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Introduction

When buying a property many home owners spend their time thinking about how to improve the appearance and therefore the value of their investment. This may for some home owners take the form of watching 'Backyard Bliss' or 'Better Homes and Gardens' on a Friday night and then spending the weekend at the local hardware stocking up on the materials required to 'assemble in half a day'. When it comes to strata-titled properties you need to investigate with the Body Corporate what is an allowable alteration or modification. Once this is established and the By-Laws attached to the Body Corporate are adhered to there are a number steps and factors that need to be considered.

Scheme Alterations/Improvements

Improvements to Common Property by Body Corporate


  • The Body Corporate may make improvements to the common property if:
    1. The cost of the improvements, or if the improvements together with associated improvements form a single project for improvement of the common property, the cost of the entire project, is not more than an amount (the improvements limit); or
    2. The improvements limit worked out by multiplying the number of lots included in the scheme by $300.00 for Standard & Accommodation Modules. The new regulations provide that this a committee decision if the costs are not more than the improvements limit.
    3. If the improvements cost is between $300.00 and $2000.00 per lot than an ordinary resolution is required at a general meeting.
    4. If the improvements costs are over $2000.00 per lot than a special resolution is required at a general meeting.
    5. The improvements are authorised by special resolution; or
    6. An adjudicator, under an order made under the dispute resolution provisions, decides the improvements are reasonably necessary for the health, safety or security of persons who use the common property and authorises the improvements.
  • If a series of associated improvements forms a single project, the cost of any 1 of the improvements is taken to be more than the improvements limit if the cost of the project, as a whole, is more than the improvements limit.

Committee Expenditure Limits

     
  • The new regulations which came into effect on the 1st September 2008 refers to "the relevant limit for Committee spending" for the standard and accommodation module as being $200 (an increase from $125)  times the number of lots in the scheme. It can be increased at a general meeting with an ordinary resolution to an amount which is not capped or limited by the new modules.
  • To calculate the spending limit within a layered schemes, the number of lots in the subsidiary schemes to the principal scheme apply to the $200 per lot limit.
  • The Body Corporate can set an amount of their choice for major spending and needs to be resolved at a general meeting with a ordinary resolution.
  • The new limits are exclusive of GST
  • If the Body Corporate resolves at a General Meeting with an ordinary resolutions to increase the Committee's spending limit to an amount higher than what is allowed for major spending the Committee must obtain two quotation
  • The only time a Committee may spend above this limit is if:
  • The amount has been approved by ordinary resolution at a General Meeting
  • All the lot owners have given written consent
  • In an emergency - through the order of an adjudicator
  • To comply with a notice or order by a public authority, adjudicator or a judgment/order of a court
  • If a series of proposals forms a single project, the cost of carrying out any one of the proposals is taken to be more than the relevant limit for Committee spending if the cost of the project, as a whole, is more than the relevant limit.
  • The BCCM Act does allow the Accommodation Module to increase this expenditure limit to a maximum of $450 per lot if resolved at a General Meeting.
  • This expenditure limit refers to a whole job and therefore the Committee can not cut up one job into separate pieces (or invoices) to keep the amounts within the Committee expenditure limit. It is very important that total cost of the job does not exceed this limit or the amount resolved by the body corporate.
  • An improvement includes:  
    1. The erection of a building; and
    2. A structural change; and
    3. A non-structural change, including, for example, the installation of air conditioning.
  • Minor improvement means an improvement with an installed value of $250.00 or less.

Major Expenditure Limits 

  • The new regulations has increased the limit from $250 per lot to $1100 per lot or $10,000.00 total, whichever is the lesser amount.
    •  
  • The same calculation applies for layered schemes as with the committee expenditure , the total number of lots in the subsidiary schemes is used.
  • The Body Corporate can set an amount of their choice for major spending and needs to be resolved at a general meeting with an ordinary resolution.
  • The relevant limit excludes GST.
  • If the quote exceeds the relevant limit, the committee must obtain two quotations and pass a motion with alternatives.

Improvements to Common Property by Lot Owner

  • The Body Corporate may, if asked by the owner of a lot, authorise the owner to make an improvement to the common property for the benefit of the owner's lot.
  • The improvement must be authorised by ordinary resolution of the Body Corporate unless:
    1. The improvement is a minor improvement; (installed value of less than $3000.00) and
    2. The improvement does not detract from the appearance of any lot included in, or common property for, the scheme; and
    3. The Body Corporate is satisfied that use and enjoyment of the authorised improvement is not likely to promote a breach of the owner's duties as an occupier (i.e. By-Laws).
    4. Any improvement which significantly changes the use or appearance of the common property must be authorised by special resolution.
  • An authorisation may be given under this section on conditions the Body Corporate considers appropriate.
  • The owner of a lot who is given an authority under this section:
    1. Must comply with conditions of the authority; and
    2. Must maintain the improvement made under the authority in good condition, unless excused by the Body Corporate.

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