Lot owner agreement as the primary decision mechanism. The regulation uses "lot owner agreement" as the recurring decision vehicle by which the body corporate approves engagements, borrowing, account arrangements, disposal or leasing of common property, acquisition or disposal of body corporate assets, establishment of voluntary plans (defect assessment, insurance), appointment of record keepers and more (for example, secs 11, 28, 29, 33, 34, 38, 39, 40, 70). Where the instrument says the body corporate "may" act only if authorised by a lot owner agreement, it places the legal power to act in the hands of whatever procedure the Act equates to a lot owner agreement (the regulation does not itself define the voting thresholds).
Specified two‑lot scheme. The entire instrument applies to a scheme limited to two lots. Many provisions are tailored to the two‑lot context: apportionment rules for contributions are proportional to contribution schedule lot entitlement (s 24); mechanisms for contribution notices allow one owner to serve the other (s 26); recovery rules make the other owner able to pay and recover from the defaulting owner (s 27); various cooperative arrangements (e.g. voluntary insurance and defect assessment plans) are optional and expressly proportionate (secs 31A-31B, 55).
Engagements. Engagements of a body corporate manager or service contractor must be in writing, specify term (start and end), any renewal options, functions and basis for payment; cannot be by by‑law or an instrument authorising representation of a lot owner; and are void if the form requirements are not met (s 12). The maximum term, including any extensions, is one year (s 13). Approvals and term starts must occur within defined timeframes (s 14).
Termination and remedial process. The body corporate may terminate engagements under statutory grounds, contract terms, or by agreement, but termination requires approval by lot owner agreement (s 16). Statutory bases include convictions for indictable offences involving fraud or dishonesty or assault, unlawful businesses supplying services to the body corporate, and unauthorised transfers of interests in the engagement (s 17). For performance‑based grounds (misconduct, gross negligence, failure to carry out duties, breach of particular disclosure duties or code of conduct), the body corporate must give a written remedial action notice (detailing the alleged breach or contravention), allow no fewer than 14 days for remedial action, and then obtain a lot owner agreement to terminate if the notice is not complied with (s 18).
Disclosure duties and sanctions. Body corporate managers must disclose, in writing before the body corporate decides to enter a contract, whenever a proposed supplier is an associate of the manager (s 19), must notify the body corporate as soon as practicable if an existing contract involves an associate of the manager that the body corporate did not previously know of (s 20), and must disclose any commissions, payments or benefits payable to the manager by third parties associated with a main contract, including monetary amounts (s 21). Each of these disclosure obligations carries a maximum penalty of 20 penalty units (secs 19-21).
Financial regimes. The regulation defines "agreed body corporate expense" as an item decided by lot owner agreement, and also treats certain legally compelled expenditures (statutory orders, adjudicator/court/QCAT orders) as agreed expenses (s 23). Contributions for agreed expenses are payable by each lot owner in proportion to contribution schedule lot entitlement (s 24). Contribution notices and timing are prescribed, including a minimum 30‑day rule where the expense notice contains no date and obligations on owners to serve contribution notices promptly (s 26). Default and recovery mechanics allow the contributing owner to pay the defaulting owner’s share and recover it as a debt (s 27).
Property and common property rules. The body corporate must maintain common property and structurally significant elements in good and structurally sound condition; where lots derive from a building format plan, the regulation allocates responsibility for boundary items such as railings, parapets, windows in boundary walls and roofing membranes, and specifies certain utility infrastructure and shower trays as the lot owner’s responsibility (s 31). The body corporate’s powers to dispose of or lease parts of common property, or to grant easements, are exercisable only if authorised by lot owner agreement and, in many cases, must be accompanied by certificates and planning approvals for registration under the Land Title Act 1994 (secs 33-34).
Insurance architecture. The body corporate must insure common property and body corporate assets for full replacement value (s 48), must insure buildings where lots are created under building or volumetric plans (s 49), must arrange single policies for buildings sharing common walls (s 50), must obtain independent valuations for replacement value at least every five years (s 51), apportion premiums according to interest schedule or reinstatement cost depending on the plan type (s 52), and must maintain public‑risk cover with minimum caps of $10m per event and per period for common property and relevant assets (s 56). The regulation allows voluntary insurance schemes for stand‑alone buildings and prescribes notification and contribution rules if such schemes are established (s 55). It sets rules on excesses, including default allocation to the lot owner for single‑lot events unless the body corporate decides otherwise by lot owner agreement (s 54).
Records and administration. The body corporate must keep a specific list of records (notices, insurance policies, engagements, lot owner agreements, financial records, valuations, etc.) and must keep certain documents in both hard and electronic form; the community management statement must be supplied in readily editable electronic form (s 67, s 68). Fees for inspection and certified documentation are prescribed in fee‑unit terms (s 73). The original owner who ceases ownership must, within two months, deliver an extensive package of documents to the body corporate, failure of which attracts penalties (s 67).
Transitional provisions. The instrument provides transitional rules preserving the effect of previous regulation actions, obligations, funds and existing insurance policies where schemes change over to this regulation (secs 77-90). These provisions ensure certain previous actions and documents remain effective under the new regime subject to specified limits.
Throughout, the regulation couples mandatory minimum standards (insurance, maintenance, timing, record‑keeping) with procedural prerequisites attaching to lot owner agreement and written notices, thereby structuring decision flows and allocating payment liabilities between the two owners.