Content of Building Management Statement

The building management statement may only have the content allowed under the Land Titles Act Section 54C. It must have provisions that deal with the following necessities

• The supply of services to the lots
• The rights of owners, occupiers and invitees to access the lots.  These rights are effective like easements and avoid the need for easements (Land Titles Act  Section 54C(3))
• The rights of each of the lots to rely on the other lots for support and shelter
• The obligations of each of the parties to make appropriate insurance arrangements.

In addition to the mandatory provisions set out above, there are also the following optional matters that may be dealt with under the building management statement

• The establishment and operation of a management group to make decisions relevant to the lots
• Financial matters, so that the lots have collected sufficient funds to spend on their joint responsibilities
• Maintenance of the lots and any shared areas
• Aesthetic matters that are controlled by an architectural or landscaping code
• Dispute resolution for the owners in respect of issues affecting the building and the building management statement
• Administration, repair, maintenance, operation, use and replacement for common services and facilities
• General administrative arrangements
• Arrangements for accomplishing extinguishments of the statement.

Experience has shown that most disputes arise from a Building Management Statement that has minimal consideration for the optional matters mentioned above.  Developers when utilising the Building Management Statement structure can be proactive by ensuring a substantial part of the consultative process focus is on the Building Management Statement and in particular the cost sharing methodologies and the practical administration to facilitate the cost sharing.

The concept of a BMS can be very useful when designing a complex property development that contains volumetric lots. For instance, two high-rise towers (one with 40 floors and four lifts and the other with 50 floors and 2 lifts) may be built above four levels of shops and other retail facilities. All three may share a basement. If all three components share access ways and the basement for parking, then they would need to regulate their relationship through the use of a BMS.  Since the shops are very different to the towers and may be sold as freehold lots there is no need to include them in a Body Corporate. As the two high rise towers have different physical structures, it is appropriate that they are each in a separate body corporate. The following diagram illustrates this arrangement.