New legislation is on its way
Currently, about one in Sydneysiders live in a strata complex, with estimations that by 2040, that number will increase to one in two. Further, there are around 75,000 strata schemes in existence in NSW with over $350 billion in assets.
Given the prevailing statistics of this rapidly growing property division, and the fact that the legislation that governs it (the Strata Titles At 1973) is over 40 years old, there is a great need for an updating of the law. In answer to this, the NSW government has drafted an updated legislation to create a modern framework for the strata schemes division, being the Strata Schemes Management Bill 2015 and the Strata Schemes Development Bill 2015.
The final release of the Bills occurred in early July 2015, which allowed for the final view and comment from the public before an anticipated enactment of this legislation that is forecast for late 2015.
What does this mean for you?
The Strata Scheme amendments are designed to makes it easier for an owners corporation to manage everyday issues that presently occur, support responsible management of schemes and establish new processes to help aid defect issues.
If you currently own a property in a strata complex, your property will be directly affected by the amendments, both initially and within the first 12 months of the enactment.
The initial changes that are included in the current exposure draft include:
- By-laws – under the new regulations there will be a new model by-law standard that can be adopted by strata schemes with every scheme being required to review its by-laws within 12 months of the legislation enactment date;
- Smoke Drift – the new model by-laws are proposing to address smoke drift issues which will allow an owners corporation to apply to the tribunal for orders to deem smoke drift into another lot or common property as a nuisance or hazard;
- Pets – current by-laws have confusing rules which allow an owners corporation to have complete final say on pet issues. Under the model by-laws, a single by-law will replace all existing pet issues, which will require any owners to get approval from the owners corporation for keeping a pet. An owners corporation will not be able to unreasonably refuse any request from an owner to keep pets, and an owner will be allowed to dispute at a tribunal if unreasonably refused;
- Parking – unlike the present model by-laws, under the new legislation, an owners corporation will be allowed to better manage parking issues on common property by applying to the council for council officers to erect parking signs and issue fines. This will allow the owners corporation to take action against any offending owners;
- Collective Sale and Renewal – the new legislation is designed to make it easier for an owners corporation to establish a collective renewal and sale of buildings, allowing for lot owners to be empowered to realise the full potential of their strata building through a democratic and transparent process;
- Owners Renovations – Under the new model by-laws, owners will be allowed to make renovations to their lot. Cosmetic renovations (installing a picture hook) will not require approval from the owners corporation as in the current by-law system. Minor renovations (installing timber floors) will only require a 50% general resolution vote. Lastly, renovations affecting the external appearance of a lot will require a 75% special resolution vote; and
- Increasing Penalties – under the current laws, the maximum fine for a breach of by-law is $550. This will increase to $1,100.00. Further, if the Tribunal believes that a person has breached a by-law repeatedly, a fine of up to $2,200.00 will be able to be issued by the Tribunal. This will increase the effectiveness of enforcing by-law breaches.
Public opinion on the proposed legislation closed on Wednesday 15 August 2015. Information can be found at the Reform of Strata Laws on the Fair Trading website, which explains the process in depth and offers a breakdown of all proposals.
If you would like a consultation with a member of our Property Team regarding an existing strata dispute or defect matter, please feel free to contact us.