NSW strata law reforms get thumbs up

Telling people what they can do - rather than what they can’t – is a positive feature of the new strata bylaws in NSW.

Strata Community Australia (NSW) president Greg Haywood has welcomed the state’s new strata law reform position paper, which aims to make strata living easier for consumers.

He is supported by property developer group, Urban Taskforce, which says changes to the Strata Act will encourage the construction of apartments.

The Minister for Fair Trading, Anthony Roberts, who released the proposed reforms today, believes they will improve strata living for millions of people across NSW. He said there are more than 72,000 strata schemes in the state with an average of five new schemes registered each day.

“It is estimated that by 2030 half of Sydney’s housing stock will be multi-unit dwellings and the proposed reforms will strengthen a culture of community and cooperation in strata,” Roberts said.

SCA’s Haywood said that the consultation process had been positive and inclusive and he felt the paper reflected the changes needed in NSW strata laws.

“While we still need to go through the paper fully we are positive about the changes the government has proposed for the strata sector.

“We believe that these changes will make living and working in the strata sector a more positive experience. We are especially pleased to see the changes to the model by-laws as these are now being written in a way that tells people what they can do, rather than what they can’t, and this is a great step forward.”

Features of the reforms are:

• Managing agents must disclose at each annual meeting any commissions received in the previous 12 months and seek approval for those expected during the next year. All non-monetary benefits and gifts from third parties will be banned;

• The model by-laws will allow for certain pets and prohibit smoke drift where it causes a nuisance or hazard;

• Hardwood floors will need owners’ corporation approval;

• Notice will be required for changes such as refitting a bathroom but approval will not be required for minor cosmetic changes, such as painting a wall or inserting a picture hook;

• Owners’ corporations will be able to limit the number of people who occupy lots to prevent overcrowding;

• Owners corporations may enter into an arrangement with the local council to issue penalty notices for unauthorised parking;

• Tenants will be given the right to attend and participate in owners’ corporation meetings;

• When registering a scheme, unit entitlements must be determined by an independent valuation to provide more transparency and consistency;

• The limiting of proxy votes to prevent an individual or group controlling decisions; and

• Documents may be issued and meetings held electronically as an alternative to traditional paperwork processes and meetings.

Roberts said the NSW government would introduce a high rise development bond to protect homeowners against building defects. The bond will be equivalent of 2% of the cost of the building work. He said it would address defective work and give consumers added protection if a developer became insolvent.

“The bond will be released once an independent defects inspection has been undertaken and any defects have been rectified.”

Haywood said SCA (NSW) had been involved in the consultation process from the start and then through every step thereafter.

“We believe that the time is right for change in the strata industry and that this position paper identifies and addresses long-held concerns with a view to changing them for the better.

“We welcome continued dialog with the Minister for Fair Trading’s office and department as we work through all the proposed reforms.”

The Urban Taskforce says the changes will give greater confidence to the development industry and to owners’ corporations that apartment buildings will be well designed and managed, says CEO Chris Johnson.

"The changes are a positive move that will give confidence to the industry and to consumers. The excessive amount of litigation around defects is only funding the legal profession.

“The proposal to require at least 75% of strata owners to agree to the finalisation of a strata plan to allow demolition should unlock a vast number of poor quality apartments from the 1960s for urban renewal.”

Johnson said NSW was leading the country in terms of the number of strata apartments. “It is essential that we have the best builders and developers involved in constructing these buildings so that owners corporations can be assured of quality results.

“The changes to the current act will give greater certainty to developers and owners on how defects are managed and how an effective maintenance regime can be established.”

Johnson said the 30% of Sydney households in apartments was likely to grow to 50% over the next 20 years. “With apartments becoming such a major part of Sydney’s housing stock it is essential that we have a modern, fair Strata Act that ensures builders, developers and owners corporations are working together rather than engaging in battles.”