Part 10Property management

Part 10—Property management Division 1—Powers of corporation to maintain integrity of the community scheme 101—Power to enforce duties of maintenance and repair etc (1) A community corporation may, by notice in writing to the owner of a lot, require the owner— (a) to carry out specified work in pursuance of a duty of maintenance or repair imposed on the owner by this Act or the by-laws; (b) to carry out specified work to remedy— (i) a breach of this Act or the by-laws by the owner or a former owner or an occupier or former occupier of the lot; or (ii) a situation that is likely to result in a breach of this Act or the by‑laws; (c) to carry out specified work required to be carried out on the lot by a council or other public authority. (2) Subject to subsection (4), if the owner of a lot does not comply with a requirement imposed under this section within the time allowed in the notice, a person or persons authorised by the corporation may (using such force as may be reasonably necessary in the circumstances) enter the lot and carry out the specified work. (3) A power of entry must not be exercised under subsection (2) unless the owner and the occupier of the lot have been given at least 2 days notice in writing of the proposed entry. (4) A person must not use force to enter a strata lot or a building on any other lot under subsection (2) except pursuant to an order of the Magistrates Court authorising the entry. (4a) Despite any other provision of this section, an officer of a community corporation or a person or persons authorised by a community corporation may, if satisfied that urgent action is necessary to avert a risk of death or injury or significant damage to property, enter a lot (using such force as may be reasonably necessary in the circumstances) and carry out such work as is reasonably necessary to deal with the risk. (4b) A person proposing to enter a lot in accordance with subsection (4a) must give such notice (if any) to the owner and occupier of the lot as he or she considers reasonable in the circumstances. (5) Any cost reasonably incurred by the corporation in having work carried out under this section may be recovered as a debt from the owner of the lot. (6) Where— (a) — (i) the owner of a lot incurs costs in complying with a notice under subsection (1); or (ii) the corporation recovers costs from the owner of a lot under subsection (5); and (b) the circumstances out of which the work was required are attributable to the act or default of another person, the owner of the lot may recover those costs from that other person as a debt. (7) Where a community parcel is subject to a leaseback arrangement, this section applies to, and in relation to, the lessee instead of the owners of the community lots. 102—Alterations and additions in relation to strata schemes (1) Subject to subsection (1a), a person must not carry out prescribed work in relation to a strata lot unless the person is authorised to do so— (a) where each of the lots comprised in the strata scheme is used, or is intended to be used, solely or predominantly for non-residential purposes—by the by‑laws of the strata scheme; or (b) in any other case—by special resolution of the community corporation. (1a) Subsection (1) does not apply to— (a) prescribed work carried out in compliance with a direction under section 23 of the Housing Improvement Act 1940; or (b) prescribed work carried out on a lot in a strata scheme consisting only of 2 lots if the work is approved development under the Planning, Development and Infrastructure Act 2016. (1b) Where a person carries out prescribed work referred to in subsection (1a)(b), the corporation may, by notice in writing to the owner of the lot, require the owner to carry out, within a reasonable period fixed in the notice, specified work to remedy any structural deficiency caused by the work. (2) Where a person acts in contravention of subsection (1), the corporation may, by notice in writing to the owner of the lot, require him or her to carry out, within a reasonable period fixed in the notice, specified work— (a) to remedy any structural deficiency caused by the work; or (b) to restore the lot to its previous state. (3) If the owner of a lot does not comply with a requirement imposed under this section within the time allowed in the notice, a person or persons authorised by the corporation may enter the lot and carry out the specified work. (4) A power of entry must not be exercised under subsection (3) unless the owner of the lot has been given reasonable notice of the proposed entry. (5) A person may only use force to enter a lot under subsection (3) pursuant to an order of the Magistrates Court authorising the entry. (6) Any cost reasonably incurred by the corporation in having work carried out under this section may be recovered as a debt from the owner of the lot. (7) In this section— prescribed work in relation to a lot means— (a) the erection, alteration, demolition or removal of a building; (b) the alteration of the external appearance of a building. Division 2—Insurance 103—Insurance of buildings etc by community corporation (1) A community corporation must insure— (a) the buildings and other improvements (if any) on the common property; and (b) in the case of a strata scheme—the building or buildings divided by the strata plan. (2) The insurance— (a) must be against risks that a normally prudent person would insure against and risks that are prescribed by regulation; and (b) must be for the full cost of replacing the buildings or improvements with new materials; and (c) must cover incidental costs such as demolition, site clearance and architect's fees. (3) In the event of a claim, any excess or shortfall resulting from under insurance must be met by the corporation. 104—Other insurance by community corporation (1) A community corporation must insure itself— (a) against risks that a normally prudent person would insure against; and (b) against such other risks as are prescribed by regulation. (2) The amount of the insurance must be the amount that a normally prudent person would insure for but in the case of bodily injury must be at least ten million dollars or such greater amount as is prescribed by regulation. (3) A community corporation (other than a corporation of a kind prescribed by regulation) must maintain fidelity guarantee insurance complying with the requirements prescribed by the regulations. (4) The Minister may, by notice in the Gazette, exempt community corporations from compliance with subsection (3) for such period as the Minister thinks fit. (5) An exemption granted by the Minister— (a) may be subject to conditions specified in the notice of exemption; and (b) may be varied or revoked by the Minister at any time by subsequent notice in the Gazette. 105—Application of insurance money A community corporation must, subject to a unanimous resolution to the contrary, apply money received by it under a policy of insurance and any excess or shortfall that it is required to meet in making good the loss in respect of which the money was paid. 106—Insurance to protect easements (1) Where support or shelter required by an easement pursuant to this Act is provided by a building situated on a lot, the owner of the lot must insure the building against risks that a normally prudent person would insure against for the full cost of replacing the building with new materials and must insure against incidental costs such as demolition, site clearance and architect's fees. (2) A person who is required by subsection (1) to insure a building must provide such evidence as is required by the regulations of his or her compliance with that requirement— (a) to the community corporation as soon as practicable after complying with that requirement and after any subsequent change to the terms and conditions of the insurance policy; and (b) if a request is made by an owner or prospective owner, or the registered mortgagee or prospective mortgagee, of a community lot or a development lot that benefits from the easement—to the person making the request within 5 business days after the making of the request. 107—Offences relating to failure to insure (1) The developer must take out the insurance required by this Division in respect of a community scheme for the benefit of the community corporation before the plan of community division is deposited in the Lands Titles Registration Office and must maintain that insurance in force for at least 6 months after the deposit of the plan. (2) A person who owns a community lot must not enter into a contract to sell the lot unless— (a) the insurance required to be taken out under this Division by or on behalf of the community corporation has been taken out and is in force; or (b) the owner, or a person acting on behalf of the owner, has, before the purchaser signs the contract, served personally on the purchaser a written statement that the insurance required to be taken out under this Division by or on behalf of the corporation has not been taken out or is no longer in force. (3) The owner of a secondary lot must not enter into a contract to sell the lot unless— (a) the insurance required to be taken out under this Division by or on behalf of the primary community corporation has been taken out and is in force; or (b) the owner, or a person acting on behalf of the owner, has, before the purchaser signs the contract, served personally on the purchaser a written statement that the insurance required to be taken out under this Division by or on behalf of the primary corporation has not been taken out or is no longer in force. (4) The owner of a tertiary lot must not enter into a contract to sell the lot unless— (a) the insurance required to be taken out under this Division by or on behalf of the primary and secondary corporations has been taken out and is in force; or (b) the owner, or a person acting on behalf of the owner, has, before the purchaser signs the contract, served personally on the purchaser a written statement that the insurance required to be taken out under this Division by or on behalf of the primary and secondary corporations has not been taken out or is no longer in force. 1 It is a defence to a charge of an offence against this Act for the defendant to prove that the alleged offence was not committed intentionally and did not result from any failure on the part of the defendant to take reasonable care to avoid the commission of the offence—see section 153. 108—Right to inspect policies of insurance (1) The owner, and a prospective owner, of a community lot or a development lot and the registered mortgagee, and a prospective mortgagee, of a community lot or a development lot are entitled to inspect policies of insurance that are in force and were taken out by or on behalf of the community corporation. (2) The owner, and a prospective owner, of a secondary lot or a development lot in a secondary scheme and the registered mortgagee, and a prospective mortgagee, of a secondary lot or a development lot in a secondary scheme are entitled to inspect policies of insurance that are in force and were taken out by or on behalf of the primary community corporation. (3) The owner, and a prospective owner, of a tertiary lot or a development lot in a tertiary scheme and the registered mortgagee, and a prospective mortgagee, of a tertiary lot or a development lot in a tertiary scheme are entitled to inspect policies of insurance that are in force and were taken out by or on behalf of the primary or secondary corporation. (4) A request made under this section for the inspection of policies of insurance must be complied with within 5 business days after the making of the request. 109—Insurance by owner of lot (1) Nothing in this Act limits the right of the owner of a lot to effect insurance in respect of the lot. (2) A contract of insurance may be entered into by the owner of a lot in respect of damage to the lot or to a building or other improvement on the lot for an amount equal to the amount secured at the date of the contract by mortgages over the lot. (3) Where a contract of insurance of the kind referred to in subsection (2) is in force— (a) payment must be made by the insurer under the contract to the mortgagees whose interests are noted in the contract in order of their respective priorities, subject to the terms and conditions of the contract; (b) subject to the terms and conditions of the contract, the insurer is liable to pay under the contract— (i) the amount stated in the contract; or (ii) the amount of the damage; or (iii) the amount sufficient, at the date of the payment, to discharge the mortgages noted in the contract, whichever is the least amount. (4) Where the amount so paid by the insurer equals the amount necessary to discharge a mortgage over the lot, the insurer is entitled to an assignment of that mortgage and where the amount is less than the amount necessary to discharge a mortgage over the lot, the insurer is entitled to obtain from the mortgagee a transfer of a proportion of the mortgagee's interest in the mortgage equal to the proportion that the amount of the payment bears to the amount owing under the mortgage immediately before the payment. (5) Money received under any such contract of insurance is not liable to be brought into contribution with any other money received under another contract of insurance, except where the other contract of insurance— (a) is in respect of damage to the same lot; and (b) relates to the same mortgage debt. Division 3—Easements 110—Easements (1) A community corporation may, if authorised to do so by a unanimous resolution of the corporation, grant an easement over the common property or consent to the extinguishment of an easement that was granted for the benefit of the common property. (2) A corporation may, by ordinary resolution, accept the grant of an easement for the benefit of the common property or consent to the extinguishment of an easement over the common property. Division 4—Leasing of common property and lots 111—Limitations on leasing of common property and lots (1) A right to occupy the whole or a part of the common property to the exclusion of all or some of the owners or occupiers of the community lots— (a) may be granted by the corporation pursuant to a unanimous resolution of the corporation; and (b) must not be granted contrary to the scheme description. (2) A right to occupy the whole or a part of the common property or a lot— (a) must not be granted contrary to the by-laws;1 and (b) in the case of the common property or a lot in a secondary scheme—must not be granted contrary to the by-laws of the primary scheme; and (c) in the case of the common property or a lot in a tertiary scheme—must not be granted contrary to the by-laws of the primary or secondary scheme. 1 The only restriction that the by-laws can impose in relation to the leasing or occupancy of a lot relates to short term occupancy—see section 37(2).