All hail the resurrection of the ancient principle Caveat Emptor

Political back flips are fairly common these days with poll-driven politics the order of the day. Less common is the legislative back flip.

Governments don’t often pass laws to revert processes to that which applied a decade or so previously for fear of looking regressive. It is, as Sir Humphrey would say on Yes Minister, ‘Indeed a courageous move’. Yet the Queensland government has done just that with quite an extraordinary law passed on 14 April 2011 about the way bodies corporate adjust entitlements used to calculate levies.

When reviewing the Queensland strata laws in 1997, for reasons no one can remember or is now admitting, it was decided bodies corporate should have the right to adjust contribution entitlements where developers got it wrong. Hard to believe, I know, but a practice developed in the 80’s and 90’s by which some developers lowered the levies on the penthouses they intended to keep or sell to their mates. This didn’t occur elsewhere in the country because laws on how entitlements were set in the first place were more proscriptive.

For more than a decade then battles have raged in Queensland buildings about whether some pay too much and others pay too little. Various judges and tribunals have espoused theories along the way and the minutiae of building operations have been dissected by experts to decide if a unit on the 6th floor really does use as much common property power as one on the ground floor.

Like parents sick of the squabbling, the Queensland State government has taken the toys away altogether. As of 14 April 2011, if just one owner wants the system to revert to the pre 1997 entitlements, then that is what must happen. Of course there are a few exceptions for material changes to the building in the intervening years that might make this reversion inequitable but they are very limited circumstances.

There will be much bleating by those who lose by this reform but they will probably be penthouse owners and will be fewer in number than those who will win. The real victor here is the principle of ‘Caveat Emptor’ – buyer beware. What these laws do is return owners to the way it was when they bought in – for better or for worse, which all fair-minded people should be able to accept.

There is a certain transparency about strata that enables a prudent purchaser to inspect the record before they purchase. If they like what they see about the rules for splitting common property costs, they will buy. If they don’t, they should pass – you can’t get much fairer than that.

Courageous indeed Queensland – but well done.

 

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