Community Management Statements

Community Management Statements… the Why, Where and How

Summary What is a CMS?

What is an interim statement What is a standard statement

How does a CMS take effect?

What’s in a CMS?

How do you record a new CMS?

Quiz

What is a CMS?A CMS is defined by section 12 of the BCCMA as a document that:

1. identifies land

2. complies with the requirements of the BCCMA

Section 59 of the BCCMA says a CMS is binding on each of the following parties, as if they had signed it under seal:

3. the body corporate

4. each member of the body corporate

5. each person who is a registered proprietor of a lot (e.g. a lessee or mortgagee)

6. each person who is a registered proprietor of common property (e.g. a lessee)

7. each person who is the occupier of a lot (e.g. tenant)

8. each person who is the occupier of common property (e.g. a licensee)

Interim StatementsWhen did the BCCMA come into force?

*****13 July 1997*****

Buildings and parcels previously regulated under the Building Units and Group Titles Act 1980 (BUGTA) were taken to have a CMS (called an interim statement) when the BCCMA commenced, which identified:

1. the name of the scheme (same as the previous name of the building or parcel)2. the name of the body corporate (the “Body corporate for [name of previous building or parcel] Community Titles

Scheme [identifying number to be allocated by the registrar]”)3. address for service (same as before)4. name and address for service of the original owner (same as before (if any))5. the regulation module, which was the Standard Module6. the contribution schedule (same as previous “entitlement”)7. the interest schedule (same as previous “entitlement”)8. the by-laws, which must be identical to the by-laws that were in force for the plan immediately before 13 July

19979. allocations of common property that were in force under the by-laws for the plan immediately before 13 July 1997

What is this thing?

Standard StatementsIf a body corporate still had an interim statement as at 13 July 2000 (i.e. if it hadn’t already recorded a new one) the registrar was required to record a new CMS for the scheme as soon as practicable (and the body corporate was not allowed to record a new one in the interim)

When the registrar recorded a standard statement for a scheme, that was taken to be the CMS for the scheme which replaced the interim statement.

The standard statement contained all of the things the interim statement was “taken to” contain except the by-laws were not reproduced. Instead there is a reference in the standard statement that provides the by-laws are taken to be the by-laws in force for the scheme immediately before 13 July 2000.

In other words, in order to ascertain which by-laws apply to one of these schemes, you need to conduct an historical search of the previous plan or parcel and obtain the original by-laws and any amendments.

Standard StatementsHow to find the by-laws if there is a Standard Statement:

1. Title search of common property will provide details of current CMS ($21.67).

2. Dealing image search to obtain current CMS ($48.73). If it is a Standard Statement we will need to dig deeper to get the by-laws.

3. Historical search of common property will provide every dealing ($37.62) (or if we have the BUP or GTP they will record any dealings relating to a notification of change of by-laws). If there are no “notification of a change of by-law” dealings, the by-laws in BUGTA apply.

4. Dealing image search will give us any change of by-law notifications ($48.73 each) and we can piece together the applicable by-laws.

Standard Statement recorded on 15 July 2000

Change of by-laws dealing number K42968OY

By-LawsTaken to be those in effect as at 13 July 2000[section 285(5)(a) Body Corporate and Community Management Act 1997]

Second page of plan. The only page in the plan that is oriented in “landscape”. If there is no page that looks like this then there were no additional dealings in relation to the plan so the by-laws will be the by-laws in BUGTA

Notification of change of by-laws recorded

Dealing number for the Dealing image search

Dealing number on first page of image search

Amended by-laws

How does a CMS take effect?Recording of CMS takes effect under s115 of the Land Title Act 1994 which provides:

1. When the registrar records a CMS the registrar must:

a. Give the statement a unique identifying numberb. Record a reference to the CMS, including its unique identifying number on:

i. The indefeasible title for each lot that is scheme land; andii. The indefeasible title for any common property that is scheme land

2. However:

a. The registrar is not obliged to examine, but may examine, a CMS for its validity, including, in particular, its:i. Consistency with any plan of subdivision; orii. Compliance with the requirements for a CMS; and

b. It must not be presumed that a CMS statement is valid and enforceable, including, for example, that the by-laws for the scheme included in the statement are valid and enforceable, because the registrar records it; and

c. Neither the validity nor the enforceability of a CMS, as recorded by the registrar, is guaranteed by the State

3. The CMS takes effect when it is recorded by the registrar as the CMS for the scheme.

What’s in a CMS?Components of the CMS:

Identifying information:name, CTS Number, dealing number, address for service

Regulation Module

Contribution Schedule and Interest Schedule (Schedule A)

Future Development (Schedule B)

By-laws (Schedule C)

Statutory easements, service location diagrams, landscape and architectural codes (Schedule D)

Exclusive Use allocations and plans (Schedule E)

First Page…The Titles Office will (literally) stick the dealing number here

Schedule A – Lot EntitlementsThe original owner determines the lot entitlements when preparing the first CMS for the scheme

There are two schedules of lot entitlements recorded in the CMS:- Contribution Schedule Lot Entitlements; and- Interest Schedule Lot Entitlements

Since 2011, new schemes are required to adopt one of the following deciding principles when determining lot entitlements:

- Interest Schedule Lot Entitlements• Market Value Principle

- Contribution Schedule Lot Entitlements• Equality Principle; or• Relativity Principle

Schedule A – Lot Entitlements

Schedule A – Lot EntitlementsInterest Schedule Lot Entitlements

Should reflect the market value of the lot

Used to determine:

each lot owner’s share of the common property

each lot owner’s share in the scheme land and body corporate assets in the event the scheme is terminated

government rates, land tax and other statutory charges based on land value

any levy raised for the purpose of insuring the buildings on scheme land

Schedule A – Lot EntitlementsContribution Schedule Lot Entitlements

Used to determine:

the proportion of the administrative and sinking fund levies that are to be paid by the owner of a lot (not including any insurance component)

the value of a lot owner’s vote when voting on an ordinary resolution by poll vote

Schedule A – Lot EntitlementsA resolution without dissent is required to change the contribution schedule lot entitlements

The relevant motion must:- include the proposed new entitlements- include the reason for the new entitlements- ensure the new entitlements are consistent with a deciding principle

Owners of two or more lots can agree in writing to redistribute amongst themselves the lot entitlements for their lots. The committee can approve a new CMS that changes the lot entitlements in this way, as long as the total entitlements do not change and no common property is affected.

Schedule A – Lot EntitlementsAn owner is only entitled to make an application to QCAT (or specialist adjudication) to challenge the contribution schedule lot entitlements in the following circumstances:

• A material change has occurred at the scheme since the contribution schedule lot entitlements were decided;

• The new contribution schedule lot entitlements approved at a general meeting are inconsistent with the relevant deciding principle; or

• The scheme was established after April 2011 and the contribution schedule lot entitlements are not consistent with the deciding principle

Schedule A – Lot EntitlementsA resolution without dissent is required to change the interest schedule lot entitlements

An owner can apply to QCAT or a specialist adjudicator to change the interest schedule lot entitlements to ensure they are consistent with the Market Value Principle

Schedule B – Future DevelopmentSection 66(1)(f) of the BCCMA provides:

The community management statement for a community titles scheme, in addition to identifying the scheme land, must, if the scheme is intended to be developed progressively and the development is not complete:

(i) explain the proposed development and illustrate it by concept drawings; and

(ii) state the purpose of any future allocations for the scheme and the stages in which the future allocations are to be made

Schedule B – Future DevelopmentSection 66(1)(g) of the BCCMA provides:

The community management statement for a community titles scheme, in addition to identifying the scheme land, must, if the scheme forms part of, or is intended to form part of, or is to be the basis for, a layered arrangement of community titles schemes explain the structure, or proposed structure, of the layered arrangement.

Schedule B – Future DevelopmentIf a developer gives the body corporate a new plan of subdivision and a new CMS which are consistent with the provisions in Schedule B of the existing CMS (or inconsistent only to the extent the development of a stage is to be done out of order), the body corporate must endorse its consent on the new CMS within 30 days after receiving it. The developer must lodge the new CMS within 30 days after receiving it from the body corporate, give a copy of the new CMS and the registration confirmation statement to the body corporate within 14 days after it is recorded, and pay for all costs of preparing and recording the new CMS

If a developer wants to change the scheme in a way that affects the nature of the development, or 1 or more stages of the development, in a manner that is inconsistent with the current development approval for the scheme, the developer is required to give written notice to the body corporate and any person who has entered into a contract with the developer to buy a proposed lot in the scheme. The notice must be given 30 days before the developer applies for a new DA

Schedule B may only be amended by resolution without dissent (since it does not fall within any of the exemptions in section 62 of the BCCMA)

Schedule C – By-lawsBy-laws are contained in Schedule C and, if there are none, the by-laws in Schedule 4 of the BCCMA apply

By-laws may only provide for the following:

1. The administration, management and control of the common property and body corporate assets

2. The regulation of, including conditions applying to, the use and enjoyment of:• lots included in the scheme; • common property, including utility infrastructure; • body corporate assets, including easement areas relevant to common property;

and• services and amenities supplied by the body corporate

3. Other matters the BCCMA permits to be included in by-laws

If there is an inconsistency between a by-law another provision of the CMS that is not a by-law, the other provision prevails to the extent of the inconsistency

Schedule C – By-lawsA by-law will be invalid if it:

1. is inconsistent with BCCMA, regulation module or another Act2. restricts the type of residential use in circumstances where a lot can be lawfully used for

residential purposes3. restricts or prevents a transmission, transfer mortgage or other dealing in relation to a lot;4. discriminates between types of occupiers5. imposes a monetary liability on an occupier or owner of a lot6. is oppressive or unreasonable

Schedule C – By-lawsSection 340 BCCMA provides:

A by-law, including an exclusive use by-law, maintained in force under this part for a new scheme, continues to have effect, and may be included in a subsequent community management statement recorded for the scheme, even though it is not competent for the community management statement for a community titles scheme established after the commencement to include the by-law

* So be careful how you advise bodies corporate about the validity of by-laws that remain in force from pre-1997 buildings. For example, pet by-laws under BUGTA may be valid because there are no constraints under BUGTA preventing by-laws form being oppressive and unreasonable.

Schedule D – Statutory Easements, Service Location Diagrams, Architectural and Landscape CodesSchedule D may include:

1. Statutory easements imposed under the Land Title Act between the lots and common property for Support, Shelter, Projections, Utility Services and Infrastructure

2. Services location diagrams – required for changes to existing services or addition of new services for SFP lots

3. Architectural and landscape codes, including the establishment and operation of an architectural review committee

Schedule E – Exclusive Use AllocationsSchedule E records any areas of common property or body corporate assets which have been allocated as exclusive use under an exclusive use by-law in Schedule C.

An exclusive use by-law attaches to a lot and gives the owner or occupier of the lot exclusive use to the rights and enjoyment of, or other special rights about:• Common property • Body corporate assetsIf an exclusive use by-law attached to a lot that is a subsidiary scheme, the exclusive rights are for the benefit of that scheme

The common property or body corporate asset must be specifically identified in the by-law or allocated by a person authorised under the by-law to make the allocation (authorised allocation) or by 2 or more owners under a reallocation agreement (agreed allocation)

Before the registrar records a new CMS that includes an exclusive use by-law, the registrar may require the relevant common property or body corporate asset to be identified in a plan (or in another way the registrar directs to avoid doubt about the extent of the common property or the identification or extent of the body corporate asset)

Schedule E – Exclusive Use AllocationsRecent crack-down by the titles office regarding clarity of EU plans, which are now required to be of sufficient quality for electronic reproduction (because they have progressively lost clarity as each new CMS has been recorded and the EU plans are a copy of a copy of a copy...)

You should familiarise yourselves with the Registrar of Titles Directions for the Registration of Plans:

https://www.dnrm.qld.gov.au/__data/assets/pdf_file/0011/97319/directions-for-the-preparation-of-plans.pdf

• Some EU areas can be properly identified by reference to structural elements and the plans signed off by a committee member

• Most surveyors are happy to send you the original drawings without charge, if they’re still on file

• If you can save your client the cost of having the EU areas resurveyed, you will be even more loved and respected than you are now!




Schedule E EU Plans in current CMS not sufficiently legible for re-lodgement…

Recording a new CMS New CMS must be approved by the body corporate

New CMS must be dated, and signed and sealed by 2 committee members, one of whom must be the chairperson or secretary (unless otherwise approved) – make sure the seal is legible!

Must be lodged within 3 months of approval

Recording a new CMSSection 62 of the BCCMA provides: (a) the body’s corporate consent must be in the form of a resolution without dissent;

(b) however, consent may be in the form of a special resolution if the difference between the existing CMS and the new CMS is limited to the following:

(i) differences in the by-laws (other than exclusive use by-laws); or

(ii) changing to a different regulation module for the CTS;

Recording a new CMSSection 62 of the BCCMA (continued):

(c) consent to the recording of a new CMS need not be in the form of a resolution without dissent or special resolution if the new CMS is different from the existing CMS only to the extent necessary for one or more of the following:

(i) compliance with a provision of the Act under which the body corporate is required to lodge a request to record a new CMS for a purpose stated in the provision;

(ii) compliance with the order of an adjudicator or District Court made under the Act for the lodging of a request for the recording of the new CMS;


(iii) changing the CMS to give effect to an approved reinstatement process;

(iv) changing the CTS to reflect formal acquisition affecting the CTS;

(v) recording the details of allocations of common property made under an exclusive use by-law;

(vi) implementation of any development proposed under the existing CMS or under the provisions of a CMS to which the existing CMS is subject;


(vii) showing the location of a service easement by a services location diagram;

(viii) amalgamating or subdividing Lots in the CTS (provided there is no affect on common property or contribution or interest entitlements for existing Lots); or

(ix) reproducing the CMS without any change of substance.

Quiz1. You are fortunate enough to add a new building to your portfolio. For the last 25 years, the building

has been self-managed. The owner of lot 1 is now trying to sell and the solicitor for the buyer has advised his client the car space used by lot 1 is not recorded as exclusive use on the (1 page) CMS. What might you do to assist to resolve the matter?

2. The committee at Island Far Resort is having problems with its building manager. Apart from poor performance, there are questions about whether the building manager properly exercised the first option in the agreement, which had an initial term of 10 years with 3 five-year options. When investigating the matter you find the inaugural EGM approved a CMS which adopted the Standard Module, but that the CMS that was actually recorded noted the Accommodation Module as the applicable regulation. What should you do?

3. A twenty year old complex in Maroochydore has a single commercial lot downstairs and 5 residential lots above. Schedule C of the CMS includes a by-law that prevents occupiers of lots from making unacceptable noise between the hours of 9pm and 6am. However, another by-law provides that the noise restriction does not apply to the commercial lot. The commercial lot is rented to a new tenant who converts it into a very popular wine bar with live music. The liquor licence allows the venue to stay open until midnight. The owners of the residential lots don’t think this is fair so they come to you for advice. What do you need to consider to determine whether the Commercial lot is in breach of the by-laws?

Thank you and enjoy the rest of the Conference