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Strata Law Review

Wednesday, 21st May 2014

Strata Community Australia (NSW) has spent the last two and a half years working with its members and the NSW Government on the various stages, which has led to the final draft of the new strata legislation. At the time of writing the new strata laws are expected to be introduced to NSW Parliament at the end of May 2014 but no date has yet been set for their implementation. SCA (NSW) believes this may be from early 2015 but no later than mid-2015.

How did this all come about? The answer is simple, the existing strata laws – the Strata Management Act 1996 - were long overdue for a review which would bring them into the 21st Century.

In a speech to SCA (NSW) in 2011 when launching the first stage of the review, the then Minister for Fair Trading, Anthony Roberts, MP, indicated that it was time for change.

“Many things have changed in our society since then and regrettably, some areas of the law have failed to keep pace with emerging issues and the growth and changes in strata and community development,” the Minister said.

“There are now ten separate pieces of legislation directly regulating strata and community title in New South Wales, totalling more than 1000 provisions.

“From my discussions with stakeholders, including Strata Community Australia (NSW), there is general consensus that the laws have become outdated and do not effectively meet the sector’s current or future needs.

“In some respects, the law is also overly formal and complex, creating unnecessary disputes and potentially hindering the future growth.”

A process then began with the community invited to participate in an online forum to express their views regarding the current legislation, as well as the workings of the sector itself. This concluded in early 2012 and, according to a Ministerial press release, resulted in 19,138 visits from 13,558 individual visitors; 1,230 individual comments were received and close to 600 suggestions for procedural change or law reform were submitted. 

“Submissions expressed concern about the facilities for disabled people and the challenges of short-term rentals right through to the use of pianos and leaf-blowers,” Minister Roberts said at the time.

From this the NSW Government drafted a discussion paper which was released in late 2012 and SCA (NSW) along with a number of stakeholders made comprehensive submissions on a number of topics.

As the process continued on it was clear that there were a number of areas across the board that required close examination with a view to improving the law or even introducing new laws.

One issue that is attracting a great deal of attention is that regarding the termination of strata schemes in favour of urban renewal.

SCA (NSW) released a policy in early 2012 that recommended the current 100 percent agreement amongst owners required to terminate a scheme be reduced to 75 to 80 percent. This of course would be subject to a number of regulatory checks and balances to ensure all owners interests were considered – even those who opposed the termination of the scheme.

It follows the process in Singapore which has a good history of redevelopment that adequately houses its growing population while looking after the interests of the individual owners.

The basis for this is that there is the potential (and some anecdotal evidence to support this) that at times one person can ‘hold out’ and destroy the hopes and dreams of the majority.

In the Sydney metropolitan area there are large numbers of buildings that are fast approaching or even past their use by dates. These are the poorly built apartment blocks – a lot of them from the 1970s and 1980s – which are costing thousands of dollars to repair and maintain.

Owners in these sorts of buildings would benefit from a rebuild but to do this the scheme must be terminated and this requires all owners to agree on this course of action.

Under the new Bill this will now become more of a reality and allow owners and property developers to rid us of some of these buildings and create better, more energy efficient newer homes.

SCA (NSW) for one is looking forward to seeing the Bill introduced and anticipating some great new changes for the strata sector in NSW.

Once the new strata laws are passed by both Houses of NSW Parliament, SCA (NSW) understands the government will work on the new regulations as well as a separate set of laws for community title.


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