NEWS: Strata Law Reform

Significant changes to the Strata Schemes Management and Strata Schemes Development legislation in New South Wales commenced in July 2016. The changes include:

1. Strata Renewal – The legislation introduces a new process to allow for consideration and approval by owners corporations of proposals for the collective sale or redevelopment of strata title properties.

2. Developers – Developers of those strata title buildings which are not covered by the Home Building Compensation Fund (because they are not more than 3 storeys) are subject to new rules designed to guard against unrectified building defects. This may include the engagement of a qualified building inspector for the preparation of interim and final building condition reports and the lodgement of a 2% building bond with the NSW Department of Finance, Services and Innovation. Original owners must provide a number of prescribed documents at the first annual general meeting including a maintenance schedule and the building condition report, if applicable. An original owner can be liable to the owners corporation for under estimating expenses and levies.

3. Renovations – Certain “cosmetic work” to a strata lot, such as installing picture hooks, painting, installing wardrobes and laying carpet, will no longer need owners corporation approval. “Minor renovations”, such as renovating a kitchen, replacing hard floors or re-configuring walls, will require owners corporation approval via an ordinary resolution. Structural works must be approved via a special resolution.

4. By-Laws – New model bylaws have been prescribed by regulations and will apply to new strata schemes that come into existence since the commencement of the legislation unless tailored bylaws are registered. Existing strata schemes have 12 months from the commencement of the legislation to review their existing bylaws. By-Laws may limit the number of adults who may reside in a lot. There is no automatic ban on keeping pets.

5. Strata Managing Agents and Building Managers – New rules apply to the eligibility, appointment and conduct of strata managers and building managers. Connections with the original owner and commissions must be disclosed.

6. Parking Areas – The Owners Corporation is able to grant a license to any person over common property. This opens the way for car park management companies and local councils to take over the management and enforcement of visitor parking. Changes have also been made in the areas of entitlement to membership of a strata committee, meeting procedures, enforcement of levies and maintenance of common property.

If you have questions regarding these or any other aspect of strata law, please contact us.