Chapter 3 Administration of a scheme

This Chapter provides for matters relating to the administration of a scheme, including:

(a) the administration of the body corporate; and

(b) the resolution of disputes arising from the operation of the scheme; and

(c) the rules governing body corporate managers, service contractors, caretaking service contractors and letting agents; and

(d) the management modules (which are rules about the management of the scheme); and

(e) the by-laws (which set out the rights and obligations of the body corporate, unit owners and unit occupiers).

(1) There must be a committee of management (the committee) for:

(a) a higher scheme; or

(b) a basic scheme with at least 4 unit owners; or

(c) a basic scheme with less than 4 unit owners if the body corporate of the scheme decides, by a resolution without dissent, to form the committee.

(2) The committee is composed of 1 or more committee members elected in accordance with the management module.

(3) A committee member must be:

(a) a unit owner that is an individual; or

(b) an individual appointed by a unit owner that is a body corporate.

(4) The management module must provide for:

(a) the term of office of a committee member; and

(b) the functions and powers of the committee; and

(c) the procedural matters relating to the committee.

(1) Except as otherwise provided by the management module, a decision of the committee is a decision of the body corporate.

(2) The committee must:

(a) implement a lawful decision of the body corporate; and

(b) act reasonably in exercising the committee's powers and performing the committee's functions.

(3) A decision of a person who honestly and reasonably believes he or she is acting as a committee member has effect as a decision of a committee member.

(4) A decision of the committee prevails to the extent to which it is inconsistent with a decision of the body corporate manager.

(1) A person is not civilly liable for an act done or omitted to be done by the person in good faith in the exercise of a power or performance of a function as a committee member.

(2) In this section:

exercise, of a power, includes the purported exercise of the power.

performance, of a function, includes the purported performance of the function.

(1) The code of conduct in Schedule 1, Part 1 applies to a committee member.

(2) A person who breaches the code of conduct may be removed as a committee member in accordance with the management module.

(1) The body corporate and the committee of a scheme:

(a) must hold meetings as required by the management module; and

(b) may hold other meetings as decided by the body corporate or committee (as appropriate).

(2) The management module may provide for the meetings and voting procedures for the body corporate and committee, including, for example:

(a) the appointment of a proxy for a meeting; and

(b) the counting of votes for a resolution.

(1) Subsections (2) to (7):

(a) apply for voting about a resolution of the body corporate at a meeting of the body corporate; and

(b) apply with changes specified in the management module:

(i) for voting about a resolution of the body corporate otherwise than at a meeting; or

(ii) for voting about a resolution of the committee; or

(iii) for a specified purpose of this Act.

(2) Only 1 vote may be exercised for each unit.

(3) Except as otherwise provided by the management module, voting may be made:

(a) personally or by proxy; and

(b) by show of hands or in writing.

(4) A motion is passed by a unanimous resolution if the number of the votes counted in favour of the motion is equal to the total number of the units.

(5) A motion is passed by a resolution without dissent if no vote is counted against the motion.

(6) A motion is passed by a majority resolution if the number of the votes counted in favour of the motion exceeds 50% of the total number of the units.

(7) A motion is passed by an ordinary resolution if:

(a) both of the following conditions are satisfied:

(i) this paragraph applies under the management module;

(ii) the contribution entitlements of the units for the votes counted in favour of the motion exceed the contribution entitlements of the units for the votes counted against it; or

(b) otherwise – the votes counted in favour of the motion are more than the votes counted against the motion.

(8) A motion is passed by a special resolution if:

(a) at least two-thirds of the votes cast are counted in favour of the motion; and

(b) the contribution entitlements of the units for the votes counted against the motion do not exceed 25% of the contribution entitlements of all the units.

(9) A unit owner who fails to pay an amount of annual contributions or levies to the body corporate by the date it is required to be paid may not, while the amount is outstanding, vote on a motion of the corporation.

(10) Subsection (9) does not apply to a motion required by this Act to be passed by a unanimous resolution or resolution without dissent.

A document affixed with the seal of the body corporate specifying the following matters is evidence of the matters:

(a) a meeting of the body corporate was held on a specified date;

(b) a resolution in specified terms was passed at the meeting;

(c) the resolution was a unanimous resolution, resolution without dissent, majority resolution, ordinary resolution, special resolution or another specified resolution.

(1) The management module of a scheme may provide for a record that must be kept by the body corporate.

(2) Any of the following may apply under the management module to access the record or specified information contained in the record:

(a) a unit owner or mortgagee of a unit;

(b) a person intending to buy a unit;

(c) a person whom the body corporate reasonably considers to have a proper interest in the record or information;

(d) someone acting for a person mentioned in paragraph (a), (b) or (c).

(3) Within 10 working days after receiving the application, the body corporate must allow the person to inspect the record or give the person a copy of the record or the information (as appropriate).

(4) Subsection (3) applies only:

(a) if the person has complied with the requirements prescribed by the management module; and

(b) to the extent to which the record or information does not contain any defamatory material.

(5) The body corporate must comply with subsection (3).

Fault element: Strict liability offence.

Maximum penalty: 20 penalty units.

The management module may provide for notices that must be given to the body corporate, including, for example, notices about:

(a) the transfer of the ownership of a unit; and

(b) the happening of a specified event in relation to a unit.

(1) The body corporate must ensure:

(a) a notice specifying the scheme name is displayed at a conspicuous place on the scheme land; and

(b) a letterbox clearly marked for receiving postal delivery to the body corporate is located at the place.

Fault element: Strict liability offence.

Maximum penalty: 20 penalty units.

(2) (2) A document may be served on the body corporate by:

(a) placing the document in the letterbox; or

(b) prepaid post addressed to the body corporate address.

(1) There is a dispute relating to a scheme in any of the following circumstances:

(a) the body corporate, or a unit owner, unit occupier or mortgagee of a unit, claims there is, or has been, a contravention of this Act by a person in relation to the scheme;

(b) a unit owner claims to have been wrongfully treated by:

(i) the body corporate or committee, or a delegate of the body corporate or committee; or

(ii) another unit owner or a unit occupier;

(c) a unit owner claims a decision of the body corporate or committee, or a delegate of the body corporate or committee, is unreasonable, oppressive or unjust;

(ca) a unit owner claims the body corporate or committee, or a delegate of the body corporate or committee, has failed or unreasonably refused to perform a function imposed, or to exercise a power conferred, on the body corporate or committee under this Act or the management module of the scheme;

(cb) a dispute has arisen between a body corporate and the body corporate manager in relation to the administrative services provided by the manager in accordance with the manager's engagement;

(cc) a body corporate claims the body corporate manager has contravened the code of conduct that applies to the manager's engagement;

(d) a dispute relating to a unit or the common property has arisen:

(i) between a unit owner and the body corporate or committee; or

(ii) between 2 or more unit owners;

(e) other circumstances prescribed by regulation.

(2) However, a matter that would otherwise be a dispute under subsection (1) is not a dispute if it relates to a termination of a scheme under the Termination of Units Plans and Unit Title Schemes Act 2014.

(1) A person (the applicant) mentioned in section 84 may apply to the Tribunal for the resolution of a dispute between the applicant and another person (the respondent) mentioned in that section.

(2) Subject to sections 128 and 129 of the Northern Territory Civil and Administrative Tribunal Act 2014, the applicant and respondent are the parties to the proceedings for the application.

Note for subsection (2)

Sections 128 and 129 of the Northern Territory Civil and Administrative Tribunal Act 2014 provide for other persons being joined, or intervening, as parties.

(3) If the body corporate is a party to the proceedings, the body corporate may appoint the body corporate manager or a unit owner to be its representative in the proceedings.

(1) For resolving the dispute, the Tribunal may make any orders the Tribunal considers appropriate.

(1A) Without limiting subsection (1), the Tribunal may make one or more of the following orders:

(a) an order for the payment of money;

(b) an order that a person take, or refrain from taking, specified action;

(c) an order to confirm, vary or reverse a decision of the body corporate or committee;

(d) an order that a change be made to a by-law;

(e) an order requiring the body corporate or committee to perform a function imposed, or to exercise a power conferred, on the body corporate or committee under this Act or the management module of the scheme.

(2) The Tribunal must not order a change to be made to a by-law unless it is satisfied:

(a) the change is necessary for an equitable resolution of the dispute; and

(b) if the body corporate was not a party to the proceedings – it had a reasonable opportunity to be a party; and

(c) a unit owner who could be adversely affected by the change had a reasonable opportunity to make a submission to the Tribunal about the change.

(3) If the Tribunal orders that a change is to be made to a by-law, the body corporate must, within 20 working days of the order, lodge the amendment, or a consolidation of the by-law in accordance with the order.

Maximum penalty: 100 penalty units.

(4) An offence against subsection (3) is an offence of strict liability.

(1) In this Part:

associate, see subsections (2) and (3).

body corporate manager, of a scheme, means a person who:

(a) is engaged by the body corporate to provide administrative services for the scheme (whether or not also engaged by the body corporate in other capacities); and

(b) is not an employee of the body corporate.

caretaking service contractor, of a scheme, means a service contractor of the scheme who is also:

(a) a letting agent of the scheme; or

(b) an associate of a letting agent of the scheme.

interposed person, see subsection (4).

letting agent, of a scheme, means a person who:

(a) is licensed as a real estate agent, or is a registered agents representative, under the Agents Licensing Act 1979; and

(b) is authorised by the body corporate to conduct a business for the leasing of the units.

service contractor, of a scheme, means a person who:

(a) is engaged by the body corporate for a term of at least 1 year to provide services other than administrative services for the scheme; and

(b) is not an employee of the body corporate.

(2) A person is an associate of someone if:

(a) there is an interposed person between them; or

(b) at least 1 of the following relationships exists between them:

(i) a marriage or de facto relationship;

(ii) members of a family according to traditional or contemporary practice;

(iii) a partnership;

(iv) an employer-employee relationship;

(v) a fiduciary relationship;

(vi) a relationship between a corporation and someone who is concerned with, or takes part in, the management of the corporation (whether as a director or not);

(vii) a relationship between a corporation and someone who controls, or can substantially influence, the corporation's conduct;

(viii) a relationship under which 1 of them is obliged (whether formally or not) to act at the direction of the other.

(3) However, a person is not an associate of someone only because 1 of them is a unit owner, and the other is a letting agent, of a scheme.

(4) An interposed person between 2 persons is someone who has a relationship mentioned in subsection (2)(b) with each of the 2 persons.

(1) This section applies if, during the original owner control period for a scheme, the body corporate enters into an arrangement to:

(a) engage a person as the body corporate manager or as a service contractor; or

(b) authorise a person as a letting agent.

(2) The original owner must ensure:

(a) the terms of the arrangement:

(i) are appropriate for the scheme; and

(ii) will be fair and reasonable for the person and the body corporate as constituted immediately after the end of the original owner control period; and

(b) the powers and functions conferred by the arrangement do not adversely affect the ability of the body corporate to exercise its powers or perform its functions.

(3) The body corporate or a unit owner may recover from the original owner any loss suffered by the body corporate or unit owner (as appropriate) because of a contravention of subsection (2).

(1) The body corporate of a scheme must not seek or accept any benefit (including money) for an arrangement to:

(a) engage a person as the body corporate manager or as a service contractor; or

(b) authorise a person as a letting agent.

(2) Subsection (1) does not apply to a benefit for the first arrangement mentioned in subsection (1)(b) made after the end of the original owner control period if:

(a) no such arrangement was made during that period; and

(b) the benefit is a fair market value for the arrangement.

(3) A person may recover from the body corporate an amount equal to the value of a benefit given by the person to the body corporate and accepted by it in contravention of subsection (1).

A letting agent must not conduct the letting agent's business in a unit unless the letting agent is the unit owner or a lessee of the unit.

This Act does not prevent an arrangement providing for both of the following for 1 or more schemes:

(a) the engagement of a person as a body corporate manager, service contractor or caretaking service contractor;

(b) the authorisation of a person as a letting agent.

(1) The code of conduct in Schedule 1, Part 2 applies as a term of the engagement of a person as the body corporate manager or a caretaking service contractor.

(2) The code of conduct prevails to the extent to which it is inconsistent with another term of the engagement.

(1) The code of conduct in Schedule 1, Part 3 applies as a term of the authorisation of a person as a letting agent.

(2) The code of conduct prevails to the extent to which it is inconsistent with another term of the authorisation.

(1) The regulations may prescribe management modules for different schemes.

(2) A management module may provide for any of the following:

(a) a matter concerning the administration of a scheme;

(b) a matter for which a management module may make provision under this Act.

(3) Without limiting subsection (2)(a), the management module may provide for the following:

(a) the budget of the body corporate;

(b) the annual contributions and other levies payable by the unit owners to the body corporate;

(c) discounts and penalties relating to the payment of the contributions and levies;

(d) recovery of unpaid contributions and levies;

(e) funds to be kept by the body corporate;

(f) powers and restrictions relating to borrowing by the body corporate;

(g) application of amounts in funds;

(h) limitation on the expenditure of the body corporate;

(i) keeping accounts and preparing statements of accounts;

(j) auditing statements of accounts by an auditor.

(4) The management module of a scheme is:

(a) the management module that applies to the scheme as prescribed by regulation; or

(b) the management module mentioned in paragraph (a) with changes approved by the schemes supervisor in accordance with the regulations.

(5) The regulations may provide for the approval of the schemes supervisor under subsection (4)(b) (including, for example, the payment of a fee for the approval).

(6) This Act does not require the member schemes of a layered scheme to have the same management module.

(1) Subject to any by-law specified in the scheme statement of a scheme, Schedule 2 has effect as the by-laws of the scheme.

Note for subsection (1)

This means Schedule 2 serves as the by-laws of a scheme whose scheme statement does not specify any by-laws. It also means the scheme statement may vary a provision of Schedule 2 and set out additional by-laws.

(2) The scheme statement may specify a by-law in relation to:

(a) the obligations and rights of the body corporate, unit owners and unit occupiers relating to the use or control of 1 or more of the following:

(i) the scheme land;

(ii) the body corporate assets;

(iii) services and amenities provided by the body corporate; and

(b) a matter for which a by-law may make provision under this Act.

(3) A by-law is invalid to the extent to which it:

(a) is inconsistent with this Act or another law in force in the Territory; or

(b) unlawfully restricts the use of a unit; or

(c) unlawfully prevents or restricts a transaction relating to a unit; or

(d) unlawfully discriminates against a unit owner or unit occupier.

(4) This Act does not require the member schemes of a layered scheme to have the same by-laws.

(1) Subject to section 97, an amendment to a by-law must be made by special resolution.

(2) An amendment to a by-law has no effect unless it is:

(a) certified by the schemes supervisor under section 95B(5)(a); and

(b) lodged with the Registrar-General under section 95C.

(3) A reference to an amendment of a by-law includes the repeal or revocation of the by-law.

(1) A body corporate must, in accordance with the directions of the schemes supervisor, submit any amendment it makes to a by-law for review by the schemes supervisor.

(2) A body corporate may also submit an amendment that it proposes to make to a by-law for review by the schemes supervisor.

(3) A consolidation of a by-law that includes an amendment may be submitted for review instead of the amendment or proposed amendment.

(4) The schemes supervisor must review the amendment or consolidation, on receipt of it and the prescribed fee, to ensure that it complies with the following criteria:

(a) it is authorised under this Act;

(b) it does not constitute an unusual or unexpected use of the authority under which it is made;

(c) its form and style are in accordance with established standards;

(d) its content is logically consistent with the by-law being amended.

(5) The schemes supervisor must, within 20 working days of receipt of the amendment or consolidation:

(a) certify that it complies with the criteria in subsection (4); or

(b) refuse to certify it and give the body corporate written reasons why it does not comply with those criteria.

(6) In the absence of evidence to the contrary, the schemes supervisor is taken to have refused to certify the amendment or consolidation if the schemes supervisor has not responded within the time allowed under subsection (5).

(1) A body corporate must, in accordance with the directions of the Registrar-General, lodge with the Register-General any amendment or consolidation of a by-law that is certified by the schemes supervisor within 20 working days of the certification.

(2) An amendment or consolidation of a by-law cannot be lodged unless it is certified by the schemes supervisor.

(1) The Tribunal has jurisdiction to review a decision by the schemes supervisor to certify or refuse to certify an amendment or consolidation of a by-law.

(2) The body corporate and the unit owners have the right to have the decision reviewed by the Tribunal.

(3) The applicant for review must serve notice of the application on the unit owners and, if the applicant is not the body corporate, on the body corporate.

(4) The interests of the body corporate and all unit owners are taken to be affected by the review, to join them as parties under section 128 of the Northern Territory Civil and Administrative Tribunal Act 2014.

(5) After reviewing the decision, the Tribunal may, in addition to its other powers, order that a change be made to a by-law if it is satisfied that:

(a) the change is necessary to comply with the criteria in section 95B(4); and

(b) the body corporate had a reasonable opportunity to make a submission to the Tribunal about the change; and

(c) a unit owner who could be adversely affected by the change had a reasonable opportunity to make a submission to the Tribunal about the change.

Note for section 95D

The Northern Territory Civil and Administrative Tribunal Act 2014 contains other provisions relevant to the review.

(1) The body corporate of a scheme that reasonably believes a person who is a unit owner or unit occupier is contravening or has contravened a by-law may, by written notice given to the person, require the person:

(a) to stop, or not to repeat, the contravention; and

(b) to remedy the contravention as specified in the notice.

(2) The person must comply with the notice.

Fault element: Strict liability offence.

Maximum penalty: 20 penalty units.

(3) It is a defence to a prosecution for an offence against subsection (2) if the defendant establishes a reasonable excuse.

(1) An exclusive use by-law is a by-law that directly or indirectly allocates to a specified unit special rights in relation to specified common property or body corporate assets, other than utility infrastructure.

Example for subsection (1)

The allocation decision is made by the body corporate of a subsidiary scheme.

(2) An exclusive use by-law may provide for the further allocation of special rights that have been allocated to a unit that is the scheme land of a subsidiary scheme.

Example for subsection (2)

An exclusive use by-law of a layered scheme allocates the use of car parks to a unit that is the scheme land of a subsidiary scheme. The body corporate of the subsidiary scheme may make an exclusive use by-law allocating specific car parks to units of the subsidiary scheme.

(3) Subject to subsection (4), an amendment to an exclusive use by-law must be made by unanimous resolution.

(4) If the amendment concerns special rights allocated to a unit when the unit owner or unit occupier was the body corporate manager, a service contractor or a letting agent, the amendment may be made by:

(a) ordinary resolution with the consent of the unit owner; or

(b) order of the Tribunal under section 98.

(5) Despite subsection (4), during the original owner control period, an exclusive use by-law that is included in the first scheme statement must not be amended or its effect varied.

(6) To avoid doubt, sections 95A to 95D apply to the amendment of an exclusive use by-law.

(7) If the amendment is certified by the schemes supervisor, the body corporate must lodge the amendment with the Register-General within 20 working days after the certification.

(8) A body corporate commits an offence if it contravenes subsection (7).

Maximum penalty: 100 penalty units.

(9) An offence against subsection (8) is an offence of strict liability.

(10) The management module may provide for the exercise of the special rights under the allocation.

Example for subsection (10)

The management module may provide for the obligations of a person exercising the rights.

(1) If a unit owner refuses to consent to an amendment of an exclusive use by-law under section 97(4)(a), the body corporate may apply to the Tribunal for an order for the amendment to be certified and lodged without that consent.

(2) The Tribunal has original jurisdiction to make any order it considers appropriate in relation to the application.

Example for subsection (2)

The Tribunal may make an order for the payment of compensation to the unit owner or unit occupier.

(3) If the Tribunal orders the lodgement of the amendment, the body corporate must take all reasonable steps to have it certified and lodged within the time specified in the order.

Note for subsection (3)

Noncompliance with an order of the Tribunal is an offence under section 84B of the Northern Territory Civil and Administrative Tribunal Act 2014.

(1) The Tribunal has original jurisdiction to deal with matters under this Division.

(2) Section 140 of the Northern Territory Civil and Administrative Tribunal Act 2014, does not apply to a decision of the Tribunal under this Division.

(1) A body corporate, a creditor of a body corporate or a person having an estate or interest in a unit scheme may apply to the Tribunal for the appointment of an administrator for the body corporate.

(2) The application must state the reasons for appointing an administrator and may include the name of a person who has consented to act as the administrator.

(3) On an application, the Tribunal may, if satisfied that the order is justified, by order:

(a) appoint a person to be administrator of the body corporate; and

(b) fix the terms and conditions of the appointment it considers appropriate.

(4) The remuneration of, and expenses incurred by, the administrator are taken to be expenditures of the body corporate.

On an application made by the administrator of a body corporate or a person mentioned in section 98B(1), the Tribunal may, by order, remove or replace the administrator.

In an order under section 98B or 98C, the Tribunal must give the directions it considers appropriate with respect to the giving of notice of the order to the Registrar-General and to the body corporate.

(1) Subject to this section, the administrator of a body corporate must perform the duties, and may exercise the powers and perform the functions, of the body corporate, its committees and officers to the exclusion of the body corporate and its committee.

(2) Except with the approval of the Tribunal, the administrator of a body corporate may not do any act that is required by this Act to be authorised by a unanimous resolution.

(3) On application by the administrator of a body corporate or a person mentioned in section 98B(1), the Tribunal may give directions regarding the manner in which the administrator is to perform the duties and functions and exercise the powers of the body corporate.

(1) An administrator of the body corporate may, in writing, delegate to any person all or any of the duties, functions and powers of the administrator, except this power of delegation.

(2) The delegate must perform or exercise any delegated duty, function or power in accordance with the delegation.

(3) A delegation under this section may be revoked at any time and does not prevent the performance of a duty or function, or the exercise of a power, by the administrator of the corporation.