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What are the obligations of a building owner/occupier?
If you are an owner, or a business or a person, that is occupying, or managing a building in Queensland, you have a legal obligation to ensure the safety of any person in that building in the event of a fire or other emergency.
What is an Occupier’s Statement?
An Occupiers' Statement is a declaration from the Building Owner and Occupier to the Commissioner Queensland Fire and Emergency Services (QFES) that all fire installations at the building are being maintained and that all critical defects notices have been rectified.
What is a Fire & Evacuation Plan?
A Fire and Evacuation Plan details the different policies and procedures for the property when managing and responding to emergencies.
How often must a Fire & Evacuation Plan be reviewed?
Under Queensland legislation, a Fire & Evacuation Plan must be reviewed on an annual basis.
What is a Fire Safety Advisor?
A Fire Safety Advisor has the responsibility to:
- Be familiar with all aspects of building fire safety.
- Provide advice to the occupier to ensure appropriate emergency planning.
- Provide advice to the occupier to ensure appropriate instruction is carried out at the prescribed times and intervals.
When is a Fire Safety Advisor needed?
For any building that is more than 25 meters in height, or where there are 30 or more workers on site it is a legal requirement to appoint a Fire Safety Advisor.
What is an Evacuation Diagram?
An Evacuation Diagram consists of a pictorial representation of the floor or area of a building and other relevant emergency response information. These diagrams are intended to provide emergency and evacuation information for occupants and visitors and contain information such as exit lights and exit routes, assembly points/areas and other emergency information.
Where must evacuation diagrams be displayed?
Under legislation a building must have evacuation diagrams displayed in common areas that clearly detail the process to follow in the event of a fire of other type of emergency. This enables occupants to be safely directed out of a building and to a designated emergency assembly area.
Who is required to provide the body corporate’s first Insurance Valuation?
The Body Corporate and Community Management Act requires that the Original Owner (Developer) provides the body corporate with their initial Insurance Valuation.
Will the Original Owners construction cost information suffice as the first Insurance Valuation?
The Body Corporate and Community Management Regulations requires that a body corporate must be insured for full replacement value.
Regardless of the original construction cost, to ensure you are properly insured for an insurable event the estimate must include; escalation, demolition/removal of debris, re-design fees and local authority application fees. These are all significant costs over and above the construction cost.
What happens if an updated Valuation changes what our scheme is insured for?
If you receive an updated Insurance Valuation that proves that the Body Corporate is under or over-insured, the Body corporate should immediately either increase or decrease the Building Sum Insured to reflect the amount contained in the Valuation.
Pursuant to the Body Corporate and Community Management Act 1997 (Qld) and its associated Regulation Modules, it is the owners' statutory duty to ensure the building is insured for its full replacement value including allowances for removal of debris and architects' fees and other costs incidental to the replacement of the Building/Common Property.
Any increase may generate an additional premium which is payable by the Body Corporate.
When the Building Sum Insured is decreased there may be a refund of overpaid premium which is refunded by the Insurer back into the Body Corporate bank account. Such refund is calculated from the date that the Insurer receives instruction to reduce the Building Sum Insured to the next renewal date.
Furthermore, in the event of total destruction, if the property is over-insured the Body Corporate will not be entitled to the additional monetary amount.
How often do I need to update my Insurance Valuation?
The regulations require that a valuation be carried out a minimum of every 5 years.
What is the QLD WHS Act 2011 (WHS Act)?
Every state in Australia has hundreds of governing acts of parliament (laws). The QLD WHS Act 2011 governs health and safety in all Queensland workplaces and is referred to in a court of law in the event of a prosecution.
What’s the difference between the WHS Act & The WHS Regulation?
Act – outlines your broad responsibilities. Regulations – set out specific requirements for particular hazards and risks, such as noise, machinery, and manual handling. Codes of practice – provide practical information on how you can meet the requirements in the Act and Regulations.
What is a Person Conducting a Business or Undertaking (PCBU)?
A 'person conducting a business or undertaking' (PCBU), who is usually the employer, has the primary duty of care under the Work Health and Safety Act 2011 (WHS Act) to ensure the health and safety of workers and others at the workplace, so far as is reasonably practicable.
Is a body corporate a PCBU?
Under the WHS Act, a body corporate which uses its common areas for residential purposes only and does not employ a worker under a contract of service is not regarded as a PCBU.
However, if the body corporate engages any worker as an employee, it will be treated as a PCBU and owe duties as a PCBU, and/or as a person with management and control of a workplace (PWMC), under the WHS Act.
What is a Worker?
Under Work Health & Safety legislation the definition of a 'worker' is a person who carries out work in any capacity for a person conducting a business or undertaking.
What are the duties of a body corporate when defined as a PCBU?
A body corporate, defined as a PCBU, owe the following duties as a PCBU, and/or as a person with management and control of a workplace (PWMC), under the WHS Act:
- ensuring, as far as reasonably practicable, the health and safety of its workers in the workplace
- ensuring, as far as reasonably practicable, that the workplace, the means of entering and exiting the workplace, and anything arising from the workplace do not pose risks to the health and safety of any person
- ensuring, as far as reasonably practicable, that the fixtures, fittings, and plant do not pose any risks to the health and safety of any person.
What does due diligence mean?
Due diligence includes taking reasonable steps to:
- acquire knowledge and keep up-to-date about WHS matters.
- understand the business, including WHS hazards and risks.
- ensure the business has the right resources and processes in place, and uses those resources and processes to eliminate or minimise WHS risks.
What is a Sinking Fund?
The sinking fund (also called a capital works fund) is a body corporate administrative fund financed by owner levies and is used to pay for planned future capital expenses such as painting, roof repairs, lift maintenance and any major improvements.
In Queensland, each body corporate is required to have a 10-year sinking fund forecast in place.
What is a Sinking Fund Forecast?
A Sinking Fund Forecast is a document that estimates likely capital works around the strata scheme, within a specific time frame, and then calculates how much to collect from lot owners to fund those works over time.
Does my building have to update our Sinking Fund Forecast regularly?
Sinking Fund Forecasts should be updated at least every 3 years to take into account changing market conditions. It is also advisable to update your forecast whenever major works, painting etc is carried out to retain a realistic reserve and contribution levy.
What type of expenses can be paid for by the Sinking Fund?
Future capital expenses such as painting, roof repairs, lift maintenance and any major improvements.
This is separate to the Administration fund which is used for the ongoing maintenance, cleaning and insurance of all common areas.
What is a Tax Depreciation Schedule?
A Tax Depreciation Schedule is a report that outlines all available tax depreciation deductions for a residential investment property or commercial building. Most properties, new and old, have depreciation available.
A depreciation schedule will project capital works deductions and plant and equipment depreciation for the life of the property. This can subsequently be claimed in your tax return each financial year to help you save thousands.
Can I use the sample estimate that my developer gave me in my Tax Return?
No. The sample estimate is just a sample. It is probably not specific to your property and may have items not included or contain the wrong measurements. The sample schedules are often just a marketing document to ‘illustrate’ what an investor might expect in depreciation if they were to obtain a full schedule.
Don’t Tax Depreciation Schedules only apply to new properties?
Tax Depreciation is available on all properties, both new and old. Both Capital Allowance depreciation on the building itself and Plant and Articles depreciation are available on properties built after 1985 (the cut-off year as determined by the ATO).
Although properties built prior to 1985 do not qualify for the Capital Allowance component of depreciation, all improvements and renovations made to the property since its construction, however minor, can be depreciated from the date they were completed.
Can I claim the renovations in my property if I didn’t arrange them?
Renovations done prior to buying a property are still eligible to be claimed for depreciation. Depreciation is based on the age of the property and the age of the fixtures and fitting
Do I need a new Tax Depreciation Schedule every tax year?
No. A Tax Depreciation Schedule, prepared by Strata Umbrella, will provide yearly calculations for the full remaining depreciable lifetime of the property (up to 40 years).
The only time we recommend that a client updates their Tax Depreciation Schedule is if they make major structural changes to the property (e.g. an extension), or if they undertake a major renovation where many of the existing fixtures and fittings are replaced.
As the owner of a unit or apartment, am I entitled to claim Depreciation on Body Corporate or Common Areas in the complex?
Yes. As an investor in a complex or apartment building, you also own a percentage of the Body Corporate or Common Areas. Your Tax Depreciation Schedule will include depreciation of all Body Corporate or Common Areas for your complex, based on your percentage ownership of same.