Lot owners from QLD are looking to purchase a villa or duplex and are wondering what is covered by body corporate.
Jump directly to the QUESTION you are after:
- QUESTION: In a duplex, what are the ramifications when the other party will not contribute to insurance? Is it possible to insure the duplex independently by only paying the Insurance for your duplex?
- QUESTION: We live in a duplex and a boundary fence needs replacing. Is the cost of boundary fences in a duplex the responsibility of both owners of the duplex and the neighbouring property?
- QUESTION: I’m looking to buy a villa or duplex in a small strata scheme. Can they make their own rules or is there any Queensland government legislation about what is covered by body corporate?
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Question: In a duplex, what are the ramifications when the other party will not contribute to insurance? Is it possible to insure the duplex independently by only paying the Insurance for your duplex?
Answer: If the duplex doesn’t have a common wall or roof, and is a standalone property then you can insure it separately. And if it’s not, you can’t.
In relation to duplexes, the first thing to establish is does the duplex have common walls or a common roof? If it has either of those things, the building must be insured as one property and therefore it must fall under strata title property policy.
If you’re having issues with the other lot owner contributing to that policy, the first advice I give anyone is to try and resolve it without it being a conflict between yourself and that owner. Have a chat to them and if you can’t talk reason with that owner, then there is availability of the commissioner [https://www.qld.gov.au/law/housing-and-neighbours/body-corporate/legislation-and-bccm/services/enquire] who can make orders that the owner does pay for their portion of insurance.
If the property doesn’t have common walls and your lot is a standalone property, you can insure it separately under home insurance. But, the Act does say that the common property (so that could be things like driveways or other areas of common land) must have public liability insurance. So it can sometimes be difficult to get around that specific requirement of sharing the policy. But it does look at specific circumstances.
If your home doesn’t have a common wall or roof, and is a standalone property then you can insure it separately. And if it’s not, you can’t.
Tyrone Shandiman
Strata Insurance Solutions
T: 07 3899 5129
E: [email protected]
This post appears in Strata News #386.
Question: We live in a duplex and a boundary fence needs replacing. Is the cost of boundary fences in a duplex the responsibility of both owners of the duplex and the neighbouring property?
We live in a duplex in Queensland and the boundary fence needs to be replaced.
The fence is on the boundary that runs along the side of duplex 2 and the next door neighbour.
I believe a Fair Trading ruling recently stated that the cost of boundary fences in a duplex are the responsibility of both owners of the duplex and the neighbouring property. The costs were split:
- Duplex 1: 25%
- Duplex 2: 25%
- the neighbouring property 50%.
Is this the ruling for fence replacements on QLD duplex sites?
Answer: The maintenance apportionment and responsibility ultimately depend on your specific circumstances.
The Neighbourhood Disputes Resolution (Dividing Fences and Trees) Act 2011 (Qld) (NDA) is the applicable law in Queensland relevant to dividing fence matters. Generally, under the NDA, adjoining owners are jointly responsible for the maintenance of boundary fences.
Section 311 of the Body Corporate and Community Management Act 1997 (Qld) (BCCMA) provides that for the purposes of the NDA, the body corporate for a community titles scheme is taken to be the owner of the scheme land.
In Odyssey Villas [2018] QBCCMCmr 194, the adjudicator considered the maintenance responsibility of a scheme boundary fence that also formed the boundary of an exclusive use area, relevantly providing (our emphasis):
“Maintenance of boundary fences falls to the Body Corporate, regardless of whether they are also the boundaries of a lot or an exclusive use area, as section 311 of the Act treats the Body Corporate as the owner of the land for the purposes of the Neighbourhood Disputes (Dividing Fences and Trees) Act 2011 (Dividing Fences Act), with some limited exceptions.
While scheme by-laws may provide that lot 7 is responsible for the maintenance of their exclusive use area, by-laws are limited to the extent that they are inconsistent with legislation. In this case, section 311 of the Act, read with the Dividing Fences Act, is clear that the Body Corporate is responsible for maintenance of the boundary fence, regardless of who benefits from it.”
Accordingly, the general position is that the body corporate is responsible for the maintenance of a fence that forms the boundary of the scheme. To the extent the fence is a dividing fence under the NDA, the neighbouring lot owner (outside the scheme) will be responsible to contribute to some of the maintenance costs.
Of course, the maintenance apportionment and responsibility ultimately depend on your specific circumstances. As just a few examples, the above position can change if the fence is actually a retaining wall, if one party caused the damage to the fence, or if the fence does not form the boundary of the scheme.
Frank Higginson
E: [email protected]
P: 07 3193 0500
W: Hynes Legal
This post appears in Strata News #314.
Question: I’m looking to buy a villa or duplex in a small strata scheme. Can they make their own rules or is there any Queensland government legislation about what is covered by body corporate?
I am looking to buy a duplex or a villa in a small complex up to six units.
Can they make their own rules or is there a Qld government legislation in the regard of the items eg. plumbing, electrical, roof repairs, fencing. What is covered by body corporate?
I am confused as the sellers claim the body corporate only pays for the building insurance and gardening. Does this sound right?
Answer: This is the difference between sales patter and legal detail.
In this one there is some gardening. There would also be (probably) whatever common infrastructure (pipes etc), driveway, letterbox, roof (it is a supporting structure for both lots) and so on.
The body corporate’s obligations to maintain these things is absolute. A body corporate cannot contract out of that obligation. But the maintenance of them is very likely capital in nature, which is what a sinking fund does.
Self managed strata
If this building is self-managed (like lots of small ones are), it wouldn’t surprise me if the levies are just for insurance and gardening and there is no sinking fund, which means that if (and when) any of those other things need work, owners have to be hit up for it as 1/6th of whatever that now urgent cost is.
So in short:-
- The act sets out the rules for how these things must be maintained;
- If the budgets are not properly managed now, there can be surprises at the end.
But you also never know if the agent is just doing the usual sales pitch without seeing any of the detail and it is all in fact built into a proper sinking fund budget which does form part of the levies!
Frank Higginson
E: [email protected]
P: 07 3193 0500
W: http://www.hyneslegal.com.au
This post appears in Strata News #182.
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Read next:
- QLD: How To Raise The Value Of Your Strata Investment
- 3 Key Things To Research When Considering Buying A Strata Unit: Don’t Shy Away From It
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These are all very interesting topics.
with the first question, re; insurance for duplexes, would this also apply nationally, or are there different rules for each state.
with regards to what is covered by Body corporate, again is this a QLD only rule or to apply to each state.
Hi Lina
Legislation differs in each state. The information contained in this post is specifically related to QLD Legislation.
Frank H., good points. Buyer beware!
When buying, check with people who are liable for what they represent (like solicitors) not with sales / marketing lingo. It is also advisable not to refuse to do the body corporate search and have the report explained to you. The costs of such due diligence is small fraction of your total investment, and may uncover hidden traps – financial or personal – which you may not want to deal with.
If i had a dollar for each time i heard “we should have done this or that” or “I really did not understand that being an owner requires involvement” – I would be driving different colour Tesla each day ;-).
Education and knowledge is important in not having to do “crash course on strata” once you are committed [edit by admin].
Jana Koutova
UOAQ Executive Officer
I agree completely, even if it is a small scheme or a two lot scheme there are still some important points to confirm especially before you purchase. Knowing whether its a Standard Format Plan or a Building Format Plan will also give you a great head start on responsibilities of maintenance of the Body Corporate.
One issue that I see on a regular basis with the insurance in a two lot scheme is an issue with the name of the insured or sometimes there are even 2 separate policies and not one of them covers public liability. The Insurance must be in the name of the Body Corporate. A bigger problem arises when the insured in the Lot Owner selling, The policy must be cancelled as it can not be transferred, and the other Lot owner may not be able to do anything about it as they are not listed as an authorised representative.
Even if there are no records to search, obtaining this basic information is very important.