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Strata Legislative Review - Colin Grace

Saturday, 30th November 2013

On Thursday 14 November he NSW Government released the latest "white" paper on the Strata review. The paper is the last step before legislation is drafted for consideration by Parliament and has been hailed as the largest review since the implementation of the Strata Schemes Management Act in 1996.

There are 22 suggested amendments to the laws surrounding corporate governance of a strata scheme.  The suggestions include easing meeting procedures requirements, dealing with executive committee appointments (and vacancies), conflict of interest  provisions and proxy voting.

Most of these matters are procedural and go some way to improving the general running of a strata scheme.  Others however are more problematic and may lead to future disharmony in the schemes and potentially the industry:
  • No minimum number for executive committee membership
  • Parking and by-law enforcement issues
  • Limitations on managing agent contract terms
  • Tenancy involvement in meetings.

Building and Construction

There are 18 reforms to the building and construction legislation that will affect not only new building construction, but remedial works and the termination of a strata scheme (now called collective sales). Whilst some set up new systems and procedures in the main it is out view they do not adequately deal with what is systematic failure of building (and remedial) construction works.

The major changes include:

  • Requiring defects to be discussed at every general meeting until all statutory warrant periods have expired (contributing both initial warranties and those covered by remedial works in time Owners Corporations will effectively have a motion on every general meeting dealing with defects and if they are aware of defects in work (or should be aware of defects) then if they do not take actions they may diminish their rights to claim in the future.
  • Requiring developers of new large building to provide a bond which can later be used to pay for defects (after an independent review).  Whilst a great initiative the bond will not deal with major structural elements that appear after the bond has been returned (after 2 years).
  • Terminations (or the "collective sale") of strata schemes.  The limit has been set at 75% in favour and the scheme enters into the collective sale process.
  • Dealing with the owners renovations.

Budgets and levies

These changes deal with further disclosure of information, recovery of levies and some general changes to fund allocations.

By-Laws

The amendments are to cover an update of the current by-law systems and give more flexibility to schemes in making and adopting by-laws.  Some significant changes are:

  • Allowing by-laws dealing with abandoned vehicles
  • Dealing with wooden floorings and other hard surface floors
  • Payment of penalties for breaches of by-laws to the Owners Corporation and not the Director General.

Managing Disputes

The management of disputes is an area in need of consideration and in some respect the suggest changes may not adequately reflect what some suggestions that have been raised.  Provisions to transfer obligations to the new Tribunal with wider powers to consider matters and make decisions including:

  • Penalty for non-attendance at mediation
  • Increase in Tribunal powers over disputes including debt collections and monetary orders
  • Removal of right to be legally represented (unless approved by the Tribunal
  • More power to Tribunal to deal with dysfunctional schemes.

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Comment from AngeliqueAngie on Thursday, 02nd June 2016

Strata review states very obliged laws and rules about assignment writing service and the management and disputes stated some legit rules too.

Comment from aieroel on Saturday, 23rd May 2015

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