Tactics to reduce body corporate disputes

Tactics to reduce body corporate disputes

Updated Feb 2023

Dispute procedures vary from state to state in Australia.

Submitting a motion to the body corporate QLD

(from www.justice.qld.gov.au)

Most day to day decisions are made by the committee. More significant decisions need to be made by the lot owners in the scheme voting at a general meeting.

However, there are restrictions on the types of matters that the committee can decide. For example, under the Standard Module the committee cannot make decisions that involve spending more than $200 per lot or another amount previously set by an ordinary resolution of the body corporate.

from https://www.justice.qld.gov.au

All lot owners have the right to submit motions at general meetings. Motions must be carefully written so that owners can respond with a simple yes or no vote.

The regulations provide that the person proposing the motion must obtain at least two quotations when proposing any significant spending by the body corporate. All quotations should then be submitted as separate motions with all relevant details.

Timeframes for the committee to make a decision

The committee must vote on the motion within 6 weeks, unless they have notified the owner that they need up to an additional 6 weeks (and no longer).

Self resolution for disputes QLD

Attempts at self resolution can involve you:

  • communicating with the other person (preferably in writing, as this may be needed as evidence of self resolution later)
  • presenting a motion to the committee
  • presenting a motion to a general meeting.

Conciliation for body corporate disputes QLD

Conciliation is the first step in dispute resolution after you have attempted self resolution.

https://www.qld.gov.au/law/housing-and-neighbours/body-corporate/disputes -:
If you live in a unit and have a dispute with your neighbour, you should try to work it out between yourselves before making a formal dispute resolution application.

Some say it is a laborious but necessary step to get to a tribunal for serious disputes with a 'dysfunctional body corporate'. And still you may not find your dispute solved at the tribunal stage.

Victoria Dispute Resolution

In Victoria they have dispute resolution

Dispute resolution is a way of resolving disagreements without going to court. It is a good first step in trying to reach agreement about many kinds of problems, including disputes:

  • between neighbours
  • between separating couples
  • between renters and rental providers (landlords)
  • about goods and services
  • in the workplace.

NSW (Owners Corporation)

Owners corporations can set up their own internal dispute handling processes to deal with minor disputes.

Fair Trading provides a free mediation service.

If an issue is not resolved by mediation, an application can be made to the NSW Civil and Administrative Tribunal (the Tribunal).
from https://www.fairtrading.nsw.gov.au/housing-and-property/strata-and-community-living/strata-schemes/resolving-disputes-and-mediation

Collective Sale and Renewal NSW - 75% can force a sale

Steps for collective sale and renewal if not 100% agreement of owners corporation.

  • The owners corporation must first opt in. This applies to strata schemes registered before 30 November 2016. If most owners, more than 50 percent, do not support opting in, the process stops.
  • The Secretary should call a meeting for the strata committee to consider a proposal to sell or redevelop the scheme
  • Most owners, more than 50 percent, must agree to go ahead with the proposal.
  • The strata renewal committee develops a strata renewal plan.
  • The owners must have at least 60 days to consider the plan and seek independent advice. If 75 percent do not support the plan in three months, it expires.
  • The Land and Environment Court need to approve the strata renewal plan before it can be carried out.

refer https://www.fairtrading.nsw.gov.au/housing-and-property/strata-and-community-living/strata-schemes/collective-sale-and-renewal

The purpose of the legislation was to allow sales when there were some persons within the strata who would not sell. Under the Strata Schemes Development Act an owner who does not wish to sell may be forced to sell and is a "dissenting owner". How much a "dissenting owner" receives is determined and may relate to the market value of the property rather than a proportion of the combined value if all lost are sold.
refer https://watsonandwatson.com.au/document-95/new-strata-laws-collective-sale-or-redevelopment-of-strata-schemes-owners-options

Nuisance, Harassment & Bullying in a Body Corporate - QLD

If you feel bullied, abused, or harassed by a neighbour, your first reaction might be to take it to your body corporate manager, building manager, or the committee.
Unfortunately, they may be unable to help you, as the Body Corporate and Community Management (BCCM) Act and its regulation modules do not explicitly refer to bullying, harassment or abuse.

from https://www.stratacare.com.au/nuisance-harassment-bullying-in-a-body-corporate

Strata Bullying: The Committee, Caretaker and Strata Manager Perspective.

Forms Of Bullying

How to reduce body corporate disputes

Given there is limited help for harassment from within the BCCM mechanism here are some practical tips to avoid problems.

1 Understand the rules

Know how to submit motions and conduct business within the BCCM guidelines.

2 Maintain good neighbour relationships

Just because you do not agree on everything is no reason not to get along well with your fellow lot members. Be proactive and supportive of your neighbours. At the very least you will elicit a better response should you have a difference of opinion.

If there is a clash or personalities, do not allow that clash to escalate publicly. It is common for "email wars" to erupt. Develop rules to deal with these so they do not force indecision or decision paralysis. A dysfunctional body corporate committee may be a crude tactic used to disrupt proceedings.

3 Tolerance

By default living with others under the same scheme, not every decision goes your way. If neighbour 'A' has a particular issue they feel strongly about, consider supporting them. Gardens are a classic source of dispute. Neighbour 'B' notion for a garden may resemble a cactus farm and neighbour 'C' may like a rain forest. These are simply tastes not idealistic values to go to war over. Don't take issues personally.

Which is better?

Backyard Tropical Rain Forest
Backyard Rain Forest
Cactus Garden
Cactus Garden
4 Pre-empt Issues

"I'm not supporting that maintenance because the building is going to be amalgamated and sold" is a comment overheard. If a developer whispers sweet nothings into the ear of your fellow residents you may face a deliberate avoidance of maintenance. Keep the budgets reasonable and avoid the "one day millionaires" dictating spending.

Develop a rule of thumb for worst-case scenarios. Take the time with every item of maintenance work carried out to gather professional opinions about other issues.

5 Be proactive

Depending on the age, condition and size of your scheme finding reliable tradespeople is important in reducing costs.

In small 3 storey walk-ups a really good handyman is very important. Why? That handyman will take pride in his work and be able to return for a number of issues. Painting should never be left to amateurs. Painting is a trade that benefits from professional preparation and selection of the right products.

Ensure tradesmen are keen to maintain your building by being organised and having motions and quotes organised.

Noise Disputes

The noise coming from the next door neighbours air conditioner sounded like a bus parked next to the window.

There are strict noise levels required for air conditioners pepending on the state you reside. The enforcement of these laws is often up to councils, so there lies the issue of actually getting a response. Manufacturers of air conditioners provide noise ratings at various speeds. An effective body corporate will not allow a unit owner to install an air conditioner without submitting it for approval. It may be simply a case of specifying the location of the outside unit.

Presenting compelling facts

There are a number of financial terms useful in presenting the benefits or otherwise of an investment or project-:

Benefit-Cost Ratio (BCR)

The benefit-cost ratio (BCR) is a ratio used in a cost-benefit analysis to summarise the overall relationship between the relative costs and benefits of a proposed investment or project. BCR can be expressed in monetary or qualitative terms. If a project has a BCR greater than 1.0, the project is expected to deliver a positive Net Present Value (NPV) to the investor. NPV is used in capital budgeting and investment planning to analyse the profitability of a projected investment or project.

Present Value Future Value

Future Value (FV) and Present Value (PV) are useful tools to take into account the time value of money. If you receive $200 today (PV), it is not the same as receiving $200 in a years time (FV).

Cost-Benefit Analysis

Similar to Benefit-Cost Ratio, a cost-benefit analysis is a systematic process that businesses use to analyse which decisions to make and which to forgo. It is a formula to help make investment or project decisions.

Practically you may want to present information to a body corporate meeting in a format that allows people to make an informed decision. Another tool is Decision Tree Analysis where you display an outcome based on 3 different projections. A low estimate, medium estimate and high estimate. If a project is feasible for all three levels it would be feasible in a worst-case scenario and clearly be worth it. Use these calculations to present the case for preventitive maintenance. It is not always prudent to not spend, especially when it comes to maintenance.

Body Corporate Lawyers

It is typical to have issues within a body corporate that cannot be resolved by the committee or a manager. Using a specialist body corporate lawyer can reduce issues or resolve issues. There are numerous law firms that work solely to get good outcomes for body corporate committees. They do not act for developers and specialise in body corporate issues.

Typically you would pass a motion that a certain issue will require the expertise of a specific law firm. Get a quote, then advise the advice. And only then take the issue to a general or extraordinary general meeting.

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