In Queensland, two lot schemes, often comprising duplexes, townhouses, or duplex townhouses, are most often part of a community titles scheme (a body corporate), rather than being two separate buildings, almost certainly where the two buildings share a wall. This is irrespective of the fact that they have separate lot numbers and no formally appointed body corporate manager.
When a duplex is part of a community titles scheme, it typically means that the two sides of the duplex are owned individually by different owners, and there is shared ownership of common property (for example a driveway) between them. Even without an official body corporate manager, there is in fact a body corporate in existence (comprising the two lot owners) which must manage the common property and address issues related to shared responsibilities, maintenance, and governance.
The Body Corporate and Community Management Act 1997 (BCCMA) governs the establishment and operation of body corporates in Queensland. Under this legislation, owners within the community titles scheme must comply with certain requirements, including the payment of levies for the upkeep of common property, insurance and adherence to by-laws set by the body corporate.
Understanding the nuances of building insurance for two lot schemes is crucial for ensuring adequate protection and compliance with legal requirements.
Under the BCCMA, building insurance is mandatory for all properties within a community titles scheme, which includes two lot schemes. The building insurance should cover the building itself, as well as any common property and should be in the name of the body corporate, not the owner/s. Often in two lot schemes, this insurance is the only expense of the body corporate toward which levies must be paid. Owners will usually simply pay 50% of the insurance premium each year, rather than paying ‘levies’ into a body corporate bank account.
In addition to insurance, where there is common property which is available for use by both lot owners (for example a fence, driveway or carport), each lot owner is responsible for 50% of the maintenance and replacement costs of such common property.
The above commentary is provided on the assumption that each owner has a lot entitlement of 1/2. If the lot entitlements of each owner are unequal, then their contributions would be altered accordingly.
If you have queries about contributions or insurance in your duplex, contact The Small Business Lawyer’s property team for advice.
