Living for the future

| November 5, 2013
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The Minister for Fair Trading Anthony Roberts has released the proposed reforms for Strata in NSW.

There are more than 72,000 strata schemes in NSW and an average of five new schemes are registered each day. The reforms aim to “support democratic, accountable and transparent decision-making and empower strata communities”, according to Minister Roberts.

A Position Paper: Strata and Community Title Law Reform highlights 70 proposed changes by the NSW Government, including:

  • Requiring managing agents to disclose at each Annual General Meeting any commissions received in the previous 12 months and to 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
  • Documents may be issued and meetings held electronically as an alternative method to traditional paperwork processes and meetings.

The NSW Government will introduce a high rise development bond to protect homeowners against building defects. The Position Paper also outlines a new system for the collective sale and renewal of strata schemes. The proposed threshold required for the collective sale will be 75 per cent of lot owners, where each lot has one vote. Key features are:

  • An opt-in provision which means that a general resolution is needed before owners can formally consider a collective sale
  • A ‘strata renewal committee’ is appointed by owners to oversee the development of a collective sale/ renewal plan
  • A minimum of 60 days for lot owners to consider and seek their own independent advice on the plan
  • Oversight of the process by an independent Strata Commissioner at the Land and Environment Court to ensure fairness
  • The Strata Commissioner to consider whether the process has been followed and everyone has been treated fairly. The Strata Commissioner will seek to resolve any dispute through mediation. If the matter can’t be resolved it will proceed to a hearing.

A copy of the Position Paper is available here.