21 strata law changes you really need to know

By Jimmy Thomson

There are more than 90 changes to the strata laws that come into force in NSW on November 30.  Here are the 21 that will affect you in ways you might actually notice.

Forced sales

The big ticket item in the strata law changes, the government prefers to call this “collective sales” but it basically means that 75 percent of owners can compel the other 25 to do something radical with a building that may or may not be well past its use-by date.

1. Redevelopment: Just 75 per cent of owners can vote to sell the strata block to developers for demolition and replacement with something bigger, shinier, safer and more expensive. Currently only one dissenting vote can stop this.
2. Renewal: Alternatively, the same proportion of owners can make better use of what they have, and not lose their homes. By adding apartments on to the existing footprint, taking advantage of modern building techniques and relaxed height allowances, they can then move back in after builders have updated and extended the building, income from the sale of the new apartments paying for the work.

New by-laws and rules

3. Pet by-laws: New “model” by-laws are more pro-pet than no-pet but they only apply to new schemes and even then the owners get a choice of models. Basically new schemes can choose between pets being allowed provided you tell the committee and pets allowed provided the committee gives permission (which may not be unreasonably refused). There are plenty of other by-laws and actual laws to deal with pets that turn out to be a nuisance, so there’s no need for alarm. Existing by-laws in established schemes will not change unless a considerable majority of owners choose to change them.
4. Parking crackdown: Owners corps will be able to make arrangements with local council parking rangers to patrol their car parks. This is aimed at rogue parking in open strata carparks near commuter hubs.  They will not patrol underground car parks for safety reasons.
5. Move it or lose it: OCs will be able to move cars parked illegally on common property to a place where parking is allowed. Like, out on the street to a parking meter where it can be fined, for instance? Watch that space.
6. Smoking a nuisance: Smoke from smoking has been defined as a nuisance, making it easier for you to raise a complaint about smoke drift from another apartment. On the other hand, owners corps can pass a by-law defining an area of common property as a designated smoking zone.
7. Overcrowding: Owners corps will be able to pass by-laws setting maximum limits on the number of people living in a unit, albeit with a minimum of two per bedroom and no limits on family members. This is aimed directly at sub-lets overcrowded for commercial purposes and the fines are massive (see item 9).
8. By-law reviews: By November 30 next year, every scheme in the state must conduct a review of their by-laws.  The rusted-on chairs and secretaries who think they can send out a notice telling owners they have read their by-laws (probably for the first time) and they are fine and dandy reckon without those owners who are itching to bring their in-house rules up to date.

Disputes and fines

Some strata residents live in fear of breaching by-laws, others blindly trundle through life as if they didn’t exist – until they get a Notice To Comply from their strata manager.  Under the new laws it will be easier to resolve disputes as well as to punish strata’s bad boys and girls. Here are the major changes.

9. Higher fines: The current maximum fine is $220. That goes up to $550 for regular by-law breaches.  On top of that, it’s $5500 for a first overcrowding offence and $11,000 for subsequent breaches. Slumlords beware!
10. Fines go to owners corp: Currently you and your neighbours (via your strata committee) make all the running at the tribunal but the fines go to the government.  Now the money will go to the owners corp, giving ‘do-nothing’ committees an added incentive to take action.
11. Internal mediation: Strata schemes will be able to organise their own mediation systems for resolving disputes in-house, before they get out of hand, albeit with potential help of outside agencies like the Community Justice Service. These in-house mediations will be accepted as mandatory precursors to any action at the Tribunal (NCAT).
12. Paper adjudications scrapped: Currently, the initial adjudication of strata disputes is done by examination of documents only, with the losing side often appealing at a hearing before a Tribunal member. Now they skip the paper adjudication and go straight to the hearing.

Strata Managers, Building managers and Rental Agents

Many strata managers are wonderful, too many are woeful. The new laws try to limit the damage the bad ones can do, allowing the better operators to rise above the pack.

13. Committee curb: Building managers and rental agents can’t be elected to the strata committees unless they are owners in the scheme.  Anyone else who has a direct or indirect financial interest in the strata scheme must declare this or face a potential fine of $1100. This reduces the ability of professionals to corral landlord votes and then run the building for their benefit, often to the detriment of residents.
14. Insurance Commissions: Strata Managers must declare commissions they receive from compulsory insurance premiums. However, insurance companies will not reduce your premiums by the amount of the commission if you deal with them directly.
15. Contract limits: Strata managers can only be appointed for the first year of a new scheme then for three years thereafter. The one-year limit on new schemes gives the owners a chance to assess service providers before making long-term decisions.

Strata Committees

16. No more EC: Executive committees have been re-named strata committees. Why?  Because some members in some schemes think the old name gives them executive powers and privileges.  It doesn’t – but a name change won’t stop the worst of them from assuming them anyway.
17. Proxies docked: Proxy farming is about to suffer a major drought with votes from owners who can’t or can’t be bothered to attend meetings limited to one per owner for schemes under twenty lots and five per cent of schemes over 20 lots.  Already control freaks who routinely carry 50 percent of the vote to meetings are sending out notices suggesting you vote for a member of their hand-picked committees.  Proxy farming is dead – welcome to proxy crop-sharing.
18. Tenant reps: Schemes with more than 50 per cent of the residents being registered tenants must arrange the election of a tenants’ rep to the strata committee. The tenant will have no voting power and can be excluded from “sensitive” discussions such as finances and by-law breach complaints.  Since the requirement to officially register new tenants in your property is routinely ignored, few if any buildings will qualify.

Renos, dumped goods and debts

19. Abandoned goods: Bringing strata law into line with tenancy laws, owners corps will be able to dump or sell goods left for too long on common property by former residents. If the owner comes back to claim them, the OC has to pass on the proceeds of any sale minus the costs of storage and advertising, etc.
20. Renovations: Current laws could prevent you hammering a nail into a common property wall without getting a by-law approved. The new regulations separate renovations into cosmetic, minor and major. The first is simply a case of notifying the committee, the second only requires approval by a vote of the committee (not a general meeting) and the last – usually involving structural changes – still require a special resolution at a general meeting.
21. Debt collection: Debts for unpaid levies or NCAT imposed fines can be recovered directly through local courts rather than having to first go to the Tribunal to get an order to collect the fine that it previously imposed. It’s probably the clearest case of red tape being cut to make life easier for all of us (except the people who owe us money).

The details of all these changes can be found in three documents The Strata Schemes Management Act (2015),  The Strata Schemes Management Regulations (2016) and, to a lesser extent,  the Strata Schemes Development Act 2015

This piece was originally run in the Sydney Morning Herald online