What happens when I can’t find the Defendant to personally serve?

As all lawyers and a significant number of clients learn quickly in litigation, finding a Defendant to personally serve can be painfully slow and frustrating.  Unfortunately, the Civil Procedure Rules categorically require personal service for originating matters (and a handful of other proceedings).

If the client is unable to provide any further details of the  Defendant to personally serve, we recommend a process referred to as a “skip trace.”  In simple terms, skip tracing involves hiring an investigator to conduct a search of a wide range of public and private resources, and often involves on site investigation, to find a Defendant’s location.  Skip tracing can be a complex and lengthy process, and usually attracts a fee of anywhere between $110 and $1,100 (which varies depending on the scope of the investigation, if on sight investigation is required, this fee can be significantly greater).

A general skip trace includes some of the following searches, but can depend on what information is already held about the Defendant:

  • Electoral roll search;
  • Electronic White Pages;
  • Federated Content Search;
  • Australia Securities and Investment Commission;
  • Real property;
  • Google;
  • Social websites;
  • Australian Business Number; and
  • Reverse phone searches.

Our Team conduct a range of these searches internally, prior to commencement of proceedings (based on the client engagement).  However, when these initial searches prove unsuccessful and/or the process servers advise us they are unable to locate the Defendant at the last known address – we will offer a solution being a “skip trace” investigation.

We welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.

What is the process of approving “common property improvements”?

Does your common property require improvement, but your Committee is unsure of their rights or the requirements imposed on it by law? Or is your Body Corporate aware of its obligations but requires guidance? At Nautilus Law Group, our team can assist your Committee or Body Corporate to make the correct choices of how to implement any common property improvements.

A Body Corporate cannot make improvements to common property without meeting particular requirements. It must also make sure that the correct procedures are undertaken to ensure it cannot be held liable.

Section 163 of the Body Corporate and Community Management (Standard Module) Regulation 2008 (“the Regulations”) allows for a Body Corporate to make improvements to common property. (Depending on your Body Corporate Scheme, you may be subject to an alternate Regulation Module.  For purposes of outlining, in principle, the process across all Modules, we only refer to the Standard Module in this Article.  If you have specific questions about a different Module and the Improvement Limits associated with each, please do not hesitate to contact our Team.)  

Basic Improvement Limit

A Body Corporate can only make improvements to common property providing the cost of the improvement is not restricted by the monetary limit stipulated within Section 163 of the Regulations. Simply, the improvement must not exceed the basic improvements limit for the community title scheme.

The Regulations provide a definition of this limit as being $300.00 multiplied by the number of lots within the community titles scheme (“the Scheme”). For example if your Body Corporate has five (5) lots, that number (being five) is then multiplied by $300.00, which is $1,500.00. Should the improvement be equal to or less than this amount, the Committee does not require Body Corporate approval to resolve the improvement.

Not only is this section beneficial for lot owners in that the Committee cannot approve a costly large scale improvement but it also allows for the Committee to make decisions on small scale improvements without requiring it being passed by ordinary resolution.

Ordinary Resolution Improvement Range

There are times when a Body Corporate wishes to make improvements to common property on a larger scale. When such a situation arises, the improvement must be approved by ordinary resolution of the Body Corporate. Generally an improvement of a larger scale will far exceed the Basic Improvement Limit of $300.00 multiplied by the number of lots within the Scheme. Large scale improvements may consist of the construction of a new swimming pool or the re-painting of the entire complex.

If the improvement is necessary, section 163 of the Regulations provides for the cost of the improvement to fall within the Ordinary Resolution Improvement Range. It further provides a definition of this limit being $2,000.00 multiplied by the number of lots within the Scheme. For example if your Body Corporate has five (5) lots, that number (being five) is then multiplied by $2,000.00, which is $10,000.00.

Some issue can arise in larger Bodies Corporate, such as those with hundreds of lots, where the proposed improvement reaches the maximum limit. In these situations, the budget for the improvement can be upwards of more than one hundred thousand dollars.  There may be a time where you, as a lot owner, may not agree on the improvement or the amount it will cost your Body Corporate. Thankfully, Section 163 assists in protecting lot owners by imposing a maximum limit on large scale improvements and allowing each lot owner the opportunity to vote on whether the improvement should be allowed.

Conclusion

At some point during your ownership of a lot within the Scheme, there is a high probability that your Body Corporate will want/need to make improvements to the common property. When this occurs, it is critical that your Body Corporate meets the requirements under Section 163 of the Regulations. If you or your Body Corporate is unsure or it simply requires clarification or confirmation, the Body Corporate Team at Nautilus Law Group is here to help.

We welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.

Body Corporate and Community Management – Small Scheme Module

The Body Corporate and Community Management (Small Scheme Module) Regulation 2008 (the Small Scheme Module) applies from 30 August 2008, and generally relates to bodies corporate with 2-6 lots and of a predominantly residential nature.

Letting Agents
Complexes applying the Small Scheme Module do not retain letting agents, which reflects on the type of the complex.
Term of engagement of Body Corporate Managers
Under the Small Scheme Module, Body Corporate Managers are retained for 12 months from the date of engagement, or such lesser terms as determined by the body corporate.  Managers are, therefore, required to renew terms of appointment on an annual basis.
Meetings

Meetings of the Body Corporate are referred to “annual general meetings” or “extraordinary general meetings.”  The meetings may be called as follows:

(1)   A general meeting may be called by—

(a)   if the positions of secretary and treasurer are held by the 1 person—the person; or

(b)   if the positions of secretary and treasurer are held by 2 persons—the secretary or treasurer, if authorised by a resolution of the committee to call the particular meeting.

(2)   A general meeting may also be called by a person authorised or required to call a general meeting by an order of an adjudicator acting under the dispute resolution provisions.

Written notice of a general meeting (including the time and place of the proposed general meeting) must be given to the owner of each lot included in the community titles scheme, and if not given personally, must be sent to the owner at the owner’s address for service. If an owner changes address, they are required to lodge a Body Corporate and Community Management Form 8 (Information for body corporate roll) with the Body Corporate. If an owner fails to do so, it is at their own peril.

Seal

In Queensland, a Body Corporate will affix the seal to any document, deed or instrument or in accordance with the delegation given to the Body Corporate Manager by the Body Corporate, and the Small Schemes Module requires:

(1)   The body corporate’s seal must be kept in the custody directed by the body corporate by ordinary resolution.

(2)   The body corporate’s seal may be used only as directed or authorised by ordinary resolution.

However, if a body corporate has not resolved how the seal is to be used, the seal may be attached to a document in the presence of the secretary or treasurer and 1 other person.

If you have any questions about the structure or requirements of Queensland Body Corporate matters,  contact our team on  (07) 5574 3560 or email us info@nautiluslaw.com.au. Thank you for considering Nautilus Law Group.

Body Corporate Repairs and Maintenance – who pays for what?

Body Corporate Repairs and Maintenance – who pays for what?
Has an owner requested your Body Corporate to do repairs and maintenance, or compensate the owner for repairs made?    There may be fine distinctions between what constitutes an owner’s obligation, and what otherwise falls within the catchment of a Body Corporate responsibility.

Generally speaking a Body Corporate is responsible for a repair relative to common property. The Body Corporate and Community Management (Standard Module) Regulation 2008 (“the Regulations”), Section 159, provides:

   “The body corporate must maintain common property in good condition, including, to the extent that common property is structural in
   nature, in a structurally sound condition.”

A Body Corporate’s obligation to repair and maintain common property, extends as well to structures bordering the common property, such as railings, fencing, doors, windows and associated fittings separating a lot from the common property.  There are exceptions to the above; however, limited.

Utility infrastructure is not necessary a “common property” matter for which the Body Corporate is liable.  If the infrastructure is on common property, but solely supplies an individual lot – the owner of the lot is liable.  An example of such an infrastructure includes air conditioning units, hot water systems and other devices supplying a utility or service to a lot.

Whilst Body Corporate liability as to “common property” and “boundary” matters are readily understandable, significant ambiguity follows from an incident arising within an individual unit which is traceable to matters associated with common property.

One such example arose in the matter of The Palms Apartments [2009] QBCCMCmr 428 (30 October 2009).  In this case, a water pipe burst in the wall of an owner’s bathroom. Both the owner and the Body Corporate disputed responsibility. The Body Corporate argued that the pipe was within the boundary of the lot and was a utility infrastructure (and referred to Section 159 of the Regulations in support of the position that the owner was liable). The owner disputed this argument producing a plumber’s report, which stated that the water pipe did not supply water solely to that unit (referring liability back to the Body Corporate). The adjudicator determined that the dispute related to a utility infrastructure, subject to Section 20 of the Body Corporate and Community Management Act 1997, and held that the pipe was considered “common property” for which the Body Corporate was responsible to maintain. The Body Corporate was required to compensate the owner of the damages arising from the water pipe leak.

The last three years have been brutal on Queensland body corporate owners, in terms of environmental damage and retraction in the property market generally.  Following from the storm surges, cyclones and flooding, many Queensland bodies corporate have been dealing with disputes between insurers and owners as to liability for repairs and maintenance.  This is especially difficult in circumstances where the bodies corporate are willing to make repairs, but skilled labour and/or services are not available.  Owners lacking appreciation for the difficulties faced by Body Corporate Managers and Committees balancing between insurers, assessors, occupiers (including displaced tenants) and alike, cause further delays in processing and can clog the Body Corporate Commissioner’s Office with complaints.

The best strategy to adopt is one of information dissemination to all owners, on an annual basis, at least.  The information sheets should identify the difference between common property/body corporate obligations and those associated with an owner specifically. Owners need to be encouraged to adapt proactive efforts at minimizing damages following environmental events, such as seeking approval from insurers to organize their own repairs (even if the repairs need to be paid out of pocket initially by the owner) so as to protect the properties from further and continuing damage.

The Nautilus Team is experienced in a wide range of body corporate disputes, and in the last three years have been engaged in negotiating with insurers, owners and Committees regarding recovery and restoration of properties following the environmental events.

If you require assistance in resolving property damage matters, please do not hesitate to contact our team to arrange a meeting on (07) 5574 3560.  Our solicitors regularly travel between Port Douglas, Cairns, Townsville, Mackay, the Sunshine Coast and the Gold Coast offering assistance to Committees along Eastern Queensland.

We thank you for considering Nautilus Law Group.

 

 

Can a Body Corporate claim costs?

A Body Corporate’s legal and mercantile costs associated with recovering outstanding body corporate debts (defined broadly as, outstanding levies, interest and recovery costs) from an owner, are distinct from legal costs incurred in association with a dispute with an owner as to any other matter (such as a property dispute, an application to the Commissioner, etc.).  A successful Body Corporate in levy litigation can recover, as a matter of Law, “reasonable costs” associated with the action.  What constitutes “reasonable”, and how the costs remain associated with a lot (as distinct from an individual owner) is currently on appeal in our appeal in the matter of 399 Woolcock (see the Nautilus Law Group website for further discussion).

Nautilus acts for bodies corporate from Port Douglas to Coolangatta for a broad range of matters, including building disputes, management rights and levy litigation.  We have been asked previously whether legal fees incurred in association with a Body Corporate’s action/defence in matters with specific owners can be claimed as “reasonable costs” in levy litigation pleadings (in circumstances in which the owner has existing levy arrearages).

The answer is the same – no.  Legal fees associated with separate proceedings; need to be recovered in such separate actions.

For example, Section 145 of the Body Corporate and Community Management (Standard Module) Regulation 2008 (“the Regulations”) provides that if a contribution is not paid by an owner, the Body Corporate may recover:

1.       The contribution;

2.       Penalty interest (if any); and

3.       Recovery costs incurred in recovering the contribution and interest (if any).

These three amounts combined are defined as a body corporate debt.

A contribution is an amount to be levied on owners within the Body Corporate which has been fixed on the basis of a budget and passed by ordinary resolution. Penalty interest is the interest which has been resolved by the Committee pursuant to Section 144 of the Regulations or is stipulated within a By-Law. Recovery costs are the costs the Body Corporate incurs when attempting to recover the outstanding body corporate debt.

If a Body Corporate is seeking to recovery an amount that does not fall within the definition of a body corporate debt, this amount would be plead as a separate cause of action and cannot be classified as “recovery costs.”

The legal costs your Body Corporate may incur to make or defend a dispute (other than a debt recovery action) against an owner, must seek those costs to be awarded by the Court or Tribunal hearing the dispute.

If your Body Corporate currently has a dispute with an owner, and is unsure as to how to apply the costs, contact our team on  (07) 5574 3560 or email us info@nautiluslaw.com.au to discuss your questions regarding skip traces.

Our solicitors service Port Douglas, Cairns, Townsville, Mackay, the Sunshine Coast and the Gold Coast and consultations can be arranged personally, by skype or by telephone. We thank you for considering Nautilus Law Group. 

Submitted by:  Katrina E. Brown BA JD ATIA TEP SSA

Can a Body Corporate add 30% interest on overdue strata levies?

Yes, absolutely.  Body Corporate and Community Management Act 1997 permits Queensland bodies corporate to charge 2.5% interest per month, in other words 30% per annum, on overdue strata levies due by an owner to the bodies corporate.

On occasion, in defense of legal proceedings issued against an owner, our opposing legal colleagues and/or the owners themselves will plead that the right to 30% interest is “unconscionable” and/or “illegal.”  This position is premised on a misunderstanding as to Queensland body corporate law generally, as well as the nature of the compensation intended to be rectified by the claim to 30% interest.

A body corporate, unlike a supplier of credit to a customer, is unable to “reject” an owner based on credit scores or other poor credit history.  The body corporate is not permitted to discriminate against an owner, or even to consider disentitling an owner to access to body corporate assets merely because an owner does not pay his/her/its contributions of body corporate expenses.

Further, unlike a commercial supplier of credit, a body corporate does not have access to investors or funding outside of the body corporate, except in limited circumstances and is legislatively restricted to the level of debt/asset ratio permitted to access in order to fund costs from banks and other lenders.

The 30% interest is intended to not only penalise an owner, but to compensate the body corporate for the costs associated with a default by an owner to service his/her/its obligations.

Purchasers into body corporate properties must consider that the body corporate is not the purchaser’s future personal lender.  The body corporate is under no obligation to finance an owner’s costs associated with membership in the body corporate, and whilst payment plans may be acceptable in many circumstances – the right of the body corporate to reject payment plans is reserved because the body corporate is responsible for all owners, and is not obligated to any one member.

At Nautilus, we often hear of stories of financial distress by owners, and our hearts go out to these owners.  However, we similarly appreciate that the failure of one owner, can threaten the stability of many others, as well as the financial viability of the body corporate as a whole.  We do attempt to negotiate suitable payment arrangements with our body corporate clients, but for regularly delinquent owners and/or owners with longstanding debts – the likelihood of successfully negotiating payment plans (in lieu of other more aggressive collection mechanisms) is often limited.

Our best advice to owners is this – if your bank will extend your mortgage – they will generally do so at rates substantially lesser than 30% per annum – give this a go before falling into arrears.  If you do not, cannot, or refuse to – the body corporate is left with no other option but to commence proceedings, and the right to claim 30% interest follows.

If you have any questions about levy recovery litigation, enforcement of body corporate judgments, mortgagee actions on body corporate properties, please do not hesitate to contact Nautilus to arrange a consultation with one of our team members.

We welcome you to contact our team on  (07) 5574 3560 or email us info@nautiluslaw.com.au. Thank you for considering Nautilus Law Group.

Submitted by:  Katrina Brown, BA JD ATIA TEP SSA, Commercial and Property Lawyer
Katrina@nautiluslaw.com.au