Changes to the BUGT Act pass the Parliament

The Building Units and Group Titles and Other Legislation Amendment Act 2022 (“2022 Act”) was passed by the Queensland Parliament on 8 November 2022. The 2022 Act was proclaimed on 21 November 2022 and inoperative provisions are expected to be proclaimed to commence shortly.[1]

The 2022 Act amends:

• The Building Units and Group Titles Act 1980 (“1980 Act”).
• The Mixed Use Development Act 1993 (“MUD Act”).

Changes to the 1980 Act

The key changes to the 1980 Act introduced by the 2022 Act, which affect a body corporate operating under the 1980 Act, include:

• The imposition on the body corporate and its committee of an obligation to “act reasonably” in similar terms to the obligation applying to bodies corporate under the Body Corporate and Community Management Act 1997 (“BCCM Act”).[2]
• The empowering of a body corporate, in certain circumstances, to approve and give effect to a levy off-set arrangement with a proprietor of a lot who provides land, goods or services to the body corporate.[3]
• As regards unpaid contributions, a body corporate –
  • may recover the amount as a debt upon expiry of 30 days after it becomes due and payable; and
  • may, in respect of contributions that have been outstanding for 2 years and 30 days, recover those contributions as a debt; and
  • must start proceedings to recover unpaid contributions that have been outstanding for 2 months after the 2 year and 30 day period referred to.[4]
• A body corporate must not only keep minutes of its meetings, but the minutes must also be “full and accurate”[5] and a copy must be given to each proprietor and first mortgagee within 21 days of the meeting, unless they have given notice of not wishing to receive copies.[6]
• New rules (similar to those in the BCCM Act) have been inserted regarding the eligibility of persons to be elected to a committee and the circumstances in which they vacate their position.[7]
• Body corporate managers and caretaking service contractors now become non-voting members of a body corporate committee.[8]
• New sections have been added to substantially replicate the provisions of the BCCM Act relating to –
  • Ineligibility of a voting member of the committee to vote at committee meetings where a body corporate debt is owing.[9]
  • The effect of conflicts of interest on voting rights of members of a committee.[10]
  • The circumstances in which a committee member may receive a benefit from a party to a service arrangement with the body corporate.[11]
• The dispute resolution provisions have been modernized by including –
  • New obligations on a Referee about observing natural justice and acting quickly and informally.[12]
  • Provisions for the making of orders for costs.[13]
  • An extension of the circumstances when the refund of a prescribed deposit can be refused (i.e. from an application being “frivolous or vexatious” to include one being “misconceived or without substance”).[14]
  • Amendment of section 121A of the 1980 Act (requiring a special resolution to commence “proceedings”) so that it will no longer apply to commencement of adjudication applications.[15]
• New powers for the chief executive to provide certain education and information services to assist those persons associated with the 1980 Act and a range of related legislation.[16]
• New and detailed notice provisions have for committee meetings.[17]
• The introduction of voting in writing by committee members (i.e. “voting outside committee or VOC”) to bring 1980 Act committees in line with BCCM Act committees.[18]

Changes to the MUD Act

The key changes to the MUD Act introduced by the 2022 Act, affect bodies corporate (including community bodies corporate and precinct bodies corporate) operating under the MUD Act. Most of those changes substantially replicate the changes introduced by the 2022 Act to the 1980 Act. Notable additions are:

• Eligibility of a person to be the “nominee” of a subsidiary body corporate and the default position where there is no nominee have been clarified.[19]
• General meeting voting disqualification for overdue amounts has been removed in circumstances where a subsidiary body corporate has certain members in arrears with their levies.[20]
• A new duty for a body corporate that has entered into a third-party agreement for the supply of an amenity or utility service that is an essential utility service, to take all reasonable steps to ensure continuity of the amenity or service.[21]
• Confirmation of the ability of a subsidiary body corporate to delegate powers to its nominee to another body corporate of which the subsidiary is a member.[22]

Deficiencies with the 2022 Act

It is unfortunate that the 2022 Act fails to achieve some other important legislative amendments. In particular:

• It fails to update the Integrated Resort Development Act 1987 (“IRD Act”) in the way it has updated the MUD Act.
• It fails to update the ‘Modified Building Units and Group Titles Act’ in Schedule 4 of the South Bank Corporation Act 1989 (“Modified BUGTA”)

These ‘oversights’ may well have been the result of undue focus on the MUD Act to assist the resolution of issues which have for some time existed at the Couran Cove Resort on Queensland’s Gold Coast.

The IRD Act

The IRD Act likely involves a similar number of 1980 Act lots as are involved in the MUD Act, yet the owners and bodies corporate associated with those lots have been completely ignored by this amending legislation. One of a number of consequences for those owners and their primary thoroughfare and principal bodies corporate will be the need to continue to run their meetings, not in accordance with the current 1980 Act provisions, but in accordance with “Schedule 2, part 1 of the Building Units and Group Titles Act 1980 in force at the commencement of this Act” (i.e. the IRD Act which commenced back in 1987).[23]

Modified BUGTA

One of the serious consequences for owners and bodies corporate in the ‘South Bank Corporation Area’ is the continuing need for a special resolution to authorize an application by a body corporate for an order under the dispute resolution provisions (e.g. to enforce a by-law).

The lesson to be learnt

There is a clear lesson from the 2022 Act exercise. Namely, the time has come for the vast collection of Queensland body corporate legislation to be consolidated into a single piece of modern and effective legislation. There is no reason why this cannot be done, and Government needs to finally come to terms with the pressing need for that to occur.

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[1] Section 2, 2022 Act.

[2] Section 6(1) of the 2022 Act and new section 46(3) in the 1980 Act.

[3] Section 7, 2022 Act.

[4] Section 8, 2022 Act.

[5] Amendment of section 38D(1)(b) of the 1980 Act.

[6] Insertion of sub-paragraph (ca) and (5) into section 38D of the 1980 Act and insertion of sub-sections (5), (6) and (7) into section 45 of the 1980 Act.

[7] New sections 41A and 41B in and amendments to, section 43 of the 1980 Act.

[8] New section 42A of the 1980 Act.

[9] New section 45A of the 1980 Act.

[10] New section 45B of the 1980 Act.

[11] New section 45C of the 1980 Act.

[12] New section 73A of the 1980 Act.

[13] New section 94C of the 1980 Act.

[14] Amendments to section 110 of the 1980 Act.

[15] A new sub-section (2) has been added to section 121A of the 1980 Act.

[16] New section 132A of the 1980 Act.

[17] New clause 6 of Schedule 4 of the 1980 Act.

[18] New clause 7 of Schedule 4 of the 1980 Act.

[19] Amendment of section 169 of the MUD Act.

[20] Amendments to section 172 of the MUD Act.

[21] New sub-section (1a) inserted in section 177 of the MUD Act.

[22] New sub-section (2) inserted in scetion183 of the MUD Act.

[23] See sections 106(6) and 143(6) of the IRD Act.