Northern Territory Explanatory Statements
[Index]
[Search]
[Download]
[Bill]
[Help]
UNIT TITLE SCHEMES BILL 2009
2009
LEGISLATIVE ASSEMBLY OF THE
NORTHERN TERRITORY
MINISTER FOR JUSTICE AND ATTORNEY-GENERAL
Unit Title Schemes Bill 2009
SERIAL NO. 35
EXPLANATORY STATEMENT
GENERAL OUTLINE
The Unit Title Schemes Bill 2009 provides for:
· the creation (and termination) of unit schemes as either basic schemes, or in layers, as lots within schemes that are either further subdivided or consolidated;
· the creation of bodies corporate to manage scheme land and the prescription of different management modules for different types of unit schemes along with a capacity for developers to adopt their own versions of a management module;
· the fixing of unit entitlements in respect of land ownership (“interest entitlements”) and running costs (“contribution entitlements”) associated with the ownership of units within a unit scheme;
· the insurance of common property by bodies corporate;
· the regulation of body corporate managers, service contractors and letting agents engaged by bodies corporate;
· the disclosure and warranty requirements if developers sell future units in scheme land off the plan;
· the resolution of disputes between unit owners and between owners and bodies corporate;
· the making of by-laws by bodies corporate to govern the use of scheme land;
· the appointment of a scheme supervisor to approve forms and perform such functions as may be prescribed from time to time;
· the jurisdiction of the Supreme Court and the Local Court concerning multi unit title’s matters;
· the exclusion of the Corporations Act 2001;
· Consequential amendments to the Land Title Act, Planning Act and Real Property (Unit Titles) Act to make certain provisions of those Acts applicable to the subdivision and consolidation of land as part of a unit scheme;
· Consequential amendments updating cross references and related matters in the Administration and Probate Act, Agents Licensing Act, Business Tenancies (Fair Dealings) Act, Cullen Bay Marina Act, Darwin Waterfront Corporation Act, Housing Act, Law of Property Act, Local Government Act, Residential Tenancies Act, Retirement Villages Act, Swimming Pool Safety Act and Water Supply and Sewerage Services Act; and
· Consequential amendments updating cross references and related matters in the Agents Licensing Regulations, Residential Tenancies Regulations and the Retirement Villages Regulations
NOTES ON CLAUSES
Chapter 1 Introduction
Part 1.1 Preliminary matters
Clause 1. Short title
This is a formal clause which provides for the citation of the Bill.
The Bill when passed may be cited as the Unit Title Schemes Act 2009.
Clause 2. Commencement
Clause 2(1), read with section 6A of the Interpretation Act, means that the provisions of the Bill may be commenced on such day or days as are determined by the Administrator by notice in the Gazette.
Clause 2(2) deems clauses 142 (Planning Act amendments) and 147 (amendment of section 200 of the Planning Act) to commence immediately after the commencement of section 53 of the Land Title and Related Legislation Amendment Act 2008. This is necessary because the amendments amend various provisions in the form they will be after the commencement of amendments made by the Land Title and Related Legislation Amendment Act 2008.
Clause 2(3) deems clauses 149 (Real Property (Unit Titles) Act amendments) and 152 (amendment of section 24 of the Real Property (Unit Titles) Act) to commence immediately after the commencement of section 27 of the Land Title and Related Legislation Amendment Act 2008. This is necessary because the amendments amend various provisions in the form they will be after the commencement of amendments made by the Land Title and Related Legislation Amendment Act 2008.
Clause 2(4) deems clauses 163, 167-168 and 174 to have commenced immediately after section 47 of the Land Title and Related Legislation Amendment Act 2008. This is necessary because the amendments amend various provisions of the Unit Titles Act in the form they will be after the commencement of amendments made by the Land Title and Related Legislation Amendment Act 2008.
Part 1.2 What this Act is about
Clause 3. Objects of Act
This clause sets out the objects of the Bill. They are to permit the creation of unit title schemes and to regulate those schemes.
Clause 4. Overview of Act
This clause summarises how the new legislative scheme (comprising this Bill, the Planning Act, and the Land Title Act) for unit titles is to operate.
The starting point is a development permit (for a subdivision) under the Planning Act with the end point being titles issued for the purposes of the Land Title Act.
This Bill provides for the creation, alteration and termination of unit title schemes [Parts 2.2 and 2.4], the key aspects of them [Part 2.3], and for their management [Chapter 3]. It also deals with disputes [Part 3.3].
Chapter 4 (Parts 4.1 and 4.2) provides for the administration of the Act.
Chapter 4 (Parts 4.3 and 4.4) provides for transitional arrangements and consequential amendments.
Part 1.3 Interpretation
Clause 5. Definitions
This clause sets out the definitions necessary for the operation of the Bill.
The main definitions are as follows:
Key terms
Basic scheme – this term’s meaning is set out in clause 63. It is the name used to describe a scheme (of units and common property) where none of the units have been further subdivided
Body corporate – is the name used to describe the corporation formed that is formed when a unit title scheme is registered. The corporation owns and manages the common property and is responsible for enforcing the by-laws and related matters.
Common property – this is the term used to describe the land that is owned by the unit owners in a communal way.
Disclosure statement – this is the word used to describe the documentation required to be provided to sellers when they are buying land “off the plan”
Layered scheme – this is the term used to describe schemes that are related to one another.
Progressive development – this is the term used when it is likely that a unit in an original scheme statement will be subdivided into further units.
Purposes (of a scheme) - this is a statement of the overall purpose of a land development that is the subject of a unit title scheme. The purpose is of relevance for the body corporate when it is making decisions (see clauses 18(1)(b), 18(1)(f) and 27(2)).
Scheme statement – this is the document that it is lodged with the Registrar-General for the purpose of the issue of titles. It also includes management documents such as by-laws and management modules.
Termination – this is the general term used to describe the ways in which bodies corporate can be brought to an end.
Unit – this is the term used to describe the part of a scheme that is in individual ownership.
Unit entitlement – is a collective term used to describe the 2 types of entitlements (namely contribution entitlements and interest entitlements).
Planning, land titles and land development terms
Consent authority - this is the relevant authority under the Planning Act that is responsible, when land is being developed, for making land use and subdivision decisions in relation to the land. The consent authority may be the Minister responsible for administering the Planning Act or it may be the Development Consent Authority (DCA) established by that Act. The membership of the DCA varies depending on the local government area in which it is operating.
Lot - this word is defined so that it has the same meaning as in the Land Title Act. This means that it refers to any piece of land that has a land title of its own. Thus “units” and “common property” are “lots” for the purposes of this Act.
Statutory easement – these are mutual easements between units and between units and common property.
Original owner – is the person who owned land before the land became the subject of the original unit title. This person, for a split second or for an indefinite time will own all of the units following the registration of the original scheme statement by the Registrar-General.
Management terms
Committee – this is the management group that must exist for all schemes other than for basic schemes that have less than 4 units.
Majority decision - a majority of the votes (greater than 50%) (with each unit having one vote).
Management module – this is the document that sets out how the body corporate makes decisions and also the rules that govern such decisions.
Ordinary resolution - this is a vote passed on the basis of votes representing a majority of contribution entitlements, so ,for example if the title for a supermarket represented 50% of the contribution entitlements for a shopping centre, the vote of that owner would represent 50%.
Resolution without dissent - means a vote where no vote is counted against the motion.
Unanimous resolution - means a vote where there is 100% vote in support for all units.
Special resolution - the winning vote must represent at least 2/3 of the votes cast, the opposition vote must not exceed 1/4 of the number of units or represent more than 1/4 of the contribution entitlements.
Exclusive use by-laws – this is the term used to describe by-laws that permit the owner of a unit to have exclusive use of some part of the common property.
Interest entitlement – this is the share of a unit owner in the overall scheme.
Contribution entitlement - this is the share of a running costs of a unit owner in the overall scheme.
Judicial and supervisory terms
The Court - The court for most of the provisions of the Act is the Local Court. However, sections 15, 71 and 72 provide that the Supreme Court has jurisdiction over terminations of schemes and the amalgamation of schemes. The legislation does not limit in any way the inherent jurisdiction of the Supreme Court.
Scheme supervisor – this is the government officer who will have specified functions under the Act and who will also be expected to be responsible for administration of the Act as a whole.
Clause 6. References about scheme
This interpretative provision provides that references in the legislation to scheme matters are taken to be references to scheme matters of the scheme to which the reference is being applied.
Part 1.4 Other matters
Clause 7. Act binds Crown
This clause provides that the Act binds the Crown.
The intent of this clause is to remove any civil immunity that the Crown might, but for this clause, possess in relation to activities governed by this Act.
This clause is not intended to make the Crown liable to any criminal liabilities for breaches of the Act.
Clause 8. Offences against Act
This clause sets out that the criminal responsibility provisions of Part IIAA of the Criminal Code are to apply to offences.
This means that Part IIAA of the Criminal Code, rather than Part II of that Code, applies to the interpretation of sections of the Act that contain offences.
For the offences, see clauses:
· 20(3) (breach by original owner to provide copy of scheme statement to the body corporate).
· 20(4) (failure of body corporate to lodge a copy of a scheme statement after endorsement).
· 40(5) (failure of body corporate to lodge a copy of subsequent scheme statement).
· 42(6)(failure of body corporate to lot a new scheme statement following a compulsory acquisition).
· 45(5)(failure of seller to lodge a disclosure statement before entering into a contract).
· 46(4) (failure of seller to provide a replacement disclosure statement).
· 52 (failure of body corporate to arrange insurance).
· 59 (failure of body corporate to arrange a subsequent scheme statement in accordance with an order if the Court).
· 65 (failure of developer to give notice to the body corporate and parties to contracts of specified planning applications).
· 66 (failure of body corporate to give notice of subsequent scheme statement lodged in the course of a progressive development).
· 71(4) (failure of the body corporate to lodge a subsequent scheme statement following the formation of a layered scheme)/
· 81(5)(failure of body corporate to facilitate inspection of records),
· 83 (failure of body corporate to maintain signage and letter box).
· 86 (failure of body corporate to lodge a subsequent scheme statement following the court ordering a change in a by-law).
· 96 (failure of person to comply with a by-law contravention notice).
· 97(failure of body corporate to lodge a new scheme statement following the agreement or an order of a court).
· 99 (failure of the body corporate to lodge a subsequent scheme statement following the review of an exclusive use by-law by the court).
This clause also sets out that, except with the consent of the Minister responsible for the administration of the Act, prosecutions must be commenced within 2 years of the alleged offence.
With the Minister’s approval this period can be extended to 5 years.
These periods are consistent with those in the Consumer Affairs and Fair Trading Act and are longer than the default prosecution period of 6 months that is contained in section 52 of the Justices Act and which would otherwise apply.
Chapter 2 Basic operation of a scheme
Part 2.1 Introduction
Clause 9. Overview of Chapter
This clause contains a summary of what matters are covered by Parts 2.2, 2.3 and 2.4.
Part 2.2 Life of a scheme
Division 1 Forming a scheme
Clause 10. Formation of scheme
Subclause 10(1) describes unit title scheme as something set out in a written scheme statement (see clause 18) that provides for two or more units and common property. It may come from a subdivision or from a changed unit title scheme. It must also provide for the incorporation for the unit owners and common property.
Subclause 10(2) provides that the scheme is formed when its first scheme statement is registered.
Subclause 10(3) provides for the naming of schemes. Names may be reserved in accordance with (proposed) section 54C of the
Land Title Act [see clause 135]. Schemes will be known by their name (if any) and the number allocated by the Registrar-General upon the registration of the first scheme statement.
Clause 11. Effect of formation of scheme
On the “formation” of a scheme (i.e. when it is registered under the Land Title Act) a body corporate is created which owns and controls the common property. The original owner of the land becomes the registered owner of each of the units created.
This clause also provides that the contents of the scheme statement, the management module and the by-laws operate as if each owner had agreed with each other owner and also with the body corporate to be bound by the provisions of each of those documents or provisions (such as the by-laws or aspects of management modules) will apply because of the operation of the Unit Title Schemes Act.
However, this deemed agreement operates subject to any higher scheme from which the scheme has been developed – that is, the deemed agreements of lower schemes operate subject to the deemed agreements that exist for the earlier (and now higher) schemes.
Division 2 Changing a scheme
Clause 12. Changes to scheme statement
In order for a scheme to be changed, a new scheme statement must be registered.
Subclause 12(2) sets out examples of changes to scheme statements, including the completion of further stages in a progressive development, additional subdivisions (to create new units or to create a layered scheme), consolidation of units or on amalgamation of a scheme with some other scheme, and the transformation of a scheme into a layered scheme.
The new scheme statement replaces the former document – which will then become an historical matter recorded by the Registrar-General.
Division 3 Terminating a scheme
Clause 13. General rules
Clause 13 states that a scheme may only be terminated in accordance with Division 3 (clause 14 and 15) or clause 72.
Subclause 13(2) makes it clear that a higher scheme cannot be terminated unless all of the lower level schemes are also being terminated.
The clause also provides than management modules (as applied or as made as referred to in clause 94) may make provision for the termination of schemes.
It is intended that regulations will set out a management module that will provide a mechanism for the termination of schemes in accordance with a provision in a management module that accords with clause 15(b). Such a module could then either be adopted by a developer when a scheme is first made modified with the approval of the scheme supervisor as per any regulations made as referred to in clause 94(4)(b).
Clause 14. Termination by court order
This clause provides that the Supreme Court may terminate a scheme if it decides that it just and equitable to do so [subclause 14(3)].
An application for an order terminating a scheme can be made to the Supreme Court by the body corporate or a unit owner of the scheme or a subsidiary scheme.
Subclause 14(4) sets out who can be heard by the Court in considering such an application. The list includes the body corporate, unit owners and registered lessees and mortgagees of units in the scheme or any higher or lower schemes, the schemes supervisor and any affected local government authority.
The Supreme Court, in making its decision, is subject to the Planning Act and the Land Title Act – see clause 14(6). That is, appropriate planning approvals must be obtained and there must be compliance with normal land titles registration requirements.
Clause 15. Termination by resolution
This clause provides for 2 separate ways that a basic scheme may be terminated.
The first is that the members of the body corporate may by a unanimous resolution decide to terminate the scheme.
The second is that where the body corporate makes a termination decision in accordance with the management module that applies to the scheme. Clause 94 sets out how a management module may come to have a special termination scheme. The management module may only contain such a special scheme if it complies with any relevant regulations and is approved by scheme supervisor. It is also intended that the management modules prescribed in the regulations contain a clause 15(b) termination scheme that may be adopted by developers.
There must be support from 90% of the interest entitlements [see subclause 39(4) regarding interest entitlements]. Also, these terminations can only occur after the scheme has existed for 20 years from the commencement of the Act. This 20 year period commences to run from the time when the scheme is registered, being a time after the commencement of the Act. This means that if a pre-commencement scheme is converted into a scheme under the Unit Title Schemes Act in accordance with clause 111, the period runs from the date of conversion rather than the date of registration of the original scheme.
The consent of lessees and mortgagees is not required for a termination. However, it is intended that a termination not take place unless satisfactory arrangements are entered into between mortgagees (i.e. they are paid out) and lessees (eg the leases are brought to an end in accordance with the Residential Tenancies Act, the Business Tenancies (Fair Dealings) Act or the Law of Property Act.
Clause 16. When termination takes effect
This clause provides that a termination takes effect when the required documents are lodged in accordance with (proposed) section 54E of the Land Title Act and the Registrar-General cancels the scheme statement in accordance with proposed section 54E of that Act.
Clause 17. Effect of termination
On the termination of a scheme, the body corporate is dissolved.
Clause 17 also sets out the consequences of dissolution in respect of matter such as liabilities and the role of the Supreme Court.
This clause sets out that the owners of the former units become the owners of the assets following the termination. Additionally, the Supreme Court may make orders about the control, management and distribution of the assets.
This clause operates subject to clauses 14 (Termination by court order) and 15 (Termination by resolution).
Part 2.3 Key elements of a scheme
Division 1 Scheme statement
Clause 18. Requirements about scheme statement
This clause sets out what the scheme statement must contain. These matters include:
· the identification of the land that the scheme relates.
· a description of the nature and the purposes of the scheme.
· the scheme name and body corporate name (if any).
· the units and common property.
· the entitlement schedules.
· the basis of any inequality between the various unit entitlements. Generally, interest entitlements will differ according to the predicted market values of the units, but contribution entitlements are to be equal to the extent that it is fair and equitable to do so (see clause 39(5)).
· for progressive schemes, the statement must contain a statement that it is intended that the development be done in stages, and any information that may be prescribed by regulation about nature of the development, the various stages and their order of implementation.
· for layered schemes the statement must contain any information prescribed about the structure of the layered scheme.
In addition, a scheme statement may also identify a management module and any by-laws that will apply.
The scheme statement must also be accompanied by appropriate endorsements from the consent authority (as to the matters to be prescribed by regulation) and from the body corporate (if the statement is a subsequent scheme statement or if there has been an amalgamation).
Clause 19. Effect of scheme statement
Scheme statements take effect on registration and cannot operate retrospectively. See also clause 11(2) (which deals with the extent to which scheme statements operate so as to contain deemed agreements involving owners of units and the body corporate).
Clause 20. Responsibilities relating to registration of scheme statement
This clause sets out who is responsible for preparing scheme statements at the various times when one is required – for example:
· at the beginning – it is the original owner of the land;
· upon completion of a stage in a progressive development – the developer;
· where there is agreement to change entitlements – the parties to the agreement;
· where there is a compulsory acquisition – the acquisition authority; and
· where there is an amalgamation – the respective bodies corporate;
· and otherwise, the body corporate.
The clause sets out that the person responsible for preparing a scheme statement must bear the costs and obtain the relevant endorsements [consent authority, and the body corporate where it is a subsequent scheme statement and the body corporate is not the body responsible for the preparation] and also lodge the document.
It is strict liability offence (maximum penalty of $11,000) for a developer who fails to provide a copy of the first scheme statement to the body corporate within a month and for a body corporate that, after endorsing a scheme statement, fails to lodge it within three months.
Clause 21. Decision of body corporate to endorse scheme statement
This clause provides that the need for the resolution without dissent (as a general rule) of the members of the body corporate in giving consent to a new statement before the registration of the statement.
However:
· a special resolution is required where the changes only relate to the management module or the by-laws;
· only an ordinary resolution is required for matters such as reinstatements, allocation of special rights, implementation of stages and certain re-subdivisions that have no impact upon unit entitlements and do not create subsidiary schemes; and
· for the lodgement of documents, clause 21(4) provides that the body corporate may choose how it makes its decision.
Clause 22. Endorsement of consent authority
This clause sets out the duties of the consent authority (under the Planning Act) when asked to endorse a new scheme statement under clause 20(2)(a).
The consent authority must not endorse a statement if it is inconsistent with a development permit, an exceptional development permit, plan of subdivision or a plan of consolidation.
Clause 23. Provision of copies of scheme statement
This clause requires the Registrar-General to provide a copy of the scheme statement to each affected local government authority and anyone else who may be prescribed by regulation. These documents may be provided electronically.
Division 2 Body corporate
Clause 24. Body corporate membership
The owner (or joint owners) of a unit in a scheme is a member of the body corporate. For layered schemes, the body corporate for a subdivided unit is the member of the higher scheme. See definition of “unit owner” as contained in clause 38.
Clause 25. Name and address of body corporate
A body corporate will be identified by its name and scheme registration number.
The body corporate must also provide the Registrar-General with any changes of address. The Registrar-General must keep a record of the address.
Clause 26. Seal of body corporate
The body corporate must have a seal for official purposes in accordance with the management module.
Clause 27. Functions of body corporate
The functions of bodies corporate include managing the common property and body corporate assets for the unit owners and unit occupiers, engaging in any activities that may affect the interest of their schemes, and any other functions in relation to the scheme that may be given under this legislation or any other law of the Territory [subclause 27(1)]. These functions include any contained in the management module for the scheme (as such functions are functions that fall within the scope of clause 27(1)(c) and (d)).
There is an obligation on bodies corporate to act reasonably in exercising their functions and they must also act consistently with the purposes of the scheme (as identified in the scheme statement) [subclause 27(2)].
Clause 28. Powers of body corporate
This clause sets out the powers of the body corporate for each scheme.
Essentially they are given powers necessary to carry out their functions [subclause 28(1)(a)]. They also have any powers given under the Unit Title Schemes Act (for example, under the management modules) or under other law.
Clause 28(2) spells out that the body corporate, for the purpose of performing the functions, can:
· acquire, hold and dispose of property;
· take legal action;
· employ people;
· invest money;
· carry on a business;
· create an interest relating to the common property;
· supply a utility service for the scheme land; and
· carry on any activity jointly with another person.
The ability to deal with an interest in real property is limited by the requirement that there be a unanimous resolution and that all other relevant requirements of the legislation be met [subclause 28(3)].
See clause 94 which spells out that the management module may also provide powers and functions concerning matters such as the borrowing of monies.
Clause 29. Body corporate assets
This clause provides for a definition of “body corporate assets”. It needs to be read subject to clause 33(2) which says that a body corporate asset is not “common property”.
Body corporate assets acquired by a body corporate cannot be used as security except in accordance with the management module (see clause 94) [clause 29(5)].
A body corporate cannot hold property as a body corporate asset as a joint tenant with the body corporate of another scheme, but two or more bodies corporate can hold separate shares in property as tenants in common [clauses 29(3) and (4)].
The right of body corporate to use a body corporate asset is subject to the scheme statement of any higher scheme for which it is a subsidiary scheme [clause 29(6)].
Clause 30. Delegation of functions and powers of body corporate
This clause provides for delegations by the body corporate to either the body corporate manager or to a committee member or to a unit owner or to a committee.
Unlike the current Northern Territory provision, there is no statutory restriction on the powers that can be delegated.
Delegations and revocations of delegations must be in writing and approved in accordance with the management module.
Clause 31. Corporations Act not apply to body corporate
This clause, for the purposes of the Corporations Act 2001 and the Corporations Agreement, provides that a body corporate established under this legislation is not subject to the Corporations Act 2001. An equivalent provision is also in the current Unit Titles Act and is standard for these kinds of State and Territory Acts (see, for example, section 29 of the Victorian Subdivision Act 1988, section 78 of the South Australian Community Titles Act 1996 and section 32 of the Queensland Body Corporate and Community Management Act 1997).
This clause ensures that neither the Corporations Act 2001 nor Part 3 of the Australian Securities and Insurance Commission Act 2001 will apply to a body corporate in relation to its performance of its powers or functions under the Unit Title Schemes Act.
Section 5F of the Corporations Act 2001 provides that if a Territory Act declares a matter to be an excluded matter in relation to the whole of the Corporations legislation then that legislation does not apply.
Division 3 Scheme land
Subdivision 1 General rules
Clause 32. Scheme land generally
This clause defines scheme land as the common property and units of the scheme including any scheme building erected on the scheme land.
The term scheme building is also defined as being a fixed structure but excludes various owners’ and tenants’ fixtures and fittings.
Subdivision 2 Common property
Clause 33. Common property
common property is defined by reference to the scheme statement. Units and body corporate assets are not common property. A lot cannot be the common property of two schemes.
Clause 34. Rights and responsibilities relating to common property
This clause states the respective rights and responsibilities of the body corporate and the owners in respect of common property.
This clause sets out that the body corporate may act in relation to the common property as the owner of the property.
Owners and occupiers of a subsidiary scheme will have the right to use the common property of the scheme and of any higher scheme.
Clause 35. Creating new common property
This clause provides that a body corporate may acquire property to become part of the common property of the scheme. Such property may be land outside the scheme land or may be a unit.
This clause also provides that such an incorporation of new common property can only occur if the body corporate by way of resolution without dissent (see clause 28(3)) approves it, and if there has been compliance with the provisions of the Planning Act and the
Land Title Act. The new common property must also be consistent with the requirements of the scheme.
Clause 36. Pre-existing rights
This clause provides that a body corporate takes on the rights of the developer following the issue of title.
Subdivision 3 Units
Clause 37. Unit
This clause defines the term “unit” by reference to land marked on the plan of subdivision and/or a cubic space. It also contemplates that a unit might be created before it is developed (i.e. it might represent a future stage of a progressive development).
As a general rule, the boundaries of units will be determined in accordance with the survey plan approved by the Surveyor-General in respect of the unit. However, clause 37(2) contains a default definition of a boundary for any time when the survey plan does not contain the details. The default boundary is such that any structure (eg a wall, a floor or a roof) that separates units or units and common property will not be considered to be part of a unit – that is, such structures would form part of the common property.
The word “lot” is used in the definition of “unit” with the meaning it has in the Land Title Act – that is, as identifying an area of land for which a separate title may be issued. This means that both units and common property are “lots”.
Clause 38. Unit owner and unit occupier
This clause defines unit owner as a registered owner or where, a unit has been subdivided, the body corporate for the resulting subsidiary scheme. This means that, for higher schemes, the “unit owners” are the owners of the units and any body corporate for former units.
This clause also defines a unit occupier as a resident owner or lessee of a unit, or a person who otherwise occupies the unit as a resident or for business purposes.
Clause 39. Unit entitlements
This clause defines contribution schedule, interest schedule and unit entitlement. It also (in effect) defines contribution entitlement and interest entitlement.
These definitions provide, respectively, for:
· the basis for working out shares of costs in running the scheme; and
· the basis for working out respective shares in the event that the scheme is dissolved (and like matters).
The clause also provides for the basis on which the entitlements are determined for the purpose of the scheme statement that is lodged as referred to in clause 18(1)(d). The responsibility for lodging the initial scheme statement rests with the original owner (developer) of the land as set out in clause 20(1)(a).
In preparing the contribution entitlement the person responsible for the scheme statement must ensure that the contributions are equal unless it is just and equitable to do otherwise. However the developer may also take into account the characteristics of the scheme and the units, whether the scheme is layered and the market value of the units.
In preparing the interest entitlement the person responsible for lodging the scheme statement must ensure that the various interest entitlements should reflect the differences in the market value between the units. As with contribution entitlements the sponsor can also take account of the characteristics of the scheme and the units, whether the scheme is layered and the market value as determined by a valuer as defined in the Valuation of Land Act.
For “market value” the valuer will often need to make a prediction given that, for units in buildings, they may not exist when the entitlement is determined.
Clause 40. Adjusting unit entitlements under Court order
This clause allows for a unit owner to seek an order of the Local Court for the adjustment of unit entitlements. In making an order the Court must have regard to the principles set out in subclauses 39(5), (6) and (7) – i.e. that the contribution entitlements should be equal and the interest entitlement of a unit should reflect the ratio of the market value of the unit to the market value of all units in the scheme.
Upon the making of such an order, the body corporate is required to lodge a new scheme statement.
The intention of this clause is to permit reviews of interest entitlements by the Local Court of the entitlements as determined by a scheme statement’s sponsor at the time when the scheme statement is lodged.
It is not intended that a unit owner be entitled to seek a review based on the fact that the unit has become more valuable (in a relative sense) than other units. This may happen, for example, if an owner makes substantive improvements to his or her unit whereas other owners make no improvements. Alternatively, a unit may lose a view or may suffer some other detriment not shared by others. These kinds of changes do not affect the underlying interest entitlement in the land.
Clause 41. Adjusting unit entitlements under agreement
This clause provides that owners may agree amongst themselves to adjust unit entitlements as between their own units. They must obtain the agreement of registered mortgagees and lessees and must advise the body corporate. The body corporate must register a new scheme statement reflecting the change.
Clause 42. Adjusting unit entitlement because of land acquisition
This clause deals with the situation where a Government authority acquires part of the scheme’s land. When this happens the body corporate is under a duty to obtain professional advice as to the impact on unit entitlements. The Government authority is responsible for the costs of such advice.
It is strict liability offence (maximum penalty of $11,000) for a body corporate to fail to a lodge with the Registrar-General within three months a copy of the amended scheme statement.
Subdivision 4 Sale of proposed units
Clause 43. Contract for sale of units
This clause outlines that Subdivision 4 applies to contracts for the sale of units that will come into existence when a scheme is established or changed.
Clause 44. Completion of contract
This clause provides that, for unit sales off the plan (before a title has issued for the unit being sold), the contract must allow 10 working days for the completion of the contract after the day on which the seller advises the buyer that the unit has come into existence.
Any contract that contains a shorter period will be read as requiring settlement in 10 working days.
Clause 45. Obligations of seller
Before entering into a contract for the sale of a proposed unit the seller must provide a disclosure statement. The statement must deal with matters such as estimated annual contributions, the letting agent, body corporate assets, the proposed scheme statement, an outline of the proposed plan of subdivision, the proposed regulation module, any proposed by-laws, and details of any proposed development application.
The disclosure statement must provide for a method of adjudicating of disputes arising from the disclosure statement and must be signed by the seller and lodged with the Registrar-General.
In preparing the disclosure statement the seller is only required to have regard to information readily available when providing an estimate of future levies – that is, current costs for matters such as the utility services, costs of lifts and so on.
In respect of the other matters, it is only facts that exist that will need to be disclosed. For example, if a letting agent has been appointed, the details will need to be advised. However, if the intention to appoint a letting agent has gone no further than the formation of the intention all that needs to be disclosed is the fact of the existence of the intention.
A failure to provide a disclosure statement exposes the seller to a fine of up to 100 penalty units (currently $11,000). The offence is an offence of strict liability.
Clause 46. Replacement of scheme disclosure statement
If the seller becomes aware of misinformation in the disclosure statement before the contract is completed, the seller is obliged to give an amended statement to the buyer. A failure to do so exposes the seller to a fine of up to 100 penalty units (currently $11,000). The offence is an offence of strict liability.
In effect this clause provides for continuing disclosure as new facts come into existence.
The seller cannot be compelled to complete the contract within 10 working days of being given an amended disclosure statement.
This allows the buyer to consider the impact of the changes and the options available to the buyer.
Clause 47. Implied warranty
This clause sets out some warranties that are implied into contracts for the sale of proposed units. The most important is that the information in the disclosure statement is accurate and that at the time of the contract, the seller has told the buyer everything known to the seller regarding defects and liabilities or any other circumstances relating to the scheme that might prejudice the buyer.
Subclause 47(2) limits the exposure of the seller by providing that the warranty takes effect to the extent to which the seller knew or ought reasonably to have known of the matters to which the warranty relates.
Clause 48. Cancellation of contract
This clause sets out the circumstances in which a buyer can cancel a contract. This can occur if the contract has not been completed by the seller or if the buyer is substantially prejudiced by matter such as:
· a contravention of clause 45(1) (failure to provide a disclosure statement), clause 45(2)(d) (information about body corporate assets), clause 45(2)(e) (information about scheme statements, by-laws and management modules) or of clause 45(2)(g)(information about planning proposals), ;
· any disclosure statement contains information of the kind referred to in clause 46(1)(a) (ie information that the seller is aware of being inaccurate or out of date);
· a breach of the warranty given by clause 47.
Clause 49. Restriction of power of attorney
A power of attorney to the seller from the buyer can only be exercised in accordance with a written statement provided to the seller by the buyer before the power was given. The power must expire no later than a year after the scheme is established or changed.
Subdivision 5 Easements
Clause 50. Easements generally
This clause provides that rights under an easement must not be such as to unreasonably interfere with the use and enjoyment of the scheme land [subclause 50(1)]. These general rights do not affect the rights of utilities (such as the Power and Water Corporation) under easements of the kind that arise from section 64 of the Planning Act when a subdivision is approved by the consent authority.
The clause implies that an easement conveys whatever rights are necessary for its effective operation, but the conditions of the scheme statement override those implied rights where there is any inconsistency between the rights and the scheme statement [subclauses 50(2)].
The clause also provides for the need for a unit owner to give reasonable notice (except for emergencies) before entering another unit or the common area under an easement right [subclauses 50(3), and (4)].
Clause 51. Statutory easements
This clause provides for various statutory easements that are mutual between the owners of the units and also between the owners and the body corporate. These relate to accessing utility infrastructure, support for walls and the like, shelter and various rights concerning maintaining and replacing buildings.
Subdivision 6 Insurance of scheme land
Clause 52. Body corporate policy
This clause sets out that the body corporate has an insurable interest in scheme land and imposes an obligation to maintain insurance in respect of the common property.
The body corporate’s obligation is to ensure that the common property for the scheme land property is insured and this can be done in more than one contract.
Clause 53. Body corporate policy must provide for reinstatement
This clause sets out the requirement for the insurance policy to:
· cover the reinstatement of any common property;
· record the interests of unit mortgagees;
· prohibit cancellation for breach by anyone other than the body corporate; and
· require notice of cancellation to be given to any mortgagee.
Clause 54. Body corporate policy must provide for public liability
This clause sets out that, for personal injury and illness liabilities, the coverage must be not less than $10,000,000 or the amount specified in the Regulations.
Clause 55. Other requirements for body corporate policy
This clause sets out that the insurance policy must set out that the insurer must give notice to mortgagees. This relates to section 59 of the Commonwealth’s Insurance Contract Act which provides >>>
This clause also provides that the insurance contract must contain a clause saying that the insurance cannot be cancelled on the basis of a breach of a condition by a person other than the body corporate.
Clause 56. Additional insurance
This clause makes it plain that the body corporate has the power to take out additional insurance to cover its own liabilities as a legal entity.
Clause 57. Insurance for mortgaged unit
A mortgagee can only demand that a unit owner separately insure their unit for a shortfall between the amount owing under the mortgage and the amount covered under the body corporate’s insurance.
Subdivision 7 Reinstating damaged scheme land
Clause 58. Approved reinstatement process
This clause provides the only ways that a reinstatement of damaged scheme land can occur. The reinstatement must occur under an approved reinstatement process that outlines the steps to be taken.
These reinstatement processes must be approved in accordance with clause 59 (ie by the Local Court) or with clause 60 (ie by the members of the body corporate by way of a resolution made without dissent).
Clause 59. Reinstatement with court approval
This clause provides a process for the Local Court to approve the reinstatement of damaged structures. The body corporate, any unit holder or any mortgagee can apply to the Court for approval of a reinstatement process.
Notice of the application has to be given to all bodies corporate involved where the scheme is part of a layered scheme, and to each insurer of the scheme land.
It is strict liability offence (maximum penalty of $11,000) for a body corporate to fail comply with a court order to a lodge with the Registrar-General a copy of the amended scheme statement.
Clause 60. Reinstatement with body corporate approval
This clause allows a body corporate to arrange for reinstatement by way of a resolution passed without dissent without the need to obtain the approval of the Court. Where more than one body corporate is involved, each body corporate must pass a unanimous resolution to approve the reinstatement process.
The approval has effect only in relation to so much of the scheme land as is insured and to the extent agreed to by the insurer.
If a body corporate fails to comply with an order of the Local Court concerning the lodging of a new scheme statement, it may be found guilty of an offence. The offence is one of strict liability with a maximum penalty of 100 penalty units ($11,000).
Clause 61. Variation of process
This clause provides a process for the Local Court to vary an approved reinstatement process whether that process was first approved by the Court under clause 59 or by the relevant bodies corporate under clause 60.
Alternatively, the relevant bodies corporate may each, by resolution without dissent, agree to a variation.
Part 2.4 Development of a scheme
Division 1 Preliminary matters
Clause 62. Overview of Part
This clause contains a summary of what Part 2.4 covers – namely:
· progressive developments;
· the formation of layered schemes; and
· scheme amalgamations.
Clause 63. Subsidiary scheme, higher scheme and basic scheme
This clause contains key definitions:
· first scheme – where a basic scheme for which one or more of its units has been subdivided into further units, the term “first scheme” is used for a scheme created for a unit that has been subdivided.
· subsidiary scheme – in the scenario set out above the “first scheme” is the subsidiary scheme of the scheme from a unit of which the first scheme was created.
· higher scheme – in the scenario set above the scheme from which the “first scheme” was created is called the “higher scheme”
· basic scheme – a basic scheme is a scheme is not the higher scheme of any other scheme.
In summary, all schemes start off as “basic schemes”. They may then be subdivided into further schemes. On this occurring the original “basic scheme” becomes a “higher scheme” for the new basic scheme with that new basic scheme becoming the subsidiary scheme of that higher scheme.
In practice, it is expected that, on many occasions, layered schemes will be created by the registration of a series of documents – so that the registration of a scheme as a basic scheme is immediately followed by the lodgment of further documents that create units from that basic scheme.
Division 2 Progressive development of a scheme
Clause 64. Scheme intended to be developed progressively
Sub-clause (1) provides a definition of the words “a scheme is intended to be developed progressively.” A scheme will come within this definition if:
· it is intended that all or part of the scheme land will be further developed;
· the implementation of a further stage of the development (whether or not the stage is specified in the scheme statement) will require a development permit; and
· at least 1 stage of the development is yet to be completed.
Subclause (2) gives various examples, and subclause (3) makes it clear that the definition on subclause (1) does not prevent a scheme that was not originally intended to be progressively developed from being progressively developed.
Clause 65. Implementation of stage of development otherwise than as indicated in scheme statement
The developer of a progressive development must give written notice of changes to the scheme that affect the progressive development or which would be inconsistent with the last development permit.
Such notices must be given, at least a month before applying for a development permit or exceptional development permit for the implementation of the stage, to the body corporate and to any person who has entered into a contract with the developer to buy a unit. For situations where a buyer off the plan has sold his or her interest under a contract there will be no obligation on the seller to provide information to the new buyer unless that person has, by assignment or some other method, become a party to a contract with the seller.
The maximum penalty for breach is 100 penalty units ($11,000) and is an offence of strict liability.
Clause 66. Subsequent scheme statement for implementation
This clause imposes an obligation upon the body corporate to lodge a subsequent scheme statement when requested to do so by the developer upon the completion of a stage in a progressive development.
The timing for the lodgment of an amended scheme statement depends upon whether the stage has been completed as originally outlined in the current scheme statement or if changes have been made and clause 65 applies.
The maximum penalty for breach is 100 penalty units ($11,000) and is an offence of strict liability.
Clause 67. Requirements relating to scheme
This clause provides a power to make regulations to impose obligations on developers who are progressively developing schemes. Those regulations might require a security deposit to be lodged, or may set out whom, other than the original owner of the scheme land, may exercise the rights of the developer in relation to the development.
Division 3 Layered scheme
Clause 68. Layered schemes
This clause defines a layered scheme as one which is not a subsidiary of another but which is higher than one or more others [subclause (1)].
The concept of member schemes of a layered scheme covers both the layered scheme and its subsidiaries [subclause (2)].
Subclause (3) provides that member schemes must operate independently of one another, except as may otherwise be provided under this legislation.
Clause 69. How layered schemes are formed
This clause states how a layered scheme may be the result of the progressive development of a basic scheme, or the amalgamation of two or more basic schemes (see clause 71) and provides examples and a diagram of the formation of a layered scheme when a unit in one scheme is subdivided to form a subsidiary scheme.
Division 4 Amalgamation of schemes
Clause 70. General rule
This clause provides that schemes can only be amalgamated under the provisions in clauses 71 and 72.
Clause 71. Amalgamating schemes to form layered scheme
Amalgamation to form a layered scheme can occur by an order of the Supreme Court or by each body corporate unanimously agreeing to amalgamate.
The Court order or agreement must provide for:
· the first scheme statement of the layered scheme;
· a subsequent scheme statement of each of the basic schemes reflecting the order or agreement;
· any provision relating to any rights or liabilities accrued in relation to the basic schemes; and
· any other matter that may be prescribed by regulation.
The amalgamation has no effect on the accrued liabilities of the basic schemes.
At the same time as the amalgamation takes place, changes can also be made to the basic schemes.
Clause 72. Amalgamating schemes to form new scheme
Amalgamation to form a single scheme can occur by an order of the Supreme Court or by each body corporate unanimously agreeing.
The Court order or agreement must provide for:
· the first scheme statement of the new scheme.
· any provision relating to any rights or liabilities accrued in relation to the basic schemes.
· any other matter that may be prescribed by regulation.
On the registration of a new scheme statement, the old schemes cease to exist and the assets and liabilities of the original schemes accrue or are novated to the new scheme.
Chapter 3 Administration of a scheme
Part 3.1 Introduction
Clause 73. Overview of Chapter
This clause contains a summary of the coverage of Chapter 3, including:
· the administration of bodies corporate [Part 3.2].
· the resolution of disputes arising from the operation of a scheme [Part 3.3].
· the rules governing body corporate managers, service contractors, caretaking service contractors and letting agents [Part 3.4].
· the management modules setting out the procedure for the management of bodies corporate [Part 3.5].
· the by-laws setting out the rights and obligations of the body corporate, unit owners and unit occupiers, [Part 3.5].
Part 3.2 Management of body corporate
Division 1 Committee of body corporate
Clause 74. Committee of management
This clause provides that there must, except for basic schemes that have 3 or less members, be a committee with the size, membership, functions and procedural matters for each committee to be determined on accordance with the management module for the scheme.
Small basic schemes can, however, agree by resolution without dissent, to form a committee.
This clause provides that the procedures and powers of the committee, the terms of offices of committee members are as contained in the relevant management module.
Clause 75. Committee must act for body corporate
This clause makes it clear that the committee acts for the body corporate.
The committee must act reasonably in exercising its powers and performing its functions.
Clause 76. Protection of committee member
This clause provides certain legal protections for committee members’ actions done in good faith and without negligence.
Clause 77. Code of conduct
This clause provides for a code of conduct for committee members. The code is set out in Part 1 of Schedule 1 to the Bill.
A person who breaches the Code can be removed as a committee member in accordance with the management module.
Division 2 Meeting and voting
Clause 78. Requirements about meeting and voting
This clause provides that a body corporate must hold meetings as required under its management module and otherwise as it decides.
It also sets out matters that can be governed by a management module, such as the counting of votes and the appointments of proxies.
Clause 79. Methods of voting
This clause provides for the various types of voting:
· Unanimous resolution – means a vote where there is 100% vote in support for all units.
· Resolution with no dissent – means a vote where no vote is counted against the motion.
· Majority resolution - a majority of the votes (greater than 50%) (with each unit having one vote)
· Ordinary resolution – this is a vote passed on the basis of votes representing a majority of contribution entitlements, so ,for example if the title for a supermarket represented 50% of the contribution entitlements for a shopping centre, the vote of that owner would represent 50%
· Special resolution – the winning vote must represent at least 2/3 of the votes cast, the opposition vote must not exceed 1/4 of the number of units or represent more than 1/4 of the contribution entitlements.
Clause 79(9) provides that a person with an outstanding liability (eg owes levies) has no entitlement to vote unless the vote is required to be passed by unanimous resolution or by resolution without dissent.
An outstanding liability is one for which the final date for payment has passed. Thus, for example, if a meeting is held on 15 June 2010 with contributions being due by no later than 30 June 2010, the owner who has not paid the levy has no “outstanding liability” as at 15 June 2010.
Clause 80. Evidence of resolutions
A document is evidence of a resolution passed if:
· the body corporate’s seal is affixed; and
· it specifies the date of the meeting, the terms of the resolution and the type of resolution (ordinary, majority, special, without dissent or unanimous).
Division 3 Records and notices
Clause 81. Records required by management module
This clause provides for record keeping and access to records. The management module may prescribe requirements about maintaining records and providing access to records.
Unit owners, prospective purchasers of units and anyone who the body corporate reasonably considers has a proper interest in the body corporate’s records can apply to access the records or specified information contained in the records.
The body corporate must permit access or provide information within 10 working days of receiving the request.
If a body corporate fails to permit this access it commits an offence and is liable to a maximum penalty of 20 penalty units ($2,100).
Clause 82. Notices required by management module
The management module may set out the information that the body corporate may insist on being provided to it. Examples cited are information about the transfer of a unit, and the happening of a specified event about a unit.
Clause 83. Service of documents
This clause sets out the duties of the body corporate regarding facilities for the service of documents. A notice of the scheme name has to be displayed in a conspicuous place and a letter box for the body corporate has to be provided.
A document can be served upon a body corporate either by prepaid post addressed to its address as specified in the Land Titles register, or by placing it in its letterbox.
Part 3.3 Dispute resolution
Clause 84. What is a dispute
This clause defines what a dispute is and sets out how the Local Court handles disputes.
A dispute arises if:
· the body corporate, a unit owner or the mortgagee of a unit claims there is, or has been, a breach of the law in relation to the scheme; or
· a unit owner claims to have been wrongfully treated by the body corporate, the committee or another unit owner; or
· a unit owner claims a decision of the body corporate or committee is unreasonable, oppressive or unjust; or
· a dispute relating to a unit or the common property has arisen:
Ø between a unit owner and the body corporate or committee; or
Ø between 2 or more unit owners.
Clause 84(2) makes it clear that a termination decision based on a 90% vote of approval as referred to in clause 15 cannot, of itself, be a decision that could be unreasonable, oppressive or unjust.
Clause 85. Application for adjudication of dispute
A person involved in a dispute listed in the previous clause has the right to apply to the Court for the adjudication of the dispute.
A body corporate can appoint a unit owner to be its representative in any proceedings.
The Court exercises its powers under the Small Claims Act and the Local Court Act to resolve the dispute
Clause 86. Powers of Court
The Local Court is given the power under this clause to:
· make an interim order;
· settle the dispute through mediation and arbitration; or
· require a party to give to the Court a report or specified information about the dispute; or
· give judgment on a monetary claim; or
· order a party to take or refrain from a specified action; or
· order a change to be made to a by-law; or
· confirm or change a decision of the body corporate or committee; or
· order the body corporate to refund or pay an amount to a unit owner; or
· make any other order for the resolution of the dispute as it thinks fit.
Sub-clause (2) restricts the Court’s power to alter a by-law unless it is satisfied that:
· if the body corporate was not a party to the proceedings – the body corporate has had a reasonable opportunity to do so;
· a unit owner who might be adversely affected by the change has had an opportunity to make a submission to the Court about the change; and
· the order is necessary for an equitable resolution of the dispute.
If the court makes an order altering a by-law, the body corporate is obliged to lodge a new scheme statement reflecting the change. The offence for breach is a strict liability offence with the maximum penalty for breach being 100 penalty units ($11,000).
Part 3.4 Body corporate manager, service contractor, caretaking service contractor and letting agent
Clause 87. Key terms for Part
This clause sets out the key definitions for the purposes of Part 3.4.
Clause 88. Original owner’s obligations
This clause sets out the original owners’ obligations regarding arrangements made by it for the engagement of a body corporate manager, service contractors and letting agents, where those arrangements will be binding on the body corporate once titles are issued.
Any arrangement must be appropriate for the scheme, must be fair and reasonable, and must not adversely affect the ability of the body corporate to carry out its functions.
If the original owner breaches the duties imposed under this clause the body corporate or an owner may take action to recover losses arising out of the contravention.
Clause 89. No consideration for arrangement
This clause sets out the circumstances in which a body corporate may seek benefits for arrangements concerning body corporate managers, service contractors or letting agents.
The body corporate is not entitled to accept a payment or benefit for an arrangement unless the arrangement relates to the first appointment of a letting agent after the initial owner control period (and there was no appointment made during that period) and the payment or benefit is a fair market value for the authorisation and if the authorisation is not made during the original owner control period.
Clause 90. Letting agent’s obligations
This clause provides a letting agents business can only be conducted from a unit if the agent is the owner or a lessee of the unit.
Clause 91. Combined arrangement
A person may provide the various agency services (body corporate managers, service contractors or letting agents) for two or more schemes.
This clause provides that a contract is not void merely because it deals with two or more of the engagements of a body corporate manager, service contractor or authorisation of letting agent.
Clause 92. Codes of conduct for body corporate manager and caretaking service contractor
This clause provides for a code of conduct for body corporate managers and for caretaking service contractors – the code is set out in Part 2 of Schedule 1.
The code applies as part of the terms of engagement between the body corporate and the body corporate manager or caretaking service contractor and prevails over any express terms to the extent to which it is inconsistent with those terms.
Clause 93. Code of conduct for letting agents
This clause provides for the code of conduct for letting agents authorised by the body corporate to conduct a business for the leasing of units in the scheme. It does not apply to a letting agent who is not authorised by the body corporate but who might be engaged by an individual unit owner to lease or manage the leasing of the owner’s unit, unless the body corporate.
The Code is set out in Part 3 of Schedule 1.
The code applies as a term of the authorisation to act given by the body corporate, and prevails to the extent to which it is inconsistent with any other terms of the body corporate’s authorisation.
Part 3.5 Other rules governing scheme administration
Division 1 Management modules
Clause 94. Management module of a scheme
The legislation provides for a range of management models (“management modules”) for the various types of developments.
This Part sets out how the regulation module for each scheme is decided.
This clause sets out that the regulations may prescribe different modules for different schemes. The scheme statement for each scheme will identify the regulation module that is to apply to the scheme.
Management modules will cover the administration of a scheme, including the ability of a body corporate to levy unit owners for the cost of administering the scheme. They may also provide for the budget, recovery actions, discounts & penalties, (sinking) funds, borrowings, expenditures, accounts & record keeping audits and voting on certain matters (ie subject to section 79 of the Unit Title Schemes Act).
Division 2 By-laws
Clause 95. By-laws of a scheme
This clause provides that the by-laws that are to apply are those identified in the scheme statement or, if none are identified, the by-laws set out in Schedule 2.
The by-laws govern the use of the scheme land and body corporate assets although they cannot unlawfully restrict the use of a unit.
Clause 96. Contravention notice
This clause deals with contraventions of by-laws. If there is a current contravention that is likely to continue, the body corporate may give a notice regarding remedying the contravention. Failure to comply is an offence with a maximum penalty of 20 penalty units (currently $2,200).
Clause 97. Exclusive use by-laws
This clause defines the meaning of exclusive use by-law. It is a by-law that gives special rights to an owner or occupier over common property or body corporate assets. The special rights may be given by the by-law or allocated by a person entitled to do so under the by-law.
A subsequent scheme statement may only create or omit an exclusive use by-law if there is a unanimous resolution (one without dissent) and either the owner of the affected unit agrees or it is ordered by the Court.
A subsequent scheme statement must be lodged within a month of the resolution and either the owners agreement or the Court order. The offence is an offence of strict liability with the maximum penalty for breach being 100 penalty units ($11,000).
An allocated right may be revoked under the terms of the by-law.
The appropriate regulation module may also deal with various aspects of the application of exclusive rights by-laws.
Clause 98. Review of exclusive use by-laws
This clause deals with the situation where a unit subject to an exclusive use by-law is owned or occupied by a body corporate manager, service contractor or letting agent. If the owner or occupier ceases to be the body corporate manager, service contractor or letting agent, and the unit owner refuses to agree to the registration of new scheme statement to omit the by-law, the body corporate can apply to the
Local Court for the registration of the new scheme statement.
In granting such an order, the Court may order the payment of compensation to the owner or occupier of the unit.
Chapter 4 Administrative matters
Part 4.1 Supervision of schemes
Clause 99. Schemes supervisor
This clause provides for the appointment of a statutory unit title schemes supervisor. The functions and powers of the schemes supervisor are set out in clauses 100 and 101. See also clause 14(4) (role in termination of schemes by the Supreme Court) and clause 67(2) (security deposits) and clause 94(5) (potential role under the regulations in approving new management modules).
Clause 100. Functions of schemes supervisor
The functions of the Schemes Supervisor are those that may be given under this Act or another law. See clauses 99, 14, 67 and 97.
Clause 101. Powers of schemes supervisor
The Schemes Supervisor has the necessary powers to carry out his or her functions and any other powers that may be given under the Bill or other legislation.
Clause 102. Delegation of schemes supervisor
This clause gives the Schemes Supervisor the power to delegate his or her powers and functions under the legislation.
Part 4.2 Other administrative matters
Clause 103. Approved form
This clause provides that the Registrar-General may approve forms for the purposes of the Bill and must publish them.
Clause 104. Jurisdiction conferred on Supreme Court and Local Court
Subject to sub-clause 85(4) (which allows for the Court to exercise its jurisdiction under the Small Claims Act in resolving disputes between unit owners and bodies corporate) the Local Court has jurisdiction to deal with all applications made under the legislation other than under the provisions that give jurisdiction to the Supreme Court (such as sections 15, 71 and 72).
This clause does not purport to affect the inherent jurisdiction of the Supreme Court – for example, the jurisdiction to deal with matters arising from breaches of the processes leading to decisions of the body corporate for matters such as the termination of schemes.
Clause 105. Persons acting for Territory as unit owner
This clause provides that, if the Territory is the unit owner of all units of a scheme, the relevant Minister (being the Minister acting for the Territory in relation to the units) or a person appointed by that Minister may affix the seal of the body corporate.
This clause clarifies who within the Northern Territory Government can sign key documents for those situations where the Northern Territory of Australia is the entity that owns the property.
Clause 106. Rates
This clause provides that units are rated separately but that bodies corporate are not liable for rates except in the case of the Darwin Waterfront Precinct where legislation already provides that common property is ratable (see section 15(6) Darwin Waterfront Corporation Act) .
Clause 107. Fees
Fees for the purposes of this legislation are set under the Registration Act and may also be prescribed by regulation made under this Act.
Clause 108. Regulations
This clause sets out that regulations may be made for the purposes of the Act. Included in the list of matters that regulations can provide for are transitional provisions to address the issue of unit developments already in progress.
Part 4.3 Transitional matters for Unit Title Schemes Act 2009
Clause 109. Definitions
This clause defines building development plan, commencement, corporation and units plan for the purposes of Part 4.3:
Clause 110. Application
This clause provides that the new Act is to apply to all land covered by a development permit issued on an application covered by (proposed) section 201 of the Planning Act (see clause 148).
It will also apply to any land subdivided under the Unit Titles Act that may in the future be converted to scheme land, and land currently being developed under the current requirements of the Unit Titles Act and Planning Act but which the developer might elect to subdivide under this legislation upon the completion of the development.
Clause 111. Conversion of units plan or building development plan into scheme
This clause allows a corporation of a units plan to lodge a scheme statement for the conversion of the units plan into a scheme.
Clause 112. Formation of scheme from pre-commencement development
This clause provides that a scheme may, as prescribed, be formed from the subdivision of land –
· for which a development permit or building permit prescribed by regulation was issued before the commencement.
· that has not been subdivided for the Unit Titles Act.
· in relation to which requirements prescribed by regulations are met.
The intent of this provision is to allow regulations to be made to prescribe requirements for any developer who:
· has already started a unit development.
· cannot meet the requirements of this legislation, and in particular the requirement to have an approved subdivision plan for something that currently requires no approval.
· wishes to register a scheme statement to bring the development under this legislation
Clause 113. Rights and obligations under Unit Titles Act
The conversion of a units plan to a scheme will not affect any rights and obligations incurred under the Unit Titles Act. This principle operates subject to anything specific in Part 4.3.
Clause 114. Transitional regulations
This clause provides for the making of regulations that deal with savings and transitional issues. The regulation making power ceases to operate 12 months after it commences operation.
Part 4.4 Consequential amendments
Division 1 Amendment of Administration and Probate Act
Clause 115. Act amended
This Division amends the Administration and Probate Act.
Clause 116. Amendment of section 72 (definitions)
This clause amends a definition of “dwelling” so that it includes units created under the Unit Title Schemes Act.
Division 2 Amendment of Agents Licensing Act
Clause 117. Act amended
This Division amends the Agents Licensing Act.
Clause 118. Amendment of section 5 (interpretation)
This clause inserts into section 5(1) of the Agents Licensing Act a definition of “body corporate manager” and a cross reference to that definition in section 5(2) of that Act. The effect of the amendments is that body corporate managers (as referred to in the Unit Title Schemes Act) are required to be licensed as real estate agents.
Clause 119. Amendment of section 5B (Exemption for trust money of corporation manager)
This clause amends section 5B of the Agents Licensing Act so that the current capacity for certain exceptions regarding trust accounts of managers under the Unit Titles Act also apply to body corporate managers under the Unit Title Schemes Act.
Clause 120. Amendment of section 127 (Regulations)
This clause amends section 127 of the Agents Licensing Act consequentially to the amendments made by clause 118 to section 5B.
Clause 121. Amendment of schedule (Functions of conveyancing agent)
This clause inserts into the provision that describes the functions of a conveyancing agent a reference to the Unit Title Schemes Act.
Division 3 Amendment of Business Tenancies (Fair Dealings) Act
Clause 122. Act amended
This Division amends the Business Tenancies (Fair Dealings) Act.
Clause 123. Amendment of section 5 (Interpretation)
This clause amends the Business Tenancies (Fair Dealings) Act so as to include a cross reference to the Unit Title Schemes Act.
Division 4 Amendment of Cullen Bay Marina Act
Clause 124. Act amended
This Division amends the Cullen Bay Marina Act.
Clause 125. Amendment of section 2 (definition)
This clause amends the definition of “owner” so that it includes a reference to bodies corporate under the Unit Title Schemes Act for any situation where a lot in Cullen Bay is subdivided into units under the Unit Title Schemes Act.
Clause 126. Amendment of section 7 (further subdivision)
This clause amends the Cullen Bay Marina Act so that it is clear that a lot in Cullen Bay can be subdivided into units under the Unit Title Schemes Act.
Clause 127. Amendment of section 12A (definition)
This clause amends the Cullen Bay Marina Act consequential to the amendments made by clause 125.
Division 5 Amendment of Darwin Waterfront Corporation Act
Clause 128. Act amended
This Division amends the Darwin Waterfront Corporation Act.
Clause 129. Amendment of section 15 (Rates for municipal services)
This clause amends section 15 of the Darwin Waterfront Corporation Act consequential to the enactment of the Unit Title Schemes Act.
Division 6 Amendment of Housing Act
Clause 130. Act amended
This Division amends the Housing Act.
Clause 131. Amendment of section 5 (definitions)
This clause amends the Housing Act by adding in a cross reference to the Unit Title Schemes Act.
Division 7 Amendment of Land Title Act
Clause 132. Act amended
This clause provides that this Division amends the Land Title Act.
Clause 133. Amendment of section 4 (Definitions)
This clause inserts into the Land Title Act various definitions necessary for the application of that Act consequential to documents and related matters created by the Unit Title Schemes Act.
Clause 134. Amendment of section 51 (Plan of subdivision and plan of consolidation)
This clause amends section 51 of the Land Title Act (Subdivision of lot by registering plan of subdivision) to make it applicable to the subdivision and consolidation of scheme land or land intended to be scheme land.
Clause 135. New Part 4, Division 4
This clause inserts a new Division 4 (Unit title schemes) comprising sections 54A-54E) into Part 4 of the Land Title Act.
54A Plan of subdivision and plan of consolidation
This new section makes it a precondition to the registration of a plan of subdivision for the formation of a scheme that a scheme statement be registered at the same time, and prohibits the registration of a plan of subdivision or consolidation that is inconsistent with a scheme statement.
54B Registration of scheme statement
This new section sets out a list of requirements for the registration of a scheme statement and provides for the issue of titles and the allocation of a scheme number for the scheme and body corporate by the Registrar-General upon the registration of a scheme statement .
This new section also provides that on the registration of a scheme statement the common property is freed from all restrictions except those that are prescribed by regulations. It is expected that the legislation will prescribe easements created in favour of the providers of utility services (whether or not the easement is created under section 64 of the Planning Act).
54C Reservation of scheme name and body corporate name
This new section makes provision for people to apply to the Registrar-General for the reservation of a scheme name and body corporate name. This is similar to the ability of people to reserve company names in advance of setting up a company. A developer who does not reserve a name faces the risk of the scheme statement being rejected because the name is not available or is considered to be offensive (see proposed section 54B(1)(c)(iii)).
54D Registration of statement reflecting approved reinstatement process
This new section governs the registration of a subsequent scheme statement reflecting an approved reinstatement process (after scheme land has been damaged – see clause 58).
54E Registration of documents required for termination of scheme
This new section sets out the registration requirements for the termination of a scheme and the Registrar-General’s duties in respect of the registration of such documents.
54F Registration and cancellation of disclosure statement
This new section sets out the Registrar-General may only register a disclosure statement if it complies with section 45 of the Unit Title Schemes Act and is signed by the seller. The disclosure statement must be cancelled if a replacement disclosure statement is registered.
Disclosure statements expire when the discloser ceases to be the owner of the land in respect of which the document has been registered.
The consent authority under the Planning Act has no duties, obligations or requirements regarding disclosure statements. It should make decisions independently of the contents of any disclosure statement.
Clause 136. New Part 14
This clause adds to the Land Title Act a new Part 14
Part 14 Transitional matters for Unit Title Schemes Act 2009
The part comprises new section 220.
220 Application
This section provides that the amendments to the Land Title Act affected by clauses 133-135 are only applicable to plans of subdivision and consolidation that are lodged with the Registrar-General after commencement.
Division 8 Amendment of Law of Property Act
Clause 137. Act amended
Division 8 amends the Law of Property Act.
Clause 138. Amendment of section 67 (Right to rescind on destruction of or damage to dwelling house)
This clause makes an amendment to section 67 that is consequential to the enactment of Unit Title Schemes Act.
Division 9 Amendment of Local Government Act
Clause 139. Act amended
This Division amends the Local Government Act.
Clause 140. Amendment of section 147 (Allotments)
This clause makes an amendment to section 147 that is consequential to the enactment of Unit Title Schemes Act.
Clause 141. Amendment of section 148 (Basis of rates)
This clause makes an amendment to section 148 that is consequential to the enactment of Unit Title Schemes Act.
Division 10 Amendment of Planning Act
Clause 142. Act amended
This Division amends the Planning Act.
Clause 143. Amendment of section 3 (Interpretation)
This clause adds definitions to the Planning Act to aid in its application to the Unit Title Schemes Act.
Clause 144. Repeal of section 43 (If proposal referred to in Unit Titles Act)
This clause repeals section 43. That section will become redundant because this Bill, in clauses 166, 167 and 168 amends the Unit Titles Act so that the relevant provisions of that Act deal directly with matters consequential to the issuing of an exceptional development permit.
Clause 145. Amendment of section 46 (Development applications)
Section 46 of the Planning Act is amended so that the proposed scheme statement is provided as part of the subdivision application.
This clause also provides that the subdivision application will also deal with the issue of whether any building will be suitable for occupancy. This suitability will be determined in accordance with the regulations. It is anticipated that occupancy will take into account of the proposed use.
For example, the immediate proposed use could be residential or the proposed use could be that of fitting out a shell of a building for future residential or office use. This principle will apply regardless of whether the building is located in an area of the Northern Territory for which a certificate of occupancy is required under the Building Act.
Clause 146. Amendment of section 51 (Matters to be taken into account)
This clause amends section 51 so that one of the matters to be taken into account in making subdivisions determination is that of whether (for any building or proposed building) it is suitable for occupancy as set out in regulations. It is anticipated that the existence or not of a occupancy permit under the Building Act will not be conclusive. That is, it is expected that a building will only be able to be subdivided if it is considered that the building meets current building standards as would apply if the current Building Act applies to the building.
Clause 147. Amendment of section 200 (Application)
This clause amends a provisions that will be added to the Planning Act when the Land Title and Related Legislation Amendment Act 2008 commences, to exclude the application of these provisions to developments that are already in progress upon commencement.
It also allows for Regulations to be made to cover any further transition issues that might arise.
Clause 148. New Part 14
This clause inserts transitional provisions into the Planning Act.
A new section, section 201 (Application for development Permit), is added by this new Part 14. This section applies the amendments made to the Planning Act to applications made after the commencement date, or if an application has been made but no permit issued and the applicant amends the application to meet the requirements of proposed section 46(3)(l).
Division 11 Amendment of Real Property (Unit Titles) Act
Clause 149. Act amended
This Division amends the Real Property (Unit Titles) Act.
Clause 150. Amendment of long title
This clause amends the long title for the Real Property (Unit Titles) Act so that it provides for the registration of unit titles “… and other instruments under the Unit Titles Act… ”.
Clause 151. Section 3 (Interpretation)
This clause sets out the relationship of the Real Property (Unit Titles) Act with the Unit Title Schemes Act 2009 making it clear that the Real Property (Unit Titles) Act has no application to instruments made for the purposes of the Unit Title Schemes Act 2009.
Clause 152. Amendment of section 24 (Application)
This clause amends section 24 of the Real Property (Unit Titles) Act so that so as to clarify the operation of transitional arrangements made by the Land Title and Related Legislation Amendments Act 2008. It is proposed that that Act commence operation immediately prior to the Unit Title Schemes Act 2009.
Division 12 Residential Tenancies Act
Clause 153. Act amended
This Division amends the Residential Tenancies Act.
Clause 154. Amendment of section 4 (Definitions)
This clause makes an amendment consequential to the enactment of the Unit Title Schemes Act (ie inserts a cross reference).
Clause 155. Amendment of section 51 (Cleanliness and damage)
This clause inserts into section 51 a cross reference to the Unit Title Schemes Act.
Division 13 Amendment of Retirement Villages Act
Clause 156. Act amended
This Division amends the Retirement Villages Act.
Clause 157. Amendment of section 3 (Interpretation)
This clause inserts a cross reference to the Unit Title Schemes Act.
Clause 158. Amendment of section 12 (Contractual rights of residents)
This clause inserts a cross reference to the Unit Title Schemes Act.
Clause 159. Amendment of section 36 (Notation of Register)
This clause inserts a cross reference to common property under the Unit Title Schemes Act.
Division 14 Amendment of Swimming Pool Safety Act
Clause 160. Act amended
This Division amends the Swimming Pool Safety Act
Clause 161. Amendment of section 22 (Definitions)
This clause amends the Act so as to include cross references to the Unit Title Schemes Act.
Clause 162. Amendment of section 23 (When swimming pools on common property to be certified or notified)
This clause includes cross references to the Unit Title Schemes Act.
Division 15 Amendment of Unit Titles Act
Clause 163. Act amended
This Division amends the Unit Titles Act.
Clause 164. Amendment of section 4 (Interpretation)
This clause inserts various new definitions regarding resolutions. The effect is that the terminology for resolutions will be the same as in the Unit Title Schemes Act 2009.
Clause 165. Repeal and substitution of sections 7 and 8
This clause omits sections 7 (References in special resolutions) and 8 (References to unanimous resolution) and replaces them with new section 7.
7. Methods of voting
This clause provides for the various types of voting:
· Unanimous resolution – means a vote where there is 100% vote in support for all units.
· Resolution with no dissent – means a vote where no vote is counted against the motion.
· Majority resolution - a majority of the votes (greater than 50%) (with each unit having one vote).
· Ordinary resolution – this is a vote passed on the basis of votes representing a majority of contribution entitlements, so ,for example if the title for a supermarket represented 50% of the contribution entitlements for a shopping centre, the vote of that owner would represent 50%.
· Special resolution – the winning vote must represent at least 2/3 of the votes cast, the opposition vote must not exceed 1/4 of the number of units or represent more than 1/4 of the contribution entitlements.
These clauses are the same as in the Unit Title Schemes Act 2009.
Clause 166. Amendment of section 16 (Conditions of approval)
This clause inserts a reference to “exceptional development permit” (and should be read with the proposed repeal of section 43 of the Planning Act).
Clause 167. Amendment of section 26Q (Application for approval)
This clause inserts a reference to “exceptional development permit” (and should be read with the proposed repeal of section 43 of the Planning Act).
Clause 168. Amendment of section 26ZI (Condition of approval)
This clause inserts a reference to “exceptional development permit” (and should be read with the proposed repeal of section 43 of the Planning Act).
Clause 169. Amendment of section 40 (Borrowing powers)
This clause provides that a corporation may borrow money if there is a resolution without dissent in favour of the borrowing. This replaces the current provision which requires a unanimous resolution.
Clause 170. Amendment of section 42 (Acquisition and alienation of property)
This clause provides that a corporation may acquire property if there is a resolution without dissent in favour of the acquisition. This replaces the current provision which requires a unanimous resolution.
Clause 171. Amendment of section 42A (Acquisition of additional common property)
This clause provides that a corporation may acquire additional common property if there is a resolution without dissent in favour of the acquisition. This replaces the current provision which requires a unanimous resolution.
Clause 172. Amendment of section 42B (Leasing of common property)
This clause provides that a corporation may lease property if there is a resolution without dissent in favour of the leasing. This replaces the current provision which requires a unanimous resolution.
Clause 173. New section 94A
This clause inserts new section 94AA
94AA Jurisdiction of the Supreme Court
This clause provides that the Supreme Court, rather than the Local Court, has jurisdiction for terminations of unit titles schemes. This adopts the same broad position as in the Unit Title Schemes Act.
Clause 174. Amendment of section 112 (Application)
This clause amends section 112 by inserting new subsections (5A), (5B), (5C) and (5D).
Subsection (5A) excludes the application of the amendment made to the section 16 of the Unit Titles Act (requiring a development permit for the subdivision effected by a units plan) by the Land Title and Related Legislation Amendment Act 2008, to developments that are already in progress at the commencement date.
Subsections (5B), (5C) and (5D) allow further transitional regulations to be made for the purposes of the Land Title and Related Legislation Amendment Act 2008.
Clause 175. New Part XII
This clause also adds a new Part.
Part XII (Transitional matters for the Unit Title Schemes Act 2009
This new Part provides for new sections 113, 114 and 115.
113 Application of Act
This which states that the Unit Titles Act does not apply to land that is or which is proposed to be scheme land for the purposes of the Unit Title Scheme Act 2009.
114 Application – method of voting
This clause provides that the changed methods of voting only apply to votes occurring after the commencement of the new provisions.
115 Application – jurisdiction of the Supreme Court
This clause provides that the Supreme Court only has jurisdiction for matters that are commenced after the commencement of section 94AA.
Clause 176. Amendment of Schedule 1 (Articles)
This clause amends the schedule to the Unit Titles Act so that:
· Permissions for alteration of structures are given by way of majority resolution rather than unanimous resolution
· Written permissions for changes in occupancy are given by way of a majority resolution (the current provisions do not specify how a decision is made)
· A permission given for structures can be withdrawn by way of a majority resolution and the giving of a notice
· An approval for “damage to common property” (such as nails for paintings and the like) can be given by way of a majority resolution (the current provisions do not specify how a decision is made)
Division 16 Amendment of Water Supply and Sewerage Services Act
Clause 177. Act amended
This Division amends the Water Supply and Sewerage Services Act.
Clause 178. Amendment of section 4 (definitions)
This sections adds cross references to the Unit Title Schemes Act.
Division 17 Amendment of the Agents Licensing Regulations
Clause 179. Regulations amended
This Division amends the Agents Licensing Regulations/
Clause 180. Amendment of schedule 1
This section adds a cross reference to the Unit Title Schemes Act.
Clause 181. Amendment of schedule 3
This section adds cross references to the Unit Title Schemes Act.
Clause 182. Amendment of Schedule 5 (Qualifications for agents’ licences)
This section adds a cross reference to the Unit Title Schemes Act.
Division 18 Amendment of Residential Tenancies Regulations
Clause 183. Regulations amended
This Division amends the Residential Tenancies Regulations
Clause 184. Amendment of Schedule 2 (Residential tenancies agreement)
This section adds a cross reference to the Unit Title Schemes Act.
Division 19 Amendment of Retirement Villages Regulations
Clause 185. Regulations amended
This Division amends the Retirement Villages Regulations.
Clause 186. Amendment of Schedule 2 (Retirement Villages Code of Practice)
This section adds a cross reference to the Unit Title Schemes Act.
Clause 187. Expiry
This clause provides that Part 4.4 (Consequential amendments) expires the day after the amendments take effect.
Schedule 1 – Codes of Conduct
This Schedule contains the various codes of conduct that might apply by virtue of clauses 77, 92 and 93. To the extent that there is any inconsistency between the provisions of these codes and the provisions of the terms of engagement or authorisation, the provisions of the codes apply.
Part 1 sets out the code of conduct for committee members.
Their basic obligations are to comply with the legislation, avoid conflicts of interest, act fairly and honestly, not to disclose confidential information about a unit owner or unit occupier, and to avoid conduct that would unreasonably interfere with another person’s enjoyment of the scheme land.
Part 2 sets out the code of conduct for body corporate managers and caretaking service contractors, and Part 3 sets out the code of conduct for letting agents. All these codes require services to be provided to schemes at competitive prices.
Schedule 2 – By-laws
This Schedule contains the default by-laws that apply to a scheme if the body corporate does not adopt its own by-laws.
[Index]
[Search]
[Download]
[Bill]
[Help]