This article discussing owning a duplex in a two-lot scheme has been supplied by Michelle Scott, Commissioner for Body Corporate and Community Management. This information was correct at time of publishing.
Some people buy a duplex or other property in a two-lot community titles scheme without realising that in doing so, they become a member of a body corporate. Clients regularly ask the Commissioner’s office if they must have a body corporate. The answer is not a matter of whether they must have body corporate, the answer is – they are a body corporate.
If two lots are registered with the Titles Registry Office as a community titles scheme (CTS) and they have a CTS number, then there is a body corporate and owners of the lots are members.
If your property is registered as a CTS, then the Body Corporate and Community Management Act 1997 (the Act) applies. The scheme will also be registered under one of the five associated regulation modules – the Standard Module, Accommodation Module, Commercial Module, Small Schemes Module or Specified Two-Lot Schemes Module. The Act and relevant regulation module that applies to your scheme determines how your scheme should operate.
You can contact the Titles Registry Office on 1300 255 750 to confirm if your property is registered as a CTS and to obtain a copy of the community management statement to check which regulation module applies.
Our office has compiled a list of frequently asked questions about duplexes.
Table of Contents:
- QUESTION: If I am in a duplex, does this mean we are automatically under the Body Corporate and Community Management (Specified Two-lot Schemes Module) Regulation 2011?
- QUESTION: Can we change the regulation module?
- QUESTION: I was told when I bought the property that there was no body corporate, now I am being told this is not the case. Is there a body corporate or not?
- QUESTION: My scheme only consists of two lots and we don’t share any common walls. Can we each just look after the maintenance of our own property?
- QUESTION: I want to make some changes to my lot. Do I need to ask the other owner?
- QUESTION: Can we insure our own lots?
- QUESTION: The other owner is not paying their share of the body corporate insurance, what can I do?
- QUESTION: Do we need to have a body corporate bank account and pay levies?
- QUESTION: I am in a duplex and we are registered under the Standard Module. I have lived here for many years and we have never had an annual general meeting (AGM). What can I do?
- QUESTION: The other owner in my scheme is breaching the by-laws, what can I do?
1. If I am in a duplex, does this mean we are automatically under the Body Corporate and Community Management (Specified Two-lot Schemes Module) Regulation 2011?
No. The regulation module that applies to a community titles scheme is initially decided by the developer when the scheme is established and the community management statement for the scheme is registered with the Titles Registry Office. It is not compulsory for a two-lot scheme to be regulated by the specified two-lot scheme module – the developer may have decided to register the scheme under a different module, or the body corporate may have changed the regulation module for the scheme. As the specified two-lot schemes module only commenced in 2011, schemes established before 2011 will not fall under this module unless the body corporate has decided to make and register this change. The best way to be sure about which regulation module applies to your scheme is to obtain a copy of the current community management statement for the scheme from the Titles Registry Office.
2. Can we change the regulation module?
Yes, you may be able to change the regulation module. A body corporate can change its regulation module at any time. However, the motion can only be considered by the body corporate once in the body corporate’s financial year.
The first step is to pass a motion to change the regulation module and community management statement by special resolution at a general meeting. The scheme must meet the criteria set out in the module.
If your scheme is registered under the Standard Module, Commercial Module or Accommodation Module, an explanatory note in the approved form must be included with the agenda for a general meeting that includes a motion proposing to change the regulation module. The approved form, BCCM Form 19, outlines the effects a change in the regulation module will have on the management of the scheme.
If the scheme is changing from the Small Schemes Module or the Specified Two-lot Schemes Module to another module, you do not have to include the BCCM Form 19.
You can read more about the criteria and process for changing regulation modules on our website.
The second step is to record the change in a new community management statement for the scheme and register the new statement with the Titles Registry Office.
3. I was told when I bought the property that there was no body corporate, now I am being told this is not the case. Is there a body corporate or not?
If the property is registered as a CTS, there is a body corporate. It may be that the owners have not been running the body corporate according to the legislation and regulations, or they were not aware themselves because there are no body corporate levies or no body corporate manager.
For a scheme registered under the Body Corporate and Community Management (Specified Two-lot Schemes) Module Regulation 2011, body corporate levies are not required, rather the body corporate has agreed expenses. It is also not compulsory to have a body corporate manager.
As above, contact the Titles Registry Office to confirm that you are a community titles scheme and which regulation module applies.
4. My scheme only consists of two lots and we don’t share any common walls. Can we each just look after the maintenance of our own property?
The body corporate (both owners) must maintain common property and utility infrastructure that is common property.
What will be classified as common property for your scheme is determined by the plan of subdivision (or “survey plan”) that your scheme is registered under, not the regulation module that applies to your scheme.
For example, even though a roof might appear to be your roof, under a building format plan of subdivision, a roof is common property and both owners are jointly responsible for the maintenance even if the roof is not shared.
You can obtain a copy of the survey plan for your scheme from the Titles Registry Office to find out whether your scheme is registered under a standard format plan (previously group titles plan) or a building format plan (previously building units plan) of subdivision.
Refer to the building format plan maintenance page or standard format plan maintenance page of our website for more information about what is common property under the different types of survey plans.
5. I want to make some changes to my lot. Do I need to ask the other owner?
The body corporate legislation does not restrict you from making improvements inside the boundaries of your lot. However, you should consider if there are any by-laws which state you must seek approval of the other owner first, or if any of your changes include common property. You will need to seek approval of the body corporate if you are making a change to common property.
The by-laws for your scheme are contained in the community management statement recorded at the Titles Registry Office.
Under the Specified Two-lot Schemes Module, approval for improvements is granted when both owners agree and sign a lot owner agreement. Under the other regulation modules, approval will be given by the committee at a committee meeting or by a vote outside committee meeting, or at a general meeting, depending on the cost of the improvement.
You can read more about improvements to common property and lots on our website.
6. Can we insure our own lots?
This depends on the plan of subdivision under which the scheme is registered.
A body corporate must have building insurance, public risk insurance and insurance of common property and body corporate assets.
If the body corporate scheme is registered under a building format plan of subdivision then the body corporate must take out insurance in the name of the body corporate.
If the scheme is registered under a standard format plan of subdivision and the lots do not share a common wall, then you can take out your own policy of insurance, or the body corporate can set up a voluntary insurance scheme. It is optional for an owner to be included in a voluntary insurance scheme. However, if there is a common wall, then the body corporate must insure the buildings in the name of the body corporate.
You can read more about insurances in a body corporate on our website.
7. The other owner is not paying their share of the body corporate insurance, what can I do?
You should first attempt to resolve the issue by writing to the other owner asking them to pay for their share of the insurance as they have a legal obligation to. You may wish to give them a time frame to respond to your correspondence, pay their share of the premium or repay you, if you have paid on their behalf.
If the owner will not pay their share of the body corporate insurance and you are unable to resolve the matter with them through self-resolution, you may be able to lodge a dispute resolution application with our office.
You can read more about owner’s contributions, disputes in a body corporate and self-resolution on our website.
8. Do we need to have a body corporate bank account and pay levies?
This also depends on which regulation module applies to your scheme.
If the scheme is registered under the Specified Two-lot Schemes Module, the body corporate does not have to open a bank account in the name of the body corporate or collect levies.
Under the Specified Two-lot Schemes Module, each owner must pay a share of body corporate expenses (called owner contributions) as they arise. You can read more about owners contributions in a two-lot scheme on our website.
Under the other regulation modules, a body corporate must have one or more bank accounts kept in its name. The account must be at a financial institution such as a bank, building society or credit union.
You can read more about body corporate bank accounts on our website.
These bodies corporate budget for expenses and then levy each owner in the scheme their share of the money to meet those expenses. You can read more about owner’s contributions on our website.
9. I am in a duplex and we are registered under the Standard Module. I have lived here for many years and we have never had an annual general meeting (AGM). What can I do?
Under the Standard Module, the body corporate is required to have an AGM within three months of the end of the body corporate’s financial year and elect a committee. If this has not occurred, no one may have the authority to make decisions on behalf of the body corporate, for example, to call a meeting or pay an invoice.
It may be suitable in this instance for you to seek an appointment of an administrator by order of an adjudicator. An order can be made to appoint an administrator to perform the obligations of the body corporate, the committee or a member of a committee.
The application can be made by an owner or with the consent of the other owner in the scheme. If the administrator is given the powers of a committee, they will have the authority to call a general meeting of the body corporate and can assist the body corporate to get back on track.
Before lodging an application for an administrator please refer to Practice Direction 17 for more information about administrator appointments.
10. The other owner in my scheme is breaching the by-laws, what can I do?
The body corporate has responsibility for enforcing the by-laws for the scheme. The process depends on the regulation module that applies to the scheme.
If you believe that an owner or occupier is in breach of a by-law you should first speak to them informally to try and resolve the issue.
If that doesn’t work, the first formal step under the BCCM Act is to give a by-law contravention notice to the person you believe is breaching the by-laws.
There are two types of contravention notices, a continuing contravention notice and a future contravention notice.
Specified Two-lot Schemes
If your scheme is under the Specified Two-lot Schemes Module, then an owner can give either a Notice on continuing contravention of a body corporate by law (Specified Two-Lot Scheme) (BCCM Form 27) or a Notice regarding likely future contravention of a body corporate by-law (Specified Two Lot Scheme) (BCCM Form 28) to the person that is in breach of the by-law.
If you are an occupier in a scheme registered under the Specified Two-lot Schemes Module, you can give a Notice to owner of a contravention of a body corporate by-law (Specified Two-Lot Scheme) (BCCM Form 25) to the owner of your lot, asking them to give a contravention notice to the person breaching the by-law.
If, after giving a contravention notice, the dispute is not resolved, you may consider lodging a conciliation application with our office.
Read more about enforcing by-laws in a two-lot scheme on our website.
Under the other regulation modules
If your scheme is registered under one of the other regulation modules, you will need to give a Notice to the body corporate of a contravention of a body corporate by-law (BCCM Form 1) to the body corporate committee asking for a contravention notice to be given to the person breaching the by-law. The body corporate committee must vote to issue either a Notice of a continuing contravention of a body corporate by-law (BCCM Form 10) or a Notice regarding likely future contravention of a body corporate by-law (BCCM Form 11).
The committee must respond within 14 days to advise whether they have issued a contravention notice. If the committee decides not to give a contravention notice, you can then lodge a conciliation application against the body corporate or the owner or occupier who is in breach of the by-law.
Read more about enforcing by-laws on our website.
Michelle Scott Information Service Freecall 1800 060 119 Commissioner for Body Corporate and Community Management
This post appears in Strata News #467.
Have a question about owning a duplex in a two-lot scheme or something to add to the article? Leave a comment below.
EmbedRead next:
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This article has been republished with permission from the author and first appeared in the BCCM Common Ground newsletter.
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