1 April 2021
Strata Managers as Fiduciaries
A paper by Gary Bugden OAM. April 2021. Preliminaries 1. Coverage In this paper I will consider: what we mean by a “fiduciary”; how to determine if a fiduciary relationship…
The ‘Ban the Banners’ amendments to the Building Act were passed in 2009 and took effect in early 2010. They included rendering inoperable certain by-laws that were used as, in effect, developer mandated building covenants.
Restrictions on occupation before the new homeowner completed landscaping, etc., permitted roof colours, or the locations of solar PV or hot water systems on the roof were all rendered inoperable if the restriction was about preserving or enhancing the external appearance of the building only. In the case of solar PV or hot water, the by-law also had the effect of preventing the installation of the solar PV or hot water system.
Fast forward a few months to 2010, and after industry backlash, Ban the Banners was significantly watered down. The relevant provision, for our purposes, Section 246Q, was cut down to cover only ‘relevant instruments’ (including by-laws) that restricted the location of solar PV or hot water only for reasons of enhancing or preserving the external appearance of the building and which had the effect of preventing the installation of solar PV or a solar hot water system.
Section 246Q remained unchanged until 2022, when a minor change was made to the section title, along with two major changes of substance.
The first was that the by-laws concerned must relate to the roof or external surface of the common property of a prescribed building (being a class 1a or 2 building or a class 10a building attached to a class 1a or 2 building).
Second, the old ‘amenity plus prevention of installation test’ was deleted and replaced with three alternatives. The effect is that if any one of the alternatives applied, then the restriction in the by-law would have effect only to the extent permitted in the relevant alternative.
The first alternative was that the restriction in the by-law was necessary to preserve the building’s structural integrity – obvious enough and very sensible!
The second alternative was that there was not enough roof or external space for all lot owners to have their own systems, and if so, then the restriction in the by-law was allowed to be a prohibition. In other words, if there is not enough space for everyone, a body corporate, through a by-law, can prevent anyone from installing solar PV or a solar hot water system. I personally think this is a great idea because, in these cases, the lot owners, through the body corporate, can seek to implement a fair allocation system OR a body corporate owned solution.
The third alternative relates only to solar hot water systems. A by-law restricting them can have an effect, but only to ensure that noise from the piping does not cause unreasonable interference with a person’s use and enjoyment of the building.
This article by Queensland Partner Michael Kleinschmidt first appeared in StrataNews Newsletter #706 from LookUpStrata Pty Ltd.
© Bugden Allen Group Legal Pty Ltd. This is general information only and not legal advice. You should not rely on this information without seeking legal advice tailored to your specific circumstances.