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My Question is about …
Work Health & Safety
Sinking Funds Forecasts
Tax Depreciations Schedules
What is 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 Occupier’s Statement is an annual declaration to QLD Fire and Emergency Services that the building meets fire safety compliance or has a defect notice in place to rectify a breach.
What is a Fire & Evacuation Plan?
Forming part of the building’s overarching Emergency Plan, a Fire & Evacuation Plan is a written document detailing how a workplace and its occupants deal with or manage a fire emergency.
How often must a Fire & Evacuation Plan be reviewed?
Under the QLD Building Fire & Emergency Services Regulation 2008, a building’s Fire & Evacuation Plan must be reviewed annually.
How often must a building undertake an evacuation exercise?
Otherwise known as a fire drill or evacuation practice, the Building Fire Safety Regulation 2008 requires organisations to carry out an evacuation exercise at least once a year.
What is a Fire Safety Advisor?
An appointed person who holds a Fire Safety Advisor qualification issued within the last three years.
When is a Fire Safety Advisor needed?
Under the Building Fire Safety Regulation 2008, a Fire Safety Advisor is required for high occupancy buildings whenever there are 30 or more workers where the worker is employed for 40 or more hours during the year, and / or is a Class 2 or 3 building over 25 metres in height.
What is an Evacuation Diagram?
An evacuation diagram forms part of the building’s Emergency Plan and is considered a procedure to assist in the evacuation of the building in an emergency.
When must evacuation diagrams be displayed?
Every building over 300m2 must have evacuation diagrams conspicuously displayed, orientated and permanently fixed to walls along exit routes from the building.
Must every lot have an evacuation diagram in it?
An evacuation sign must be conspicuously displayed, orientated and permanently fixed to inside the lot when the lot used for short-term letting purposes.
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?
No, the Original Owner must provide an independent valuation of the replacement cost for each building the body corporate must insure.
What must the Insurance Valuation include?
The valuation must include the full cost of replacement of buildings and common property for damage and include costs incidental to the reinstatement or replacement of insured buildings, including the cost of taking away debris and the fees of architects and other professional advisors. It must also provide for the reinstatement of property to its condition when new.
What happens if an updated Valuation changes from what our scheme is insured for?
If a new Valuation is carried out and the replacement cost comes in at an amount which is different to what the scheme is currently insured for, it is recommended that your scheme amends the insured amount to reflect the Valuation amount.
How often do I need to update my Insurance Valuation?
The Body Corporate and Community Management Act requires that a new independent Insurance Valuation is 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 QLD 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, WHS Codes of Practice and Australian / International Standards?
You can only be prosecuted for breaching sections of the WHS Act. The WHS Regulation explains the WHS Act in greater detail, while WHS Codes of Practice and Standards are minimum expectations.
What is a Person Conducting a Business or Undertaking (PCBU)?
In accordance with the WHS Act, a PCBU is defined as a business or an undertaking that is either conducted alone or with others, whether or not for profit or gain.
Is a body corporate a PCBU?
Under the WHS Act, a body corporate that 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.
Where a body corporate engages a person to do repairs (e.g. an electrical contractor), this does not make the body corporate a PCBU for the purposes of the WHS Act.
However, if the body corporate engages any worker as an employee, and / or is responsible for common areas used for commercial purposes (e.g. shops or restaurants), it will be treated as a PCBU under The Act.
What is a Worker?
Under the WHS Act, a worker is an employee, contractor, subcontractor, outworker, apprentice and trainee, work experience student, volunteer
and a PCBUs who is an individual if they perform work for the business.
What are the duties of a body corporate when defined as a PCBU?
Ensuring, as far as reasonably practicable:
- The health and safety of its workers in the workplace.
- 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.
- That fixtures, fittings and plant do not pose any risks to the health and safety of any person.
Do I have to put in place the recommendations in the WHS Report to comply with legislation?
The recommendations in the report are based on our specialist’s years of experience in the industry. Where a particular section of legislation, whether that be the building code, Australian Standard or other legislative requirement, is relevant the report will provide a reference as to why our specialists are making certain recommendations. It is the body corporate’s obligation and responsibility to identify, eliminate and minimise any risks as much as practicable.
Remember – The only thing worse than not getting a safety report to meet your duty of care and legislative obligations, is to get one and not act on it.
Can a member of a body corporate be held accountable under the WHS Act for a decision made by the body corporate?
Where the body corporate is responsible for common areas used only for residential purposes (and so is not regarded as a PCBU), the WHS Act does not apply and officers of the body corporate do not have ‘officer’ duties under the WHS Act.
If the body corporate is a PCBU, then the WHS Act applies and its officers must exercise due diligence to ensure that the body corporate complies with its duties under the WHS Act.
Volunteer members of the body corporate are excluded from being prosecuted as officers under the WHS Act; however, they can be prosecuted in their capacity as a worker if they fail to meet the duties of a worker under the WHS Act.
Where does a body corporate stand if it engages an onsite manager?
Under the BCCM Act, resident managers are engaged by the body corporate under a contract for service.
If the body corporate engages an on-site manager as a contractor and is responsible for residential common areas, it would not be regarded as a PCBU under the WHS Act.
If a community title scheme manager lives on-site, the manager may use their domestic premises to carry out work for the body corporate or a separate office area for managing the complex.
What are the duties of an Lot owner?
Under the WHS Act, an owner or occupier of a unit, apartment or townhouse used for residential purposes only has duties if the owner/occupier falls under the definition of a PCBU.
What does due diligence mean?
Due diligence in context to bodies corporates is demonstrating that reasonable steps have been taken to ensure the health and safety of workers, occupiers and visitors from a corporate governance perspective.
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.
Does my building have to update our Sinking Fund Forecast regularly?
Yes, the Body Corporate and Community Management Act requires that a Sinking Fund Forecast provides a forecast of capital expenditure for a minimum of your scheme’s current Financial Year plus the next 9 financial years. This is why at Strata Compliance Solutions we provide you with 15 year Sinking Fund Forecasts meaning they are updated approximately every 5 years. It is recommended however that they are reviewed annually to ensure they remain accurate.
What type of expenses can be paid for by the Sinking Fund?
A Sinking Fund can be used for items of capital expenditure, or non-recurrent items or other reasonable expenses which should be reasonably met from capital. Examples of expenditure include: painting, major structure repairs, carpet replacement, pool furniture, etc.
If our Sinking Fund is a bit low can we transfer the surplus from our Administrative Fund to the Sinking Fund?
No, money cannot be transferred between the Sinking Fund and the Administrative Fund, and vice versa.
Who is required to provide the body corporate’s first Sinking Fund Forecast?
The Body Corporate and Community Management Act requires that the Original Owner (Developer) provides the body corporate with their initial Sinking Fund Forecast.
Can I use the sample estimate that my developer gave me in my Tax Return?
No, the sample estimate is just that…… 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?
This is a very common misconception as most new properties being offered by developers will include a depreciation schedule. There is also a large amount of initial depreciation as the fixtures and fittings are all new. An asset still depreciates despite it having a lower initial value because it isn’t new. It is definitely beneficial for investors to obtain a Tax Depreciation Schedule, regardless of the age of the property.
Can I claim the renovations in my property if I didn’t arrange them?
Yes you can. In fact this is the one way to make sure you get the most out of a newly purchased property that is well presented and perhaps remodelled. Anything in the property that appears to be part of a renovation will be valued by our Quantity Surveyors and depreciated accordingly. Even the stuff you can’t see like new wiring, new plumbing, waterproofing etc that to the untrained eye would otherwise go unnoticed. You don’t need receipts either, we can value everything that makes up the property.
Do I have to do anything special at tax time each year?
Once you have obtained your tax depreciation schedule, you simply take it to your accountant and it is lodged with your tax return.
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