Recommendations for strata law reform

| February 10, 2012

High-density housing is vital to addressing sustainable population growth while protecting our environment. To ensure apartment living remains an attractive choice in the future, the law needs to keep pace with changes to apartment living and the needs and expectations of owners and residents. Clover Moore shares her thoughts on Strata Law reform.

My Strata Legislation Amendment Bill 2011 was developed following consultation with strata experts, owners, residents, managers and lawyers. The bill identifies a number of problems and provides solutions that should be considered as part of this review (See my speech in Parliament).

This Private Members Bill is the first of planned bills to address the concerns raised during my research and consultation. Other issues raised that need to be addressed in the Government review are:

Delivery of Documents from Original Owner

Currently, the original owner must provide the Owners Corporation with specific documents at the First Annual General Meeting, such as plans, specifications, certificates, diagrams, insurance policies and accounting records.

Developers who don’t can be fined up to $11,000, which is less than the cost to comply and a disincentive, resulting in some developers not fulfilling their duty and some owners not having access to vital documents.

This penalty should be increased.

Types of Documents Provided by Original Owner

The documents that the original owner must deliver by law are too limited and do not enable an Owners Corporation to reasonably take over management of a building.
The original owner should also be required to deliver:
  •                       Certificate of the principal certifying authority that the building was constructed in accordance with the development consent, all applicable Australian Standards and Building Codes, and the construction certificate;
  •                      A sanitary drainage diagram;
  •                      A ten-year sinking fund plan;
  •                      Valuation of the replacement costs of the building;
  •                      A diagram of all hot and cold water pipes, isolation points and all drainage lines;
  •                      A diagram of all electrical and communication cabling;
  •                      As-built architectural plans noting all variations from the construction certificate and development consent drawings;
  •                      Diagrams showing the location of all hydraulic, fire and lift services.
  •                      A schedule of equipment belonging to the Owners Corporation with maintenance manuals and other documentation provided by the supplier;
  •                      All maintenance contracts binding on the Owners Corporation;
  •                      Suppliers’ details and a maintenance schedule of electrical equipment and all other mechanical equipment;
  •                      Warranties and guarantees of items belonging to the Owners Corporation;
  •                      An asset register of the Owners Corporation; and
  •                      A valuation of the replacement costs of the building addressed to the Owners Corporation and compliant with section 85 of the Management Act.

Proxy Votes

Proxy votes can give one person or a small number of people the deciding vote at Owners Corporation meetings and there are reports of this resulting in decisions detrimental to other owners.

Proxy votes should be limited to prevent control of an apartment by any one person or a small number of people.

Proxy votes should only be granted where an owner can direct a proxy on how to vote. Ballot voting should also be an option so that owners who cannot attend meetings can still have a say.

Major Contracts

The Owners Corporation signs contracts with the Caretaker and the Strata Managing Agent when the strata scheme begins, but owners don’t necessarily have the knowledge or experience to understand the implications of these contracts.

Owners should be given 18 months after the first AGM or three Executive Committee meetings to discuss and assess contracts in order to understand relevant issues before signing contracts.

Schemes that commenced prior to legislative changes limiting caretaker contract periods to 10 years still have caretakers on perpetual contracts and there are many complaints from owners.

The CTTT should have power to set aside such contracts if they are improvident or unconscionable.

Executive Committee Training

Executive Committee members do not always have the knowledge and expertise to manage the complex issues of strata schemes, particularly in larger buildings.

Mandatory executive committee training should be explored, particularly for larger sized schemes, with consideration of how it would impact on nominations and whether it could be funded by the strata scheme.

Short-Term Rentals

Short-term rentals in strata schemes can impact significantly on residential amenity and owners’ costs. Impacts include noise from residents who are always on holiday, damage to common property from frequent movement of luggage, overcrowding and increased use of common facilities, and loss of neighbourhood security with constantly changing residents.

Legislation prevents by-laws that restrict leases, preventing Owners Corporations from banning short-term leases. This should be overturned and prohibitions on short term rentals should be an option in the By-Laws schedule.

Car Spaces

Some Councils require car parking spaces to be allocated for visitors, emergency or other services in development consent conditions, but sometimes owners may convert these into private car parking. If Councils require these spaces, Council approval should be required to permit a change in their use.

Illegal parking on strata property remains a problem and many residents call for clamping powers. This or other protections should be explored.

Flooring

Acoustic insulation such as carpeting of floors in upper-level apartments is used to protect the quiet enjoyment of lower level apartments. There are reports that some owners replace carpets with wooden or tiled floors and use rugs.
Standard By-laws should clarify that flooring must provide acoustic insulation to a minimum defined standard.

Boundaries

Strata boundaries are not clearly defined in plans and unlike detached dwellings, the Office of Land and Property Information does not determine boundaries within strata schemes, making dispute resolution difficult.
Boundary plans for apartments should be prepared in line with Office of Land and Property Information standards giving the Registrar General power to resolve disputes.

CTTT Decisions

Existing CTTT adjudicators are not necessarily experienced in strata law, and some applicants feel their case has not been properly heard or understood. Owners, occupiers and lawyers report frequent unfair or contradictory CTTT rulings.
CTTT panels for strata disputes should include senior or legal practitioner members who have experience in strata law.
The CTTT should be required to deliver reasons for intended rulings, as done by the Equity Division of the Supreme Court, to enable parties to respond before the final determination.

Pets

Most apartments impose outright bans on pets irrespective of problems or complaints and make little distinction between different pets and potential impacts. This can cause significant distress to people with much-loved pets moving into a new apartment.
Outright pet bans should not be allowed. Instead, bans should be based on cases where an animal causes unreasonable problems such as noise or amenity impacts.
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Clover Moore

Clover Moore has been State member for Sydney (formerly Bligh) since 1988 and Lord Mayor of Sydney since 2004. Clover is committed to making Sydney a green and sustainable liveable city, and has an extensive record advocating for sustainable urban development, public transport, increased parks, green spaces and public domain, and safer cycling and pedestrian activity, and social justice. Representing inner Sydney, which has the largest number of apartment dwellers of any area in Australia Clover has introduced in Parliament the first in a series of bills for strata reform to ensure apartment living remains an attractive choice.

0 Comments

  1. furious

    February 8, 2012 at 2:45 am

    suppression of minority

    Unit living will only become acceptable if the laws are equal for the minority. In a 3 block apartment where 2 of the 3 are together in "crime" and CTTT and managing agent accepts this due to the majority rule law, something needs to be changed. We are now in the process of appeal, with 100’s of pages of proof of misappropriation of funds, yet the 2 on the executive committee(both living overseas) have acquired a law firm in the OC name for $11,000 to fight us at CTTT. We are being made to pay 37% of this amount to fight against us . We have not been informed of the EC meeting as previously, in which the 2 have approved these funds. We are not even told how much the previous amount that was paid out was, both the treasurer and managing agent have just refused to give us the figure, of which once again we paid out 37% of the total, by virtue of being part of the Owners corporation. WE are sure there have been others in this position, where to fight the EC because of majority rules, is an expensive and time consuming business. The managing agent incomprehensibly, refuses for example to call back the painters whose work is totally below standard. The walls are peeling within 3 months there is supposedly a 7 year warranty. The quote accpeted was $10,000 plus, as against other quotes with 10 year warranty for $6000. What could possibly be the reason for accepting a quote so much higher and inferior, and not even calling back the painter?

    There has also been a cupboard placed in guest car park without approval. A cupboard for which we have 3 quotes for under $1000. yet a $3300 payment has been made on unit 1’s say so alone.  We would love to have a meeting with Clover Moore or anyone else who finds themselves being duped by the EC

    Can you believe that we as 37% owners and 1 of only 3 units, being the only ones living in Australia are refused access to any meetings?

    Can you believe that the electricity cupboard with essential services such as water pump, lift, lights around building, is LOCKED with the only 2 keys in Canada and NZ, and 2 to 1 vote, we who live here, are not allowed to have a key. This is with managing agent’s approval.

    Surely there is something wrong here. Please anyone HELP. Total misjustice, oppression of minority, and a blank cheque for the EC members.

  2. billen ben

    February 9, 2012 at 10:15 pm

    proxies

    "Proxy Votes
    Proxy votes can give one person or a small number of people the deciding vote at Owners Corporation meetings and there are reports of this resulting in decisions detrimental to other owners.

    Proxy votes should be limited to prevent control of an apartment by any one person or small number of people.

    Proxy votes should only be granted where an owner can direct a proxy on how to vote. Ballot voting should also be an option so that owners who cannot attend meetings can still have a say." Clover Moore

     
     
    Everything but making it manadatory to vote.
    Limit proxies, make proxies such that the proxy must follow the instructions of the principal (that is a legal first) and ballot voting (in writing).
    If that is where reform goes then that is better than the current situation but i still beleieve that making votying mandatory is a good option (95%participation) and that other changes should be looked at to remove the need to be financial in order to vote.
  3. Dafelan

    February 25, 2012 at 11:58 am

    Executive Committee Behaviour

    The questions we have been invited to address are repetitive, and the website is too confusing and self-serving.  Just try and find something you’ve posted within the last hour.  Having "Your Say" is like whistling in the wind, and where do our comments end up.  In the waste bin, most likely.

    Anyway, there’s absolutely no point in any new SSMA if the legislation doesn’t allow for the inappropriate behaviour of wayward Executive Committees (EC).  While training for EC members might be nice, we need to be protected from dictatorships.  Sorry Clover, no cigar.

    • Clover Moore

      Clover Moore

      February 28, 2012 at 4:50 am

      Dafelan, this review is

      Dafelan, this review is a State Government project.

      I’ve developed a Private Member’s Bill on strata reform – see http://www.clovermoore.com.au/introducing-strata-reform/

      The bill includes a Code of Conduct for Executive Committee members.

      Your concerns are about State legislation, contact your local MP if you seek specific changes to strata laws.