A building management statement governs how shared facilities are accessed, maintained and funded. It is particularly relevant when separate parts of a building share services, accessways or other facilities.
This guide explains what a BMS does, what it must cover, how volumetric lots fit into the arrangement and why the registered document matters when decisions are being made.
What is a building management statement?
A building management statement, or BMS, is a registered instrument that identifies the lots to which it applies and contains provisions that benefit and burden those lots. The lots must be entirely or partly contained in, or contain, one or more buildings, subject to limited provisions for lots affected by a building development approval.
A BMS can regulate shared facilities even when the property is not a community titles scheme. A community management statement, on the other hand, is recorded to establish or govern a community titles scheme. You can read more about community management statements in our guide to community management statements.
BMSs are used where separate parts of a building share access, services or facilities. Examples may include:
- accessways and stairs
- lifts
- water supplies
- fire safety equipment
- other facilities used by more than one part of the property.
They are common in mixed-use buildings containing retail, commercial and residential components. Clear arrangements can reduce uncertainty about who can use, maintain and pay for shared facilities.
A registered BMS binds successors in title to the registered owners of the lots to which it applies. The arrangements can therefore continue to affect later owners, not just the original developer or the parties who signed the document.
Why do mixed-use buildings use a BMS?
Mixed-use buildings often have separate areas with different owners, uses and operational requirements. A retail tenancy, commercial floor and residential area may all depend on the same entry points, services, plant or safety systems.
A BMS provides a framework for managing those shared arrangements. It can set out access rights, maintenance responsibilities, insurance arrangements and how costs are recovered. This gives the parties a clearer understanding of their responsibilities when making decisions.
A BMS does not replace the documents that apply to a community titles scheme. If a BMS applies to scheme land, it is binding on the community titles scheme. If the BMS establishes a management group, a decision made by that group under the BMS is also binding on the community titles scheme.
For owners and committees, a BMS can affect how shared facilities are managed alongside the body corporate’s usual responsibilities. Check both documents before making a decision about an area or service that crosses the boundaries between different parts of the building.
What must a building management statement include?
A BMS must identify the lots to which it applies. It must also contain provisions about:
- the supply of services to lots
- rights of access to lots
- rights of support and shelter
- insurance arrangements.
The BMS may also include provisions about:
- establishing and operating a management group
- imposing and recovering levies
- keeping and spending levy amounts
- property maintenance
- architectural and landscaping standards
- dispute resolution
- rules for common services and facilities
- administrative arrangements
- extinguishing the BMS
- proposed future development.
These provisions can be detailed and property-specific. For example, the BMS may describe how a shared lift is maintained, how insurance is arranged for shared areas or how the cost of a common service is allocated between the relevant lots.
Use the registered BMS as the starting point for understanding these arrangements. A summary, sales material or older working document may not show the complete position.
How do volumetric lots relate to a BMS?
The Land Title Act 1994 allows a plan of survey to use a volumetric format. A volumetric format plan defines land using three-dimensionally located points that identify the position, shape and dimensions of each bounding surface.
In plain terms, a volumetric lot defines a section of airspace in three dimensions. This can allow different parts of a multi-level development to be separately identified. For example, retail space might occupy the lower levels, commercial areas might sit above it and residential areas might occupy the upper levels.
Volumetric lots are commonly used to separate retail, commercial and residential parts of a multi-level building, although mixed-use buildings do not all use the same arrangement.
A BMS may be registered only if it is signed by the registered owners of all lots to which it applies. Those lots must comprise either:
- 2 or more volumetric format lots; or
- 1 or more volumetric format lots and 1 or more standard format lots.
The legislation also recognises certain common property created on registration of a building format or volumetric format plan.
Read the plan of subdivision and the BMS together. The plan shows how the land is defined, while the BMS sets out the arrangements applying between the relevant parts.
How does a BMS affect body corporate decision-making?
Representation and voting rights depend on the individual BMS. The committee, chairperson or body corporate may not have the same role under every BMS.
Start by checking whether the BMS establishes a management group and what powers, voting arrangements and responsibilities it gives that group. The document may also explain how costs are approved, how representatives are appointed and how decisions affecting shared facilities are recorded.
Where a body corporate is one of the parties affected by a BMS, it may need to consider the BMS when making a decision about shared services or facilities. A body corporate is responsible for administering common property and body corporate assets for the benefit of owners, but a BMS can create additional arrangements that affect the scheme.
The BMS may also provide for levies, maintenance and insurance arrangements outside the body corporate’s ordinary levy or maintenance decisions. Owners and committee members should check the registered BMS and the scheme documents before applying standard body corporate voting or spending assumptions.
If you are unsure whether a proposed decision is a body corporate matter, a BMS matter or both, obtain advice before the decision is made. Keeping the documents with meeting records can also help explain why a decision was made and which parties were involved.
How should you check, amend or resolve issues under a BMS?
Begin with the registered document. The registration of a BMS is noted on the indefeasible title for each lot to which it relates, and the registered statement binds successors in title.
Check:
- the lots covered by the BMS
- the services and facilities covered
- access, support and shelter rights
- maintenance and insurance responsibilities
- levy or cost-sharing arrangements
- management group and voting provisions
- dispute resolution provisions
- any provisions dealing with future development or extinguishment.
A BMS may be amended by registering an instrument of amendment. The instrument must generally be signed by the registered owners of all lots to which the BMS applies, and it must not change the lots to which the BMS applies. The legislation also recognises an exception where the amendment relates to a court order under the Property Law Act 2023.
An amendment does not automatically require unanimous approval, and it is not simply added as an appendix. Check the correct process against the registered BMS, the current legislation and the requirements for registering the relevant instrument.
A BMS may include a dispute resolution provision that refers a dispute to a forum other than a court. However, that provision is ineffective to the extent that it tries to prevent the final determination of the dispute in a court of competent jurisdiction.
The available process will depend on the wording of the BMS and the circumstances of the issue. Review the dispute clause carefully and obtain appropriate advice before choosing a forum or taking formal action.
A BMS sets the framework for shared facilities, costs and responsibilities, so understanding the registered document can help owners and committees make decisions with less uncertainty. If you need help reviewing a BMS, contact our team at reception@stratacare.com.au.
