Jadran Court [2004] QBCCMCmr 44 (22 January 2004)

Last Updated: 30 September 2005

REFERENCE: 0500-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	13870
Name of Scheme:	Jadran Court
Address of Scheme:	54 Frank Street, LABRADOR QLD 4215

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the Body Corporate for Jadran Court

I hereby order that the owner of lot 2 for the time being is and continues to be entitled to the exclusive use of common property delineated in the plan attaching to the exclusive use by-law.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0500-2003

"Jadran Court" CTS 13870

The applicant, the Body Corporate for Jadran Court has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote -

To clarify is Mr Joe Stonham (owner of unit 2) has the right to the exclusive use of land around unit 2. ...

Section 276(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 the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

The scheme

The scheme is a subdivision of 11 lots recorded under a building format plan of subdivision (formerly a building format plan).

The application

The application, made by the body corporate, seeks a determination of whether lot 2 continues to enjoy the benefit of an exclusive use of certain parts of the common property. However, the grounds to the application and submissions received from other owners raise a number of associated issues that I intend to consider. I conclude that there are in fact three issues for discussion, namely –

1. The validity of the exclusive use allocation;
2. Maintenance of exclusive use areas;
3. Improvements to exclusive use areas.

The validity of the exclusive use allocation

The relevant by-law, recorded in 1974 provides that –

The proprietor or proprietors for the time being of lot No. 2 in the said Building Units Plan shall be entitled to the exclusive use for himself or themselves and the occupier for the time being of the said unit No. 2 in the said Building Units Plan of that part of the common property interlined in red and set forth in the diagram hereto annexed and marked with the letter "A".

There are statements made by several owners, and the application itself, that given that the scheme has not had a manager for a considerable period of time, then the exclusive use allocation no longer applies. Alternatively, that the exclusive use allocation only operated for the benefit of a manager, but not an ordinary owner.

This issue is an easy one to determine. There is no question whatsoever that the exclusive use in favour of lot 2 continues for the benefit of lot 2. Whilst exclusive use allocations can be limited by way of condition, this allocation is not so limited. There is no condition that it apply only so long as the owner of lot 2 is the manager for the scheme. Further, the exclusive use allocation for lot 2 applies for the benefit of each succeeding owner of lot 2. The existence of the exclusive use in favour of lot 2 is a matter of public record, discoverable by search. No other owner can suggest that they were disadvantaged since it could have been discovered by them at the time of their purchase by search of the relevant record.

Maintenance of exclusive use area

The second issue which arises is that of maintenance of the exclusive use area. The application does not specifically refer to this, and the owner of lot 2, Joseph Edward Stonham (the respondent) does not refer to this issue in his submission in response to the application. However I consider the issue a relevant one given that several owners in submissions have mentioned various issues relating to maintenance of the exclusive use common property area enjoyed by lot 2, including that the pool is in need of repair, that the pool is not maintained and left to go green on occasions, and that parts of the area are unkempt.

Firstly it is relevant to note that the by-law which grants the exclusive use to the respondent is silent on the question of responsibility for maintenance. In this situation the provisions of section 123 of the standard module are relevant to determine responsibility for maintenance of the exclusive use area, and any improvements included therein. Section 123 provides -

123 Conditions and obligations under exclusive use by-law--Act, s 173
(1) If the owner of a lot included in the scheme to whom rights are in the first instance given under an exclusive use by-law agrees in writing, the by-law may impose conditions (which may include conditions requiring the owner to make a payment or periodic payments to the scheme’s body
corporate or the owners of lots included in the scheme, or both).
(2) An exclusive use by-law is taken, in the absence of other specific provision in the by-law for maintenance and operating costs, to make the owner of the lot to whom exclusive use or other rights are given responsible for the maintenance of and operating costs for the part of the common property to which the exclusive use by-law applies.
Examples of operating cost for part of common property-- Cost of providing lighting to the part of common property.
(3) However, if the lot was created under a building format plan of subdivision, in the absence of other specific provision in the by-law, the owner of the lot is not responsible for--
(a) maintaining in good condition roofing membranes that--
(i) are on the part of the common property to which the by-law applies; and
(ii) provide protection for lots or common property; or
(b) maintaining in a structurally sound condition any of the following elements of scheme land that are part of a structure that is on the part of the common property to which the by-law applies and is not constructed by or for the lot owner--
(i) foundation structures;
(ii) roofing structures providing protection;
(iii) essential supporting framework, including load-bearing walls.

The provisions of this section are relevant to the circumstances of this application. The owner of lot 2 is responsible for the maintenance and operating costs of the exclusive use area and all improvements in the exclusive use area. For example, the registration fees for the pool are the responsibility of the respondent, as are the costs of maintaining the pool and keeping it operating. This includes all costs from the cost of chlorine to the cost of any major repairs to the pool (eg. resurfacing etc). There are some limited limitations on the obligation of the respondent regarding the exclusive use allocation in sub-paragraph (3).

Improvements to exclusive use areas

There are two different allegations regarding improvements to the exclusive use area. The first is that the respondent has made improvements to the exclusive use area (the erection of a carport) without referring the matter to the body corporate. In addition, the respondent is proposing the erection within the exclusive use area of some demountable accommodation. Whether or not the respondent intends to seek body corporate authorisation for this is uncertain, however I am concerned from the respondent’s submission that he considers it only necessary to obtain local authority authorisation for the demountables. This is not correct. Moreover, it is clear from submissions that a number of owners currently oppose the construction of the demountables on the common property exclusive use allocation of lot 2.

Section 124 of the standard module is relevant to the question of improvements proposed to be made to the exclusive use area.

124 Improvements--Act, s 173
(1) An exclusive use by-law may authorise the lot owner who has the benefit of the by-law to make stated improvements to the part of the common property to which the by-law applies.
(2) Without limiting subsection (1), improvements stated in the by-law may include the installation of fixtures on the common property and the making of changes to the common property.
(3) If the exclusive use by-law does not authorise the lot owner to make an improvement, the lot owner may make the improvement only if the body corporate authorises it to be made.
(4) However, if the value of the improvement mentioned in subsection (3) is more than $250, the making of the improvement must be authorised by a special resolution of the body corporate.

It should be noted that the current by-law does not provide for or authorise the making of improvements to the common property exclusive use allocation of lot 2. Given this, then the relevant provision dealing with improvements to common property by a lot owner is section 114, quote –

114 Improvements to common property by lot owner--Act, s 159
(1) 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.
(2) The improvement must be authorised by special resolution of the body corporate unless--
(a) the improvement is a minor improvement; and
(b) the improvement does not detract from the appearance of any lot included in, or common property for, the scheme; and
(c) 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.
(3) An authorisation may be given under this section on conditions the body corporate considers appropriate.
(4) The owner of a lot who is given an authority under this section42--
(a) must comply with conditions of the authority; and
(b) must maintain the improvement made under the authority in good condition, unless excused by the body corporate.

In essence, a special resolution of the body corporate will be required to any improvements to the common property exclusive use allocation of lot 2. This includes the erection of the carport. If a special resolution was not obtained for the erection of this improvement, the body corporate will need to determine what it might do regarding this non-compliance.

I do not propose to go further, as the above considerations will better inform all owners of their rights and obligations. It is from this position that all parties will be able to better proceed in the future.