Keeping Up with the Proposed New Strata Laws in NSW
The NSW Government is in the process of finalising new strata laws, with the overall aim of creating a more modern framework for people living in multi-unit buildings. The draft Strata Schemes Development Bill 2015 and Strata Schemes Management Bill 2015 have now been released for public comment, with submissions closing on August 12.
Aims of the proposed strata reforms
The reforms aim to:
- Improve the democratic process around collective sales.
- Increase the ability of owners’ corporations to manage by-laws.
- Ensure building defects are addressed early on in new developments.
- Increase the accountability and transparency of building managers and managing agents.
- Enable greater participation in strata schemes through modern communication methods.
While there are more than 90 proposed changes, here are some of the major reforms that are most likely to affect owners and residents of strata units.
Major reforms in the proposed new strata laws in NSW
- Changes to by-laws – by-laws cover various day-to-day matters such as keeping pets, smoking, parking, and noise. Some of the proposed changes affect the following areas:
- Owner renovations – a more common-sense approach such as allowing owners to do minor renovations and cosmetic changes to their own units without needing approval from the owners c
- Parking control – changes to enable greater control over unauthorised parking, such as the ability for owners’ corporations to enter into agreements with local councils to manage parking in common areas such as visitor parking spots.
- Short-term letting issues – short-term stay arrangements can tend to result in excess noise and overuse of common areas. The reforms allow owners corporations greater control in enforcing by-laws around these matters.
- Overcrowding – allows owners corporations to limit the number of people residing in a lot, as long as it is not less than two adults per bedroom.
- Pet-keeping – greater flexibility around pet ownership rather than automatic blanket bans. This includes considering each case on its merits.
- Smoke drift – allows the owners corporation to enforce bans if nuisance smoke drift occurs, rather than leaving it up to individual unit owners. Of course this is not intended to result in banning all residents from smoking in their own units.
- Greater transparency and accountability – lifting of the standards for building managers and managing agents such as the requirement to disclose conflicts of interest and any commissions they receive such as insurance commissions. It also includes placing time limits on managing agent agreements
- Collective sales – increases the rights of owners to jointly end a strata scheme to allow the site to be sold or renewed, with the agreement of 75% of owners instead of the current 100%. Reforms would also protect the rights of owners to ensure at least the current market value of their lots plus extra to cover costs, and put protections in place for elderly and vulnerable owner-occupiers.
- New building conditions – requirements for developers to lodge a 2% bond (of the contracted price of the building) as security for defective works.
- Proxy voting – restrictions on individuals controlling decisions by gathering a majority of votes by proxy. (otherwise known as proxy farming)
- Tenant participation – allowance for tenants to take part in owners corporations meetings and to be represented on strata committees, in cases where the majority of units are tenanted.
- Dispute resolution – expanded tribunal powers to deal with strata disputes and to recover unpaid levies.
- Modern flexible schemes – such as enabling voting to occur through the post, electronic means or secret ballots, and accommodating meeting attendance through electronic communications such as teleconferencing and social media.
More detail can be found on the reforms at NSW Fair Trading, including instructions on how to lodge a submission. Speak to us at Jamesons if you would like assistance in understanding the proposed new strata laws.