Review of the Unit Titles Act 1972 - Discussion Document, May 2006
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5.8 Creating a better way to resolve disputes
The current Act does not offer a satisfactory procedure for resolving disputes.
The proposals in this section cover a four-tier dispute resolution procedure.
Issues
There are many different kinds of disputes over unit title developments. Some of them are minor and are easily solved, while others involve large amounts of money or are very difficult to sort out.
They can be disagreements between the body corporate and unit owners, disagreements between neighbours, or serious arguments about the future of the whole development.
As we said in section 5.7, there is a lack of compulsory and comprehensive disclosure. At present, developers and bodies corporate don’t have to tell prospective owners much about their obligations or how they can be part of a unit title community. As a result, misunderstandings about rights, responsibilities and expectations can cause disagreements and bad feeling.
Tenants often have no idea about their obligations to other occupiers and the body corporate. Bodies corporate often have trouble contacting landlords to get them to enforce the terms of the tenancy. Neighbours can get very upset when tenants don’t follow the rules.
Currently, anyone with a problem generally has to go to the High Court. Owners who can’t get unanimous agreement for a proposal also have to go to the High Court. This takes time and it is expensive.
There is no accessible, affordable dispute resolution process that satisfactorily deals with different types of disputes. There is also no straightforward way of making people follow the body corporate rules.
| A central government agency with existing dispute resolution capability will expand its services to include a dispute resolution service for unit title matters. This proposal will depend on government approvals and funding. |
| The first tier of the dispute resolution service will be education and information about the Act. The central government agency will be responsible for providing this. This is expected to help people to make more informed decisions and prevent disputes starting. |
| The second tier of the proposed dispute resolution service will be a mediation service. This will be provided by a central government agency with existing mediation services. |
| Where appropriate, anyone who asks for mediation will need to show that they have tried to resolve the dispute themselves. They must show that a letter saying what the problem is and what action needs to be taken, or a ‘notice to remedy’, has been given to the other party. They must also be able to show that the other party has failed or refused to comply voluntarily with the requirements in the letter. |
| The third tier of the proposed dispute resolution service will be an adjudication service by a tribunal. An existing adjudication tribunal, such as the Tenancy Tribunal, will provide the service. It will not deal with title issues, but it will deal with everything else, unless the dispute involves more money than it is allowed to rule on |
| Settlements agreed to by mediation, which have been approved as an order by the tribunal, and orders made by the tribunal, will be enforced in the same way as District Court orders. |
| The fourth tier of the proposed service will be a District Court hearing. The District Court will replace the High Court as the court of first instance unless a dispute is about title or the amount involved is more than the District Court can rule on. These cases will go direct to the High Court. |
| The District Court will hear any matters transferred up from the lower tribunal. It will also hear appeals on decisions made by the lower tribunal. |
| The High Court's role will be limited. It will only hear title disputes, high value disputes and appeals on District Court decisions. |
How the process will work
Depending on available government funding and all necessary approvals, the dispute resolution service could look like this.
Tier One – Information and advice
The central government agency offers information and advice through publications, online and through an 0800 freephone number. These services will encourage the people involved to make informed choices and to take all reasonable steps to resolve the dispute themselves.
If the dispute is not resolved at this point, it moves into the formal dispute resolution process.
Tiers Two and Three – Mediation and adjudication
A case administrator assesses the application and sends it either to mediation or straight to the tribunal for adjudication.
The decision on where the case goes will depend on:
- how complex it is
- how much money is involved
- whether it is likely to set a legal precedent
- what the parties want
- how they feel about the case.
If mediation has been chosen, this takes place. If mediation wasn’t chosen or doesn’t work the case is sent to the tribunal.
The tribunal uses the factors listed above to decide whether it will hear the case itself or send it to the District Court or to the High Court.
The tribunal adjudicates or the case goes to the District Court.
Tier Four – District Court
The District Court hears the case and gives a decision. This is the end of the process, unless there is an appeal to the High Court against the District Court decision.
Effect of proposals
It will be easy for owners and occupiers of unit title developments to get information and advice. They will know much more about their rights and responsibilities. This means that some disputes will be prevented and that people will be able to resolve more disputes themselves.
The tiered dispute resolution process will be easier to use, cheaper and faster than in the current Act.
As a result, many types of dispute that were not resolved because it was difficult and expensive to go to the High Court may now be worked through effectively.
Settlements agreed to by mediation, which have been approved as an order by the tribunal, and orders made by the tribunal, will be enforced in the same way as District Court orders. This will keep costs down because existing enforcement processes can be used and it won’t be necessary to set up a new structure.
Essentially, the proposals will make the High Court the final, rather than the ?rst, step in the dispute resolution process for many claims and applications.
| Do you agree with the proposals for dispute resolution? If you do, is there anything else we should consider? If you disagree, please explain why. |
| What are the advantages and disadvantages of the proposals for you? |
| Will the proposals have any financial implications for you? If so, please explain giving as much information as you can. |
| What is the best way to fund the proposed unit title dispute resolution service? |
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