas,” she said.

“However, many of us agree that ‘my home is my castle’ and that you should be able to live the life you want to live when you’re in the boundaries of your own home.

“Of course, the challenge comes with the fact that when you live in an apartment or a unit, your activity can also have an impact on others who live very close by – which is the case with smoke drift and second-hand smoke risk.”

She said legislative reform to prevent body corporates from banning pets, except in specific circumstances, had been another controversial topic in body corporate schemes.

“Historically it’s not uncommon to see body corporate bylaws with a blanket pet prohibition that says ‘no pets allowed’, and time and time again we have seen those bans being overturned,” Ms Mercorella said.

“We know pets are an extension of our families in many cases and the mental health benefits of having pets has been widely reported, so this reform will come as welcome news to many.

“However, it’s the REIQ’s view that there’s a missed opportunity to align this legislation to the Residential Tenancies and Rooming Accommodation Act regarding the timeframe for a decision in relation to a pet request – any inconsistency will likely impact lot owners that rent their properties on the residential rental housing market.”

In relation to allowing body corporates to tow motor vehicles if parked in contravention of a by-law, she said the REIQ expects this will be welcomed if there’s sufficient notice.

“This reform addresses situations such as visitor parking being monopolised by the same lot owners or their guests, when the benefit is meant to be enjoyed by all,” she said.

“Our view is that stakeholders should be educated about what signage should be erected and what information should be provided to lot owners about parking and towing by-laws, liability for the cost of same and particularly, with respect to third party guests.”

She said the most controversial change was to allow the termination of a community titles scheme for economic reasons, after providing a termination plan and following a prescribed timeframe, with 75% of lot owners voting for the motion.

“This scheme termination reform, which was raised at the Housing Summit, is limited to specific circumstances with ageing or rundown buildings that will become unviable within five years, and there are rigorous statutory hoops to jump through to satisfy this,” she said.

“From our perspective, it was particularly important to see adequate consumer protection measures included for vulnerable people, such as options for recourse, and compensation for lot owners as well as for parties with contractual interests in the scheme.”

In addition, changes have also been made to the Land Sales Act 1984 impacting the operation of sunset clauses in off-the-plan land sale contracts to:

• Limit when property developers can invoke sunset clauses in contracts for the sale of land to specific situations, including requiring buyer’s consent. 

Reduce consensus for scheme termination from unanimous to 75% of lot owners in limited circumstances.

“It is our view that the proposed provisions, albeit offering strong consumer protection, may lack consideration for the commercial challenges faced by developers in providing housing,” Ms Mercorella said.

“We appreciate that in what has been an unprecedented, extraordinary market period, that there have been some reports of developers pulling the pin on developments and leaving buyers to start again.

“However, our concern is that this now legislates an outlier issue which is not prevalent or evident in today’s market now that we’ve returned to ‘normality’, and under normal circumstances these clauses are needed for developers to avoid bankruptcy on unfeasible projects.”

She added, “As peak body, the REIQ is committed to developing resources and training for the real estate sector to ensure they are supported and prepared for the changes.”

ENDS

Media enquiries: Claire Ryan, Media Manager, REIQ M: 0417 623 723 E: media@reiq.com.au

Read another REIQ media release: REIQ Housing Report Card highlights sad state of affairs.

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