QLD: Q&A Utility Infrastructure and Utility Contracts

Qld lot owners would like to know about how to change utility contracts such as embedded network operators and gas suppliers. Also, who can use common property electricity and who owns utility infrastructure in a body corporate?

Table of Contents:

• QUESTION: A waste pipe to only one unit runs from a shared pipe under common property through a lot’s exclusive use balcony then through the lot’s boundary wall and out into the unit. Is the owner responsible for the pipe back to the shared pipe or just the section inside the unit?
• QUESTION: Rainwater on my lot balcony takes a long time to drain. The body corporate insists the drains are my responsibility as they only service my lot. Is this correct?
• QUESTION: A resident continually charges household electrical items like power tools with common property power. Can the committee ask them to stop?
• QUESTION: Is the embedded network seller or exempt network seller of an apartment block obliged to advise residents of the rate charged on the application/contract?
• QUESTION: In our semi-rural body corporate estate, underground power goes through some blocks to feed other blocks. If the power cable is common property, is the dirt above the power cable common property?
• QUESTION: How can residents leave an embedded network when the prices charged are not the best in the market?
• QUESTION: How much notice does the Body Corporate have to give before turning off water?
• QUESTION: A number of our residents charge their mobility scooters in the basement car park, using electricity from common power points and paid for by the body corporate. Should this usage be reimbursed?
• QUESTION: We’ve arranged for a much better deal on Hot water and Gas. Do we have to wait until our AGM to get the contract approved or can we set it in motion now and ratify the decision at the AGM?
• QUESTION: What is the process the Body Corporate Committee will need to follow to change to another Embedded Network Operator?

Question: A waste pipe to only one unit runs from a shared pipe under common property through a lot’s exclusive use balcony then through the lot’s boundary wall and out into the unit. Is the owner responsible for the pipe back to the shared pipe or just the section inside the unit?

Answer: This will depend.

This will depend on whether the part of the pipe is:

1. servicing more than one lot or just the lot owner; and
2. connected to a device.

If the part of the pipe (even if outside the boundary of the lot) only services the lot owner and is connected to a device, the lot owner will be responsible. If both of those requirements are not satisfied, the body corporate will be responsible.

Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753

This post appears in Strata News #674.

Question: Rainwater on my lot balcony takes a long time to drain. The body corporate insists the drains are my responsibility as they only service my lot. Is this correct?

Over the last year, rainwater has taken a long time to drain off through the two floor drains on my balcony. The balcony is part of my lot, not an exclusive use area. Our scheme is nearly 20 years old and is building format. I worry that prolonged ponding will damage my balcony tiles and may even leach into the lot below.

Both the caretaker and body corporate manager say the drainpipes are my responsibility because they are on my balcony and service only my balcony. They claim the body corporate is only responsible for the shared pipes my drains run into.

Answer: The primary issue to determine here is the cause of the blockage.

The primary issue to determine here is the cause of the blockage. For example, if the blockage is caused by something the lot owner is contributing towards (like not cleaning the balcony surface from leaves), the lot owner is going to be responsible.

Assuming there is no specific contributing cause, and the issue causing the drainage issue was limited to the drains themselves, the starting point is that:

1. lot owners are responsible for maintaining their lot; and
2. the body corporate is responsible for maintaining the common property.

Utility infrastructure within a scheme (such as the drains) are common property unless the infrastructure only services a lot, is within the boundary of the lot and is not located in a boundary structure. It appears as though this exception is not met as the drain would be in the boundary structure and therefore the drain is common property.

However, even though the drain is common property, owners hold some maintenance obligations over common property utility infrastructure if the infrastructure only services one lot and relates to a “device”. Generally, a balcony drain is not connected to a device (and even if it was, it is commonly connected to a broader rainwater drainage system servicing multiple lots), so would not make the lot owner responsible.

Todd Garsden
Mahoneys
E: [email protected]
P: 07 3007 3753

This post appears in Strata News #669.

Question: A resident continually charges household electrical items like power tools with common property power. Can the committee ask them to stop?

A resident continually charges equipment using body corporate power in the basement garage. We are not talking about an EV, just household electrical items with batteries like car batteries and power tools.

Can the committee instruct the resident to stop? If they continue, could the body corporate charge them for the cost of the power? If so, how could this be measured? It would be impossible to determine the amount of power used.

Answer: Has the resident been asked to stop using the power?

Your final comments about the challenges of measuring the power used suggest you might have answered this for yourself: if you have no objective way of tallying up the costs of power used, how can you levy a bill on the individual for it? I think you’d need to find an answer to this conundrum before doing anything else. It may be that the body corporate has to make enquiries to contractors who have expertise in this field and consider installation of measuring devices (if practical or available). That, in itself, might require a vote at a general meeting, depending on what is involved.

Before that, though, it is not clear if the individual in question has been asked to stop using common electricity or if there has been any discussion with them about the issue. I would suggest this is the first step. I assume in doing so you have evidence to support your discussion. You might also want to make sure no other owners or occupiers are doing the same thing. An appropriately worded communique to residents that common property electricity is not exclusive use could be considered.

Chris Irons
Strata Solve
E: [email protected]
P: 0419 805 898

This post appears in the May 2023 edition of The QLD Strata Magazine.

Question: Is the embedded network seller or exempt network seller of an apartment block obliged to advise residents of the rate charged on the application/contract?

Answer: Yes, as well as other information.

Yes, the embedded network seller or exempt network seller of an apartment block must advise residents of the rate charged on the application/contract.

The seller must provide you with all information as per condition 2 of the exempt selling guidelines on page 40 of this document: Retail Exempt Selling Guideline. This includes:

• their legal name and trading name (if relevant)
• the contact details of the exempt seller
• information about the resident’s right to elect to purchase energy from a retailer of their choice and options for metering that would allow this choice
• an electronic link or hardcopy of the AER customer factsheet: How to Access an Authorised Retailer of Your Choice If You Live in an Embedded Network
• information regarding the exempt seller’s lack of obligations as an authorised retailer
• the exempt customer’s rights concerning dispute resolution
• the conditions applicable to the exemption
• any relevant government or non-government energy rebates, concessions and relief schemes
• the availability of forms of assistance if the exempt customer is experiencing payment difficulties
• details of the energy tariffs and associated fees and charges
  flexible payment options
• contact numbers in the event of a gas or electricity fault or emergency

The exempt seller must provide any or all of this information as soon as practicable upon request by the exempt customer or the AER.

Candice Suttor
Altogether Group
E: [email protected]

This post appears in the April 2023 edition of The QLD Strata Magazine.

Question: In our semi-rural body corporate estate, underground power goes through some blocks to feed other blocks. If the power cable is common property, is the dirt above the power cable common property?

We live in a semi-rural body corporate estate that has underground power going through some blocks to feed other blocks with power. I am presuming that the power cable is common property, but is the dirt above the power cable common property?

There is no registered easement over the underground power. Taking this further, if repairs had to be undertaken to the cable, can the body corporate go directly onto the private property and instigate the repairs?

Answer: Underground power cables are ‘utility infrastructure’ and, in most cases, are common property.

Underground power cables are ‘utility infrastructure’ per the definitions in Schedule 6 of the Body Corporate and Community Management Act 1997. Under section 20 of the Act, that means the cables are common property unless either:

1. there is a deal that the developer or body corporate is a party to, under which the cables are owned by a third party OR
2. the cables only supply electricity to one lot and part of the cable is inside that lot (in which case that part of the cable is owned by the lot owner).

If the cable is owned by a third party, usually they are liable to maintain it; but the contract or agreement may provide otherwise.

If there is cable owned by the lot owner, as it is within the boundaries of their lot, then the lot owner is liable to maintain it, per section 211(5) of the Body Corporate and Community Management (Standard Module) Regulation Act 2020.

Next, consider the rest of the cable. That is the bits of cable outside the boundaries of the lot. That other cable will be common property, so the starting position is that the body corporate must maintain it; see section 180(1) of the Standard Module.

If however, the cable provides power to only one lot, then the owner of that lot will be liable to maintain it, per section 180(4)(a) of the Standard Module. There have been some very big fights about whether utility infrastructure provides services to only one lot – the lead case is one of mine, in the Queensland Court of Appeal; see JM Family Holdings Pty Ltd & Anor v Owltown Pty Ltd & Anor [2018] QCA 260.

Now, all of the above applies to ‘original’ installations. That is cables that were in place at the establishment of the scheme. New installations will be governed by statutory easements and the terms of any approval of the body corporate to run the cables across the common property. That, however, is an entirely different question!

Michael Kleinschmidt
Bugden Allen Graham Lawyers
E: [email protected]
P: 07 5406 1280

This post appears in Strata News #635.

Question: How can residents leave an embedded network when the prices charged are not the best in the market?

This question is applicable to New South Wales and Queensland. I’m a property manager and I have a few properties in complexes where embedded networks exist.

I’m often asked by tenants how they can leave the embedded networks due to the prices charged. They sometimes find these charges are not the best in the market. Can you explain how to go about leaving and what impacts there are for any body corporate, the owner and the tenant?

Answer: Your Embedded Network Manager is legally obliged, without a cost to you, to assist you in selecting an alternative product of your choice.

If you’re in an embedded network and you’re not getting a better deal than you could get if you were to leave the network, then something is fundamentally wrong with the arrangement you have with your onseller or the seller’s agent. The cost structures of embedded networks are such that there are almost no circumstances in which you should be paying more and you should be paying significantly less. So there are questions to be answered as to why the residents are not getting a better deal, because they absolutely should be.

Regarding leaving the network, it is a matter of law that all residents, whether you’re an embedded network or not, are entitled to exercise their power of choice. A resident absolutely can leave an embedded network but they shouldn’t need to because they should always be getting the best deal. Depending on the age of the network and the supplier that built the network and the infrastructure (the electricity metre) you have, it may not meet the necessary standards to be supplied electricity by the normal markets. If you were to use an authorised provider (and certainly with us, we do this as a default when we step in as the authorised party managing an embedded network for our clients), if those metres do not provide the resident with the freedom to choose another retailer without having to invest in new infrastructure, then we will instal that infrastructure at our own cost.

When these laws change, the embedded network would have appointed an Embedded Network Manager. Your body corporate or the agent that’s operating on their behalf will provide you with your Embedded Network Manager’s contact details. They are legally obliged, without a cost to you, to assist you in selecting an alternative product of your choice. It’s really important to note that you do have that right. If they’re implying you can’t leave or trying to dissuade you from doing so, that is a breach of their obligations. You have absolutely the right to choose your own supplier.

Drew McKillican
Altogether Group
E: [email protected]

This post appears in the May 2022 edition of The NSW Strata Magazine.

Question: How much notice does the Body Corporate have to give before turning off water?

The Body Corporate have recently turned off the Water Utility supply to 44 Lots on multiple occasions for periods of between 5 and 8 hours while looking for and repairing the leak. This has been done with approx. 12 hours Notice or, in one case, zero Notice.

How much notice does the Body Corporate have to give before turning off water?

Answer: Any timeline would likely depend on the urgency of the situation.

There are no mandatory notice periods for works like this and any timeline would likely depend on the urgency of the situation. Water leaks can cause major damage to the building and lead to considerable costs so stopping them as quickly as possible is always important.

What’s not clear from the question is the nature of the leaks or why they are occurring. To get a better understanding of this it would be worth contacting the committee and asking for an update to be sent to all owners so that you have a better picture of what is happening at the building. It might not change the stoppages, but would hopefully give some understanding as to why the issue is occurring.

Otherwise, for scheduled water stoppages, especially for an extended period of time, you would expect a reasonable notice period to be provided. ‘Reasonable’ could vary from building to building and might depend on how easy it was to contact all occupants but owners, are entitled to a respectful notice period.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #533.

Question: A number of our residents charge their mobility scooters in the basement car park, using electricity from common power points and paid for by the body corporate. Should this usage be reimbursed?

In my large unit block a number of residents charge their mobility scooters in the basement car park, using electricity from common power points and paid for by the body corporate, estimated at up to $200 per year per scooter.

What rules are about using common property electricity to charge items such as mobility scooters and what can be done to ensure the body corporate is reimbursed for the power usage?

Answer: Owners and/or occupiers are entitled to use common property electricity

Owners and/or occupiers are entitled to use common property electricity, subject to any by-law in the community management statement for the Scheme regulating electricity usage.

In order to be reimbursed for electricity, the Body Corporate must:

1. have an agreement with the relevant owner or occupier in respect of the services.

This agreement is commonly referred to as a supply agreement; and

2. only be reimbursed to the extent required to cover the electricity usage.

The Body Corporate would be required to have evidence to support the amount of reimbursement being sought from the relevant owner or occupier.

Hayley Gath
Mathews Hunt Legal
E: [email protected]
P: 07 5555 8000

This post appears in the June 2021 edition of The QLD Strata Magazine.

Question: We’ve arranged for a much better deal on Hot water and Gas. Do we have to wait until our AGM to get the contract approved or can we set it in motion now and ratify the decision at the AGM? The contract was voted on by the Committee two month ago.

Answer: Depending on the limitations the contract proposal may need to be formally ratified at a general or committee meeting. These can be called at any time so there is no need to wait for the AGM.

Generally, the role of the Strata Committee is the day to day administration of the Body Corporate – that includes agreeing on items such as utility contracts. Providing the Committee had a transparent process for selecting the new provider that may be sufficient.

However, before a contract can be implemented you need to consider any restrictions on the Committee’s decision making authority such as spending limits, the nature of the scheme or the need to get multiple quotes. Your strata manager should be able to review these for you and advise of any requirements for your plan.

Depending on the limitations the contract proposal may need to be formally ratified at a general or committee meeting. These can be called at any time so there is no need to wait for the AGM.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

This post appears in Strata News #430.

Question: What is the process the Body Corporate Committee will need to follow to change to another Embedded Network Operator?

Our apartment complex (<5 years old) consists of 100+ residential lots and a number of commercial lots. The embedded network equipment was installed by a major energy provider who bills the Body Corporate (common area usage only) and each of the lots individually (monthly). The energy provider installed the metering equipment at its own cost.

Termination of the existing agreement requires 6 months notice. The Body Corporate Committee has been approached by a number of Embedded Network Operators (ENO) offering significantly lower tariffs than those currently being charged. What is the process the BCC will need to follow to change to another ENO? For example, does the Body Corporate Committee need to seek formal approval from the BC to proceed? What type of resolution would need to be passed?

Answer: It is 100% a contractual issue. One thing to be aware of is that some providers build the capital costs of a system into the tariffs and have them paid back over a period. This avoids the need for an up front payment.

William Marquand, Tower Body Corporate:

The relationship with your embedded network supplier will be contractual in nature so the strata basics of changing to a new contractor would be the same as those required for any change of contract. Given the size and nature of the contract this is most likely to be via a general meeting with a majority decision on motions for termination of the existing contract and appointment of the new supplier. Your strata manager should be able to advise you on the requirements for your plan.

Any time you are changing a contract you should consider what effect the termination will bring and what the new contractor will provide. This is especially true of an embedded network where the costs of change could be substantial. It would be worth having a lawyer review the existing contract with your current supplier to fully understand the implications of the termination clauses and what exactly you would be handing over at the point of change from one supplier to the next. For example, you should be completely clear on which party owns the installed network equipment on finalisation of the contract or any costs for the transfer of this. In turn, this knowledge may affect any deals offered new suppliers.

We would recommend that any new supplier considered be a member of the Energy and Water Ombudsman Queensland’s (EWOQ) regulatory scheme. This will allow you access to EWOQs dispute resolution services in the event of any issues: EWOQs Embedded Networks

Frank Higginson, Hynes Legal:

It is 100% a contractual issue. One thing to be aware of is that some providers build the capital costs of a system into the tariffs and have them paid back over a period. This avoids the need for an up front payment.

William Marquand
Tower Body Corporate
E: [email protected]
P: 07 5609 4924

Frank Higginson
Hynes Legal
E: [email protected]
P: 07 3193 0500

This post appears in Strata News #428.

Have a question about how to change embedded network operators or something to add to the article? Leave a comment below.

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