Guidance for body corporates of a mixed use development that want to add to or amend the default operational rules in the Regulations.
Operational rules help the body corporate govern the development and can help prevent disputes between unit owners and occupiers.
Deciding on rules that apply in mixed use developments can be difficult. Finding a balance that will ensure the needs of residents, tenants, restaurants, bars, shops, office workers and hotel owners and guests are met (for example) can take time.
The key challenge in mixed use developments is that the different uses of unit can have competing or contradictory interests. For example, residential owners might have noise concerns about bars or nightclubs that stay open late. Conversely, business owners will want as much freedom as possible to make good business decisions, including hours of operation and what services they provide.
Attempting to keep everyone in the development happy relies on having a good, comprehensive set of body corporate rules.
When you are deciding on what rules you need in your development, see the sections on residential developments and commercial developments. You will likely need a combination of the suggested topics in your rules. In addition, see the tips below.
Tips: what to think about when deciding on rules
When you are considering what kinds of operational rules you need in your development, you should think about:
- what kinds of matters people have had disputes about in the past, why these disputes arose and whether rules could help prevent disputes from arising in the future
- what kinds of facilities are there for everyone to use and whether rules are a way to protect or ensure access to those facilities
- what kind of behaviour is acceptable in the development and what kind of behaviour is not
- what rules are fair to all unit owners
- what kind of businesses are involved
- whether the units are used by the owner or whether there are leasing arrangements in place
- what kind of additional duties the body corporate is responsible for undertaking.
The body corporate could decide that specific rules apply to only certain types of units in the development. For example, if there is a hotel or other accommodation service provided, there could be specific rules that apply to those units. If that is the case, make sure you clearly identify the units that are subject to those rules. You should also be careful to ensure that rules don’t contradict the Act or impose rules that are unfair or restrict the rights of owners under the Act.
Involve unit owners from a range of different unit types in deciding on the rules. This will help ensure the rules are fair on everyone and don’t contradict any other law or contractual agreements that are in place.
Other rules that can apply in mixed use developments
Units in mixed use developments may be used for commercial or retail purposes. In these cases there will usually be formal lease documentation in place between the unit owner and the tenant (for example a deed of lease). This lease documentation will contain additional rights and responsibilities of between the parties to the lease.
Other contractual arrangements may also need to be taken into consideration. For example, if accommodation units make up a part of the building there may be contracts in place that cover management rights.
There are also other laws and bylaws that can affect commercial and retail units, for example the Sale and Supply of Alcohol Act, food health and safety regulations and council bylaws, which cover a number of areas such as business uses and parking.