Turn your strata thinking forwards before making changes

| January 27, 2012

Strata law has undergone a series of small changes since it’s introduction in New South Wales in 1961. According to Francesco Andreone small changes are no longer enough – what is needed is a major rethink.

Apparently it’s time to make serious changes to the laws affecting strata, stratum and community title in New South Wales and the government wants our opinions.

Without sounding cynical, this has happened before and there’s the same risk that despite everyone’s best efforts and intentions, the results will not match the inputs.

The most significant strata law changes occurred on 1 July 1961 when strata law began.  Previously unheard of property ownership concepts were introduced like owning airspace, determining boundaries by structures (and not drawings), a collective representative body, mandatory owner obligations, and title termination mechanisms.

Since then the strata laws have been changed repeatedly, but only a few things have been really new –

  • specialist dispute resolution in 1974
  • leasehold strata schemes in 1986
  • part strata schemes in 1987
  • community title schemes in 1989
  • large strata schemes in 1997, and
  • model by-laws in 1997.

Everything else has just been tweaking the rules for real (or apparent) operational issues.

Today, we have the choice to simply tweak things some more and fix the annoying issues, or actually rethink strata laws so they suit the future of strata development, ownership, use and management.  To be honest both things need to occur.

So, here are 10 suggested strata law changes in New South Wales.

  1. All current bugs in strata laws need to be identified and fixed.  They’re easily discerned from court decisions; owner, resident and manager experience; complaints to government; previous discussion papers; and simple analyses of the current laws by experts.  This is a big job, but it’s just the beginning.
  2. The different property title regimes for medium and high-density real estate need to be merged so that they operate consistently. There’s no good reason why owners’ experiences in strata buildings should differ to community title or part strata.
  3. Governance models and hierarchy need to be re-thought and re-structured based on policy positions about whether owners should always overrule elected committees.  After all, if everything always needs to be decided by owners then why give committees and managers any decision-making powers and responsibilities?
  4. Strata scheme information collection and sharing needs to be upscaled so that more information is more easily available to owners (and others) about what has, is and will happen in strata buildings.
  5. More flexible options for discussions, debate and decision making by strata owners needs to be permitted so that engagement levels increase from the current minimums and decisions better reflect owner views.
  6. Long term (non-owner) residents’ interests in strata buildings need to be recognised.  They form almost half the strata constituents in New South Wales and are critical to the future.
  7. The construction quality of the strata buildings needs to be improved and guaranteed (at construction, for the first owners and in the medium and long term) by improved approval, checking and re-checking systems.
  8. Differences between the experience (and cost) of property ownership between free standing and medium-high density real estate needs to be reduced or eliminated, so that strata property is not second rate property.
  9. A register of strata buildings and key information should be created, with regular updates so that everyone can know more about what is (and is not) happening in those buildings.
  10. The position of non-owners who assist strata corporations needs to be better defined as traditional roles and business models change to meet owner, committee and building needs.

These 10 points only scratch the surface of what I believe needs to change in regards to NSW strata laws. It’s a series of complex laws and updating them is a difficult task to undertake, but we finally have the chance to make our opinions heard.

Strata Laws Consultation 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?