There is no such thing as your “typical” strata scheme. From size to the use case of the lots within, community title schemes all vary from each other. With this in mind, body corporate legislation in Queensland has 5 separate frameworks, known as Regulation Modules, in order to cater to the different governance needs of various kinds of schemes that operate in tandem with the Body Corporate and Community Management Act.
There will always be a regulation module applicable to your scheme, noted on your Community Management Statement, being one of the following; Standard Module, Accommodation Module, Commercial Module, Small Schemes Module, or Specified Two-Lot Schemes Module.
Each of these will be more suited to certain types of schemes, depending on the size of the scheme and how the lots are generally used. We will give you a brief overview of the standard module, the key differences in other modules, and how you can go about changing your regulation module if your current one isn’t suitable for your scheme.
This information will provide you with an introduction to the major differences between the modules, however for more detailed information please contact your community relationship manager, or look for BCCM Form 19 from the Office of the Commissioner for Body Corporate and Community Management.
First is the Standard Module, under which most community title schemes will be registered. As per the information published by the Office of the Commissioner for Body Corporate and Community Management, the Standard Module is most suited for schemes that are predominantly owner-occupied and is the most highly regulated of all modules. Under the Standard Module, there must be a committee of at least 3 members, and no more than 7, with the executive positions of Chairperson, Secretary, and Treasurer.
The committee has a spending limit of $200.00 multiplied by the number of lots unless changed at a general meeting. The number of proxies that can be held by one person is limited to 1 proxy in schemes under 20 lots, and no more than 5% of lots in larger schemes. Body Corporate Managers can also be engaged for a term of up to 3 years.
The Accommodation Module is mostly similar to the Standard Module and is designed more suitable to those schemes where most of the lots are rentals. Under this module caretakers and letting agents can be engaged for a term of up to 25 years, whereas the Standard Module only allows for a term of 10 years. Borrowing money is also slightly easier under the Accommodation Module, with a motion to do so only being a special resolution to borrow an amount of more than $250.00 multiplied by the number of lots. This is a resolution without dissent under the Standard Module.
The Small Schemes module is designed for communities of 3 to 6 units and presents significant differences from the Standard Module as it is less regulated. Under the Small Schemes Module, your committee will consist of only a Secretary and Treasurer, and the committee members can be a lot owner or any person nominated by a lot owner. Further to this, one person can hold both the positions of Secretary and Treasurer.
There are also no restrictions on the number of proxies a person can hold for a general meeting. Under the Small Schemes Module, a Body Corporate Manager can only be engaged for one year at a time, so you will be voting on a management agreement every year. Services provider contracts cannot be longer than one year and the body corporate is unable to engage a letting agent for the scheme, however, individual owners can still use a letting agent for their own lot. On the matter of borrowing money, any amount over $3000.00 must be approved by a resolution without dissent, regardless of the number of lots in the scheme.
The Commercial Module is applied to those schemes that are mainly used by businesses and are designed to facilitate the efficient operation of the body corporate. The committee composition is the same as the Standard Module, however, like the Small Schemes Module, the committee can be either the lot owner or any person nominated by the lot owner.
For those lots that are owned in the name of a company or trust fund, a company nominee form will need to be submitted so the body corporate knows who is representing your lot. The most significant difference of the commercial module to all others is that there is no limit for committee spending, however, the body corporate must still observe the major spending limit, where works over $10,000.00 must have at least 2 quotations for body corporate consideration.
Under the Commercial Module, the requirements for engaging service contractors, letting agents, and borrowing money are the same as those under the Accommodation Module.
Specified Two-Lot Schemes Module
The final and least common of the regulation modules is the Specified Two-Lot Schemes Module. This module can only be applicable to schemes of two residential lots that are not part of a layered scheme. This is the least regulated module, with no requirement to elect a committee or hold an annual general meeting. Body corporate decisions under this module are made by written agreement between the owners of the two lots. The engagement term of body corporate managers and service contractors is limited to 1 year, the same as the Small Schemes Module. The body corporate is also unable to engage a letting agent for the scheme.
On financial matters, there is no requirement for a scheme under this regulation module to set annual budgets or even keep an administrative and sinking fund. Body corporate expenses can be funded in a manner agreed upon by the owners of the lots.
How to change your regulation module?
If you as a lot owner feel as though your current regulation module does not suit the needs of your body corporate, it can be changed. Provided your scheme meets the criteria for the module you want to change to, a motion requiring a special resolution can be put to a general meeting to record a new Community Management Statement with the desired module.
If your scheme is currently under the Standard, Commerical, or Accommodation Modules, a copy of the BCCM form 19 must be included in the explanatory material of the motion, however, this is not required if your scheme is under the Small Schemes or Specified Two-Lot Schemes modules.
The criteria for changing the module as outlined by the Office of the Commissioner for Body Corporate and Community Management is as follows, for those who may be considering proposing a change of regulation module:
- Standard Module
- No restrictions. Any scheme can adopt the Standard Module.
- Accommodation Module
- Most lots in the scheme must be for accommodation, i.e., lots that are let, up for let, or part of a hotel.
- Commercial Module
- Lots must be primarily used for commercial purposes, such as retail or industrial, not residential or accommodation.
- Small Schemes Module
- No more than 6 lots, not part of a layered scheme, and no letting agent engaged by the body corporate.
- Specified Two-Lot Scheme
- Only 2 lots that are both residential, not part of a layered scheme, and no letting agent engaged by the body corporate.
We trust this has provided a useful introduction to the Regulation Modules. If you would like further explanation of any of the terminology used in this article, please do not hesitate to contact your Community Relationship Manager, or browse the educational material on Capitol’s website.