Recent amendments made to the Building Units and Group Titles Act 1980 (BUGT Act) and the Mixed Use Development Act 1993 (MUD Act) commenced on 1 December 2022.1
The amendments were introduced by the Building Units and Group Titles and Other Legislation Amendment Act 2022. Both Acts have been updated to improve the operation of the legislation, including to ensure the Acts more closely reflect improvements made in recent years to the Body Corporate and Community Management Act 1997 (BCCM Act).
Practitioners advising clients with schemes regulated by the BUGT Act and the MUD Act should be aware of the changes. Indicative reprints of both Acts, incorporating the changes, have been published.
Purpose of the changes
Prior to the BCCM Act, most multi-owner developments in Queensland were established and regulated under the BUGT Act.
Developments established solely under the BUGT Act were transitioned to the BCCM Act upon commencement. However, existing MUD Act (and developments under certain specified Acts)2 were not transitioned to the BCCM Act and as a result, the BUGT Act remains in effect for subdivisions within developments governed by the specified Acts.
The amendments focus on making body corporate governance arrangements fairer for owners.
Overview of key amendments
As outlined in the Explanatory Notes, some of the key amendments include:
- Supporting information and education services – amendments to the BUGT Act (based on provisions of the BCCM Act) to support provision of an information and education service to assist proprietors understand rights, responsibilities and dispute resolution options under the BUGT Act, including provisions of the BUGT Act applied in the MUD Act and other specified Acts, and to assist referees to increase their proficiency at resolving disputes.
- Enhancing dispute resolution – amendments to improve provision of dispute resolution services under the BUGT Act (as well as under the MUD Act and other specified Acts, where the BUGT Act is applied). Referees will be provided greater flexibility when dealing with dispute resolution applications and the amendments clarify that referees must observe natural justice, act with as little formality and technicality as possible, and not be bound by the rules of evidence.
- Obligations of bodies corporate – amendments that more clearly state the obligations and duties of relevant bodies corporate. Amendments to the MUD Act and BUGT Act will require bodies corporate established under these Acts to act reasonably when carrying out their functions. The requirement to act reasonably will also apply to executive committees in making decisions on behalf of MUD Act bodies corporate, and committees in making decisions on behalf of BUGT Act bodies corporate. The requirement for a body corporate to act reasonably has been a beneficial feature of the BCCM Act since its commencement, providing scope for resolution of disputes involving the decision-making processes of bodies corporate that might otherwise not be covered by specific requirements or prohibitions under the BCCM Act.
- Committee eligibility – amendments to improve the operation of the MUD Act and BUGT Act in regard to the eligibility requirements established for executive committees and committees to ensure the probity and quality of governance provided by those committees. Amendments will make persons owing a debt to any body corporate within a development (whether to a body corporate under the MUD Act or the BUGT Act, in the same development) ineligible for election to an executive committee or committee. In addition, a person who is an associate of a person who owes a body corporate debt will also be ineligible for election as a member of an executive committee or committee.
- Subsidiary body corporate representation and voting – amendments to improve the operation of the MUD Act regarding requirements for nominees representing subsidiary bodies corporate on ‘higher-level’ bodies corporate. Amendments to the MUD Act will help ensure the appropriateness of nominees of subsidiary bodies corporate by requiring that they first be a member of the committee or executive committee of the subsidiary.
- Committee decision making – amendments to improve the operation of the BUGT Act and MUD Act through measures designed to ensure executive committee and committee decision making is in the best interests of the body corporate and its proprietors. Conflict of interest provisions are included for committees under the BUGT Act, that will require a voting committee member to disclose a conflict of interest in relation to a matter being considered by the committee, and to refrain from voting on the matter.
- Financial management – amendments to improve the operation of the BUGT Act and MUD Act to support the financial viability of developments through amendments designed to ensure the financial obligations of proprietors to their body corporate are satisfied in an appropriate manner and debts recovered in a reasonable time frame. The Act amends the BUGT Act and MUD Act to require that contributions and other amounts owed by a proprietor to the body corporate must ordinarily be paid as a monetary amount. However other forms of payment through non-monetary exchanges of fair value will be permitted in certain limited circumstances, in recognition of the flexibility and convenience this can provide to bodies corporate and proprietors in some cases.
- Information disclosure – amendments to ensure disclosure and transparency of body corporate and committee decision making. The Act amends the MUD Act and BUGT Act to require committee meeting and general meeting minutes to be given to body corporate members (and their mortgagees) within 21 days of the meeting. The amendments also require the minutes of general meetings that must be kept to be ‘full and accurate’.
Wendy Devine is QLS Principal Policy Solicitor.
1 Proclamation—Building Units and Group Titles and Other Legislation Amendment Act 2022 (commencing remaining provisions) – 25 Nov 2022.
2 The specified Acts are the MUD Act, Integrated Resort Development Act 1987, Registration of Plans (H.S.P. (Nominees) Pty. Limited) Enabling Act 1980, Registration of Plans (Stage 2) (H.S.P. (Nominees) Pty. Limited) Enabling Act 1984 and Sanctuary Cove Resort Act 1985.