Even with the result now declared, the outcome of the January 31 State Election in Queensland is causing uncertainty in the body corporate community.
The principal piece of legislation regulating the tens of thousands of strata schemes is the Body Corporate and Community Management Act. When the legislation was originally passed in 1997 it was acclaimed as leading the world in the regulation of strata. It was to provide for, and many believe it did allow, the best and most livable strata developments in the world to be created in Queensland.
Nevertheless, the Newman State Government had this legislation under a full review, with priority being given to the vexing issue of how to calculate and how to change the contribution lot entitlements.
Every apartment, townhouse and strata lot has contribution lot entitlements, and they are of critical importance to all lot owners because the contribution lot entitlements determine what share of the overall budget each lot owner must contribute. Lot entitlements matter because they directly impact how much each lot owner pays.
The area of lot entitlements has been controversial for some time and has been subject to several changes in law which might be said to have worsened matters. A plotted history of the changes include:
- The way entitlements were calculated was altered
- Owners were given an ability to have the existing entitlements changed from the old method of calculation to the new method. In hundreds of instances this allowed for owners who paid very high body corporate levies to reduce substantially the amount they paid. However, in the bodies corporate where there was a change, the rest of the owners were required to cover the short fall. A very small number of lot owners benefited on the expense of the other owners in their body corporate.
The level of change in this area demonstrates how emotive the issue became, and still is.
The Body Corporate and Community Management Act review process was outsourced by the Newman Government, to Queensland University of Technology (QUT) academics. I understand the portion of the review to do with contribution lot entitlements was completed and all body corporate stakeholders were awaiting a policy announcement. However, the election intervened in the final step, being new legislation, and the policy was not announced nor was the legislation changed.
At the time of writing this article the Electoral Commission has declared the result of the election, and all Queenslanders now know we have a new Government with a new Premier.
With the result of the election now declared, my personal view is that the final policy and legislation for contribution lot entitlements will be substantially different under the ALP government, compared to how might have been under the LNP government.
The policy questions which need to be answered include:
o Using a system where all lot owners contribute roughly the same?
o Using a system where more expensive apartments contribute more, because the owners are deemed to be more capable of paying?
o Using a “user pays” methodology?
o Using some other methodology?
We all need to know if the review of the Body Corporate and Community Management Act will remain a priority under the new Queensland Government, and if it is a priority, will the policy as to contribution lot entitlements be what is recommended by the QUT review panel?
It could be a case where having a final result, which is certain but imperfect, is a better result than having a system with constant change.
We wait to find out about the content of the new policy. When the outcome is known, SSKB will be across all of the detail for our clients. We will analyse the impact and provide each body corporate with a customised strategy which suits the needs of the owners. In the meantime, please contact your Community Manager if you require further information.