COMBUSTIBLE CLADDING AUDIT OBLIGATIONS FOR BODIES CORPORATE

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THE OFFICIAL MAGAZINE OF UNIT OWNERS ASSOCIATION QLD EDITION DECEMBER 2018

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COMBUSTIBLE CLADDING AUDIT OBLIGATIONS FOR BODIES CORPORATE
ABOUT US                                                                                     FROM THE EDITOR                                                       CONTENTS DECEMBER 2018

                                                                                             W       e are coming towards
                                                                                                     the end of another
                                                                                             very busy year. The first day
                                                                                             of October marked the start

Published by Unit Owners Association Qld
    6th Floor. 333 Adelaide St, Brisbane QLD 4000
                                                                                             of new regulations focusing
                                                                                             on the issue of combustible
                                                                                             cladding, imposing obligations
                                                                                                                                                                    4                                  6
                                                                                             on bodies corporate. Read our                                         Combustible cladding audit         Body corporate assets
          help@uoaq.org.au (07) 3220 0959
                                                                                             feature article to see what your                                      Bligations for bodies corporate
     uoaq.org.au facebook.com/uoaq.inc                                                       obligation really are, and if it is
        twitter.com/UnitOwnersQld                                                                                                  Jana Koutova
                                                                                             necessary for your scheme to          editor@uoaq.org.au
                                                                                             hire a specialist to guide you        Unit News Editor
                                                                                             through the process.
Brisbane                                        Gold Coast                                                                         the knowledge that we do
(07) 3220 0959 or
uoaq.org.au and request
to communicate to a
particular person.
                                                Wayne Stevens
                                                Mike Murray
                                                Greg Melloy
                                                Roger Dearing
                                                                                             Learn how good building
                                                                                             management platform such as
                                                                                             MYBOS can help you with your
                                                                                                                                   make a difference, that keeps
                                                                                                                                   us going. Our membership
                                                                                                                                   keeps growing, and we trust
                                                                                                                                   it reflects the value of our
                                                                                                                                                                    9                                  11
                                                                                             obligation on page 9. Check                                           Powering through the new           How should I pay my
Ross Anderson, Bob Boundy,                                                                   also how it can influence your        activities to the community     cladding regulations               electricity bill?
Paul Cassels                                                                                 insurance on page 8.                  of owners. For the summer,
                                                                                                                                   we have brought REFER and
Advertisers                                     Help for Members                             We continue with our Self-            SAVE campaign, so if you
                                                                                             managed and simple schemes            would like to invite anyone           NEW FEATURE
We appreciate the support                       Members of the UOAQ
                                                                                             series, this time focusing            into the membership, now it’s           - PART 3
of our sponsors to help us                      are welcome to contact                                                             the time!

                                                                                                                                                                    12                                 13
                                                                                             on Exclusive by-laws and
do the work we do.                              committee members of
                                                                                             improvements on page 12.
To advertise in Unit News,                      the association for any
please contact Jana Koutova                     help on any body
                                                                                             Yet another edition full of useful
on (07) 3220 0959                               corporate matter.                                                                                                  3. Exclusive use by-laws           NBNTM Migration
                                                                                             information; so enjoy reading
or editor@uoaq.org.au                                                                                                                                              and improvements                   - What you need to know
                                                                                             and do not forget to let us know
                                                                                             how we are doing.
Editor                                          Art Direction
Jana Koutova                                    Dan Hancock                                  A heartfelt thank you to the              Have a very                 ABOUT THIS EMAGAZINE
editor@uoaq.org.au                              hi@danhancock.com.au                         UOAQ volunteers and staff for
                                                                                             their tireless and committed             Merry Christmas              To print or download this edition please look for these
Disclaimer
Articles contributed to this newsletter are published as a service to members and do not
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necessarily reflect the opinion or policy of this Association. To contact the committee of
the UOAQ for assistance with a body corporate matter please email help@uoaq.org.au
                                                                                             readers and UOAQ members it
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COMBUSTIBLE CLADDING AUDIT OBLIGATIONS FOR BODIES CORPORATE
FEATURE STORY

                                         Executive Summary                                      alteration of the cladding on the building.   the body corporate.

COMBUSTIBLE                              The Building and Other Legislation
                                         (Cladding) Amendment Regulation
                                                                                             If a building falls within the above
                                                                                             definition, then the body corporate
                                                                                                                                              To undertake Step 2 a body corporate
                                                                                                                                              must complete checklist Part 2 and
                                                                                                                                              ask a “building industry professional” 4
                                         2018 (“BOLA Regulation”) commenced                  must undertake 4 key steps in order to           to prepare a statement about whether

CLADDING AUDIT                           operation on 1 October 2018. Many
                                         bodies corporate will be caught under the
                                         definition of “private building” and will
                                                                                             comply with the BOLA Regulation. Those
                                                                                             steps are described below in detail and
                                                                                             illustrated on the chart appearing at the
                                                                                                                                              or not the building may be an affected
                                                                                                                                              private building. If for some reason a body
                                                                                                                                              corporate cannot discharge its obligation
                                         have to make sure they understand the               end of this article.                             under Step 2 prior to the deadline, it may
                                                                                                                                              seek an extension of time from the QBCC

OBLIGATIONS FOR                          obligations set out in the BOLA Regulation
                                         and how it’s provisions may affect the
                                         owners and tenants.
                                                                                             Registration and
                                                                                             Assessment Process
                                                                                                                                              Commissioner provided the request is
                                                                                                                                              made before 1 May 2019.

                                         This article is intended to assist bodies           Step 1                                           Step 3

BODIES CORPORATE                         corporate to identify whether their
                                         buildings are affected and, if so, what
                                         they need to do to comply. Compliance
                                                                                             Bodies corporate responsible for a
                                                                                             private building must register and
                                                                                             complete checklist Part 1 online before
                                                                                                                                              If a body corporate’s building may be
                                                                                                                                              an affected private building (either by
                                                                                                                                              knowledge/suspicion or by assessment
                                         and rectification costs for some bodies             29 March 2019.2 If for some reason a body        under Step 2) or has failed to complete
By Kevin Pai1, Solicitor, Bugden Legal   corporate will be very substantial but              corporate cannot discharge its obligation        checklist in Part 2, then Step 3 will apply to
                                         failure to comply can result in fines of up         under Part 1 prior to the deadline, it may       the body corporate.
                                         to $43,734.25 (see Table 1 below for the            seek an extension of time from the QBCC
                                         list of penalties).                                 Commissioner provided the request is             In that event, the body corporate must:
                                                                                             made before 1 March 2019.                        (a) engage a fire engineer; and
                                         Identifying buildings affected                                                                       (b) provide the fire engineer’s details to
                                                                                             Step 2                                               the QBCC by 27 August 2019;
                                         A building is affected by the BOLA                  If a body corporate knows or suspects that
                                         Regulation if it is a “private building” that is:   it is an “affected private building” 3 and       and prepare the following by 3 May 2021:
                                                                                             gives notice to the QBCC by the online           (c) checklist part 3;
                                         (a) a class 2,3,4,5,6,7,8 or 9 building and         system before 29 May 2019, then this             (d) a “building fire safety risk assessment”; 5
                                             of a type A or type B construction (as          Step 2 does not apply.                               and
                                             defined under the Building Codes of                                                              (e) a “fire engineer statement”. 6
                                             Australia, part C1 – see Table 2); and          If checklist Part 1 indicates the building
                                         (b) had a building development approval             may be an affected private building or the       If for some reason the body corporate
                                             issued after 1/01/1994 but before               body corporate failed to complete checklist      cannot complete:
                                             1/10/2018 for the building or for               Part 1, then Step 2 must be undertaken by        (f) (a) and (b) above prior to the deadline,

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COMBUSTIBLE CLADDING AUDIT OBLIGATIONS FOR BODIES CORPORATE
FEATURE STORY

                                                                                                                            “This article is intended to assist bodies corporate
                                                                                                                              to identify whether their buildings are affected
                                                                                                                                    and, if so, what they need to do to comply.”

    it may seek an extension        be kept for at least 7 years
    of time from the QBCC           subject the specific provisions
    Commissioner provided the       in the BOLA Regulation.
    request is made before 30
                                                                         Table 1: Key penalties in the BOLA Regulation
    July 2019; and                  Rectification Works
(g) (c) to (e) above prior to the
    deadline, it may seek an        If a body corporate’s building       Section of the BOLA Regulation                                                               Maximum Penalty Units
    extension of time from          requires rectification work, it
    the QBCC Commissioner           should consider seeking legal        Part 1
    provided the request is made    advice about:
    before 5 April 2021; and                                             Section 16Q Registering and giving completed checklist to QBCC                               20
                                    (a) calling tenders;
                                    (b) negotiating and preparing        Section 16R Keeping completed checklist                                                      10
Step 4                                   the necessary building
If the building fire safety              contract;                       Part 2
assessment states that it is an
                                    (c) obtaining body corporate         Section 16T Giving completed checklist and related statement to QBCC                         20
affected private building, then
                                         approvals for rectification
the body corporate must:
                                         works;                          Section 16U Keeping completed checklist and related statement                                10
(a) display the affected private
                                    (d) raising special levy or taking
     building notice in the                                              Part 3
                                         out a loan; and
     way set out in the BOLA
                                    (e) undertaking the rectification    Section 16W Giving fire engineer details to QBCC                                             50
     Regulation 7 within 60
     business days after the             work.
                                                                         Section 16X Giving completed checklist and related assessment and statement to QBCC          165
     assessment is given to the
     body corporate; 8 and          Action required
                                                                         Section 16Y Keeping completed checklist and related assessment and statement                 10
(b) give a copy of the building
     fire safety risk assessment    Bodies corporate should start        Part 4
     to lot owners and tenants      the building identification
     within 60 business days        process now. If there is any         Section 16ZA Displaying affected private building notice                                     30
     after the assessment           doubt about the application of
                                                                         Section 16ZB Giving copy of building fire safety risk assessment to lot owners and tenants   20
     is given to the body           the BOLA Regulation or what
     corporate.9                    is required for compliance,          Total Maximum Penalty Units                                                                  335
                                    the body corporate should
Record Keeping                      get immediate advice from            Total Maximum Fine ($130.55 penalty unit value current from 1 July 2018)                     $43,734.25
                                    a lawyer, engineer or other
In general, all documents must      professional.                        > continues P7

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COMBUSTIBLE CLADDING AUDIT OBLIGATIONS FOR BODIES CORPORATE
FEATURE STORY

                                                                                                                                                  Part 3 of the Standard Module sets out requirements for body
                                                                                                                                                  corporate assets, which I have summarised as follows:

                                                                                                                                                  • Maintenance: the body corporate must maintain its assets in
                                                                                                                                                    good condition (note that “good condition” is not defined).
                                                                                                                                                  • Types of asset acquisition: the body corporate may acquire
                                                                                                                                                    freehold land, leasehold interest in freehold land, acquire
                                                                                                                                                    (or surrender) a licence or concession related to land or other
                                                                                                                                                    personal property. In all of these instances, the acquisition
                                                                                                                                                    is for “the general use and enjoyment of the owners and
                                                                                                                                                    occupiers of lots included in the scheme”.

    Body                                                                                                                                          • Requirements to acquire: the requirements are—
                                                                                                                                                    o For acquiring freehold land or a lease of more than three
                                                                                                                                                        years: resolution without dissent; and
                                                                                                                                                    o For entering into a lease of three years or less, or a

    corporate
                                                                                                                                                        licence, concession or agreement, or acquiring personal
                                                                                                                                                        property where the value of the property to be acquired
                                                                                                                                                        is more than the greater of $1,000 or multiplying the
                                                                                                                                                        number of lots included in the scheme
                                                                                                                                                        by $200: a special resolution.

    assets
By Chris Irons, Commissioner for Body Corporate and Community Management
                                                                                                                                                  The requirements around disposal of assets reflect the requirements
                                                                                                                                                  to acquire them, namely:

                                                                                                                                                  • selling or otherwise disposing of a body corporate asset
                                                                                                                                                    that is freehold land, or a leasehold interest in freehold land:
                                                                                                                                                    resolution without dissent;
                                                                                                                                                  • granting or amending a lease over a body corporate asset that
F   or the purposes of the Body Corporate and Community
    Management Act 1997 (the Act), a body corporate can acquire
an asset in the same way an individual can acquire an asset.
                                                                              as a body corporate asset, but then becomes common property
                                                                              when it is installed as a fixture.                                    is freehold land, or another body corporate asset capable of
                                                                                                                                                    being leased:
                                                                              Section 45(3) of the Act then provides that a body corporate may      o If the term of the lease, as granted or as amended, is more
What, then, do we mean by body corporate assets and what                      dispose of a body corporate asset, although it must not (except            than three years: resolution without dissent. Otherwise, a
are the responsibilities of the body corporate in relation to their assets?   to the extent permitted under a regulation module) mortgage, or            special resolution applies;
                                                                              otherwise create a charge over, the asset. Section 157 of the Act   • selling or otherwise disposing of a body corporate asset that is
Section 11 of the Act provides that body corporate assets                     further provides that the relevant Regulation Module may provide      personal property including a licence or concession related to
“are items of real or personal property acquired by the body                  for how disposal is to occur.                                         freehold land, if the market value of the asset is more than the
corporate, other than property that is incorporated into and                                                                                        greater of $1,000 or multiplying the number of lots included in
becomes part of the common property”.                                         I will refer to the Body Corporate and Community Management           the community titles scheme by $200: special resolution.
                                                                              (Standard Module) Regulation 2008 (the Standard Module),
On this latter point, the Act gives an example of an air-                     so please refer to the relevant provisions of other Regulation      Further requirements are that the body corporate must insure its
conditioning unit which might be bought by the body corporate                 Modules if they apply to you.                                       assets to full replacement value (Standard Module, section 178(1)

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COMBUSTIBLE CLADDING AUDIT OBLIGATIONS FOR BODIES CORPORATE
FEATURE STORY

                                                                   > continued from P5
(b)) and must keep a register of its assets (Standard Module,
section 197). The register must include all assets more than
$1,000 in value and include the following details:                 Table 2: Part C1 of the Building Codes Australia                                                   Flow Chart of BOLA Regulation
• a brief description of the asset
• whether the asset was purchased or was a gift
• when the asset became an asset
• if purchased, how much the asset cost and the name and
   address of the person from whom the asset was purchased
• if the asset was a gift, the estimated value of the gift and
   the name and address of the gift’s donor.

This register forms part of the body corporate’s records and, as
such, can be accessed by an “interested person”.

If you are reading this information about assets and thinking
that it all sounds convoluted and complicated, remember
that the body corporate has a duty to act reasonably and this
duty extends to the way in which it acquires, maintains and
                                                                   References
disposes of assets. Keep in mind also that assets are for the
                                                                   1   Solicitor at Bugden Legal.
benefit of all owners (and occupiers) and so for this reason       2   Section 16Q.
                                                                   3   Affected private building means a private building that has combustible
alone, it is important that there be appropriate transparency          cladding forming part of, or attached or applied to, an external wall or another
                                                                       external part of the building other than the roof.
and detail about the assets.                                       4   Building industry professional means a builder certifier – level 1 or a person
                                                                       who holds a licence of 1 or more of the following classes under the QBCC Act
                                                                       – (i) building – open; (ii) building design – open; (iii) fire safety professional; or a
                                                                       practising architect under the Architects Act 2002; or a practicing engineer under
If a body corporate has questions about the legal or financial         the Professional Engineers Act 2002 registered in 1 or more of the following
                                                                       areas of engineering – (i) civil engineering; (ii) fire engineering; (iii) fire safety; (iv)
implications of its assets and how they are acquired,                  structural engineering.
                                                                   5   A building fire safety risk assessment must be prepared by a fire engineer,
maintained or disposed of, I would recommend it seek                   include an assessment of the combustibility of the material that makes up the
                                                                       cladding and if the cladding is assessed to be combustible cladding – include an
appropriately qualified advice on these topics.                        assessment of the combustibility of the insulation or sarking located behind the
                                                                       cladding.
                                                                   6   A fire engineer statement must be in the approved form and prepared by a fire
For further, general body corporate information please                 engineer.
                                                                   7   Section 16ZA(2).
contact my Office on 1800 060 119 or visit our website             8   Section 16ZA(3)(a).
                                                                   9   For new owners, within 60 business days after the person’s name is entered on
www.qld.gov.au/bodycorporate.                                          the body corporate’s roll.

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COMBUSTIBLE CLADDING AUDIT OBLIGATIONS FOR BODIES CORPORATE
FEATURE STORY

New cladding                                                                                        Key Deadlines

legislation may flow
                                                                                                     Date                What you must do

                                                                                                     29 March 2019       •Register
                                                                                                                         •Complete combustible cladding checklist (part 1)

on to Strata Insurance
by Tyrone Shandiman, Strata Insurance Solutions
                                                                                                     29 May 2019
                                                                                                                         •Upload the signed & witnessed checklist

                                                                                                                         •Engage a building industry professional
                                                                                                                         •Complete combustible cladding checklist (part 2)
                                                                                                                         •Upload signed checklist & building industry professional statement

I  n the January/February 2018 Unit News, we published an article which discussed disclosure
   obligations for strata properties cladding. The message to owners was that the presence of
cladding (whether conforming or not) is a matter to disclose to insurers and non-disclosure could
                                                                                                     27 August 2019      •Engage a fire engineer
                                                                                                                         •Register the fire engineers details
void cover at the time of a claim.
                                                                                                     3 May 2021          •Complete combustible cladding checklist (part 3)
New legislation introduced by the Queensland government has now imposed new reporting                                    • Upload signed and witnessed checklist, building fires safety risk assessment
measures on buildings that contain cladding. Under the Building and Other Legislation Cladding                           and fire engineer statement.
Amendment Regulation 2018, building owners may be required to register their buildings and
complete the combustible.
                                                                                                    History of Claims related to Cladding
This extra level of reporting makes “burying your head in the sand” with regard to your insurance   Below is a history of known fires where there has been a direct connection with the use of cladding.
duty of disclosure much harder as an insurer could in theory use the new reporting to demonstrate
knowledge of the presence of cladding and failure to meet duty of disclosure.                        1991    Liverpool, UK                              2014    Lacrosse, Melbourne, Australia

Who is affected?                                                                                     1999    Garnock, Scotland                          2015    The Torch, Dubai

Buildings effected by this new legislation are owners of buildings which:                            2004    Television Cultural Ctr, Beijing, China    2015    The Torch, Dubai
• are class 2 to 9 buildings (essentially all residential and commercial buildings,                          (7 Injured)
    other than houses and other low-rise residential use buildings); and
                                                                                                     2010    Shanghai, China (58 dead / 70 Injured)     2016    The Address, Dubai
• are of Type A or B construction (buildings over 2 stories); and
• were given development approval to build, or have had the cladding altered after 1 January         2012    Saif Belhasa Building, Dubai (2 Injured)   2017    Grenfell Tower (71 Dead / 70 Injured)
    1994 but before 1 October 2018.
                                                                                                     2012    Tamweel Tower, Dubai
Owners of houses or townhouses do not need to register. Body corporates are considered
owners of buildings that have 2 or more lots.
                                                                                                     Further Questions
What are you required to do?                                                                         Contact the Queensland Building & Construction Commission
                                                                                                     (QBCC) on 139 333 or visit the safer buildings website
Owners of affected buildings should go to the QLD Safer Buildings website for further                www.saferbuildings.qld.gov.au.
information on what their requirements are and it spells out a detailed process to follow            Source: www.saferbuildings.qld.gov.au
www.saferbuildings.qld.gov.au.

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COMBUSTIBLE CLADDING AUDIT OBLIGATIONS FOR BODIES CORPORATE
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Powering
through the
new cladding
regulations
How it can turn out better than you thought.

by Sam Khalef, Managing Director, MYBOS

T     he newly enacted cladding laws, though
      necessary, put quite a few requirements
on the owners of buildings which are affected
                                                     it only for managing projects at your property
                                                     and nothing else. In contrast, a good building
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by these laws. There are definite costs which        management capabilities is something the               However, MYBOS is not just about project             with comprehensive reporting and much more.
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                                                                                                                                                                 by none other than a young and inspiring
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scheduled time, cost or both. In many cases,         it allows you to create tasks with attached            and notifications. While the facility manager        regulations may seem like an added burden
complacency and archaic business practices           documents and group them into a project. As            can also log jobs and incidents, the system          to many, but with MYBOS, smart owners can
play a significant role in these escalations.        a building manager or owner, you can not only          also enables them to track work orders and           easily work this into an opportunity that will
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is that if you opt and pay for a generic project     notices using SMS or email broadcasts to custom         For more information visit www.mybos.com
management system, you will be able to use           groups. The provision of one-click reports on all or

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COMBUSTIBLE CLADDING AUDIT OBLIGATIONS FOR BODIES CORPORATE
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       Date 28/11/2018
                                                                                                                                        can be challenging, and
                                                                                      We understand that changing electricity suppliers
                                                                                                                                       benefit.
       Reference: Federal Policy on Electricity Offers                                the time and effort might outweigh the financial

                                                                                                                                 feedback from UOAQ’s
       Dear Member,                                                                   With this in mind we would like to request
                                                            g in servicing the
       LPE are a QLD-based electricity supplier specialisin                           members as to how we might assist with
                                                                                                                                this process, whether it be
                                                   we   were   requested to attend
       strata industry. On the 7th November 2018,                                     through educational content or   comp limen tary consultations. We
                                                  Minis  ter for Energy. Also in
       a meeting with The Hon Angus Taylor MP,                                        also welcome your questions   rega rding elect ricity supply options
                                             senta tives  from  AGL,  Origin Energy
       attendance at this meeting were repre                                          and rates.
       and Energy Australia among other  s.
                                                                                                                                         , educating members
                                                         current pricing models       We look forward to continuing our work with UOAQ
        The Minster called the meeting, to discuss the                                on their electricity options and empowering them
                                                                                                                                       to take action and
                                                           confusing and
        offered by the big electricity suppliers which are                            save money.
                                                           noted that small
        disadvantage loyal customers. The minster also
                                                          includ es strata
        to medium sized enterprises, a category which                                  Yours Sincerely
                                                     ent that found  it difficult
        common areas, was highlighted as a segm
        to change suppliers.                                                           Damien Glanville
                                                        ution to develop a             CEO LPE
        The main outcome of the meeting was the resol
                                                           a loyalty program that
        supplier-initiated transparency program along with
                                                         e electricity suppliers.
        doesn’t disadvantage customers that don’t chang

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How should I pay                                                                                                                           “Remember it is always your choice
                                                                                                                                          as to how you pay, which also means
                                                                                                                                              it is your choice to pay the fees if

my electricity bill?                                                                                                                        they exist which should always be
                                                                                                                                                    clear on an electricity offer.”

W       hen comparing electricity offers,
        the choice of how bills are paid
consistently ranks at the top of people’s
                                               That said, certain payment types do
                                               cost more money. These costs are not
                                               from the electricity supplier but from the
                                                                                            Avoiding ‘Bill Shock’

                                                                                            There are always other options to
priorities. At the end of the day it should    payment provider.                            support payment like bill smoothinag
be up to the consumer how they want to                                                      or a scheduled payment plan, where
pay, yet some offers are only available        Expensive Ways to Pay                        a small amount is paid towards the
if you agree to pay by Direct Debit or                                                      account each week or month and then
accept reduced payment terms.                  Type of payments that incur fees             adjusted to the actual amount once the
                                               include Cash, Cheques and Money              bill is generated at the end of the billing
Almost all electricity suppliers issue bills   Orders (almost obsolete now)                 period. This works a bit like the pre-paid
‘in arrears’. This means you received the      which are usually transacted over            option and helps avoid ‘bill shock’. These
electricity for 30 days (monthly) or 90        the counter through Australia Post,          are normally reserved to direct debit
days (quarterly) and at the end of the         and Credit Cards. According to the           facilities due to the unnecessary effort
period they bill you. You normally have        Australian Securities and Investments        of manually making the payments.
14 days to pay from the date the bill was      Commission’s ‘Money Smart’ website,
issued. There are a couple of exceptions       electricity retailers have the lowest        Remember it is always your choice as
which involve paying for the energy for        credit card processing fees of all           to how you pay, which also means it is
the period in advance and paying the           consumer products ranging from 0.4%          your choice to pay the fees if they exist
difference when the bill is issued.            to 2.5% depending on the card type.          which should always be clear on an
                                                                                            electricity offer.
All products require the electricity           Best Ways to Pay
supplier to carry the cost of the
consumer, in both cash and credit risk,        Direct Transfer via BPay or Direct            Further Information
this is where certain payment options          Debit via a bank account are usually          For more information visit
can become a saving which is passed            the lowest or no-cost options and are         localityenergy.com.au
onto the consumer.                             generally the easiest. These methods
                                               are typically the best because you
In general, your account should                avoid the risk of forgetting to pay and
represent what you have agreed to pay          incurring late fees and, for the most
and an option to make payment without          part, paying this way provides you with
incurring a fee needs to be available.         access to the best offers.

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NEW FEATURE

Self managed and simple schemes                                                                                                                         painted individually, the colour
                                                                                                                                                        scheme (which must remain
                                                                                                                                                        unchanged unless explicitly
                                                                                                                                                                                           register. Recently, a townhouse
                                                                                                                                                                                           that I manage had a water
                                                                                                                                                                                           ingress issue thought to be
3. Exclusive use by-laws and improvements                                                                                                               permitted to be changed) may       coming from the roof. However,
By Ross Utting, Tracsafe                                                                                                                                become slightly mismatched         the unrecorded air-conditioning
                                                                                                                                                        and degrade the overall            unit installed by the lot owner
This is the third article              Finding and changing EUA             the neighbouring owner. I often        Extending EUA in a townhouse         impression of the scheme.          and situated on common
in a series about                      Your current community               convert duplex schemes to the          In simple townhouse schemes,                                            property in the roof cavity was
simple schemes. Most                   management statement (CMS            specified two-lot regulation           defined by BFP survey, the           Improvements                       the culprit. If that unit had
simple schemes can be                  schedule E), in association          and at the same time allocate          EUA can be extended further          A recurring request for a          been recorded on the common
characterised as being                 with the exclusive use by-           the scheme perimeter fence as          in order to shift the funding for    committee to consider will be      property improvements
                                       laws and any exclusive use           EUA. Simple schemes with a             maintenance out of the sinking       improvements by lot owners         register, the committee may
either a low height
                                       drawings, is the only way to         small number of lots can also          fund and into the lot owner’s        to the common property. In         have been more circumspect in
apartment complex or a                                                      make this CMS modification                                                                                     investigating the root cause.
                                       confirm the true state of the                                               bank account. Roofs, eaves,          an older scheme, the number
collection of independent              EUA on your scheme. EUA is           but as lot numbers increase, it        guttering, cladding that are         of such improvements can be
dwellings. Complexity                  hard to change because of the        becomes difficult to get all lot       adjacent/beneath the lot can         considerable. Ceiling insulation   Committees can approve a
increases with the number              need for resolutions without         owners to agree. Unless each           be allocated as EUA. Painting        for a top floor unit, satellite    common property improvement
of lots and the variety and            dissent and agreement by all         and every lot owner accepts            and roofing are the two biggest      dishes, courtyard landscaping,     by a lot owner where the cost
extent of infrastructure               directly impacted lot owners.        responsibility for their portion       expenditure items in simple          solar panels, air conditioning,    of the improvement is less than
on the common property.                Consequently, it is very             of the scheme perimeter fence,         townhouse schemes. This can          shade cloths, decks, etc. are a    $3,000. Beyond that, only a
There is no strict cut-off             important that the EUA created       it would not make sense to             drive the sinking fund levies        few common examples.               general meeting may consider
                                       by the developer is as good as                                                                                                                      the motion for an improvement.
to our definition of simple.
                                                                            proceed with the change.               down significantly.
                                       it can be.                                                                                                       Under the standard module          One approach when considering
                                                                            One of the motivations for the         There are downsides.The Act          regulation, a register of          committee approval is to
E     xclusive use by-law
      allocations (EUA), typically
courtyards, are very common in
                                       Perimeter fence as EUA
                                       An obvious EUA that is often
                                                                            scheme perimeter fence EUA
                                                                            is that the sinking fund of the
                                                                                                                   requires that the common
                                                                                                                   property be maintained in
                                                                                                                                                        authorisations affecting the
                                                                                                                                                        common property must exist.
                                                                                                                                                                                           imagine if every lot in the
                                                                                                                                                                                           scheme wanted a similar
                                       overlooked is the perimeter fence    body corporate should no longer        good condition (not bad, not         My experience with managed         improvement ... would that be
townhouse schemes surveyed
                                       that bounds scheme land. By          include an allocation for perimeter    fair). If one or more lot owner      schemes is that this register is   an issue for the lot occupiers?
by building format plan (BFP). I
                                       default, this is a body corporate    fence maintenance. Indirectly,         does not repaint to meet this        generally not well-maintained      ... would there be utility capacity
sometimes find that lot owners
                                       responsibility irrespective of       this should impact sinking fund        maintenance requirement,             by body corporate managers.        in the scheme if that happened?
fail to realise that their courtyard
                                       the scheme survey plan. In           levies in a downwards direction.       other lot owners may feel that       The register is not required for   If the improvement is slightly
does not form part of their lot.
                                       a townhouse scheme, it is            Over time, each lot owner will still   the scheme is looking shabby.        the small schemes module, but      controversial, get it decided at
An even more common scenario
is lot owners being unaware that       common for each lot (or lot/         need to fund the same amount of        Unfortunately, the process           I do encourage small schemes       a general meeting rather than
they need to seek permission to        EUA) to be partially bordered by     repairs for the scheme. Some of        of getting the recalcitrant lot      committees to also maintain a      committee.
make improvements to scheme            the scheme perimeter fence. A        the funds will come directly from      owner to act can be tough.
common property. EUA remains           specific EUA by-law regarding        the lot owner (self-funded EUA         Additionally, the cost to repaint
common property … and as               the perimeter fence adjacent         maintenance) and some indirectly       per lot owner may be much             Further Information
such any changes to the EUA            to the lot or the EUA courtyard      via lot owner sinking fund levies      cheaper if the whole scheme           Website www.tracsafe.com.au
do require approval (unless            can assign all maintenance and       and consequential body corporate       had been repainted due to the         Email contact@tracsafe.com.au
otherwise stated in the exclusive      structural repair to the lot owner   maintenance activities.                benefit of scale and a single         Phone 07 31143198
use by-law).                           who will then need to deal with                                             painting contract. If the lots are

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