Registration of Community Management Statements
The Community Management Statement (‘CMS’) is a critical document for every body corporate, and it is essential that it is clearly drafted and accurately reflects the rights, and where possible the intentions of the owners.
A well drafted CMS containing provisions appropriate to the particular body corporate saves a great deal of stress and dispute.
This article looks at the process of lodging a CMS including time limits and supporting material required and how to obtain a copy once it has been lodged in Titles Office.
As most owners are aware, strata title schemes in Queensland are governed by:
- the Body Corporate and Community Management Act 1997 (the ‘BCCMA’);
- the Community Management Statement (‘CMS’) for the relevant Scheme; and
- the Regulation Module for the relevant Scheme (which is nominated in the CMS), set out in the Regulations to the BCCMA.
Since the enactment of the BCCMA, the CMS is effectively the ‘constitution’ for each Scheme.
Under previous legislation each time there was an amendment to bylaws of a body corporate, appropriate documentation was required to be registered with Titles Office, but there was no single document that owners or other interested parties could review to ascertain the current rules of the body corporate, and such other information as exclusive use areas, and lot entitlements. It was necessary to obtain and read through all of the successive documents lodged to obtain an appreciation of the current situation.
One of the major innovations introduced by the BCCMA was that every time an amendment was made to any of the terms of the CMS, a new CMS was required to be registered with Titles Office, so that a searching party could be sure that they were reviewing the latest information, in one document. This has saved an enormous amount of time and expense, particularly as schemes have become much more complex and flexible than was the case prior to the enactment of the BCCMA.
A CMS is not an instrument under the Land Title Act 1994, or itself a document capable of registration with Titles Office, and must be accompanied by a General Request to register, signed by the relevant party or a solicitor (which specifies which schedules of the CMS are being changed, in the case of a change to an existing CMS).
A body corporate is created upon registration of a ‘First CMS’, executed by the local authority and the developer (the ‘original owner’). Every successive CMS after that document (‘a New CMS’) will be executed by the body corporate, and possibly the local authority (depending upon the changes being made to the CMS – e.g. if additional lots are being included in the Scheme). If a New CMS is being lodged by the developer before the first annual general meeting has been held it may be signed by the original owner under the body corporate seal, provided an appropriate statutory declaration by the original owner is deposited, stating that the first annual general meeting has not yet been held.
A CMS must be lodged with Titles Office for registration within 3 months of the date of consent. It is essential that care be taken to ensure that the appropriate approval/consent is obtained to the registration of a New CMS, or the document will be requisitioned, or rejected.
Generally the consent must be in the form of a resolution without dissent of the owners in general meeting, however the consent may be in the form of a special resolution of a general meeting of the body corporate, if the difference between the existing statement and the proposed new statement falls within one of the categories specified in Section 62 (3) of the BCCMA, and will not require either a resolution without dissent or a special resolution if the new statement differs from the existing statement only to the extent specified in Section 62 (4).
An example of this might be if 2 owners ‘swap’ car parks under an appropriate bylaw contained in the CMS – this will not require a resolution without dissent or a special resolution of owners in general meeting, whereas if the body corporate were to grant exclusive use over a part of the common area to an owner this would require a resolution without dissent passed by an appropriate general meeting.
Any New CMS must contain all appropriate plans and schedules contained in any previous CMS, and any new or amended plans required as a result of the proposed changes. Once approved by the body corporate in general meeting, in the manner appropriate having regard to the subject matter of the change, the New CMS is executed under the common seal of the body corporate and lodged with Titles Office for registration with the appropriate General Request and fees (currently $91).
Registration will generally take less than a week. Once registration has taken place, a registration confirmation statement (‘RCS’) will issue from Titles Office confirming registration of the New CMS.
We recommend that body corporate managers and committees at least obtain and retain a copy of the RCS and a copy of the fully executed CMS in the form lodged with Titles Office for their records, if they do not wish to incur the expense of undertaking a search of the latest registered CMS after registration every time a change is registered.
The CMS is a critical document for every body corporate, and it is essential that it is clearly drafted and accurately reflects the rights, and where possible the intentions of the owners. A well drafted CMS containing provisions appropriate to the particular body corporate saves a great deal of stress and dispute.
All too often we are approached by a body corporate or an owner for advice on some issue, only to find that the parties have not been referring to the most recent CMS, or that there is a dispute about the terms of the CMS, or their meaning, which could have been avoided if more care had been taken in the drafting of the terms of the CMS, and consideration given as to the practical effect of the wording (alas all too often stemming from poorly thought through or poorly worded resolutions at general meetings).
We very strongly recommend that bodies corporate obtain appropriate legal advice before preparation of new CMS’s, from solicitors experienced in body corporate law.
This article was contributed by Ken Waddington, Partner – Garland Waddington Solicitors.