Strata reform see developers fear more “onerous requirements”, but concerns may be misplaced
The delay to the reforms of the New South Wales Strata Act is being called a disappointment that may see the introduction of “onerous requirements” for developers, according to Urban Taskforce CEO, Chris Johnson.
The six month delay of the reforms comes as stakeholders are asking for more time, with October suggested as the potential date to expect the changes to be pushed to.
Johnson said that a number of members were looking to re-enter developing in the apartment market on the basis of the proposed reforms, but that they are now reconsidering in light of the delays.
“The development industry has gone along with the reforms as a package but the delay announced by NSW Fair Trading could untangle agreements to-date,” he said.
“It is vital to diffuse the litigious environment around defects resolution and we supported the use of independent assessors and the use of a retention fund of 2% to cover defects but the delays could see other more onerous requirements added to industry costs.”
Johnson told Property Observer that they’ve reached a reasonable package between the various parties, and they’re concerned as to what any changes now may mean.
“The groups that seem happy about [the reforms] taking more time are generally the owners corporation network and consumer groups,” he said, noting that they’d worked with these groups in the past to come up with the current arrangement.
His fear is that the reforms will become skewed against the development industry.
“The reality is that the New South Wales government has been slow in bringing in reforms to do with planning and now the strata act. We’re only a year out from an election and any good bold reformist decisions need to be made well away from that time,” he said.
However, the Urban Development Institute of Australia’s chief executive Stephen Albin disagreed with claims that it will make developers reconsider.
“I don’t think that people will put off plans based on a change in three months, we have been talking about these reforms for the last six or seven years, it isn’t a deal breaker for investors,” Albin told Property Observer.
“The delays aren’t ideal, it would have been great had the whole legislative package been together, but I think one of the important points is that there’s transparency and certainty. The whole package needs to go to parliament as one. It’s a smarter move than putting two bits of legislation up at different times,” he said.
“These laws, which are all about creating better infrastructure, better communities, may be subject to politics and that’s not a good thing, but I think they’ve done the right thing to put the package together as one.”
The UDIA, who have been involved with assisting the legislation for five years, said that there has been a general consensus towards these changes.
Any further requirements for the developers may be changes in the margin, but he said that there are unlikely to be substantial differences as a result of the delay.
“We’ve learned lessons from the planning system and the way planning reforms have been a subject of political misinformation, this time we go in with our eyes wide open,” he said.