This article about the obligatory process when you lease out a lot or appointing a letting agent in Queensland has been supplied by Wayne Stevens, UOAQ President.
Many owners would be aware of the obligatory two-step process which applies when “a person becomes the owner of the lot”.
- Step 1: New owner gives written notice to the body corporate, advising the person’s name and address. (The notice is usually given by the new owner’s solicitor.)
- Step 2: Body corporate includes this information in the roll of lots and entitlements. (The roll is commonly referred to as either the “body corporate roll” or the “owners’ roll”).
It is the UOAQ’s experience that many owners are not aware this two-step process also applies to other events affecting an owner’s lot.
Two of these events involve letting arrangements
- Owner leases out the lot for six months or more
The owner of the lot must give written notice to the body corporate and advise:
- The name and address of the lessee; and
- The term of the lease, ie from when to when.
It is the length of the term that is important here, not who organises and manages the lease. It does not matter whether the owner self-manages the lease or organises it through a third party, eg a real estate agent, or even the complex’s rental pool manager.
- Owner engages a letting or leasing agent
An owner who engages a person to act for the owner in the letting or leasing of the lot must give written notice to the body corporate and advise the name and address of the person appointed.
It is the engagement of an agent that is important here, not the term of the rental period, eg short-term holiday rentals versus long-term leases. Nor does it matter whether the appointee is an off-site letting agent or the complex’s rental pool manager appointed, for example, by the owner under the Property Occupations Act 2015 [QLD] per Property Occupation Form 6.
These 2 events are mutually exclusive of each other
An owner who rents out the lot may be caught by both, or just one, or by none. For example:
- Both Events, eg when the owner engages a rental agent for long-term rentals;
- One Event, eg when the owner either self-manages long-term rentals or engages a rental agent (including a rental pool manager) for short-term holiday rentals; or
- No Event, eg when the owner self-manages and only for short-term rentals, in which case notice to the body corporate is not required.
Written Notice & Form 8
While the notice must be in writing and include specific information, the BCCM legislation does not require it to be given in any “approved form”. Even an e-mail to the body corporate is sufficient.
The Commissioner’s Office nevertheless provides a Form 8 for owners’ convenience. Although it is an “office form” only and therefore not mandatory, it is a very useful document. It details minimum requirements for each of the 2 events described above, ie:
- Form 8 Section 4: Creation of long-term lease; and
- Form 8 Section 5: Engagement of letting agent.
The notice does not have to include the appointee’s phone number or e-mail address, but the legislation does not prohibit it either.
Notice must be given within 2 months after the event, or after the owner becomes aware of the event.
Body Corporate’s Role & Owners’ Roll
Significantly, Form 8 is headed “Information for body corporate roll”.
The body corporate must include in the owners’ roll brief details of all information contained in the notice given by the owner, including when the information was given.
The owners’ roll is a searchable document.
Normal rules also apply to the retention of, and access to, the written notice itself. It too is searchable.
How important is this?
First of all, owners risk a maximum penalty of about $2,200 in the event of non-disclosure. There are many “musts” in the BCCM legislation; few attract fines for non-compliance.
The body corporate’s obligation to include the disclosure details in the owners’ roll also indicates relatively high importance.
It would have been easy to require no more than notice be given by the owners to the body corporate, with the attendant risk of the information being lost in the flood of correspondence circulating amongst the records.
As the letting agent, and/or a long-term tenant, is generally the first point of contact regarding a whole range of issues about the lot, it is easy to see why they need be identified in the centralised and readily accessible owners’ roll.
And if you think about it, how hard can it be?
|Event||Owner’s Role||Body Corporate’s Role|
|If owner buys lot:
If owner creates long-term lease:
If owner engages rental agent:
|Owner notifies BC in writing||BC updates owners’ roll|
Where to from here?
It is our experience that off-site letting agents and conveyancing solicitors usually notify the body corporate appropriately via a Form 8.
However, it is not general practice for owners and/or their letting pool managers to follow suit. And the same can be said about bodies corporate [BC] not updating the owners’ roll.
If you wish to find out what is happening in your complex – especially if regulated as an Accommodation Module, which assumes a high proportion of rental lots – the first step may be to ask for a copy of the owners’ roll.
Perhaps it would be useful to stop calling it the “owners’ roll” – which may be too limiting – and use the more inclusive “body corporate roll”, which reflects a broader scope than just a roll of current owners.
This post appears in Strata News #287.
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This article has been republished with permission from the author and first appeared on the UOAQ website.
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