Reforms make termination of rundown community titles schemes easier

• Palaszczuk Government delivering key action from 2022 Queensland Housing Summit.
• Amendments propose a new process for termination of uneconomic community titles schemes (for example, unit blocks).
• A scheme can be terminated for defined economic reasons with agreement of 75 per cent of lot owners.

The Attorney-General introduced the Body Corporate and Community Management and Other Legislation Amendment Bill 2023 (the Bill) into the Queensland Parliament today.

The Bill delivers a key action from the Palaszczuk Government’s 2022 Queensland Housing Summit, which is to reform body corporate legislation to allow for the termination of uneconomic community titles schemes, to facilitate renewal and redevelopment.

The Bill allows for the termination of a community titles scheme with the support of 75 per cent of lot owners, where the body corporate has agreed there are economic reasons for termination which meet defined thresholds.

An economic reason for termination is that it is not economically viable, or will not be economically viable within 5 years, to carry out repairs or maintenance to parts of the property the body corporate is responsible for.

Protections and safeguards for lot owners will be part of the new process, including requirements for professional reports and other information to inform decision making about economic reasons.

There will also be minimum compensation requirements for lot owners, and review and dispute resolution pathways including provisions to reduce lot owners’ exposure to costs associated with proceedings relating to a proposed termination.

In all other situations, termination of a community titles scheme will still require either that the body corporate pass a resolution without dissent or that an order of the District Court is obtained.

Quotes attributable to the Attorney-General and Minister for Justice and Minister for the Prevention of Domestic and Family Violence, Yvette D'Ath:

“By reforming the process for terminating community titles schemes, the Palaszczuk Government is delivering a key action from the 2022 Queensland Housing Summit.

“We have listened to the concerns of unit owners who are facing excessive and exorbitant costs for maintaining, repairing, and rectifying buildings in their schemes.

“For these owners, a collective sale of the whole community titles scheme makes economic sense but cannot be achieved if a small number of lot owners are not agreeable to a sale.

“Often, these uneconomic schemes are located on sites that could provide an opportunity for potentially opening-up more housing and investment opportunities for Queenslanders.

“In reforming the process for terminating community titles schemes, the Government has been careful to balance the need for renewal and redevelopment with respect for people’s property rights.

"Like other body corporate issues, when it comes to selling and terminating community titles schemes, it is critical to strike the right balance between the legitimate, but sometimes competing, interests of everyone within a body corporate.

“Our new laws recognise that it might not make economic sense for lot owners to have to pay large body corporate levies to repair and maintain their buildings, when a significant majority of the lot owners would rather the scheme be sold for redevelopment.

“These laws also recognise that the rights of lot owners who do not wish to sell and terminate their community titles scheme must be respected.

“That is why the Bill includes important safeguards such as minimum compensation requirements for lot owners and rights for lot owners to seek reviews of key decisions made during the termination process.

“Importantly, decisions about whether economic reasons exist for terminating a community titles scheme will be informed by a comprehensive package of information (including professional reports) for all lot owners to consider.

ENDS

Media Contact: Cullen Robinson 0418 170 474