Changes to NSW Strata Laws – What Do They Mean for You?

Changes to NSW Strata Laws


Reforms to the Strata Management Act will come into effect at the end of next month on 30 November 2016. The changes will affect a significant proportion of the population, with more than a quarter of NSW’s population living in, owning or managing strata properties.

There are more than 90 changes, many of which bring strata laws into the modern age (the last major strata reforms occurred in 1973), while a few of the changes will have some in strata managed buildings less than impressed. We take a look at the most significant changes and what they’ll mean for you.

Use of Technology

You can forget rushing from work to make it to an owners corporation meeting, under the new reforms it will be possible to attend and hold meetings via teleconference or using services such as FaceTime and Skype. Email can also be used for electronic voting and the distribution of papers.

Limits on Proxy Votes

Individuals will be prevented from obtaining a majority of proxy votes (proxy farming) in order to control owner decisions. The changes will put limits on the number of proxy votes that an individual can hold. Proxy votes will be restricted to one proxy vote per person in complexes with less than 20 lots or 5% for those with more than 20 lots.

Pets Are Included

Changes to standard bylaws will include pets by default unless specifically excluded, rather than the previous position which automatically prohibited pets by default. These changes will typically only apply to new buildings unless an existing strata scheme chooses to adopt the new bylaws.

Smoking is a Nuisance

Other changes to bylaws will define cigarette smoke as a “nuisance”. This means that even residents who smoke inside their unit can be ordered to stop if it affects other residents, but again, this will only apply to an existing strata scheme if they choose to adopt the new bylaws.

Council Patrol of Parking

Many complexes, especially those near public transport stations or in popular city and beach areas have issues policing their car parks and preventing commuters or other persons from using car spaces on the property. Under new strata reforms, owners corporations can make a commercial arrangement with local council to police any unauthorised parking.

Tenants Can Have a Say

Tenants will have a right to attend owners corporation meetings and can vote if they hold a proxy to vote on an owner’s behalf.

Accountability for Strata Managers

Strata managers will need to disclose any conflicts of interest, including any commissions they receive from insurers. These requirements will also place time limits on strata managing agent agreements and if a strata managing agent is not performing, owners will be able to apply to the Tribunal to vary or terminate the contract.

Minor Renovations Made Easy

Under previous strata laws it was difficult for owners to make even minor alterations to their property. New reforms mean that any work defined under ‘cosmetic works’ that does not affect a common area such as painting or laying carpet will no longer require approval from the owners corporation. Approval for work defined as ‘minor renovations’ like renovating a kitchen or reconfiguring walls will still require approval from the owners corporation, but this has also been relaxed. Approval can now be granted through an ordinary resolution.

Building Defect Bond Scheme

Part of the reforms include the new building defect bond scheme. To allow sufficient time to prepare for the changes this will not take effect until 1 July 2017. Under the new scheme, a developer will need to arrange mandatory defect inspection reports according to the new Australian Standard and they will need to lodge a 2% bond to account for any defective building work.

Realistic Levies

Developers will be required to set realistic levies at the very beginning of a development to stop them from attracting buyers with unusually low strata levies, then dramatically increasing strata levies once all lots have been sold.

Collective Sale

Perhaps the most controversial reform is the introduction of a new process which will allow owners in apartment blocks to jointly sell the entire building to developers. The process has met opposition as the new reforms only require 75 per cent of owners to go ahead with a sale despite objection from the other 25 per cent. In an effort to make the process fair and equitable the reforms ensure that owners receive at least the market value of their lot, plus extra to cover moving costs.

If you would like more information on the new strata reforms, Fair Trading will be running free strata reforms information sessions. You can view the events register to find an information session near you.

Strata laws can be complex, understanding what they mean for you, your property and lifestyle is essential. Strata schemes vary and failure to properly investigate a strata scheme could have significant financial consequences and may impact on your way of life. If you need assistance to navigate the sometimes confusing strata world, chat with one of the property law experts at Taylor & Scott Lawyers.

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