Forced Sales - Queensland - 75% Rule

Will you be forced to sell your unit against your will or take on the expensive legal ramifications of wanting to stay in your home?

Following the October 2022 Housing Summit, the Palaszczuk Government has announced reforms to body corporate legislation to make it easier to sell and redevelop ageing or rundown community titles schemes in Queensland.
'Stakeholders made it clear at the Queensland Housing Summit that scheme termination was a key area that required reform – and the Palaszczuk Government has listened.'

Media Statement The Honourable Shannon Fentiman

COVID-19 changed the way Australia viewed sea change locations like Gold Coast and Sunshine Coast.
The growth of lifestyle locations is well documented.
The pressures on Governments to repay massive COVID-19 expenses is creating a collision course for our communities.
Inflation was inevitable and a rental crisis or petty landlord crisis has created an unhealthy decision making process.

The Gold Coast City Council (GCCC) has demonstrated a lack of respect for ordinary residents, ratepayers and homeowners.

GCCC are now calling for state taxes to be dropped for developers. For so called 'social housing projects'.
However they have utilised/offered premium public parks to developers who are building units primarily for overseas based or interstate based wealthy purchasors.

• Cable Park Main Beach
• Forise Tower (discontinued) - an electrical sub-station was moved for a foreign developer to a prime children's park on the foreshore.
• Monaco Main Beach (actually taken over the location of the so called 'Spit entry statement' for developer dongas with free advertising)

When units that ordinary workers would reside are replaced by $3-5 mil private holiday pads the whole community loses.
The sale of batteries to keep luxury cars charged-up for absent owners rises (according to the local battery provider) but local experience shows the general economy suffers.
Next, massive immigration is required to make up the worker shortfall - recently on ABC 7:30 Alan Kohlar said immigration has caused the rental crisis.
There are benefits in the temporary building employment.
However the reality of a high rise next to an older building is always damage to that building.

Developers do not have to live with the outomes

• No concern about existing residents (parking - traffic - visual amenity)
• Do not live there themselves
• Known to harass homeowners - a penchant for harassing vulnerable women
• Lie and misrepresent (eg 75% rule 'will mean you will be forced to sell for less than we offer you now')
• Attempt to deliberately cause disharmony amongst homeowners
• Corruptly sway body corporates to either underspend (building condemned) or overspend (average wage earners forced out)
• Are often only interested in their 2% profit
• Developer profits are directly related to 'low balling' existing home owners and getting 'deals' from council in the DA process

Developers turn your home into a battle ground

Pitting neighbour against neighbour appears to be the go to mode for some developers seeking amalgamations.
What happens when a greedy neighbour looking for an extra $200,000 on the sale of their unit approaches a developer?
They identify the 'weak links' and target them.

Neighbours you once knew on a casual friendly basis are now in a very different relationship-:

• How old are they?
• Are they healthy?
• Are they in debt?
• Are they in a stable relationship?
• Are they employed?
• How well have they managed their finances?
• Do they gamble?
• Have they formed alliances aimed at targeting you?
• Have they been offered inducements to -:
  a) run down the body corporate
  b) harass a specific person
  c) offered temporary accommodation not available to you

What can an ordinary homeowner do in response?

It is important to become proactive in your complex.
Being good neighbours is a far more helpful than creating unnecessary enemies.
Separate personal life from discussions about finances.
Whilst a person wanting to sell immediately is a reality, discussing this is only ever an option if you allow it to be.
If an owner approaches you, often it is at the request of a developer.
Sometimes the very topic of discussing your future with essentially a stranger with no real interest in your wellbeing is stressful.
Understand the triggers for your own stress and set the boundaries to the developer and any neighbours.
Even a neighbour who does want to sell will be more inclined to understand your position if you state it clearly and set the boundaries to any financial discussion.
Typical comments like 'these will be knocked down soon' are typical sales conditioning used to condition someone into selling.
The reality can be that a block of units built pre 1980s can have another 40 years.
It is the case that some buildings only 15 years old are in a state of disrepair or structural issues.
Each building is unique and generalisations on the lifespan of a building are separate than a wish to live in a new unit.
There is no guarantee a new unit is built well.
There is no way of knowing the body corporate fees of a building in advance.
Insurance alone is an issue for coastal locations in Australia. Would simply the difficulty in obtaining insurance trigger the proposed 75% rule?

Level of Experience - Lifestyle

Knowledge of finances is never a given.
An understanding of the time value of money is necessary to really make financial decisions.
Individual life experiences vary.
Lifestyle to some is more important than others.
Cultural backgrounds and experiences play a role in what people consider 'success'.
Some cultures make enormous sacrifices to improve the life of their children.
Others have been born into a very comfortable lifestyle and pursue other goals.
A recent piece of legislation due to be debated in Queensland is going to cause an abundance of the issues discussed in this article.
Developers are already quoting the rule which has not actually been introduced yet.
Were any of the 'stakeholders' mentioned in the media statements by Attorney General Shannon Fentiman actual unit owners facing ongoing harrassment?

Draft legislation under current consideration by the Queensland Parliament may make redevelopment possible with a simple 75% vote of owners in favour.

Developer misrepresenting draft legislation (name withheld)

Given the reason for the proposed reform is to “make it easier for units to be redeveloped”, one can surely envisage a developer with billion dollar resources able to swiftly displace the long settled retirees from their long term abode in a sought after seaside suburb. As if developers do not already have far more power and influence than to change the law to make it even easier for them. The proposed reform represents corporate bullying at its worst.

UOAQ: 75% for Termination of a Scheme is Offensive to Queenslanders

5 years - not economically viable clause

Body Corporate and Community Management and Other Legislation Amendment Bill 2023
Statement of Compatibility
Page 5

1. Termination of community titles schemes (required sale of lots)
Clause 7 of the Bill sets out a new process for termination of uneconomic community titles schemes that has the potential to limit property rights of a minority of owners who do not support sale (and termination) of the scheme. In summary, the new process will permit the owners of 75% or more lots in the scheme to resolve to undertake a collective sale process and terminate the scheme, essentially compelling other lot owners to sell their lot without their agreement. This will require that the body corporate first establish, based on consideration of prescribed information about the scheme, that there are economic reasons for termination. Economic reasons are either that it is now, or will in five years be, not economically viable to continue to repair or maintain the community titles scheme, or that for a scheme with all lots used for commercial purposes, that it not economically viable for the scheme to continue.

Legislation Passed

Inquiry into the Body Corporate and Community Management and Other Legislation Amendment Bill 2023

The bill was passed on Tuesday 14 November 2023. 95 submissions were received and accepted by the committee. Submissions were from significant stakeholder groups including-:

• Australian Resident Accommodation Managers' Association
• Body Corporate Law Queensland
• Committee of Mariner Court Body Corporate
• Strata Assist Queensland
• Property Council of Australia Queensland
• Urban Development Institute of Australia Queensland
• Town Planning Alliance
• Real Estate Institute of Queensland
• Planning Institute Australia
• Housing Industry Association
• The Main Beach Association
• Strata Community Association
• Strata Search Agents Association Queensland
• Community Alliance Association
• Australian Property Management Alliance
• Property Owners Association of Queensland
• Unit Owners Association Queensland
• Queensland Law Society
• Australian Apartment Advocacy
• Many individuals

Multiple steps before a community titles scheme can be terminated

• Preparing a pre-termination report with input from an appropriately qualified person, such as a structural engineer
• Once the lot owners receive a copy of the pre-termination report, 90 days must pass prior to holding a general meeting to consider an economic reasons resolution
• Notify all lot owners within 14 days of passing an economic reasons resolution and termination plan resolution
• Parties have 90 days from the day they are notified about the passing of the economic reasons resolution to apply to a specialist adjudicator to dispute the decision
• Once a termination plan is distributed, 120 days must pass prior to a general meeting being held to consider termination resolution
• If a motion to terminate the scheme passes, all lot owners and leaseholders must be notified within 14 days
• Parties have 90 days to apply to the District Court from the day they are notified about the termination of the scheme to dispute or vary the termination

Source: Inquiry into the Body Corporate and Community Management and Other Legislation Amendment Bill 2023

Most stakeholders broadly supported the proposed new framework for the termination of community titles schemes that were not economically viable.

On the extreem end of the of the submissions were representatives of the property devlopment sector-:

recommended opening the scheme termination process to all community titles schemes over 30 years old, removing the economics reasons test

Property Development Sector

The Property Council, UDIA and other property developer submitters called for the termination provisions to apply to any scheme, referring to the New South Wales model and recommendations by the QUT Property Law Research Centre.

Source: Inquiry into the Body Corporate and Community Management and Other Legislation Amendment Bill 2023

Unit owners need to ensure their body corporate schemes are well managed, especially from a financial point of view.

NSW - forced to sell

One of the first strata renewal and collective sales of apartments in NSW has closed in Sydney's Macquarie Park, but not without a long-drawn legal stoush between owners and buyer that could be cause for a review of new laws.

Source: AFR - Objecting owners forced to sell in Macquarie Park strata renewal scheme