All the strata facts that are fit to print

The future is … flexible

Don’t hold your breath but it may be that the most profound changes to strata law are in the offing … or it could be the most elaborate deployment of smoke and mirrors in an area of government previously, at least, unsurpassed in its lack of transparency and history of obfuscation rather than enlightenment.

I’m speaking of course of the NSW government’s current canvassing of all and sundry in strata for their – that’s YOUR – views on what needs to be done to fix strata laws in this state.

If you go to the website HERE you can chip in and answer any or all of these four questions:

Q1. What are the main areas of the existing strata and community scheme laws you would like to see changed?
Q2. Can you see any future issues that need to be addressed in the legislation?
Q3. How could the management of strata and community schemes be improved?
Q4. Are there any changes needed to the way disputes in strata and community schemes are resolved?

You can read what other people are saying and the survey is allegedly going to be used to help with a revision of the strata laws planned for mid this year (2012). Whether or not they pay much attention to what we, the people who actually live in strata say, is another matter.

Cynical, moi? Anyone who has watched an episode of Yes, Minister or The Thick Of It will know that one of the basic principles of politics is that you don’t ask a question if you don’t know the answer. So let’s have a look at what our pollies are thinking the answer might be.

If you look at the survey website, there’s a message from Fair Trading Minister Anthony Roberts who says: “An improved, modern and more flexible framework for strata and community schemes is essential. Many people waste thousands of dollars in legal fees because the law is not simple and clear.”

No argument from me on that although I wonder what ‘simple’, ‘clear’ and ‘flexible’ mean to politicians and civil servants.

Also via the website, Greg Pearce, MP, briefly outlines his vision for the new laws: “The legislation should be flexible and accessible, balancing the needs of developers, owners and residents, but is it?”

There’s that F-word again. And when you hear about a need to “balance the needs of developers” you have to assume, based on the recent reduction of the window for defect rectification, that they aren’t going to be any worse off in this brave new ‘flexible and accessible’ world.

Fair’s fair, it mostly sounds good – but what does it all mean? Where are they going with this? Here’s a clue: a senior civil servant telling us they’d prefer fewer rules, not more, in strata.

“The problems that cause most disputes in strata and community schemes are fairly easy to identify,” say Michael Coutts-Trotter. “You start with the three Ps – pets, parking and parties. Floating timber floors, noise problems, decaying old buildings, rising levies, overcrowding, misuse of proxies, owners who do not pay on time and a lack of clarity over what is common property are just some of the other issues.”

Notice there is no mention of building defects and the difficulty many new home buyers have in simply getting what they paid for or being sneakily locked into long-term contracts with the developers subsidiaries or mates. A clear case of “don’t mention the war,” don’t you think? It seems that as long as we remember that we are the problem, maybe then the government can find a solution.

So what does Mr Coutts-Trotter, Director-General of the Department of Finance and Services, think the government should do about the issues they do acknowledge? The answer seems to be “less is more”.

“One area that needs more attention is the amount of red tape, particularly for smaller buildings and those that run their scheme without the services of a professional managing agent,” says Mr Coutts-Trotter. “Many thousands of people across NSW give up their time to sit on executive committees or become office bearers for their scheme.

“This is often a thankless task and some schemes have increasing difficulty in finding enough people willing to volunteer for these roles. The last thing they need are prescriptive rules and procedures to follow without any real reason or purpose.”

Amen to that, but can you give us an example of rules that have ‘no reason or purpose’? Are you saying that Executive Committees, many of whom already either don’t know about or don’t bother with rules and regulations, should have even fewer controls on their actions?

“Cutting red tape would not only save costs for schemes, it would also remove the source of many nitpicking, technical disputes that arise when someone has simply forgotten to dot the i’s and cross the t’s,” says the DG, who asks, “Can you think of any unnecessary areas of red tape in either the strata or community scheme laws which should be cut?”

Hmmm. What does he mean by technical? Proper agendas and notifications of meetings? Correct minutes and meetings procedures?

Or are we talking about the current requirement for EC meetings before Notices To Comply can be issued. Or having to traipse off to the CTTT every time somebody parks on Common Property? Or ending up strangled by the dreaded red stuff if you want to ensure your residential building isn’t turned into a holiday hotel by a handful of greedy bastards or prevent hot-bunking students being crammed into one flat?

Fair Trading Commissioner Rod Stowe has a few thoughts too: “Opening up the types of matters that can be mediated may prevent disputes from festering within schemes. Adopting the Community Justice Centre model of a free service may encourage more people to give mediation a go.”

Sounds good – and Rod has views on enforcing compliance too.

“There are close to 70 offences in the current laws, many of which attract maximum penalties of only $110 or $220,” he notes. “A shorter list of key offences would make better use of our limited resources. Innovative and practical remedies, other than court action and fines, may be worth exploring.”

Like … what? Name and shame? An hour in the stocks (rotting vegetable missiles optional)? But seriously, what most strata schemes want is quick action against troublesome offenders. However, anything that doesn’t have proper procedure gets perilously close to vigilante tactics.

Des Mooney, the General Manager, Land and Property Information (LPI), again mentions flexibility; it’s a great word for politicians and civil servants because it sounds desirable but, when it comes down to it, means little.

The pollies want to cut the number of laws that govern strata from a ridiculous 10. Hear, hear to that. But there is a simple solution – you simply say that Strata Law supersedes any other law when there is a conflict over a strata issue. Also, as a general legal principal, you accept that in strata the needs of the community over-ride the much-vaunted ‘rights’ of the individual.

And, in an effort to root out the cancerous corruption that can eat at the heart of these new-born communities, once half the lots have been sold a developer should have ZERO influence over the rest of a strata plan. No votes. Nada.

Combined, these changes would sweep up all the others and be modern, flexible, clear, balanced and all the other buzzwords that have infected this debate.

One other idea. Every strata plan in NSW is given a year (or two AGMs) to review their by-laws. After that, they have to have a “mission statement” that goes on the front of every rental or sales contract.

It could say something like: “This strata plan does not allow uninsulated flooring or pets. We also take action against excessive noise and illegal parking. We encourage short-term lets. All our other by-laws are enforced.”

Or it could say, “This Strata plan has a give-and-take attitude to noise, provided it is not excessive or persistent, and we welcome well-behaved pets. However, parking is strictly monitored and we take action against smokers who are a nuisance to other residents.”

See what I’m getting at? Everybody would know from day one what kind of building they were getting into and no one would have any excuses when they were pulled up for by-law breaches. These mission statements could, of course, be altered as the nature of the buildings evolved.

But what we really need is a quick, clear and INflexible process of enforcement so we can all get on with enjoying our strata living. Flexibility may be the springboard to a bright new strata future … but it sounds too close to floppy for my comfort.

NB: There are considerable differences in strata law between NSW and other states and countries.  There have also been changes in the law since some of the articles archived here were written.  If you have a serious problem, contact the agencies listed in our contacts sections. Otherwise contact a properly qualified and experienced strata lawyer or strata manager. These columns offer general opinions and should not be regarded as a substitute for professional legal advice.

Jimmy Thomson, 2011