Approving Improvements – Part 2 Owners
In Part 1 of our approving common property improvements series, we covered everything you need to know when it is the Body Corporate that wants to authorise its own improvement and the process it must follow, which can be reviewed here.
We will now review the varying scenarios for when a lot owner seeks approval to make an improvement defining the improvement range stated within the legislation.
As a quick recap, we need to clarify that the proposal is in fact an improvement and not simply maintenance, which does not require approval. The definition of improvement in schedule 6 of the Body Corporate and Community Management Act 1997 (the BCCM Act) states that an improvement includes:
a) the erection of a building; and
b) a structural change; and
c) a non-structural change, including, for example, the installation of air conditioning.
Once you have confirmed the request is an improvement request and is an improvement to the common property, the next step is to check the by-laws to determine if there is an authorisation for the improvement requested already in place including any conditions that must be met when seeking approval. If the by-law exists, it will be for an exclusive use area allocated to the lot and needs to comply with section 174 Improvements (1) & (2) of the Body Corporate and Community Management (Standard Module) Regulation 2008.
If there isn’t a by-law in place or the improvement requested is either beyond the by-laws parameters or not within an exclusive use area they have been allocated, the request may be considered for authorisation as per section 164 Improvements to common property by an owner of a lot which states:
(1) The body corporate may, if asked by an owner of a lot, authorise the owner to make an improvement to the common property for the benefit of the owner’s lot.
(2) The improvement must be authorised by ordinary resolution of the body corporate unless—
(a) the improvement is a minor improvement; and
(b) the improvement does not detract from the appearance of any lot included in, or common property for, the community titles scheme; and
(c) the body corporate is satisfied that use and enjoyment of the improvement is not likely to promote a breach of the owner’s duties as an occupier.
(3) An authorisation may be given under this section on conditions the body corporate considers appropriate.
(4) An owner who is given an authority under this section—
(a) must comply with conditions of the authority; and
(b) must maintain the improvement made under the authority in good condition, unless excused by the body corporate.
Note: the same provisions are in place within the Accommodation Module quoted within this article.
One of the most frequent questions we receive when an improvement approval request is submitted is what defines a minor improvement? Once defined the Committee has authority to grant approval, without the need for a General Meeting of all owners. The answer to the question is within section 174 Improvements subsection (4) which requires improvements with a value of more than $3,000 to be authorised by Ordinary Resolution. Therefore any improvements with a lesser value are defined as minor.
There are additional provisions surrounding the improvements effect on insurance premiums covered in detail at section 185 Insurance for buildings with no common walls and should be considered when approval conditions are proposed when applicable.
In summary, check the by-laws to determine if terms are already in place and if not, seek an estimate of the improvements value with the application. Consider conditions of approval appropriate to the improvement to ensure that provisions of 164 are enforced.
This article was contributed by Grant Mifsud – Partner, Archers the Strata Professionals.