This article is about decision-making, dispute resolution, and self-resolution requirements in two-lot (duplex) community title schemes in Queensland.
A duplex refers to a building that contains two lots, often units or townhouses, typically divided by a shared wall and sometimes with neighbouring courtyards. Some duplexes may also be free standing. Most duplexes with a shared wall will be registered as a community titles scheme (CTS).
Like all community title schemes, duplexes must comply with the Body Corporate and Community Management Act 1997 (BCCM Act) and the relevant regulation module.
To find out more information about the lots, you can review the survey plans by contacting Titles Queensland and check if a community management statement (CMS) has been recorded. If a CMS is recorded, the property is part of a CTS, and a body corporate exists. The CMS provides key details including:
- the regulation module that governs the scheme
- lot entitlements, and
- by-laws that apply to the scheme.
Body corporate obligations
If your duplex is registered as a CTS, both lot owners together form the body corporate.
A body corporate is a legal entity with responsibilities under the BCCM Act and the relevant regulation module. Key obligations include:
- maintaining the common property
- establishing and enforcing by-laws
- adopting budgets to cover maintenance costs, and
- ensuring compulsory building insurance is in place.
Owner obligations
Individual owners in a CTS also have obligations, including:
- maintaining their own lot
- complying with by-laws, and
- paying levies on time (depending on the regulation module).
Decision-making in duplexes
The way decisions are made depends on which regulation module applies to your scheme. You can refer to BCCM Form 19 – The effect of a change in the regulation module for a comparison of modules.
- For Standard Module, Accommodation Module, Commercial Module, or Small Schemes Module, decisions are made at committee and general meetings.
- For Specified Two-lot Schemes Module, decisions are made by lot owner agreements rather than meetings.
Committees
The committee is responsible for the day-to-day administration of the body corporate.
In most schemes, committee members are elected at the annual general meeting (AGM). However, in a duplex, where the two lots have different owners, no election is needed. The two owners, or their nominees, make up the committee and must decide who will hold executive positions. If they cannot agree, the executive positions are jointly held.
For schemes registered under the Specified Two-lot schemes Module, there is no committee.
General meetings
Schemes under most modules must hold an AGM each year to decide all motions listed on the agenda. Urgent issues may be dealt with at an extraordinary general meeting. The specific requirements, such as proxy rules, depend on the regulation module.
Schemes under the Specified Two-lot regulation module do not hold general meetings, as decisions are made by lot owner agreement.
Breaking a deadlock
In two-lot schemes, voting entitlements are equal. This can result in deadlocks that cannot be resolved without third-party assistance.
The Office of the Commissioner for Body Corporate and Community Management (the BCCM office) provides a dispute resolution service to assist lot owners who cannot reach an agreement.
The requirement for self-resolution
Before lodging a dispute application with the BCCM office, you must attempt to resolve the issue with the other party first. This is called self-resolution.
Self-resolution can involve formal or informal steps, and evidence must be provided for each outcome sought in an application. This may include:
- correspondence between the parties
- proposed motions and related meeting minutes
- written request to the committee to consider the matter, and/or
- contravention notices (for by-law breaches).
Depending on the regulation module, the type of dispute, and its complexity, multiple steps may be required. If these preliminary procedures are not met, the application may be rejected or dismissed.
Case studies
The following adjudicator decisions highlight how self-resolution can be assessed in two-lot schemes. These examples are not precedents but provide guidance on the importance of following legislative processes.
Milton Gardens [2023] QBCCMCmr 470 (28 November 2023)
This two-lot scheme was regulated under the Small Schemes Module. The applicant (lot 2 owner) sought approval to replace a pergola in their exclusive use area.
Before lodging the application, the applicant
- provided the respondent with a form to sign, consenting to the construction of the pergola
- shared design and construction plans
- offered to answer any questions with input from the builder, and
- left notes to maintain communication.
The parties also attempted conciliation, but failed to reach agreement. Despite these efforts, the adjudicator dismissed the application.
The adjudicator noted that for schemes regulated under the small schemes module, lot owner improvements to the common property valued over $3000 require approval by ordinary resolution at a general meeting. While the applicant made informal attempts, no formal motion was submitted.
The body corporate must act reasonably, and objections from the respondent lacked substance. As the required legislative process was not followed, approval could not be granted, and the application was dismissed.
Rest-N-Surf [2023] QBCCMCmr464 (27 November 2023) (austlii.edu.au)
This two-lot scheme was regulated under the Standard Module. The applicant (lot 2 owner) challenged improvements made by the respondent (lot 1 owner) to common property without approval.
The adjudicator found:
-
However, there is no evidence of the former owner’s response and no evidence that body corporate approval was ever sought or obtained. The respondent says approval was conveyed to him “verbally”. Whatever may have been said, there is no evidence of a body corporate resolution (or the support of both owners, however expressed) approving the changes.
As the respondent evidently lacks body corporate approval for his improvements to common property, they will have to be removed.
The adjudicator ordered removal of the improvements and restoration of the common property.
Key takeaways
- Even in a two-lot scheme, good governance and record keeping are essential.
- Self-resolution, through documented attempts to engage with your neighbour, is a legislative requirement before lodging a dispute.
- Following the proper process may seem tedious when there are only 2 owners, but it ensures disputes can be resolved fairly, obligations are met, and transitions are smoother when lots change hands.
Commissioner for Body Corporate and Community Management P: Information Service Freecall 1800 060 119
This post appears in Strata News #766.
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Read next:
- QLD: Q&A AGMs, Motions in Strata and the Obligation to Act
- QLD: By-law enforcement in community titles schemes: avoiding the common pitfalls
- QLD: Q&A Submissions and registration fees of updated by-laws
This article has been republished with permission from the author and first appeared on the Commissioner for Body Corporate and Community Management website.
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