With the recent surge in apartment building and the increasing the demand for mature-age lifestyle communities, more and more land in Queensland is being held and managed by community management schemes.

This article provides a brief overview of the parts that make up a basic community management scheme and how they work together for the benefit of Lot Owners.

Why Have A Community Management Scheme

Some parts of a development are intended to be for the benefit of all Lot Owners. These can either be desirable features such as shared swimming pools or recreational areas or are parts that are critical in order for Lot Owners to fully enjoy the lot they own such as basement level car parks, lifts and the very structure of the building containing the lot.

It would be unrealistic (and unreliable) to expect any one Lot Owner to be able to save up, pay for and maintain these share facilities. A community management scheme is an effective way for all the lot owners in a scheme to pool their resources and manage the maintenance and operation of the shared land, buildings, plant and equipment for everyone’s mutual benefit.

What Is A Community Management Scheme

Very generally speaking, a community management scheme is a system where a “Body Corporate” holds and manages “Common Property” for the use and benefits of the Lot Owners. In return for this, each Lot Owners agree to:

• pay “Levies” or “Special Levies” to the Body Corporate to cover the Body Corporate’s costs; and
• obey the “By-Laws” of the scheme to ensure that all Lot Owners can enjoy the Common Property and not have their use, enjoyment and rights over their lot negatively affected.

The Terms

Body Corporate – A Body Corporate is the organisation that runs, maintains and (if necessary) upgrades or repairs the Common Property. A Body Corporate also calculates, approves of and collects the Levies and Special Levies, sets the By-Laws for the scheme. A committee of Lot Owners make day-to-day decisions for the Body Corporate and general meetings (where all Lot Owners are entitled to vote) are held to make certain important decisions.

Common Property – The Common Property of a community management scheme is the shared land, buildings, plant and equipment the Body Corporate owns and manages for the use of some or all of the Lot Owners.

Exclusive Use Areas – A community management scheme could be set up so that only certain Lot Owners can use specific parts of the Common Property. This is desirable when a Lot Owner needs to have the exclusive use of part of the Common Property without interference from other Lot Owners. The primary example would be car parking spaces that are reserved for the exclusive use of a specific Lot Owner. A Lot Owners is usually responsible for the cleaning and maintenance of the Exclusive Use area that it has been given.

Levies – A Levy is the amount that each Lot Owner contributes towards the operation of the Body Corporate and the running and maintenance of Common Property. This includes payments to an ‘Administration Fund’ to cover operational costs, payment into a ‘Sinking Fund’ to cover the cost of maintenance, repairs and upkeep and payment towards the insurance premiums for the Common Property and the Body Corporate.

Special Levies – A Special Levies is an amount that each Lot Owner contributed to cover the extraordinary or unforeseen expenses that a Body Corporate may incur. These costs could arise as a result of disaster, unanticipated need of repair, having to defend or mount legal claims or substantial upgrades to the Common Property. There are strict controls about how the Body Corporate can decide to charge a Special Levy and special levies cannot be raised without a general meeting of the Lot Owners. Because Special Levies can often result in Lot Owners paying significantly higher amounts of money to the Body Corporate, Lot Owners that have not been keeping themselves up-to-date with the outcome of the general meetings or new buyers that have not searched the body corporate can be caught unprepared when special levy notices are issued.

By-Laws – By-Laws are the rules of the community management scheme that are intended to ensure that the scheme runs smoothly without any Lot Owners doing something that could have a negative effect on the Common Property or the use, enjoyment or value of other lots in the scheme.  Many community schemes have By-Laws that attempt go further than this (with dubious levels of effectiveness).

Conclusion

Community management schemes can be set up in almost an endless variety of ways depending on the shared and competing interests of developers and the individual Lot Owners.

Understanding the basic concepts discussed in this article is critical to being able to navigate a system that, fundamentally, is designed to ensure that the rights, use and enjoyment of all Lot Owners are respected.

How We Can Help

Quinn & Scattini Lawyers have the experience and expertise required to assist with community management schemes.

Our team go above-and-beyond to obtain you the best possible outcome.

As one of our clients said “Invest in the best. Q&S“.

Contact Us

Get the best representation. Contact Quinn & Scattini Lawyers on 1800 999 529, email mail@rmold.newwebsite.live, or submit an enquiry below.

We are available to meet with you at any of our local offices (Brisbane, Gold Coast, Beenleigh, Cleveland and Jimboomba) or by telephone or video-conference.

This article is for your information and interest only. It is not intended to be comprehensive, and it does not constitute and must not be relied on as legal advice. You must seek specific advice tailored to your circumstances.