Strata law reform: there’s no easy fix

| January 10, 2012

Problems in strata and community schemes are easily identified. Michael Coutts-Trotter is keen to look at balanced, innovative and practical solutions.

The bringing together of NSW Fair Trading and Land and Property Information under the one umbrella provides a unique opportunity to take a fresh approach to the laws regulating strata and community schemes.

In my view, the development and management of schemes go hand in hand. Uniting the two main agencies into the one arm of government is an important step which should have many long term benefits. It means that all of the issues can be put on the table for consideration at the same time. The end result should be laws which are clear, consistent and cohesive.

The problems that cause most disputes in strata and community schemes are fairly easy to identify. You start with the three Ps – pets, parking and parties. Floating timber floors, noise problems, decaying old buildings, rising levies, overcrowding, misuse of proxies, owners who do not pay on time and a lack of clarity over what is common property are just some of the other issues.

The hard part is finding answers that are balanced, innovative and practical. There are no easy solutions. If there was they would have been implemented a long time ago.

Red tape

One area that needs more attention is the amount of red tape, particularly for smaller buildings and those that run their scheme without the services of a professional managing agent. Many thousands of people across NSW give up their time to sit on executive committees or become office bearers for their scheme. This is often a thankless task and some schemes have increasing difficulty in finding enough people willing to volunteer for these roles. The last thing they need are prescriptive rules and procedures to follow without any real reason or purpose.

Cutting red tape would not only save costs for schemes, it would also remove the source of many nitpicking, technical disputes that arise when someone has simply forgotten to dot the i’s and cross the t’s.

Can you think of any unnecessary areas of red tape in either the strata or community scheme laws which should be cut? With no fewer than 10 pieces of legislation containing more than 1000 provisions between them, there appears to be plenty of room to trim.

                                       HAVE YOUR SAY ON THE FOLLOWING QUESTIONS:

Q1. What are the main areas of the existing strata and community scheme laws you would like to see changed?

Q2. Can you see any future issues that need to be addressed in the legislation?

Q3. How could the management of strata and community schemes be improved?

Q4. Are there any changes needed to the way disputes in strata and community schemes are resolved?



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  1. foggy


    January 3, 2012 at 6:00 pm

    Law reforms

    It is more noticeable as a millenium thing and Global watch-This trend of seeing which measures work for which governance;resulting in enduring success stories.With so many int’l NGOs and technology transfer expertise producing a heartening feeling that capacity building measures do work;and that speaks for the peoples having a good opinion buildup for all things with Global influence.May the New year see the envisaged law reforms result in a ready-to-be-emulated anticipation among developing countries especially concerning property and community development!

  2. Mr Strata

    January 6, 2012 at 4:45 am

    Insurance provisions

    The insurance provisions in the original 1961 Act contained three sections; one about the duty to insure the whole building, another about mortgagors interests and a third about applying the proceeds in the event of destruction.

    New South Wales now has no fewer than 20 sections of its laws to do the same job, Queensland 25, Victoria 13 and ACT 11.

    Other than requiring valuations at least every 5 years and the laudable Queensland practice of compelling disclosure of insurance details at each AGM, the reforms of the last 50 years are unnecessary. They complicate the very simple proposition that the whole building must be insured for the collective good for no discernible benefit. Indeed by trying too hard, for example in Queensland by allowing for adjustments of premium contributions for different use, the reforms promote disputation.

    Even the two reforms that seem like good ideas didn’t need legislation. The first statutory obligations for strata required replacement value insurance. Common sense and the fear of lawsuit for underinsurance should be incentive enough for regular valuations and disclosure at the AGM costs nothing and promotes continual awareness of joint ownership rights and responsibilities.

    More laws equal less responsibility.



    • bberry

      February 29, 2012 at 12:27 am

      Executive committee members

      Michael, No one is forced to go onto an executive committee. There is always the option of a licensed strata managing agent, where the position of a member of the EC changes.

      A well run O/C managed by a licensed SMA with computerised accounting and regular reporting to owners, enables the executive comittee to function without the work load of a self managed O/C.

      Many of the disputes arise due to some members of the EC acting like it is a committee of the local P&C, rather than a committee which is required at all times to comply with an Act and regulations.

      It is noticable that schemes with a competent licensed SMA have very few meetings of the EC, almost no disputes and  few owners even worry about attending the AGM.  As an agent we deal with many owners, managing their residential strata property, which are in O/C managed by a very professional SMA. There is a high level of satisfaction among owners, agents and tenants, with the management services of this particular SMA

      If an owner accepts appointment to a EC they should be accountable and have a basic knowledge of the Act, particularly if it is a self managed O/C.