Body Corporate
Terminating a management rights agreement is risky business
Article by Frank Higginson
Current as at November 28, 2024
The question of who is obliged to pay for structural repairs to scheme land that forms part of a lot is a question that is often put to us. There are different rules depending on the type of plan and the form of repair required.
Hynes Legal recently advised a body corporate in relation to their obligation to keep buildings within the scheme in good structural repair. A structural defect to a supporting beam was causing the flooring and walls in a lot in the scheme to bow. Under the Accommodation Module, the body corporate was responsible to maintain essential supporting frameworks on the scheme in a structurally sound condition.
This will not always be the case, as the obligation to maintain the structural integrity of lots in a community titles scheme will depend upon how the lot was created.
Where lots are created under a Building Format Plan (the old Building Units Plan), the Act provides that it is the responsibility of the body corporate to maintain the lots in a structurally sound condition. This includes the obligation to maintain railings, balustrades, doors and windows that are on the boundary of the lot and the common property, as well as all roofing, foundation and support structures, regardless of whether or not they form part of the common property for the scheme.
No such obligation is placed on the body corporate where the lots are created under a Standard Format Plan (the old Group Title Plan). Owners of lots contained in a Standard Format Plan are responsible for the maintenance of their own buildings and lots.
The distinction is an important one that has the potential to cause disputes in schemes that are created in stages. For example, if the first stage was created under a Building Format Plan and a later stage is created from a Standard Format Plan, lot owners from the Standard Format Plan will be potentially responsible for contributing towards structural repairs of the lot owners from the Building Format Plan. In this circumstance it may be necessary for the scheme to alter its contribution schedule to ensure that it is just and equitable.
Of course, it is always the responsibility of the body corporate to maintain all common property in good order, including common property that is structural in nature.
