JOE VELLA NEWS
Strata Frequently Asked Questions
- What is a Community Titles Scheme?
- How will I know if my duplex is on a Community Titles Scheme?
- What is a Body Corporate?
- What does a Body Corporate do?
- Why do I need to have a Body Corporate committee?
- Who owns what?
- What is common property?
- Why do I need a separate Body Corporate Bank account?
- Who is responsible for the insurance?
- Does my Body Corporate need a building valuation?
- How is my Strata Title policy different to a Domestic Insurance policy?
- The legislation.
- Where do I find more information?
What is a Community Titles Scheme?
A Community Titles Scheme can include properties such as a duplex, residential unit block, high rise accommodation building, shopping complex or business park. These schemes are comprised of individually owned lots or units and common property.
(Reference - page 4 of Body Corporate: A quick guide to community living in Queensland www.justice.qld.gov.au/bccm)
How will I know if my duplex is on a Community Titles Scheme?
Duplexes, like any other Community Titles Scheme, must comply with the provisions of the BCCM Act and the applicable regulation module.
It is very rare for a duplex not to be part of a Community Titles Scheme. To verify the status of your lots, the current owners, or any prospective purchasers, will need to check their survey plans at the Department of Environment and Resource Management and see whether a Community Management System (CMS) for the scheme has been recorded. If a CMS has been recorded with the plan then it is a Community Titles Scheme and a Body Corporate will exist.
(Reference – Body Corporate and Community Management, Owning a duplex, What is a community title scheme? www.justice.qld.gov.au/bccm)
What is a Body Corporate?
The Body Corporate for a Community Titles Scheme is made up of all the owners in the scheme and must comply with the Body Corporate and Community Management Act 1997 (the BCCM Act) and regulations. Every new owner automatically becomes a member of the Body Corporate.
(Reference - page 4 of Body Corporate: A quick guide to community living in Queensland www.justice.qld.gov.au/bccm)
It is a legal entity created when land is sub-divided and registered under the Land Title Act 1994 to establish a Community Titles Scheme.
(Reference – The body corporate – an introduction. . www.justice.qld.gov.au/bccm)
What does a Body Corporate do?
The Body Corporate makes decisions on matters with shared responsibility. These include:
- maintenance and management of common property, including equipment and services.
- determining levies (financial contributions) which owners must pay to fund its operation.
- public risk insurance.
- any compulsory building insurance.
- establishing and enforcing by-laws (rules) relating to the management and control of lots and the common property.
(Reference - page 4 of Body Corporate: A quick guide to community living in Queensland www.justice.qld.gov.au/bccm)
Why do I need to have a Body Corporate committee?
The Body Corporate must elect a committee at each annual general meeting. The committee consists of executive members (a chairperson, secretary and treasurer) and any ordinary members. The size of the committee can vary in size from at least three to no more than seven people.
If there are not enough body corporate members interested in forming a committee or one of the executive positions is not filled, regulations allow a body corporate to employ a body corporate manager to carry out the functions of a committee.
(Reference - page 5 of Body Corporate: A quick guide to community living in Queensland www.justice.qld.gov.au/bccm)
Who owns what?
One of the major differences between owning a house and owning a unit (known as a ‘lot’) in a scheme is that the external walls, the floor and roof do not usually belong to the lot owner. These areas are usually common property and the maintenance and repair of these parts of the building are usually the responsibility of the body corporate. As it is common property, the lot owner is not able, without permission of the body corporate, to alter or renovate these areas, or install services such as cable television. As a further example, a lot owner is not allowed to put an additional window in a common property wall without obtaining owners corporation approval.
In most schemes, the lot owner owns the inside of the unit but not the main structure of the building. Usually the four main walls, the ceiling, roof and the floor are common property. The internal walls within the lot (eg. the wall between the kitchen and lounge room), floor coverings such as carpet and fixtures such as baths, toilet bowls and bench tops are all the property of the lot owner. While it is sometimes a hard concept to envisage, a lot owner effectively owns the airspace (and anything included in the airspace) inside the boundary walls, floor and ceiling of the lot.
What is common property?
Common property may include lawns, access roadways, swimming pools, common doors & windows and common contents (eg. furniture, benches, etc). You may need to refer to a copy of your plan to confirm these areas. Copies of plans may be obtained from the Department of Environment and Resource Management. The Titles Registration Service Centre can be contacted on 13 13 04.
(Reference - page 5 of Body Corporate: A quick guide to community living in Queensland www.justice.qld.gov.au/bccm)
Why do I need a separate Body Corporate bank account?
In accordance to the BCCM Act it is a requirement that there be at least 1 (one) bank account held in the name of the Body Corporate. All owners are required to contribute funds into this account and any expenses such as maintenance, repairs and insurance should be transacted via this account. Equally, all claims and reimbursements must be made payable directly into this Body Corporate bank account.
(Reference – page 2 of the body corporate – an introduction. www.justice.qld.gov.au/bccm)
Who is responsible for the insurance?
The type of survey plan registered for the Community Titles Scheme affects the Body Corporate’s responsibility to insure a building. The common categories of plans registered as Community Titles Schemes are ‘Building Format Plan’ and ‘Standard Format Plan’. As such this should be checked to ensure you have fulfilled these responsibilities.
The Body Corporate must take out the following building insurance:
- Building format plan – insurance for the full replacement value of each building which contains a lot.
- Standard format plan where a building on one lot has a common wall with a building on an adjoining lot – insurance for each building to its full replacement value.
The insurance policy must be for full replacement value of the buildings, the common property and any Body Corporate assets. (Standard Module section 178). Additionally, the Body Corporate must maintain public risk insurance.
(References – Body Corporate and Community Management, Owning a duplex, Who is responsible for insuring duplex buildings? and Body Corporate and Community Management, Insurance factsheet. www.justice.qld.gov.au/bccm)
Does my Body Corporate need a building valuation?
The type of survey plan registered for the Community Titles Scheme affects the Body Corporate’s responsibility to insure a building. The
If the body corporate is required to insure one or more of the buildings, the body corporate must, at least every five (5) years, obtain an independent valuation for the full replacement value of the building or buildings. Details about the most recent valuation must be included in the notice of the annual general meeting or any note attached to the administrative fund budget proposed for the annual general meeting.
Replacement Calculations Basis:
- Re-building costs at date of valuation
- Removal of debris
- Professional fees including council fees
- An allowance for GST
- An allowance for cost escalation during the planning, tendering, construction and fit-out stages
- An allowance for cost escalation for the lapse time between insurance renewal date and the occurrence of the event leading to the claim
You may also want to consider catastrophe cover and loss of rent/temporary accommodation.
How is my Strata Title policy different to a Domestic Insurance policy?
A strata title policy is different to a domestic insurance policy as it is held in the name of the Body Corporate on behalf of all body corporate members; and covers buildings, common property and public risk insurance. It does not cover the individual/personal contents of residents/owners. Payments for this policy must be made from the Body Corporate account and equally any refunds or claims payments made out to this account, not individual members.
A domestic insurance policy is only held in the name of an individual owner/s covering items on their property including their personal contents. Payments for this policy can be made by the individual owner from their normal transaction account and any refunds or claims payments can be made direct to the individual owner/s.
The Legislation
The Body Corporate and Community Management Act 1997 (the BCCM Act) is the Queensland legislation regulating bodies corporate. It sets out the rights and responsibilities of certain people associated with bodies corporate, particularly lot owners and tenants. The Department of Justice and Attorney-General administers the BCCM Act. Dispute resolution and information services are provided by the Office of the Commissioner for Body Corporate and Community Management (BCCM Office) within the department.
A number of regulation modules complement the BCCM Act and are designed to meet the needs of different types of community titles schemes. The regulation modules set out rules relating to committees, general meetings, financial and property management and insurance. Every owner should know which regulation module applies to their scheme.
Where do I find more information?
For more information please refer to the following:
Office of the Commissioner for Body Corporate and Community Management
Telephone: 1800 060 119
Website: www.justice.qld.gov.au/bccm
Community Titles Institute Queensland Limited (CTIQ)
Telephone: 07 3839 3011
Website: www.ctiq.org.au
The above information has been provided as assistance to you, the Body Corporate Member(s) for compliance. Information extracted from the Queensland Government Web Site www.justice.qld.gov.au
Please refer to this web site if you require the information for the use of non-English speaking persons.
