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08 Jul 2014 to Min Bleijie - Misclassification - Local Government Responsibility

8 July 2014

You can access the original letter here
Mr. Jarrod Bleijie
Attorney General
GPO Box 149
Brisbane QLD 4001

Dear Jarrod

Thank you for your response dated 24 June 20014 to my previous letter.

My Association has serious concerns with developers applying Accommodation Module (AM), when those developers are fully aware that their developments do not qualify. Section 3 of the AM states the circumstances that determine its application.

Adjudicator’s order of Carrington Court - Main Beach [2005] QBCCMCmr 710 (15 December 2005) clarifies the meaning of “predominately” as intended in section 3 of the AM. This adjudicator’s order is attached for your convenience.

The attached document: LAND AND ENVIRONMENT COURT CLARIFIES MEANING OF “RESIDENTIAL BUILDINGS.” ·(19th July 2012) provides a useful definition of “residential”.

The issue I reported in my letter of 30 November 2013 that related to the development of V77, provides clear evidence that demonstrates the developer applying AM to the development, yet within the disclosure statements, the developer represents that the development is residential. For the AM to apply to the V77 development there is a requirement for the development to be predominately accommodation. As the developer has represented in the disclosure statements, the development will be residential, it should not apply AM. Future Purchasers should not be exposed to any confusion when purchasing a unit in a residential development having established a clear belief that they are buying into a community with owners of like intentions. That is to reside in an exclusively residential property without any fear of short term rentals. A property represented as a residential development with no accommodation units as determined by Section 3 of the AM, and that is able or permitted to be nominated AM creates that confusion. In the interests of consumer protection this confusion should be clarified to the offending developers.

Your advice that “the enforcement of building classifications and the use of the building is a matter for local governments” is of further concern as the case study from Griffith University at page 9 states:

“The focus of the local authority appears to be more on planning that on use. Residents also expressed concern about the weak response received from local authority officers on the issue of regulating how land is used on an ongoing basis. It became clear to the researchers that residents believed that while issues such as environmental fit were considered at the planning stage, due consideration was not given to land use beyond this.”

The least that could be undertaken is for the Commissioner of BCCM to issue an information bulletin clarifying this important issue to discourage developers applying AM to developments that do not qualify as being predominately accommodation. The Griffith University Study at pages 8 9 &10 describes the failures at the time of purchase to insure a new owner has purchased in a property that will not be subject to short term rentals. The study also discloses the problems created due to a lack of a definition of the term “residential” in local government planning legislation. The above referred to definition provides that clarification. We respectfully recommend that the Government direct the Minister for Local Government to communicate to all Queensland City Councils to address the shortcomings raised in this letter. In that regard a separate letter is produced and attached for your attention.

A further issue on this topic is that should a developer deliberately misclassify a development as AM and the future body corporate consider reverting to the correct module, Section 128 (2) of the Act requires that a management agreement sold by the developer with a 25 year term is unable to be reverted even if that agreement had been deliberately unlawfully undertaken.

In my letter to you of 9 April 2014 I advised that from material received from the office of the Commissioner of BCCM, there seemed to be a clearly identified spike in the recording of developments in the Accommodation Module, from an historical level of 1 in 9 of developments recorded Standard Module, to in 2013, 1 in 3 recorded Standard Module. It is argued that there has not been a greater increase in the development of accommodation properties, but the increase in the developments classified Accommodation Module is a direct result of developers misclassifying the developments. It would be most regrettable for future unit owners, if the government condoned or even overlooked such poor practice.

Jarrod, on July 3, I corrected a mistake that had occurred during January of this year when I forwarded a document to QUT that was not my intention to send dealing with management rights. The correct document related to changes to the BCCM Act sought by UOAQ and listed 24 governance recommendations which I have now provided to QUT. The UOAQ is aware that the current review does not cover management rights and that this topic is subject to a separate review. As a consequence of providing an incorrect document in January I have generated misunderstanding between us for which I apologise. My computer skills are less than basic and have frequently delivered me into situations I would prefer to avoid.

The UOAQ looks forward to actively participating in the review process.

Best regards,

Wayne

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