|RESORT NEWS February 2005|
|Issued by Queensland Resident Accommodation Managers Association Inc|
|Competitive Services Provisions threatened by one owner|
|by Kim Cox (President)|
The business of holiday letting is one of the pillars of Queensland’s largest industry –tourism - a multi billion industry that drives so many sectors of the State’s economy.
A recent decision handed down through adjudication conducted by the Body Corporate and Community Management (BCCM) Commission, again highlights the problems that face owners and investors in tourist orientated properties.
The issue involves the powers of the Body Corporate and what can the Body Corporate decide for all owners if one owner decides to opt out of the decision.
The question that follows is: where the desire of most owners is clear, and is the ‘common interest’, why should a selfish owner degrade the amenity of the other owners’ investment and potential?
The adjudication outcome arose when an individual owner decided to opt out of the service being provided by Foxtel, the cable and satellite television provider, who provides special rates for installation of their services into buildings, through the common property.
As resident managers and owners know, one of the requirements of holiday and resort accommodation is those special ‘extras’ that make the venue a special holiday precinct.
The fit out of a gymnasium, the provision and maintenance of a barbeque area, games room and the like, are all decisions by the Body Corporate to ensure that the holiday letting building is competitive and attractive to visitors.
One of the major reasons for the Body Corporate’s establishment is to manage the issues of the common property for the benefit of all owners.
Recently the BCCM Commissioner ruled that a majority decision by a body corporate, for a resolution carried at its AGM in 2004 that all owners should pay the Foxtel levy, be dismissed.
The ruling now means that Body Corporate of the holiday letting resort will be in default on the current contract with Foxtel and could be in further breach if other owners decide to seek to be blocked from the service.
The outcomes will be that the Body Corporate will have to pay for blocking devices to be fitted to these owners units and then levy the remaining Foxtel service owners for the shortfall in fees.
The decision states that the Body Corporate needs in writing agreement from all owners and presumably this will mean any subsequent owners each time there is a sale.
Thus the lack of contract security for a Body Corporate would seem to render the contracts with Foxtel totally inadequate and fraught with danger. There is a degree of volatility that now exists with hundreds of such contracts in existence in buildings throughout Queensland.
At the moment, Foxtel have been able to provide owners in buildings a special monthly rate of $24, but this would rise considerably if buildings had to be retrofitted with a full backbone cable system at the cost of some $7000 as well as the installation of a decoder in every unit, together with a normal rate service.
Our concern with this outcome is that a holiday resort property constituted under the “Accommodation Module” of the BCCM can be dictated to by a single owner, who suddenly decides to ensure all other owners suffer increased expenses because it now does not suit that owner.
We at QRAMA could understand if the ruling was applied to the “general module” but not the accommodation module.
In many “accommodation module” buildings there is also an advertising levy, common to all holiday resorts. Why is it that an owner occupier who knowingly purchases a unit in a holiday resort can then proceed to refuse to pay the advertising levy?
Recently a non levy paying owner advertising his property referred potential buyers to the building’s website. Our worry is - can potential owner occupiers legitimately claim that they did not know a holiday resort advertises?
The continuing growth of the tourist accommodation industry provides on going challenges in achieving the realistic balance required to ensure the viability and capital growth elements of the investment, whether an owner, occupier or an investor. The devil is always in the detail.
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