Property 101: ASIC consults on 'sunsetting' property and management class orders

Property 101: ASIC consults on 'sunsetting' property and management class orders
Property 101: ASIC consults on 'sunsetting' property and management class orders

ASIC has released a consultation paper proposing to remake eight class orders that are due to expire (‘sunset’) between 2016 and 2018.

The class orders relate to property, strata and management rights schemes. The class orders proposed to be remade are:

  • Class Order [CO 99/463] Serviced strata scheme valuations, which sunsets on 1 April 2018;
  • Class Order [CO 02/185] Sale of strata units for $500,000 or more, which sunsets on 1 April 2018;
  • Class Order [CO 02/245] Closed schemes, which sunsets on 1 April 2017;
  • Class Order [CO 02/303] Management rights schemes—amendment, which sunsets on 1 October 2017;
  • Class Orders [CO 02/304] Management rights schemes and [CO 02/305] Management rights schemes, which sunset on 1 October 2016;
  • Class Order [CO 07/189] Management rights schemes where the strata unit cannot be used as a residence, which sunsets on 1 October 2017; and
  • Class Order [CO 02/182] Real property rental schemes which sunsets 1 October 2017.

ASIC also proposes repealing Class Order [CO 02/183] Small property syndicates on the basis that it appears that there is no longer significant reliance on this class order. If this appears to be the case after ASIC has considered submissions, the relief provided by the class order can be dealt with on a case by case basis.

ASIC proposes remaking the eight class orders by consolidating seven of them into a single instrument to be known as ASIC Corporations (Serviced Apartment and Like Schemes) Instrument 2016/XX so that the substantive effect of the relief in each class order is continued beyond the expiration date in a new legislative instrument. Class Order [02/182] Real Property Rental Schemes which will be known as ASIC Corporations (Property Rental Schemes) will remain as a stand-alone instrument. Our preliminary position is that only minor and technical changes be made to the terms of the relief to remake the remaining class orders as, in our view, they are operating effectively and efficiently and continue to form a necessary and useful part of the legislative framework.

Consultation Paper 250 Remaking ASIC class orders on property, strata and management rights schemes (CP 250) outlines the class orders to be remade and our rationale for remaking them.

Each class order has been redrafted using ASIC’s current style and format, while preserving the current effect of the instruments. The draft ASIC instruments, which reflect the minor amendments proposed in the consultation paper, are available on the ASIC website here.

Submissions on CP 250 are due by 8 March 2016.

Background

Under the Legislative Instruments Act 2003, all class orders are repealed automatically or ‘sunset’ after a specified period of time (mostly 10 years) unless we take action to exempt or preserve them. This ensures that legislative instruments like class orders are kept up to date and only remain in force while they are fit for purpose and relevant.

Where an instrument is deemed to no longer serve a regulatory purpose we will consult on repealing it. We will repeal instruments rather than allow them to sunset so that industry is certain of our intentions and confident that where instruments are removed, this was our intention.

Tags: 
Asic Class Orders

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