Santorini Twin Waters [2001] QBCCMCmr 62 (8 February 2001)

P J HANLYREFERENCE: 0605-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	28222
Name of Scheme:	Santorini Twin Waters
Address of Scheme:	13/13 Mudjimba Esplanade MUDJIMBA QLD 4564

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

John Gerard Noonan and Margery Lynne Noonan, the owners of lot 13



I hereby order that the application for an order that the body corporate shall not collect insurance premiums in advance, is dismissed.



STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0605-2000

“Santorini Twin Waters” CTS 28222

The applicants, John Gerard Noonan and Margery Lynne Noonan, the Owner of lot 13, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

That a ruling/order be made by a departmental adjudicator on the forward charging of insurance premiums within the body corporate levies.

Section 223(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about –

a) a claimed or anticipated contravention of the Act or the community management statement; or

b) the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or

c) a claimed or anticipated contravention of the terms, or the termination of, or the exercise of rights or powers under the terms of, or the performance of duties under the terms of an engagement contract or an authorisation contract.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 223(2)). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

In the supporting grounds, the applicants state that they object to the forward charging of insurance premiums, as they have already had to reimburse the developer for the insurance which is currently paid to June 2001, and the body corporate has now charged the premium for 2001/2002.

The body corporate committee was invited to respond to the application. A submission was received from the body corporate manager, on behalf of the committee. The manager stated that the financial year-end date for this scheme is 31 May, and that the annual general meeting must be held within 3 months after that date (section 58 of the Accommodation Module). The manager further stated that the insurance is due and payable (in advance) on 23 June 2001. The manager further stated that it would be impossible for the body corporate to prepare a budget, have it approved by the committee, hold the annual general meeting and pay the insurance all within the space of 23 days.

The position as stated by the body corporate manager is correct. The sections of the Accommodation Module have been referred to in the manager’s submission, a copy of which was supplied to the applicants. I do not propose to repeat the sections in this document.

The applicants appear to misunderstand the way in which levies are adjusted in the event of the sale of a unit. A buyer is entitled to have levies paid up to date at the time of settlement. If levies are in arrears, then the seller will be required to pay those levies up to the end of the current quarter or half-year, depending on the frequency of the levies. If the current levies have already been paid by the seller, and the current quarter or half-year ends later than the date of settlement, then the seller is credited with a pro-rata amount of the current levies by the incoming buyer. However, if the body corporate has been budgeting to paint the building in five years, and owners have been levied progressively for that amount the seller will not be entitled to receive reimbursement of the amounts which have been paid just because the seller will not be there when the building is ultimately painted. A similar principle applies to the insurance. The reason that the developer is reimbursed for the insurance premium is because that is a standard condition of a developer’s contract of sale.

I have dismissed the application.