Body Corporate Law Reform – How does it impact unit owners?

On 1 December 2022, amendments were made to some key body corporate legislation. These amendments aim to modernize the Building Units and Group Titles Act 1980 (Qld) (BUG Act) and Mixed Use Development Act 1993 (Qld) (MUD Act), by mirroring the recent amendments made to Queensland’s main body corporate legislation, the Body Corporate and Community Management Act 1997 (Qld) (BCCM Act). The amendments have an overall goal of making the body corporate arrangements fairer for unit owners, rather than being grossly in the corporate body’s favour. It will be important for all unit and townhouse owners/occupiers to determine whether these amendments will impact them and if so then how.

Who is impacted by the amendments to the BUG and MUD Acts

In short, not very many people will be impacted by these amendments. The BUG Act use to regulate body corporate properties prior to 1997. After 1997, when the BCCM Act commenced, most corporate schemes were transferred from the BUG Act to the BCCM Act.

However, that doesn’t mean that all corporate body buildings were transferred to the BCCM Act from 1997. There are some corporate body buildings that are still regulated by the BUG and MUD Acts, particularly properties that were subdivided. Unit owners should contact their corporate body if they are the element which legislation their corporate body is subject to. The corporate body should be able to confirm this by looking at the property’s Community Management Statement. The owners/occupiers of property in the body corporates that should pay particular attention to the 1 December 2022 amendments are as follows:

• Body corporates established before 1997 that were built on subdivided properties which were not transferred over to the BCCM Act;

• Any body corporates that are mixed uses (ie. residential and retail);

• Body corporates subject to the Integrated Resort Development Act 1987 (Qld);

• Body corporates subject to the Registration of Plans (HSP (Nominees) Pty Limited) Enabling Act 1980 (Qld);

• Body corporates subject to the Registration of Plans (Stage 2) (HSP (Nominees) Pty Limited) Enabling Act 1984 (Qld); and

• Body corporates subject to the Sanctuary Cove Resort Act 1985 (Qld).

Key Amendments

Eight (8) amendments have been made to the BUG and MUD Acts. These amendments include:

1. Information and Education Services for Unit Owners

More information and educational services are to be provided to unit owners who are regulated under the BUG Act. These services will focus on informing unit owners of their rights, responsibilities and the dispute resolution methods available under the BUG Act. This increased provision of information and education services is to align with the same services offered under the BCCM Act.

2. Improving Dispute Resolution Processes

The dispute resolution processes under the BUG and MUD Acts will see improvements under these amendments. The dispute resolution process has been amended to provide referees (who are employed under Queensland’s Public Service Act) with more flexibility when dealing with dispute resolution cases. While the referees will be experiencing greater flexibility in their power, the referees must provide natural justice when facilitating the dispute resolution process. The amendments avoid referees being limited by formalities and the rules of evidence.

3. Body Corporate Obligations

The amendments have made the body corporate’s obligations to unit owners clearer, especially when it comes to acting fairly and reasonably. The BUG and MUD acts have inserted new subsections in their legislation expressly outlining the corporate body must act reasonably when carrying out corporate body functions and the committee-making decisions. This amendment updates the BUG and MUD act to align closer with the BCCM Act, which already has this express provision in the legislation.

4. Eligibility for being elected to the Body Corporate Committee

The BUG and MUD Acts have been amended to provide a threshold for unit owners who are eligible to be nominated to become the Body Corporate Committee. Any unit owner (or person associated with a unit owner) who owes a debt to the corporate body, regardless of whether the debt is in another building with another corporate body, will be ineligible to sit on a corporate body committee. The reasoning behind this exclusion is to make corporate bodies fairer in their governance, by ensuring that those who are sitting on corporate body committees are owners not indebted to the corporate body and will be the least likely to abuse the committee’s power.

5. Representation and Voting in Body Corporates

This is only applicable to corporate bodies subject to the MUD Act. Nominees who wish to become representatives of a subsidiary corporate body must first become a member of the subsidiary body corporate’s committee. This aims to promote more fairness within the committee itself, by requiring representatives to already be part of the subsidiary body corporate’s decision-making committee.

6. Body Corporate Committee’s decision making

Amendments have been made by the BUG and MUD Acts decision-making committee. When making a decision for the committee, members must make decisions in the best interests of the corporate body and unit owners. Any member voting on a decision where a conflict of interest arises must disclose the conflict and must refrain from voting on that decision. This is to promote transparency and fairness in corporate bodies subject to the BUG and MUD Acts.

7. Financial Management

The BUG and MUD Acts have been amended to require that financial contributions, made by unit owners, must be paid as a monetary amount. There is an exception to this rule however, if the non-monetary payment is of fair value. This amendment is to improve the corporate body’s financial sustainability which is subject to the BUG and MUD Acts.

8. Information Disclosure

The BUG and MUD Acts have been amended to the extent that the body corporate committee must provide body corporate members with committee meeting minutes and general meeting minutes within 21 days of the committee meeting being held. This is to promote transparency between the body corporate committee and unit owners (who are members of the body corporate).

If you have any questions or require assistance with purchasing a unit or assisting with understanding body corporate matters in Queensland, please contact NB Property Law for more information.

Write by

Kayleigh Swift, Associate

Kayleigh Swift is an associate in our Commercial and Property team who assists with Employment Law matters. With a high level of experience in commercial and retail leasing, voluntary and involuntary purchase and sale acquisitions, property development and employee relations, Kayleigh provides practical advice to ensure smooth business transactions.

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[email protected]
(07) 3876 5111

Chloe Skubis, Lawyer

Chloe Skubis is a Lawyer in our Property team who assists with various conveyancing transactions. Chloe is very experienced in residential conveyancing and is a problem solver. She always provides efficient service to all her clients.

Chloe Bio Page
[email protected]
(07) 3876 5111