Body Corporate and Community Management (Accommodation Module) Regulation 2020 (Accommodation Module)

GENERAL MEETING MOTION - where the applicants are seeking to challenge the body corporate's decision not to pass a motion for the body corporate to consent to their material change of use application - whether the body corporate acted unreasonably in declining to pass the motion.

Act, ss 4, 94

• [1] This application is about the body corporate's refusal to give its consent for the applicants to make a material change of use application to the local city council to use their lot as short-term accommodation.
• [2] Sea Palm Beach CTS 53348 is located in Palm Beach, Queensland. It is comprised of 64 lots and common property and is governed by the Accommodation Module.
• [3] The applicants, Mark and Ingrid Carvalho, are the co-owners of Lot 602 in the scheme. I understand they purchased Lot 602 in or around April 2024 and intended, when not using the lot themselves, to rent it out as short-term accommodation.
• [4] In or around May 2024, it was brought to the applicants' attention that Lot 602 was not approved to be used for short-term accommodation and that they needed to make a material change of use application to the local council for the lot to be used for this purpose. I understand a body corporate's consent is required to make such an application because it could affect how common property is used.
• [5] At the scheme's 2025 annual general meeting (AGM) held on 5 March 2025, the applicants put forward a motion seeking the body corporate's consent to file a material change of use application to allow Lot 602 to be used for short-term accommodation. The motion, Motion 12, was voted down by owners.
• [6] The applicants say the body corporate's decision not to pass Motion 12 was unreasonable. They seek the following final order:

That Motion 12 of the Annual General Meeting held on 5 March 2025 is declared passed on the basis that the decision not to pass it was unreasonable.

• [7] The applicants bear the onus to establish that the final order they seek is warranted in the circumstances.

• [8] This application for adjudication was lodged on 8 May 2025.
• [9] The commissioner invited submissions from the body corporate committee and all other owners in the scheme. The committee and 16 other owners in the scheme made submissions in response.
• [10] The applicant inspected the submissions made in response and submitted a reply.
• [11] A dispute resolution recommendation was made referring the file to department adjudication.[1]

• [12] An adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, about (relevant to this dispute): a claimed or anticipated contravention of the Act or the CMS, or about the exercise of rights or powers or performance of duties under the Act or the CMS.[2]
• [13] I am satisfied I have jurisdiction to determine this matter under the legislative dispute resolution provisions.

• [14] The applicants explain they currently reside in Sydney but use Lot 602 for 3 to 4 months per year. They say for the rest of the time, they intended to rent out Lot 602 as short-term accommodation. I understand the applicants were renting the lot out via Airbnb when the scheme's building manager relayed a message, (believed to be from the committee), directing the applicants to remove the listing from Airbnb or the body corporate would complain to the local city council, Gold Coast City Council (GCCC).
• [15] The applicants say that on 21 May 2024, the GCCC sent them a letter enclosing a data collection form to identify the correct rating category for Lot 602 and noting that a rental property, regardless of whether it is short-term or long-term, must be licenced with the GCCC.
• [16] The applicants say that on 19 June 2024, the committee met and discussed Airbnb with respect to Lot 602 and another lot in the scheme. They say the consensus was that short-term letting should not be permitted at the scheme.
• [17] On 30 July 2024, following the applicants request for the same, the committee emailed the applicants its reasons for opposing short-term letting at the scheme. The committee raised the following concerns:
  • The building not being zoned or registered for such usage.
  • Concerns regarding security of the scheme with increased numbers of persons having keys/fobs.
  • Increased damage to common property as a result of short-term letting guests.
  • Insurance premiums increasing for change of use.
  • Additional wear and tear on common property from short-term letting guests.
  • Nuisance to other residents and improper use of common property for example parties being held in the pool area.
  • Building rates increasing if the building is zoned for short-term letting which would be unfair to owners who do not engage in this use.
  • Costs to apply to council for registration of short-term letting.
• [18] The applicants say that on 22 August 2024, the body corporate manager emailed them information about insurance saying that if the percentage of short-term rentals at the scheme were to go over 20%, then the scheme's insurance premiums would significantly increase.
• [19] The applicants say they subsequently submitted a motion for inclusion on the scheme's 2025 AGM agenda which sought the body corporate's consent for them to make a material change of use application allowing Lot 602 to be used for short-term accommodation. This motion read as follows:

MOTION NO. 12 CONSENT TO DEVELOPMENT PERMIT APPLICATION

That the Body Corporate resolves to consent to the owners of lot 602 at the scheme (Lot 602) making the attached application for a development permit for material change of use for short-term accommodation (DP) (Application), supported by the attached Town Planning Report (Report).

• [20] The motion included the following explanatory note:

Motion 12: CONSENT TO DEVELOPMENT PERMIT APPLICATION

Lot 602 was used for short-term (3 months or less) accommodation and continues to be used for holidays by Mark and Ingrid.

A DP [development permit] is required to resume the short-term accommodation.

The consent of the body corporate is required for the Application.

An operational plan (Appendix B to the Report), which covers matters such as limits on guest numbers and the use of outdoor spaces and parking, supports the Application and demonstrates how the use will operate and avoid imposing adverse amenity impacts on occupiers at the scheme.

Mark and Ingrid are very concerned to ensure that the use has no impact on the common property and other occupiers, as was the case when Lot 602 was previously used for short-term accommodation.

Mark and Ingrid are unable to identify any costs that the body corporate will need to incur related to the Application.

The authorisation must be by ordinary resolution (more votes for than against) at a general meeting of the Body Corporate.

• [21] Along with Motion 12, the applicants say they provided a letter addressing the concerns the committee had previously raised with them. And, prior to the AGM, they emailed a circular to all owners in the scheme providing them with the committee's concerns and the applicants' response addressing the concerns.
• [22] Motion 12 was defeated with 37 votes against the motion and only 5 votes in favour. The applicants say the decision not to pass Motion 12 was unreasonable.

• [23] The committee, on behalf of the body corporate, denies that the decision not to pass Motion 12 was unreasonable. It says the Sea Palm Beach building is not zoned for short-term accommodation and the by-laws prohibit it. It says despite this, the applicant unlawfully operated Lot 602 as short-term accommodation in contravention of the local council laws and the scheme's by-laws.
• [24] The committee says it took prompt action to inform the applicants and the GCCC of the unlawful use of Lot 602 as short-term accommodation. The committee says the applicants subsequently sought the body corporate's approval to lodge a change of use application with the GCCC. However, it points out that motion was overwhelming defeated and says owners do not want short-term accommodation to be permitted at the scheme.
• [25] The committee says it has received numerous questions and concerns from lot owners about the applicants' change of use application and, it summarises the particular concerns which have been raised. Firstly, it says lot owners have concerns that short-term accommodation introduces a high turnover of guests and this brings heightened security risks. It says the applicants proposed a 'KeyNest' key management system for Lot 602. However, they did not particularise what this system is or how it works. It says the applicants did not sufficiently deal with this concern.
• [26] Secondly, the committee says lot owners are concerned that short-term guests are more likely to violate by-laws, such as causing noise disturbances and damage to common property. It says there are also concerns that increased use from short-term guests will accelerate the wear and tear on shared facilities. It says previous incidences of by-laws breaches by short-term guests support these concerns. The committee says the applicants failed to provide any information on processes or strategies to prevent breaches from occurring or how issues would be dealt with if they did arise.
• [27] Thirdly, the committee says Sea Palm Beach was established as a premium owner-occupied residential community, as evidenced by historical marketing materials and the scheme's by-laws. It says lot owners are concerned that short-term accommodation would fundamentally alter this established character and have a negative impact on the permanent residents at the scheme. The committee says the applicants have not adequately dealt with this concern.
• [28] Fourthly, the committee says the building's insurance policies do not cover incidents involving short-term guests and lot owners are concerned that allowing short-term accommodation at the scheme may increase risk exposure and insurance premium hikes. The committee says there are also concerns that approval of the application could lead to more units engaging in short-term letting and exacerbating the risks. The committee says the applicants have not adequately dealt with this issue.
• [29] In addition to the above, the committee says lot owners have previously experienced issues with short-term accommodation being unlawfully operated at the scheme. It explains it has received complaints in the past about short-term guests causing noise and property damage, storing luggage on common property and guests being locked out of their rental unit. It says many lot owners have ongoing concerns about short-term letting and the applicants have failed to adequately address the issues to give lot owners sufficient confidence to vote in favour of the motion consenting to the change of use application.
• [30] The committee says the body corporate has acted reasonably and considered all aspects of the applicants' proposal. It says the decision of the majority of lot owners should be respected and maintained.

• [31] All 16 of the owners who made submissions on this dispute did not support Lot 602 being used as short-term accommodation. Various reasons were given by the owners but the key themes included non-compliance with the by-laws, increased risk of damage to common property, higher building rates and insurance premiums, nuisance and noise, security risks and the inappropriate use of a residential building. Many owners noted that the scheme does not have an on-site manager who could deal with issues if they were to arise.

• [32] The applicants say that as soon as they received the message from the building manager advising them that short-term letting was not allowed, they amended their listings for the unit setting a minimum stay of more than 90 days. They say they also took steps to obtain the required consent from the GCCC.
• [33] The applicants say that where lot owners had raised complaints about short-term letting in relation to other lots in the scheme, they are unable to address those. They deny that the use of Lot 602 as short-term accommodation has resulted in multiple complaints, including damage to common property and breaches of the scheme's by-laws. They say the body corporate's submission contains no evidence to support these serious allegations and it seems the body corporate is conflating complaints in respect of other lots with Lot 602.
• [34] The applicants say they have addressed the concerns raised by owners about how the short-term accommodation will be conducted with respect to Lot 602 including the issues of security, increased damage and nuisance. The applicants say the body corporate's submission does not say how or why the applicants have not addressed the relevant issues raised by lot owners. They say the submission merely alleges they had not provided sufficient detail, without saying what further detail is sought.
• [35] The applicants say that, regardless of the intention of the scheme's developer, or the reasoning of owners as to the purchase of their lot, the scheme is not restricted to owner-occupiers over a certain age, owner-occupiers generally or long-term occupiers (provided there is approval from GCCC for short-term accommodation).
• [36] The applicants submit that the test for unreasonableness is not a question of the percentage of owners that voted against Motion 12. Rather, it is a consideration of the relevant factors that have a rational bearing on the issue.

• [37] The issue in this application is whether the body corporate acted unreasonably in refusing to pass Motion 12 that would have confirmed its consent for the applicants to make a material change of use application to the GCCC to allow them to use Lot 602 as short-term accommodation.
• [38] A body corporate is required to act reasonably when carrying out its general functions, including making, or not making, a decision.[3] Numerous judicial decisions have considered the test for reasonableness. The cases emphasise that what is reasonable is a question of fact for the decision-maker to determine, and what is required is a careful weighing up of all the relevant factors while not taking irrelevant factors into account.[4] The High Court has noted that the standard of reasonableness is objective and should take into account all the relevant factors which exist at the time the decision is made.[5]
• [39] If I am satisfied the body corporate has failed to act reasonably in making its decision on Motion 12, I may make an order giving effect to the motion.[6] However, it is not my role as an adjudicator to take over the body corporate's decision-making function or to impose my own view on what the body corporate ought to have decided. I may only set aside the decision on Motion 12 if I am satisfied the body corporate acted unreasonably in coming to it or if I consider the decision is legally unreasonable.[7]

• [40] It is clear the majority of owners in Sea Palm Beach are against the idea of short-term letting being permitted at the scheme. However, I need to consider whether, in reaching its decision on Motion 12, the body corporate acted reasonably. That is, did it properly weigh up the relevant factors which applied at the time the decision was made and not take irrelevant factors into consideration.
• [41] Various reasons were given by owners for not wanting to support Motion 12, the key themes being concerns about heightened security risks, non-compliance with by-law laws, increased risk of damage to the common property, higher insurance premiums and the inappropriate use of a residential building. I will go through each of these issues in turn.
• [42] Firstly, I will deal with the concerns raised about security at the scheme. The committee explains owners are concerned that short-term accommodation introduces a high turnover of guests. I understand owners are concerned about the number of short-term guests who will be provided with key fobs to access the building and that this would heighten security risks.
• [43] The applicants say that before the AGM took place, they sent an email to all lot owners attaching a document which addressed this concern. I have reviewed this document and it explains the applicants will use a secure key exchange service called 'KeyNest'. They said this system offers real-time notifications for key exchanges and provides a custom code for each guest so they can track which guest has access to the key fobs at any point in time. They further explained that the key fobs can be disabled quickly by the property manager if one is misplaced.
• [44] I have carefully considered all the submissions made on this issue. Owners have expressed that very little information was provided about the 'KeyNest' system and how this would work in practice. I note that in their submissions to this office, the applicants have provided a more detailed explanation about how the 'KeyNest' system works. However, this information was not available to owners at the time they made their decision on Motion 12. Ultimately, I do not consider that security was an irrelevant consideration which the body corporate was unable to take into account in coming to its decision on Motion 12. There is nothing in the materials before me which suggests this was not a genuine concern.

1. Secondly, I understand owners are concerned about short-term guests not complying with the scheme's by-laws and creating a nuisance such as having loud parties or causing damage to the common property. Many owners have voiced that the scheme has no onsite manager that could deal with any issues caused by short-term guests in the event they arose. I further understand there have previously been instances at the scheme where short-term guests have failed to comply with the scheme's by-laws.[8]

• [46] The applicants say they also addressed this issue before the AGM. They explained they would clearly communicate the body corporate rules to any guests staying in Lot 602. In addition, if the council allowed them, they would install a decibel monitor in the unit to monitor noise. They also indicated they would have a local person managing the apartment who could respond to any situations that arose.
• [47] Like for security, I do not consider concerns about short-term guests being unaware of or not complying fully with the scheme's by-laws is an irrelevant consideration that the body corporate is unable to take into account. From the materials before me, it appears there have been instances of short-term guests staying at the scheme who have not complied with the scheme's by-laws. This has led owners to have genuine concerns about this being a possibility if short-term guests are permitted at the scheme.
• [48] Thirdly, I understand owners are concerned that allowing short-term accommodation at the scheme will have a negative effect on the scheme's character. The committee says Sea Palm Beach was marketed as a premium owner-occupied residential community. It says owners are concerned that allowing it to be used for short-term accommodation will fundamentally alter the character of the scheme and negatively impact the permanent residents.
• [49] The applicants say they also addressed this issue before the AGM. They say they explained the scheme is located in the 'central zone' in the city plan and the land use for this area anticipates visitor accommodation. They say the planning rules identify short-term accommodation as being assessable for this area and this is why they are submitting their application for approval to use their lot for this purpose. The applicants say accordingly, this is not a valid reason to withhold consent.
• [50] I do not agree it follows that just because the land use of a particular area is anticipated for visitor accommodation in the town planning rules means it would automatically be unreasonable for owners to oppose an application to use it for such. The council requires that a body corporate consent to the making of a change of use application. In my view, the body corporate was entitled to consider the proposal having regard to its statutory obligation to administer the common property in the interests of all owners.[9] I am not satisfied the established character of the scheme is an irrelevant consideration owners were not able to take into account in deciding whether or not they want to consent to an application to seek approval for a lot in the scheme to be used as short-term accommodation.
• [51] Fourthly, I understand owners are concerned that insurance premiums will increase due to the changed use of the scheme. The committee says approval of this application could lead to more units engaging in short-term letting and further increases to insurance.
• [52] The applicants say they also addressed this issue before the AGM. They say the scheme's insurance broker explained there was usually little to no increase in insurance premiums where only one lot in the scheme is used for short-term accommodation. The broker went on to say that if the percentage of short-term lets in the scheme went over 20%, then this would be more likely to cause an increase in the scheme's insurance premiums.
• [53] I have carefully considered the materials in relation to this issue. While I do not consider insurance implications to be an irrelevant consideration, it appears that some owners may have conflated the applicants' application to use Lot 602 for short-term accommodation with the possibility that further owners will want to do the same thus leading to a significant increase in insurance premiums. That is not something I consider would be appropriate to give weight to in considering Motion 12.
• [54] Fifthly, I understand owners are concerned about the risk of additional wear and tear on common property as a result of short-term letting guests. The committee says increased traffic from such guests accelerates wear and tear on shared facilities leading to higher maintenance costs for all lot owners. Owners argued that multiple short-term guests will bring luggage in and out of the unit causing wear and tear on the carpet and cleaners will need to service the unit after each use leading to even more traffic in and out of the unit.
• [55] The applicants say they also addressed this issue before the AGM. They say they explained the intended occupancy for the short-term accommodation would have no greater an impact than a long-term rental. They say the occupancy of Lot 602 would be limited to a maximum of 4 guests at any time with an anticipated occupancy rate of around 70% over a year. They explained the use of common areas extends to all occupiers, whether long or short-term guests and any concerns about additional wear and tear on the common property is hypothetical and unfounded.
• [56] On this issue I agree with the applicants that short-term guests are unlikely to cause additional wear and tear on common property. There is no evidence in the materials before me which demonstrates that permanent residents would come and go from units less than short-term guests. I am not persuaded the example scenarios put forward by owners raise genuine concerns that short-term guests would accelerate wear and tear of the common property in the ways which have been suggested.

• [57] In this case, the body corporate considered many factors in coming to its decision on Motion 12. While I note it has taken a couple of irrelevant considerations into account, it is clear there were other relevant considerations the body corporate was entitled to have regard to. Overall, I am not satisfied the irrelevant factors which were taken into account were determinative of the issue. That is, if they had not been taken into account that the body corporate would have reached a different decision on Motion 12.
• [58] Ultimately, the applicants have failed to persuade me that body corporate acted unreasonably in coming to its decision on Motion 12. Accordingly, I have dismissed the applicants' application.

[1] Section 248(3)(e) of the Act

[2] Section 276(1)(a) and (b) of the Act

[3] Section 94(2) of the Act

[4] Luadaka v Body Corporate for The Cover of Emerald Lakes [2013] QCATA 183 applying Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission [1997] FCA 1311; Secretary, Department of Foreign Affairs and Trade v Styles [1989] FCA 342

[5] Per Nettle J in Ainsworth v Albrecht [2016] HCA 40 (12 October 2016) at paragraph 101

[6] See Item 24 in Schedule 5 of the Act

[7] See Body Corporate for Beaches Surfers Paradise v Backshall [2016] QCATA 177

1. [8] The committee's submission sets out previous instances where short-term guests at the scheme did not comply with the scheme's by-laws. I understand none of these incidents were in relation to guests staying in Lot 602 however, they were intended to illustrate why owners are opposed to the proposal to permit short-term letting at the scheme.