John Hodgkinson
The Strata Schemes Development Act 2015 and the Strata Schemes Management Act 2015 was reviewed in 2021 by the Department of Customer Service. It measured the legislation against ten objectives which were open to interpretation. For example, it sought to foster “ a culture of community and co-operation” and to ensure the legislation is “future oriented”.
The Department recommended 139 reforms. It received 222 submissions from the public. The departmental report was presented to Parliament on 29 November 2021.
The public debate also dealt with issues about keeping pets. That was fueled in part by the Department of Customer Service calling for discreet submissions about that subject. It also ran an online “quick-poll” which attracted nearly 22,000 votes.
The Strata Legislation Amendment Bill 2023 was introduced to Parliament on 12 October 2023. It seeks to implement 31 of those recommendations.
This paper summarises some of the important amendments included in the Bill. The Government also intends legislating further reforms about embedded networks, sustainability infrastructure, repairs and maintenance, and governance sometime in 2024.
Currently, a special resolution of the general meeting is required to remove a serving strata committee member. The amendments will adjust that threshold to an ordinary resolution. And a committee member who is impeached cannot be re-appointed for at least 12 months.
The amendments require at least 14 days advance notice to be given of an annual general meeting. That’s up from the present seven days.
The original owner of a strata scheme, who is usually the developer will be required to provide important documents (for example, building plans, occupation certificates, operations manuals and manufacturers guarantees) at least 14 days before the first annual general meeting of the owners’ corporation.
The restriction on the number of proxies that can be exercised at a general meeting will be extended to powers of attorney and company nominees. The bill does not restrict who can be a company nominee or hold a power of attorney but limits the number of votes they can cast at a general meeting.
At present, a general meeting must authorise the issue of any notice requiring an owner to comply with a by-law. In a scheme comprising just 2 lots, either owner has an effective right of veto. The law will be amended to allow the issue of compliance notices without a unanimous vote.
Under the current Act, the number of votes the original owner can exercise is reduced while it owns half of more of the unit entitlements in a scheme. The amendments will allow the original owner of a two‑lot scheme to vote according to its unit entitlement.
The amendments will require all owners’ corporations to keep the strata roll and other records in electronic form. That change will apply to all records made six months after the Act is passed. It will not apply retrospectively. It will not prevent copies being kept on paper.
Every strata scheme will be authorised to serve notices electronically, even if the general meeting has not passed a resolution about the subject.
At present, owners must notify the owner corporation if a lot is leased and provide its tenants with copies of the by-laws.
The bill will extend both obligations to the owners letting agents. Tenants will be authorised to notify the owners corporation about their tenancy where the landlord or agent has failed to do so. That will assist schemes to comply with the obligation to notify tenants of general meetings and to decide whether a tenant representative can be appointed to the strata committee.
A proposal for consolidation of strata by‑laws will need a special resolution, even if there is no change to the existing by‑laws.
All strata schemes (not just large schemes containing more than 100 lots) will be required to obtain at least two competitive quotes for expenditure in excess of $30,000.
The amendment clarifies that a general meeting must resolve within 3 months to approve the repayment of money from the administrative fund to the capital works fund or vice versa.
Levies to defray the cost of urgent repairs needed to avoid a threat to the health or safety of occupants will be required to be paid within 14 days of service of the levy notice, instead of the usual 30 days.
The Fair Trading Commissioner will be given standing to apply to the NSW Civil and Administrative Tribunal for the appointment of a compulsory managing agent.
The process for strata renewal is complex. The Land and Environment Court will be given jurisdiction to approve a strata renewal plan even if the process has not been followed strictly, so long as it hasn’t caused a substantial injustice to any owner.
The 12-months period currently allowed to a strata renewal committee to develop, report and seek approval of a strata renewal plan has proven inadequate. Its role will be extended to two years.
All owners (not just the strata committee) will be obliged to disclose any direct or indirect pecuniary or other interest they may have in the outcome of a renewal proposal. They will not be prevented from contributing to the debate or voting on the proposal.
The Land and Environment Court will be empowered to consider those disclosures when they consider a strata renewal application or any objection. It will be able to award costs against an owner who dissents to the proposal without good reason or for some ulterior motive.
Owners’ corporation will be banned from charging owners or tenants any kind of fee or bond or requiring insurance cover for keeping of a pet.
Bylaws which restrict or burden the use of an assistance animal (e.g., that they must be carried in arms whilst on common property) will be illegal. Regulations will clarify what evidence may be required to demonstrate it is truly an assistance animal.
[ Strata Legislation Amendment Bill 2023 – Proposed Changes ]
For further information, please do not hesitate to contact John Hodgkinson on (02) 8239 6500.
This communication is sent by Kreisson Legal Pty Limited (ACN 113 986 824). This communication has been prepared for the general information of clients and professional associates of Kreisson Legal. You should not rely on the contents. It is not legal advice and should not be regarded as a substitute for legal advice. The contents may contain copyright.
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