Body corporate rules and legislation apply, whether you live in a body corporate property in Port Douglas, Paramatta or Perth. You might think there would be one cohesive standard that applies to everyone owning or renting an apartment, but in actuality, there are many differences between each state’s strata laws.
If you’re confused by the differing rules applying to apartments across the country, this handy guide should help.
Why does each state have different strata laws? Wouldn’t it be simpler if the same laws applied everywhere?
Well yes, of course it would be. However, each different scheme has different problems, requirements and demands, and states recognise that no single piece of legislation will be able to accommodate such diversity. As such, they are free to impose their own rules, policies and procedures for body corporate governance. Each state’s legislation has developed in response to specific industry and stakeholder concerns, with no regard for consistency or unity.
Much like each individual owner is subject to the by-laws of their scheme, each strata scheme is subject to the strata laws of their state (or territory) government. This means that an owner of properties in two different states will be subject to different rules in each case.
When this causes problems
Problems can arise when people move interstate and buy units, often not realising exactly how the strata legislation differs; or when owners own strata properties in different states. This sometimes means that the same issue may need to be dealt with differently in each state, depending on the legislation. However, all too often, owners with the same problem they had previously look for the same solution. This can lead to issues.
How the legislation differs
All body corporate legislation is aimed at promoting fairness and transparency for all, and these overriding principles do not change between states. Body corporate legislation, no matter where the body corporate is located, aims to:
- Protect the rights of all lot owners, and ensure fair treatment for each
- Provide owners with a framework for reporting and dealing with issues that may arise
- Ensure costs are fairly shared between all owners
- Ensure the scheme is effectively managed
However, while the purpose of the legislation remains essentially the same between states, there are hundreds of both fundamental and small differences from state to state. While many of these differences won’t have a whole lot of impact on the day to day running of the strata community, they can certainly make a difference at Committee level.
Here are some of them.
Different states use different terminology to essentially refer to the same thing – sometimes leading to confusion.
Here are some examples:
- Body Corporate/Owner’s Corporation. In Queensland, the legal entity that jointly owns the common property on behalf of the owners and is responsible for managing the property, is known as a body corporate. In NSW and the ACT, the same entity is referred to as an owner’s corporation, and in WA it’s referred to as a Strata Company.
- Community Title Scheme/Strata Plan. In Queensland, all bodies corporate are referred to as Community Title Schemes. This can create confusion, as community titling also refers to the way a scheme is divided (strata subdivision can occur horizontally or vertically). Community title refers to properties that have been subdivided outwards, such as gated communities – as opposed to strata title, which refers to properties that have been subdivided upwards, such as apartment buildings. In NSW, SA, WA and Tasmania, this confusion doesn’t exist, as schemes in these states are known as Strata Plans or Schemes.
- By–laws. In Queensland and most other states, the rules governing a scheme are known as by-laws. In the ACT, however, they are often known as Articles.
- Committees. The committee is known as just that – the committee – in Queensland. In other states it can be referred to as the executive committee, management committee or strata council.
- Managers. The position which Queensland refers to as a body corporate manager, is referred to in other states as an agent, strata managing agent, caretaker or onsite residential property manager.
These are just a few examples – there are plenty of other ways that terminology and jargon differ between states.
Queensland has adopted a unique legislative framework and regulatory structure, where different regulations address different levels of needs in different types of buildings (for example, residential schemes vs commercial buildings). This structure is not to be found in other states.
While all bodies corporate issue and collect levies, set by-laws and hold general meetings, the process of doing these things can differ widely from state to state. Take, for example, the way new schemes are registered. In Queensland, major business is enacted at the first general meeting after a new scheme is registered, such as altering by-laws, creating easements or subdividing. In NSW, for example, once a new body corporate is registered, there are strict rules prohibiting such major business before the first AGM, which is held once one third of the scheme has been sold.
Or, take the sinking fund balance. In Queensland and NSW, it’s not possible to have a sinking fund balance of zero, and for the body corporate to choose not to collect funds for major works. In Victoria, this is entirely possible.
These processes are completely opposite to each other and are just a few examples of how body corporate processes and legislation can vary widely.
The dispute resolution process differs in Queensland, where disputes are regulated by the Commissioner of Body Corporate Management. In NSW, by contrast, disputes are regulated by the Strata Schemes Management Act 1996 and the Strata Schemes Management Regulation 1997.
Different management rights
The length of the term of management rights differs between Queensland and other states. In Queensland, Caretaking and Letting agreements can last for 25 years for certain buildings, while in NSW, all schemes limit the term of the management rights to ten years.
While processes do vary widely, Queensland is often considered a national leader when it comes to establishing strata industry legislation that is both effective, yet flexible. While these are just a few examples, the thing to keep in mind is that legislation does vary between states, so don’t just assume it will always work the same way. If a situation arises, it’s always best to gain some knowledge of the relevant legislation as it applies. Contact us here at Capitol if you need advice on any aspect of body corporate legislation: https://www.capitolbca.com.au/contact-us/