The Property Council has provided a submission on the draft Body Corporate and Community Management Amendment Bill 2010. The Bill gives consideration to amending the BCCM Act to provide a more appropriate and flexible system for the setting and adjustment of lot entitlements in Queensland.
The Property Council has welcomed the fact that the Queensland Government is moving to ensure that there is as much certainty around body corporate costs as possible by introducing a new lot entitlements system.
Retrospective changes to the user-pays system following a successful 2004 court challenge had disastrous consequences for pensioners and low income earners who faced an enormous loss in the value of their unit, due to the imposition of much higher levies.
The 2003 amendments to the above Act also resulted in developers being unable to incorporate a mix of affordable and high-end apartments in the same scheme.
The proposed legislative changes will create a good outcome for the Queensland property industry and unit owners alike. It will enable developers to include affordable housing products in their development schemes, and a fairer system will be put in place. It will also create greater certainty for unit owners that their levies will not change in the future, except in exceptional circumstances.
Unit owners who have previously been prejudiced through so called “penthouse owners” achieving levy reductions as a result of the 2004 court challenge case will be able to return to the cost sharing arrangements which were disclosed to all unit owners when they purchased their lots. The Property Council recognizes that reversal of existing lot entitlements will be a contentious issue.
However, the detriment suffered by a relevant small number of recent buyers of penthouse units will be significantly lower in overall scope than exactly the same sort of detriment that would have been imposed on hundreds of owners of more affordable units if the existing legislation was allowed to remain in place.
The Property Council is, however, very concerned with the draft provisions that would provide additional new rights for buyers to terminate contracts – notwithstanding proper pre-disclosure – where the seller is the original owner. The Property Council fails to see why a buyer should be afforded a further 90 days to terminate a contract after entering into a contract with full disclosure, particularly when estimated budgets and levies are included in the disclosure material. This could very well impact on developers being able to secure “unconditional presales” in a timely manner for construction funding adding additional cost and uncertainty.
Overall, the proposed amendments to the Body Corporate Community Management Act will bring greater certainty for unit owners, whilst allowing flexibility for developers to include a range of residential products in residential community title schemes.