Strata Act will underpin Sydney’s urban future
GUEST OBSERVATION
The draft Strata Act released by Minister Victor Dominello will underpin the dramatic growth in apartment living in Sydney, says the Urban Taskforce.
The release of the draft Strata Schemes Development Bill 2015 and the Strata Schemes Management Bill 2015 by the NSW Government is an important step forward in shaping the future form of Sydney.
With around a third of Sydneysiders currently living in apartments and the likelihood of this increasing to 50% in the next 25 years the changes to NSW strata legislation are timely and necessary to give confidence to the development industry and to owners corporations.
The two most significant changes are the reduction from 100% to 75% of the owners in a strata scheme required to collectively terminate or renew a strata scheme and the introduction of a 2% retention bond after construction of an apartment building to cover any defects.
The reduction from the current requirement of 100% of owners to 75% is an important step forward to allowing the renewal of thousands of substandard walk up flats constructed prior to 1990. Previously a single owner could hold a body corporate to ransom by demanding an exorbitant price for their apartment. The reduction to 75% is in line with models that operate in New Zealand, Singapore, the United Kingdom and North America.
The process for collective sale or renewal involves checks and balances to ensure that owners receive adequate compensation for their lot and a free advocacy program will be established to assist vulnerable owners.
A recent report by the University of NSW identified thousands of ageing pre-1990s walk up apartment blocks located close to transport and services throughout metropolitan Sydney which are costly to maintain and run and many do not conform to modern building standards. The proposed new strata laws will assist in ensuring these buildings are renewed.
The 2% defects bond is similar to the retention sum that most building contracts already have to cover defects that can arise during occupation of a building. The bond has been formalised in the Draft Bill to give all parties confidence that funds are available to repair defects.
The Urban Taskforce has developed designs with Turner Architects that demonstrate how 40 year old walk up flats can be renewed with modern apartments. You can view the publication here.
Chris Johnson is chief executive officer of Urban Taskforce Australia and can be contacted here.