From the 28 February 2012, the management of duplexes is regulated under The Body Corporate and Community Management (Specified Two-lot Schemes Module) Regulation 2011. The purpose of the new module is to make the day-to-day management of duplexes less complex for owners. Previously, duplex buildings were regulated by the Body Corporate and Community Management (Standard Module) Regulation.
This meant all decisions had to be made at a formal body corporate meeting using a voting process.
There is no requirement under the new module to elect a committee and all decisions can now be made by lot owner agreements.
Lot owner agreements must to be in writing, dated and provide details of the agreed matter.
The Specified Two-lot Schemes Module will apply to any community titles scheme (CTS) if the lots are residential, if there is only two lots in the scheme, and if the community management statement (CMS) identifies that the specified two-lot scheme applies.
Where there is a letting agent or the scheme is part of a layered arrangement of a CTS, the Two-lot Schemes Module will not apply. Lot owners can be represented by an authorised person who will have the same functions and powers of an owner to deal with relevant body corporate matters.
The representative must give the other lot owner a copy of the document that authorises the representative to act with the owner’s capacity. A Body Corporate Manager or a service contractor is not entitled to be a lot owner representative.
Lot owners can still engage the services of a Body Corporate Manager, however, the term of engagement cannot be any longer than 12 months. There is still a requirement to keep records and either a lot owner, representative or body
corporate manager must be appointed for that purpose via a lot owner agreement. The lot owners are to have reasonable access to the records and access is to be available to other interested persons at a prescribed fee.
Financial matters are dealt with using lot owner agreements. Funds can be kept in one or more accounts with a financial institution, however, the accounts must be in the name of the body corporate. Under the new module, the body corporate is no longer required to provide annual budgets, levy contributions, establish administrative and sinking funds, or prepare annual statements of accounts. The Body Corporate is still required to insure common property and assets to the full replacement values and take out public risk insurance.
Each lot owner is liable to make contributions for expenses which are referred to as ‘agreed body corporate expenses’. An ‘agreed body corporate expense’ is an item of expenditure that the body corporate has decided, by a lot owner agreement, to incur. If a lot owner receives a written notice of an agreed body corporate expense (e.g. tax invoice for maintenance work), that owner may give the other lot owner a notice of contribution. The notice must state the total amount payable, the proportion to be contributed and the date for payment. The contribution notice must be delivered as soon as practicable after receiving the notice of the agreed body corporate expense.
Where a lot owner defaults on a payment (defaulting owner), the other lot owner can make the payment on their behalf (contributing owner). The contributing owner can recover the amount as a debt as well as any penalties or costs incurred as a result of the defaulting owner not paying their contribution.
Alternatively, the body corporate can recover the amount owed by the defaulting lot owner as a debt.
In order to change from the Standard Module to the new Specified Two-lot Schemes Module, there must be a general meeting to vote on the proposed change and to record a new CMS.
The voting paper must accompany a BCCM Form 19 which outlines the effect of a change in the regulation module. Duplex owners will still have access to the Office of the Commissioner for Body Corporate and Community Management’s dispute resolution service under the new Specified Two-lot Schemes Module.
If you require any further information about the Specified Two-lot Scheme Module or would like assistance changing our existing duplex to the new scheme, please contact our office for an appointment.
