QLD: Changes to BUGTA – a reform for lot owners

This article is about recent changes to BUGTA.

The Building Units and Group Titles and Other Legislation Amendment Act 2022 has been introduced to amend the Building Units and Group Titles Act 1980 (BUGTA) and the Mixed Use Development Act 1993 (MUDA). These changes took effect on 1 December 2022.

The reform promotes transparency and fairness for lot owners by reconsidering body corporate governance arrangements – but what does this really mean for those lot owners affected by BUGTA or MUDA?

By way of example, the BUGTA amendments:

1. impose an overarching duty on the Body Corporate to act reasonably in carrying out its functions (which provides scope for the resolution of disputes which are not otherwise covered by a specific provision in BUGTA);
2. establish an education and information service – similar to that which has existed related to the Body Corporate and Community Management Act 1997 (Qld) (BCCMA); and
3. enhance the dispute resolution services by:
   
   1. clarifying that referees must observe the principles of natural justice, act quickly and informally and without being bound by the rules of evidence;
   2. removing the need for a Body Corporate to pass a special resolution to authorise the making of a dispute application; and
   3. allowing a referee to make a costs order or refuse the refund of a deposit in relation to an application which is frivolous, vexatious, misconceived or without substance.

It is intended that lot owners will have a greater understanding of their rights and access to more informal and flexible dispute resolution procedures.

The amendments also target the quality of decision-making and governance provided by the Body Corporate.

Relevantly:

4. there are new conflict of interest provisions which require a voting committee member to disclose a conflict of interest and refrain from voting on the matter;
5. a person will be ineligible to be elected for the committee or vote at committee meetings where a body corporate debt is owed;
6. caretaking service contractors and body corporate managers will be deemed non-voting members of the committee;
7. service contractors, body corporate managers or letting agents are ineligible to be elected as a member of the committee; and
8. the Body Corporate must:
   
   1. provide members with 7 days’ notice of committee meetings (or 2 days’ notice if agreed by committee members);
   2. keep ‘full and accurate’ minutes and provide a copy of the committee and general meeting minutes to members within 21 days of the meeting.

The financial viability of the Body Corporate is also supported by provisions which allow the Body Corporate to:

1. authorise a levy off-set arrangement with a lot owner who provides land, goods or services to the Body Corporate;
2. commence proceedings to recover a debt within 2 years and 2 months of an amount owed to the Body Corporate becoming outstanding (a debt is outstanding after 30 days of being due and payable).

Ultimately, the amendments address some of the prevalent shortfalls and outdated elements of BUGTA, however further reform may be necessary to harmonise BUGTA with its modern counterpart – the BCCMA.

Holly Dunne
Mahoneys
E: [email protected]
P: 07 3007 3753

This post appears in Strata News #630.

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This article has been republished with permission from the author and first appeared on the Mahoneys website.

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