Lynkim Lodge [2016] QBCCMCmr 419 (14 September 2016)

Last Updated: 11 October 2016

ADJUDICATOR’S ORDER

Office of the Commissioner

for Body Corporate and Community Management

ORDERS MADE:

REASONS FOR DECISION

Overview

[1] This application relates to the short term letting of lots in the scheme.

[2] At an extraordinary general meeting (EGM) on 17 March 2016 the Body Corporate passed a motion (Motion 4) with eight votes in favour and nil against. The motion resolved that the scheme “...forbids the regular, on-going short term (under 3 months) tenancy occupation usages by any rental service; including Air BNB and that a new By-Law be registered (a new Community Management Statement to be registered) to reflect this decision.” It does not appear that any new by-law has yet been recorded.

[3] The applicant was absent and did not vote at the EGM. However he disputes Motion 4 as being contrary to the legislation which prevents restrictions on the residential use of lots.

[4] A previous meeting in October 2015 had discussed the short term letting (through Airbnb) of the applicant’s Lot 7. The meeting said the scheme had never been used for that purpose; owners were not in favour of it; and there were concerns regarding excessive noise, rubbish and the unacceptable behaviour of tenants. The applicant apparently indicated he would cease letting. However he subsequently advised he had been pressured and that he would continue short-term letting.

[5] The applicant says the Body Corporate has not explained why they want him to stop short-term letting. He says he has received only one noise complaint about an Airbnb tenant in eight months. He says he explains to his guests the need to be respectful of others, and is also committed to finding longer term tenants. A reference had been made to insurance but the applicant says he received no response when he asked for the particular clauses of the insurance policy which was being relied on.

[6] The applicant seeks an order to invalidate Motion 4 at the EGM in March 2016. The question then is whether that motion breached the legislation.

Preliminaries

[7] Lynkim Lodge community titles scheme 14907 (Lynkim Lodge) consists of 12 lots and common property. It is registered as Building Unit Plan 147 and Survey Plan 202331. The community management statement (CMS) shows the Standard Module applies.

[8] This application was lodged on 17 June 2016 seeking the following order:

For the reasons stated in section 9, I seek a declaration that the resolution passed on the 17th March and the By Law created as a result of that resolution be declared void as being inconsistent with sections 169 and 180 of the Body Corporate and Community Management Act 1997 (Qld). Further it unconscionably restricts my use of my unit in accordance with my rights as a registered proprietor.

Jurisdiction

[9] I am satisfied that this matter falls within the legislative dispute resolution provisions.^[1]

[10] An adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute, in the context of a community titles scheme, about a claimed or anticipated contravention of the Act or the CMS, or the exercise of rights or powers or performance of duties under the Act or the CMS.^[2] An order may require a person to act, or prohibit a person from acting, in a way stated. An order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.^[3]

Procedural matters

[11] The Commissioner invited submissions on this application from the Committee and all owners.^[4] Submissions were made by the chairperson on behalf of the Body Corporate and one other owner. The applicant inspected and responded to the submissions received.^[5]

[12] A dispute resolution recommendation^[6] was made referring the file to department adjudication. I then investigated the dispute^[7], including considering the application and submissions.

Submissions

[13] The submission made on behalf of the Body Corporate corrects various factual ‘errors’ in the application. It says its concerns with the short-term letting of Lot 7 include:

1. Excessive noise from Lot 7 at all hours.
2. The noise generated from tenants bringing suitcases up and down the stairs.

100. The rubbish bin for Lot 7 not being put out which makes an awful smell and requires others to put it out and bring it back in.

4. Rubbish being put in the bins allocated to other lots.
5. Tenants using the car bays allocated to other lots rather than that for Lot 7.
6. Tenants not being given access to Lot 7 and seeking the assistance of other tenants.

[14] The Body Corporate submission further says the scheme is a good quality building and has a majority of live-in owners, with minimal rental units and rentals of six months or longer. It says that the use of Airbnb will make the building seem like a motel and adversely affect property values. It further says that the issues experienced may affect the ability of other owners to attract and retain tenants. The submission further says that the applicant causes excessive noise when he resides in the scheme.

[15] The submission from the Owner of Lot 6 says the short term leasing of Lot 7 is having a detrimental effect on other residents. She says she has experienced excessive noise well into the early morning, as well as the noise of tenants moving in and out. She says that any instructions that the applicant has given to tenants about noise have not worked. She seeks an order in favour of the majority of residents.

[16] The applicant’s reply to the submissions notes the submissions do not respond to the substantiative issue about the lawfulness of the by-law. He rejects the suggestion that Airbnb will adversely affect property values. The applicant also refutes the criticisms about his person and character, noting that they raise matters that have never been raised with him.

[17] The applicant then asks to amend his application to seek an order that the Committee not vote on any proposed resolution that would restrict the right of any lot owner to use any lawful service to acquire tenancies of any duration.

Analysis

[18] The issue to decide in this application is whether Motion 4 at the March EGM was valid or not.

[19] Section 169 of the Act provides generally for the matters which may be included in by-laws by a body corporate. This includes by-laws for the regulation of and conditions applying to the use and enjoyment of lots in the scheme. Section 180 of the Act goes on to set limitations on what may be included in by-laws.

[20] Section 180(3) specifically provides that:

If a lot may lawfully be used for residential purposes, the by-laws can not restrict the type of residential use.

[21] Furthermore, section 180((4) provides that:

A by-law can not prevent or restrict a transmission, transfer, mortgage or other dealing with a lot.

Examples—

1 A by-law can not prevent the owner of a lot from leasing or mortgaging a lot.

2 A by-law can not prevent the sale of a lot to a person under or over a particular age.

[22] The legislation does not define or qualify the term ‘residential purposes’ in section 180(3). The section does not say, for example, “if a lot may lawfully be used for a specific type of residential purpose”. I am satisfied that the plain English meaning of ‘residential purposes’ includes any type of residential purpose, including short and long term letting and permanent residency. There is no suggestion that lots in this scheme cannot lawfully be used for residential purposes. It follows then that the attempt to record a by-law to limit the type of residential use of a lot to only long term letting or permanent residency is a restriction of the type of residential use contrary to subsection (3).

[23] The proposed by-law is also purporting to restrict the capacity of lot owners to lease their lots. As such it is contrary to subsection (4).

[24] Adjudicators have consistently held that by-laws which attempt to prevent the short term letting of lots (including where there are local government or building classification concerns regarding short term letting) were invalid.^[8]

Conclusion

[25] It would be contrary to the Act for the Body Corporate for Lynkim Lodge to record a by-law that prevented owners from leasing their lot for less than three months, regardless of whether the rental was arranged directly or via a traditional property manager or via a rental service such as Airbnb. It follows that Motion 4 at the March 2016 EGM was beyond the power of the Body Corporate to pass and could not lawfully be implemented. I have invalidated that resolution.

[26] The applicant subsequently asked for an order that the Committee not vote on any proposed resolution that would restrict the right of an owner to use any lawful service to acquire tenancies of any duration. I am not clear what the applicant is asking for, but an adjudicator cannot make orders about hypothetical future contraventions of the body corporate legislation.^[9] The limits on the power to make by-laws should now be clear and if the Body Corporate sought to impose improper restrictions on letting in future that decision could likewise be challenged.

[27] The concerns of the Body Corporate and other owners regarding the noise and other offending conduct allegedly caused by the applicant and his tenants can be addressed separately. The current CMS for the scheme^[10] includes by-laws about noise (By-law 1), parking on common property (By-law 2), and rubbish and garbage disposal (By-laws 7 and 10). By-law 6 requires an occupier to take reasonable steps to ensure that their invitees do not behave in a way likely to interfere with the peaceful enjoyment of others. The Body Corporate, owners and residents can utilise the by-law enforcement processes in the Act if these are not complied with.^[11] If the current by-laws do not adequately cover all the areas of current concern, the Body Corporate could consider resolving to amend or add to the by-law to impose additional obligations or restrictions to reduce adverse impacts on other residents. However in doing so the Body Corporate must always act reasonably^[12] and its decisions can be challenged if it does not.

[28] The applicant should consider giving more explicit directions to his guests about appropriate conduct during their visit, particularly regarding noise, parking and bins, and ensure that he abides by the by-laws when he is in residence.

^[1] See sections 227, 228, 276 and Schedule 5 of the Act

^[2] Section 276 of the Act

^[3] Section 284(1) of the Act

^[4] Section 243 of the Act

^[5] See sections 246 and 244 of the Act respectively

^[6] Section 248 of the Act

^[7] The investigative powers of an adjudicator are set out in section 271 of the Act

^[8] See for example, Noosa Close [2007] QBCCMCmr 612 in which Adjudicator Dowling reviewed several relevant previous decisions.

^[9] Daish v Body Corporate for Birchgrove CTS 100 [2013] QCATA 13

^[10] Recorded on 6 July 2012, dealing number 714554740

^[11] See www.qld.gov.au/law/housing-and-neighbours/body-corporate/by-laws/enforcing-by-laws/

^[12] Section 94(2) of the Act