The official newsletter of Unit Owners Association QLD MARCH 2011JANUARY 2012

See Inside January

Constitutional Class Action in Queensland

Caretaking and Management Rights

Recognising Why

THEQUEENSLAND

See Page 3

SA = 10*

WA = 20*

TAS = 5*

VIC = 25*

NSW = 200*

QLD = 2,350*

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uoaq.org.auUnitNews January 20122

BrisbaneP 3220 0959 or www.uoaq.org.au and request to communicate to a particular person Sue Ekert, Bob Boundy, Elle Young, Paul Cassels.Published by Unit Owners Association QLD

Editor Paul Cassels

Gold CoastWayne Stevens, Greg Carroll, Roger Dearing

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Web DevelopmentJohn Connole - P 0439 879 740 E john@stickybeakmedia.com.au

Help for MembersMembers of the UOAQ are welcome to contact committee members of the association for any help on any body corporate matter.

SponsorsWe appreciate the support of our sponsors to help us do the work we do. To become a sponsor of UOAQ, please contact Paul Cassels on 3220 0959

Unit Owners Assocation QLD6th Floor. 333 Adelaide St, Brisbane Q 4000E help@uoaq.org.au P 3220 0959uoaq.org.au

DisclaimerArticles contributed to this newsletter are published as a service to members and do not necessarily reflect the opinion or policy of this Association. To contact the committee of the UOAQ for assistance with a body corporate matter please e-mail help@uoaq.org.au

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Coralie Mott (BA Dip Ed, Cert IV in BCM)Director and Body Corporate Manager

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Happy New Year fellow unit owners from the Committee of the Unit Owners Association of QLD

From the Editor Paul Cassels

Incorporated (UOAQ). “Your committee is unswerving in seeking consumer protection for Unit Owners and for that reason, is putting proposals to both sides of politics, which will stem the loss of capital values (cash) and investor returns (lifeblood) for Queensland Unit Owners, which are directly attributable to the “Queensland Disease”. Unsustainable Management Rights contracts are out of control and the Management Rights industry in Queensland is out of kilter with the rest of Australia. If these issues are not addressed, investment in and ownership of, units in Queensland will become unviable in the near future.”

Council Rates are another issue. Queensland councils must remove the Differential rate imposed on unit owners. The View Tax on the Gold Coast and Sunshine Coast and the Parity factor, “ditch the disparity” rating in Brisbane. These

must be removed.Your committee is also addressing the following very important issues:

• The misuse of Class 2 buildings, • Top Ups of 25 Year and 10 Year contracts• Conversions from Standard to Accommodation module providing Caretakers to access 25 year management agreements must be stopped and or reversed

Your committee will be fighting to deliver legislative relief for all unit owners in the coming year. Increased membership is vital to the maintenance of quality representation, and Body Corporate or Building Membership, the most effective means to achieve greater numbers of members.

Please urge your committees to join as building members and please encourage at least one friend or neighbour to join the UOAQ.

Go to www.uoaq.org.au

A special Thank You to all the Advertisers who have pledged support to the UOAQ for the coming year of 2012.

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uoaq.org.au january 2012 UnitNews 3

Editorial

Once upon a time in a land not so far away lived Little Lottie, the lot owner. Lottie was so proud that she lived in a land known throughout the empire as the Smart State. Lottie’s land was ruled by a Queen, so it was called Queen’s Land. Lottie often heard the Queen of the land referring to the booming economy of the Smart State (which had enormous mineral reserves and a strong tourism industry) and thought to herself “How proud and lucky I am to live in the Queen’s Land Smart State.”

Lottie knew that many people travelled from other kingdoms abroad and principalities within the empire to holiday on the palm-fringed beaches which stretched from the top to the bottom of the Smart State. The type of accommodation available to holiday-makers varied enormously, from luxury penthouses, to humble 1960’s bungalow-style motels. Lottie herself lived in a unit building which had a caretaker who ran an on-site letting business and handled the reservations of the holiday-makers who wished to stay and have fun in the sun.

Little Lottie sometimes wondered about the caretaker. He and his wife

Kruella, smiled broadly at the sunburnt tourists, but really didn’t seem very kindly disposed toward lot owners like Lottie, whose properties weren’t in the holiday letting pool - or worse… who chose to live in their units as owner-occupiers, as Lottie did. Lottie couldn’t fathom why the caretaker snubbed her every time she said, “Good morning, Mr Con,” but thought it was probably because the caretaker had so much to do… such as sweeping the paths; emptying the rubbish bins; mowing the lawn, or working out ways to set up a subsidiary company which could act as a booking agency.

Little Lottie had not taken a holiday for many years. She couldn’t afford to - what with the GFC, sovereign debt worries in Europe causing jitters in the markets, and escalating body corporate levies – and Lottie was becoming very concerned that living in her tiny apartment would soon be unsustainable. Lottie wondered if every lot owner in every land throughout the empire had the same problem.

One day, Lottie had an idea. She decided that she would travel everywhere across the vast empire and find out just what was going on in the other principalities (which clearly weren’t as smart as hers because none of them had called themselves “The Smart State”).

Before she set out on her travels, Lottie did some Googling and discovered that the Queen’s Land (aka the Smart State) had approximately 2,350 long-term management rights contracts in place on unit buildings. Little Lottie learnt that these managements rights contracts had been traded like pork belly futures for decades and the current prices being paid for these contracts were exorbitant. The terms of these contracts varied from 10 years to 25 years and it appeared that many of the contractors spent a great deal of the their time trying to convince lot owners to extend the the terms of the contracts, so that the contractors would be able to trade their contracts to the next person at an even higher figure. Lottie thought that was just plain silly.....why would anyone (other than the contractor of course) want to ensure a contract that could not be terminated, renegotiated or amended for 25 years! Lottie began to worry that the Smart State wasn’t so smart after all. Lottie folded some clothes and food into a tea towel and firmly tied it into a bundle before she set off on her adventure.

Crossing border after border, she travelled the land and everywhere she went, she introduced herself as Lottie from the Smart State and then went on to ask those she met how the issue of long-term, ever-extended, management rights contracts on Community Title Buildings was handled in that particular principality In the new territories of South Wales, the Armani-suited businessmen almost choked on their triple- shot espressos as they doubled over in laughter. “Sweetheart, we got rid of that outdated idea years ago.... we have only 200 management contracts in the entire State...your State isn’t Smart, It’s Hicksville! … Now run along, Little Lottie. We don’t want to catch the Queen’s Land disease!” Little Lottie slunk away as the immaculately groomed businessmen high-fived one another.In the Garden State, Lottie was stunned when a business lady in the streets of Toorak pulled her fur coat tight around her shoulders, reached into her pocket and pulled out a head of garlic. “Be gone, Lottie!” she cried. “We don’t want your disease here! We have only 25 building management contracts like yours in this State and that’s how we want to keep it! We’re not going to let you spread the Queen’s Land disease down here!” And Little Lottie ran away as fast as her little legs would carry her, the woman’s strident voice ringing in her ears. In the Festival State, Lottie felt an immediate kinship with the people. They all seemed like down-to-earth, hardworking citizens, and they welcomed her with open arms until she asked the question: “How did this State handle the problem of the long-term, ever-extended management rights contracts?” And as soon as she asked the question, everyone within earshot began yelling and gesticulating wildly, shooing her away. “Get away from here, Lottie. Go back to the land of the white shoe brigade. We would rather take our chances with the white pointers off Eyre Peninsula than risk catching the Queen’s Land disease! There are only ten management rights contract here in Festival Land and that’s how we plan to keep it!”

By now, Lottie was feeling rather despondent. Being laughed at, ridiculed and chased away were not pleasant experiences and although the Queen of Queen’s Land had told all the Queen’s

The Scary Adventures

of Little Lottie, The Lot Owner

A modern Fairytale

THE QUEEN’S LAND HAS A DISEASE Is there a cure?

Feature Story

Continued Page 7

uoaq.org.auUnitNews January 20124

THE 2011 BCCM ACT AMENDMENTS – CLASS ACTION/TEST CASE

A large number of owners have been adversely affected by the recent amendments to the Body Corporate and Community Management Act 1997 (the BCCM Act) which allows for the Contribution Scheme Lot Entitlements (CSLE’s) to revert to their original levels despite them previously being changed by a special Adjudicator or QCAT to just and equitable levels. We have now been contacted by a number of owners who have been, or potentially will be adversely affected by the 2011 amendments. These owners wish to investigate the possibility of launching a class action to challenge the validity of the amendments.

PRIOR TO THE AMENDMENTS

Amendments to the Lot Entitlement provisions of the BCCM Act commenced on 14 April 2011 (the Amendments). Prior to the Amendments the original owner (the Developer) was responsible to allocate the CSLE’s without providing any explanation or justification as to why the CSLE’s were allocated and set in the way that they were. This often led to unfair and inequitable allocations of CSLE’s. To correct the unfair and inequitable allocation of CSLE’s the BCCM Act previously provided that an owner had the ability to apply to a Specialist Adjudicator or QCAT seeking an adjustment of the CSLE’s so that they were equal, except to the extent that it is just and equitable for them not to be equal. Many schemes have now been adjusted to ensure a fair and equitable allocation of CSLE’s.Whilst it’s conceded that some owners may have been adversely affected by an order of a Specialist Adjudicator or QCAT, it was only to the extent that the newly adjusted CSLE’s were now just and equitable for all owners of Lots in a scheme.

THE AMENDMENTS

The Amendments have now removed the ability to apply to a Specialist Adjudicator or QCAT for an adjustment of the CSLE’s for Lots in a scheme established prior to the amendments. More importantly the amendments provide that a scheme must revert the CSLE’s to the pre-adjustment levels (i.e. - as they were determined and allocated by the Developer), and upon the submission of a motion by a single lot owner.Therefore, despite the fact that an independent Adjudicator has previously determined that many of the CSLE’s as allocated by the developer were unfair and inequitable, the amendments now provide an avenue to have those CSLE’s reverted back to those unfair and inequitable levels.Many schemes are now in the process of reverting to pre-adjustment CSLE levels, and often instituted by a single owner who will be advantaged by the change. The provisions allowing the reversion of the Lot Entitlements to the pre-adjustment levels apply for 3 years from the commencement of the amendments. As such, you may not be an adversely affected party at this stage, however if the CSLE’s within your scheme were adjusted to fair and equitable levels prior to the amendments, it is highly probable that the CSLE’s will revert to the pre adjustment levels at some time between now and April 2014.

ARE THE AMENDMENTS INVALID?

The amendments effectively overturn orders from a specialist adjudicator, tribunal and court even though such orders were made under just and equitable principals. Therefore, it can only be that these amendments provide the framework which will ensure an unfair and inequitable outcome for many owners. Section (2)(a) of the Legislative Standard Act 1992 requires legislation to have sufficient regard

to the rights and liberties of individuals. The explanatory notes produced with the Amendments admit quite candidly that the amendments will potentially breach the fundamental legislative principals by adversely affecting the rights and liberties of individuals retrospectively. It therefore poses the question as to whether the enactment of provisions that allows orders that were made on a just and equitable basis to be overturned is in breach of the provisions of the Legislative Standard Act, and subsequently the Queensland Constitution.

CLASS ACTION/TEST CASE

We are now looking to seek a formal advice from a leading Constitutional/Administration Senior Counsel as to the likelihood of successfully challenging the legislation. It is in this respect that we invite all Lot owners who disagree with the amendments (whether adversely affected or not) to register your interest with Anthony Delaney Lawyers.

Subject to the advice received, the parties can then determine whether they wish to be part of a Class Action/Test Case should any of the parties wish to continue down that course.

Registering your interest does not involve any financial commitment. We simply wish to ascertain the number of parties interested at this stage so we can put forth a formal proposal.

We ask that you register your interest either via email or postal address, details provided below.

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uoaq.org.au january 2012 UnitNews 5

Quick News

- know that something’s got to give and would welcome a change.

The evil that is Management Rights in Qld, together with the associated legislation, is an anachronism in our modern society - where developers are able to ‘stitch up’ apartment Owners by installing a Caretaker on a 25 year contract and the Owners have no say whatsoever in that process, and then the legislation makes it so difficult to get an under-performing Caretaker ejected - that nonsense has got to come to an end. Whether the warrior who leads the charge is another Peter Lawlor (the Lot Entitlement soldier), or some other politician, maybe one who gets ‘bitten’ personally at his Noosa holiday apartment, whether he’s ‘pumped up’ himself or pumped up by others - doesn’t matter - the job just needs to get done, the legislators need to pick

up their quills and start drafting the changes - but be warned politicians

and legislators, the ‘little people’ won’t be pacified with just a ‘pat on the head’ - substantive changes that will dry out the rot and stop the stench are needed. The stench originated in George Street, and it’s there it needs to be stopped.

To these calls, the age-old response from those in the industry has often been the old homily: “..well, one bad apple...” - unfortunately it’s not just one bad apple - it seems as if half the barrel’s “gone off”. The amount of disputation, hardship, Committee work, tribunal sessions, litigation, legal fees, caused by under-performing and badly behaving Caretakers has been monumental. But it was always going to be that way wasn’t it - when you have someone entrenched in a ‘job’, a 25 year contract that’s difficult to break,

a guaranteed salary - gosh!, who would have thought that might lead to laziness, arrogance, and complacency. The current Caretaking & Letting Agreements in place can’t be ‘unwound’, but the holders of those Agreements will not be spared - the current ‘move on’ provisions in the legislation are just too cumbersome and difficult to implement and need to be significantly reworked. There is the problem of absentee Owners generally not really knowing what is going on at the Scheme - if their monthly rental cheque arrives that is the primary concern, and Committee Minutes, if they read them, rarely are able to give a vivid picture of the hardship the Committee is having on the ground. And when a General Meeting resolution does reach these Owners, they are invariably reluctant to be joining a group that is taking action against the man who writes them their monthly rental cheque - fear over losing rentals is justified too - victimisation definitely does take place! Be under no illusion, the engines that drive this circus roundabout are Greed, Self-interest, and People Behaving Badly.

There are lots of options for legislative reform to fix this mess - not allowing developers to enter into the long agreements in the first instance, but rather giving that right to the Owners - not allowing very long Agreement terms no matter who selects the Management Entity - making the ‘move on’ provisions far easier to implement and execute. But it’s a rotten system - it didn’t get rotten, it’s been rotten from the outset - and the fact that there are indeed some good Resident Caretakers doing a good job, doesn’t make the system itself less rotten or less in need of urgent overhaul, and drastic and fundamental change - and if those changes don’t work, then abolishment.

Reproduced with permission from StrataLiving.com |StrataLiving is a publication of www.strata3.com.au

“It’s a rotten system - it didn’t get rotten, it’s been rotten from the outset.” The winds of change are picking up - the zephyr is becoming a breeze.The bad joke perpetrated on Queensland apartment Owners for more than two decades has gone on far too long, and the ‘little people’ are massing at the city gates. Even those ‘in the game’ - the more sensible of them

Caretaking & Management Rights - a House of Cards?

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uoaq.org.auUnitNews January 20126

Unit owners are being urged to make sure their smoke alarms are the best available and ready to save lives when they are really needed. Director State Community Safety Operations Branch Neil Reid warned that some simple, precautionary actions taken now could save lives if a fire strikes.

“It’s crucial that people check their smoke alarms to make sure their alarms are not past their use by date. Smoke alarms generally have a limited life of no more than 10 years. If an expiry date is not visible on the alarm, it is probably nearing 10 years old and should be replaced”.

“The Queensland Fire and Rescue Service recommend replacing them with photoelectric smoke alarms where possible, as growing evidence shows this type of alarm has an advantage over those most used in homes today.

“Photoelectric smoke alarms are better at detecting smouldering fires, the type that most commonly happen at night when people are asleep”, he said.

“Your sense of smell also goes to sleep when you go to sleep. So, you cannot rely on smelling a fire to warn you of potential danger, and you certainly won’t see it.

“This is where photoelectric smoke alarms come into their own. They react faster to the type of smoke given off by a smouldering fire, faster than the type of smoke alarms that are now mostly commonly installed in Queensland homes.

“This will give extra time to either deal with the fire or escape the home.”

“Photoelectric smoke alarms will also detect fires which quickly develop flames.

“If your existing 240 volt smoke alarm is relatively new but not photoelectric, and you want better protection without the immediate cost of replacement, add a battery powered photoelectric smoke alarm beside your existing alarm.”

An electrician or alarm technician is required to replace all 240 volt hard wired alarms with a photoelectric type.

“People often ask, how do I know if an alarm is photoelectric? The word ‘photoelectric’ appears on the packaging, and it doesn’t have a radiation warning symbol on the back. They are becoming more available through retailers such supermarkets, hardware stores, and specialist electrical outlets,” he said.

“Your electrician can easily access photoelectric smoke alarms through their normal supplier,” Mr Reid said.

“While photoelectric smoke alarms may cost a little more, they will increase your peace of mind that you and your loved ones are protected by better technology”.

“I urge everyone to consider when they can either switch to photoelectric smoke alarms or install at least one to back up their current smoke alarm system,” he said.

More information on photoelectric smoke alarms is available on the Queensland Fire and Service website www.fire.qld.gov.au or by calling the Queensland Government call centre on 1300 369 003.

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uoaq.org.au january 2012 UnitNews 7

Feature Story

Land citizens that they lived in the Smart State, Lottie wasn’t feeling very smart at all. Still, she carried on, trudging through the Land of Apples … and even the land of the bureaucrats called Can of Berries Land, asking her usual question. In both these places people mostly just looked at her blankly. “We have no idea what you are talking about, Little Lottie. Why would anyone do such a stupid thing?” And it worried Little Lottie greatly that even people from Can of Berries Land could apparently see how dumb the Smart State people were.

Eventually, Lottie found a mysterious wizard deep in the Huon Valley forest in the Land of Apples who waved his magical green wand and explained to her. “… Dear child, don’t you know that Apple Land and Can of Berries Land only have 5 such management rights contracts each? We believe in lot owner’s rights here. Now you must hurry on back to where you came from because we don’t want to be infected by the dreaded Queen’s Land disease down here”. He gently pushed her out of the door. As he turned back inside, Lottie heard him mumble, “And they reckon WE have two heads!”

Lottie’s only hope now was the vast western territory known as The Real Thing Land.

Lottie had to cross a huge desert to get there and when she arrived she was covered with red dust. Feeling a bit intimidated, Lottie went straight to the most important man in Real Thing Land and after listening to Little Lottie’s question the most important man just snorted his disgust. “Stone the crows! We only have 20 management rights contracts here. S’truth girl! We have a skills shortage in the mining industry and we WANT people to move here… we don’t want to frighten them away. Why in the name of Lang Hancock would we impose such a bloody stupid legislation on our people? Get out of here little girl. Go and tell your queen we don’t want your stupid ideas here! You’re not going to infect us with your

dumb Queen’s Land disease. And be sure to tell your Queen and her treasurer to get their eyes off our share of the GST revenue, too… G’orn! Git!”Poor Lottie! Disheartened and in low spirits, she returned to her little apartment in Queen’s Land only to find a Notice of an Extraordinary General meeting on which the only agenda item was the request by the caretaker for an extension of the caretaking contract…..and – looking at her watch – she saw that the meeting was beginning right now!

Little Lottie raced to the meeting room and burst through the door to find a room jam-packed with people….150, at least.“Stop

everything!” Little Lottie yelled, breathlessly. “I have news! I have just returned from visiting every land in the kingdom and I have news for you. Important news!. This isn’t the Smart State at all. This is the Really Dumb State! The Queen’s Land has a terrible disease and the only cure is to vote “NO” to any extension of our caretaking contracts! All of the lot owners of Queen’s Land must act now to reclaim our rights. We are being squeezed by escalating costs and it must stop. Please listen to me!”

A stunned silence fell over the room. Almost imperceptibly, Kruella, the wife of the caretaker, nodded to a burly security

guard and suddenly, Little Lottie’s arms were grasped from behind and thrust into the sleeves of a straightjacket. She was quickly gagged and dragged from the room.

The Chairman, at the head table (still basking in the warm memories of his most enjoyable dinner the previous evening with Kruella and her husband), sighed wearily. “Oh dear. Another revolutionary, loony lot owner…It’s sad really. I mean, what’s wrong with the status quo.

“Yes, Mr Chairman,” Kruella, smiled. “I quite agree with you. Little Lottie is a loony. And we must remember,”

she intoned, nodding at all of the assembled lot owners until they started to nod back, “this is the Smart State and we are all very lucky to live here.” Kruella then smiled coquettishly at the Chairman. “Now, where were we, Mr Chairman… I believe you were just counting the votes for the extension of the management contract. What was it now? 150 votes in favour, and…” her flinty eyes scanned the crowd. Out of the blue, at the very back of the room, a little elderly lady named Gladys paused her knitting and raised her hand., “Excuse me Mr Chairman,” Gladys said. “You know….what Little Lottie said just now really makes sense to me. Just because we’ve

always done something a certain way doesn’t

mean we have to keep doing it that way. Particularly if

it is stupid and not in our interests. So I believe I

would like to change my vote… to ‘NO!’ I don’t see why we should renew the caretaking contract for the benefit of the caretaker when doing so is contrary to our interests as owners.

Everyone in the room turned to stare at Gladys in astonishment. Gradually, as realisation dawned, one by one they began nodding…then, slowly at first, others began raising their hands and calling to the Chairman as well…. “Me, too,” … “I’m with Gladys!” … “You know, Little Lottie’s right… this is stupid.”And Kruella looked on in horror as she realised the Revolution had begun!

uoaq.org.auUnitNews January 20128

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Some say it’s not about right or wrongOnly about winning or losing...Winning when right can only make strongWrong compounds the loss, the lows enlightening

We all find ways to recognise our strengthsWhether it be by practice or listeningMine a quest to never falter Hang in, not suffer from compromising

Thinking about my serious victoriesSuccess never far from self discipline They all came via TenacityLoaded and fuelled by adrenaline

Comes from a place re my attitudeWhere motivation is in plentyThe will to drive with no shameThe prize in sight inspiring that capacity

Know I come on too serious for someBut the need for stimulationUse a cocktail of my emotional forcesTo serve a self perpetuating cycle of satisfaction

Losing or being wrong never holts my questFor they are temporary and teach me where not to go.Positive and truth won’t stop being a testCan’t do without or achievement will slow

Strength, wisdom, satisfaction all good companyBut the road, the way, the speed While lining up to find confidenceFor me depends on want and need

Conquests are what turns me on Passion is what makes my heart beatReflecting on why truth makes victory sweet Realize... Tenacity is my weapon Intensity is its sheath.

Final Thought

Recognising Why ©WRMoffat 4/4/10

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