Case Study: Can My Body Corporate Force Me To Install A Water Meter On My Lot?

body corporate water meters

I had an email not long ago from a lot owner who prefers to remain anonymous about the body corporate wanting to install water meters.

In fact the scheme had passed a motion at the AGM to install the water meters at the individual lot owner’s costs.

The question was, can the body corporate actually force me to install a water meter? This article will discuss installation of water meters, why it’s important and who’s responsible for the cost.

Please note that this article includes a discussion about Adjudicators decisions. The thing about case law is that it’s subject to interpretation. It also changes. This article is my interpretation only and is of course subject to challenge. See you own Solicitor for advice.

The problem with water meters

Body corporate water meters are a subject of great interest to many lot owners given the way water usage is allocated when meters are not present; by use of contribution lot entitlements.

Without water meters rather than the user paying, essentially, usage costs are averaged out across all the lots. So if you’re frugal you may very well end up paying a portion of the cost for someone who’s not.

Obviously there are many people who object quite strenuously to this arrangement.

The solution is to install individual water meters to each lot. In that way actual usage can be calculated and on charged to the lot owner responsible, a much fairer way to address the issue.

Given the benefits you’d think that every scheme that didn’t currently have individual water meters would be getting them installed as soon as possible.

But that’s not actually happening and the number one reason why is cost.

Costs associated with body corporate water meters

There’s a couple of ongoing problems when the body corporate installs water meters:

  • Cost to install, maintain and replace
  • Cost to have the water meters read and billed to lot owners

Installing, maintaining and replacing water meters comes at a significant cost.

Who is responsible for the installation costs? This is the core of this article, which I’ll address more fully below.

The second problem is the ongoing cost of actually reading the meters and then billing each lot owner for their portion of the cost.

When the contribution lot entitlements are used to allocate water usage then the local Council will bill the individual lot owners directly. A bill is not generated for common property.

When individual water meters are installed then one bill is generated for the body corporate as a whole, who must take on the responsibility of recovering amounts from lot owners.

The scheme must find someone to read the meters and produce bills.

The Gold Coast City Council offers a sub-metering option where they will continue with the billing if the body corporate enters into an agreement. Part of that agreement includes the necessity to install Automated Meter Reading (AMR), Smart Metering or data logging system, which is essentially an automated version of reading meters.

The costs associated with the installation and ongoing readings often work out to be so prohibitive that it’s more cost effective for schemes to stick with the contribution lot entitlement method.

Who pays body corporate water meter installation costs?

The body corporate may resolve to install water meters by passing an ordinary resolution at general meeting.

That resolution will need to include at least two quotes for lot owners to vote on. It will also need to clearly state how the works are to be funded.

How that’s determined will revolve around where the water meters are to be located.

Water meters on common property

If the water meters are located on the common property it is the body corporate’s responsibility to pay for the installation, repair and replacement, notwithstanding each water meter is only “servicing” the one lot.

This is a key point.

Utility infrastructure is defined in section 21(1) of the Act. Infrastructure within a lot is lot owner responsibility. If the infrastructure is on common property it’s common property unless the infrastructure relates to one lot only.

So for instance, if a hot water service is on common property but only services one lot, then it’s that lot owner’s responsibility to pay for installation, repair and maintenance of that hot water service.

At first glance that would seem to apply to water meters as well, however in Timbertops Indooroopilly [2007] QBCCMCmr 76 (13 February 2007) that was found not to be the case.

A water meter doesn’t provide a service at all. It is a tool for measuring a service.

Consequently if a water meter is on common property is body corporate expense.

NOTE: This does not apply if the water meter was installed after 1st January 2008, in which case the water meter is the property of the water supplier.

Water meters on individual lots

If water meters are to be located within a lot then it is the individual lot owner’s responsibility to pay for the installation, repair and replacement of the meters.

Which brings me back to my original question: Can my body corporate force me to install a water meter?

The short answer is no, no they cannot.

In Orchid Park [2013] QBCCMCmr 40 (5 February 2013) the installation of water meters within the lot was challenged. The facts of the case are:

  • The body corporate, a Standard Format Plan, resolved at general meeting to install water meters to half the lots in the scheme (the other half already had water meters).
  • The initial motion was silent on the manner of payment of the water meters, though it was implied in committee meetings that each lot owner affected was responsible for the cost.
  • A later motion was passed ratifying the issue of a special levy in the amount of $330 to those lots affected to fund the installation.
  • The water meters were subsequently installed.

One lot owner objected. He believed that the body corporate could not force lot owners to install water meters on their lots without their agreement. The Adjudicator agreed, noting:

If the meters now installed are situated on privately owned lots, as they appear to be, then this action cannot be authorised by an ordinary resolution at a general meeting. The body corporate has no authority to make improvements to any owner’s lot even if the majority view it as a good idea. If this is what Motion 10 proposed, then it was fatally flawed. An owner cannot be forced by the majority to install a water meter on his property.

To me that seems fairly clear. You cannot be forced to install a water meter on your lot. For the works to proceed you must agree to the installation and that you will pay the cost.

Common practice for installation of water meters on lots

In practice how body corporate’s get around this matter is to produce agreements for each lot owner to sign.

Each agreement is essentially a contract between the body corporate and the lot owner that they acknowledgement the body corporate is doing this as a courtesy and agree to pay the costs of installation, repair and maintenance.

Only when all the agreements are all signed does the installation proceed.

Which all gives the impression that the lot owners may opt out.

In the case of my emailer however the body corporate had gone to a great deal of effort to make it seem that matter was compulsory up to an including the threat of legal action to coerce compliance.

From the above Adjudicators Order it’s clear that the legality of this action can be challenged. However, it’s not that simple.

What if you want to install but other lot owners don’t?

You have to consider the other side of the story. Enough of the other lot owners have got together and decided they really want to install water meters, enough that the issue is being forced.

My emailer could simply refuse to pay and challenge the whole things in Adjudication, and likely succeed.

But what then is the position of those who do want water meters?

You might be thinking why on earth would someone want to stop the installation of water meters? It offers equitable allocation of costs. Surely that’s good?

Not all lot owners have the same circumstances though. What is a great idea for a resident lot owner can seem like a terrible imposition for an investor who needs to pay for his tenant’s water usage.

Equally some lot owners are cash strapped and simply cannot afford the costs.

What’s the solution?

Well I didn’t find any Adjudicators Orders that decided the matter so there’s no help there. Clearly this is a part of the law that needs some more exploration and it’s those brave souls who’re willing to take on the cost and risk of Adjudication that will help us all.

A possible solution is to consider placing the water meters on common property. In that way the body corporate takes responsibility for the costs and more importantly is actually able to ensure the installation by passing an ordinary resolution.

If you have anything to add on this matter I’d really love to hear from you. Leave a comment or email me at info@mybodycorpreport.com.au

If you have a complaint about the way your body corporate or a lot owner has acted it’s a good idea to speak directly with the Adjudicators Office or your own Solicitor.

 

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Comments

  1. Thanks for the article – very interesting. On a related matter, your final comments on placing water-meters so that the cost is with “the body corporate” is indicative of one of the most profound issues of body corporate situations. “The Body Corporate” isn’t a separate entity, a suited group of business-men forcing matters, like a little government imposing itself on owners; the body corporate IS the owners. Much like government taxes, the money used for projects IS the owners money. It’s so easy to miss the profundity of point and the confusion some owners have about it. It can be made very plain to owners who still revert to old misunderstandings of this point and behave as though the body corporate (and the committee in particular) were their police force or resented parents. Your phrasing is exemplary of this.

    • I certainly wasn’t intending to give the idea that the body corporate is anything other than a collective.

      In fact that was kind of the point; rather than try and “force” someone to install on their lot, which is a stand over tactic, maybe a better solution would be to install on common property where the collective are jointly responsible.

      I completely agree that at the core of most issues is this idea that the body corporate is somehow separate to the lot owners. I’d love to erase that idea altogether, since, as you say, so many people will persist on being mortally offended when they’re simply asked to be considerate.

  2. Susan Tognolini says:

    Should monies recently recovered from a legal case fir which the sinking fund was used to finance over seven years be allocated to all current owners or just the existing owners who owned at the time.

    • Hi Susan

      In most cases it will simply go into the body corporate coffers.

      From the body corporate perspective it’s refunded to lot owners. If the lot owners have change it should be discussed between them as to how it gets disbursed. In some cases their may be an undertaking made by the scheme to refund to those who contributed. Check with your manager or in the body corporate records.

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