Changes You Need To Know: Strata Legislation Amendment Bill 2023

On December 11, 2023, significant changes to the strata and community title legislation in NSW came into effect. It's crucial for residents and stakeholders in strata or community title properties to stay informed about these legal amendments arising from the Strata Legislation Amendment Act 2023.

The Bill introduces a number of amendments to the following Acts:

• The Strata Schemes Development Act 2015;

• Strata Schemes Management Act 2015;

• The Community Land Management Act 2021; and

• Community and Development Act 2021.

In this article, we highlight some of the changes:

Original Owner

If a scheme comprises more than two lots, the amendments specify that the value of a vote cast by an original owner, typically a developer, may be reduced.

The duration for the original owner to furnish specific documents before the initial annual general meeting has been extended to 14 days, as opposed to the previous 48-hour timeframe.

Initial Appointment

During the initial period, no individual, including a Building Management Committee (BMC) manager, strata manager or facilities manager aiding in the management, maintenance, or repair of common property, can be appointed beyond the First Annaul General Meeting (FAGM) without obtaining an order from NCAT.

Strata Managers

Strata managers must provide a 6-month notice to the owners corporation before the expiration of their agency agreement. Fair Trading can recommend appointing a compulsory agent to manage dysfunctional strata schemes.

Strata Committees

Committee member removal now requires only an ordinary resolution, and a removed member is ineligible to be on the committee for 12 months. Committee elections can occur at any general meeting, not just the AGM. Notices for committee nominations must be included in the general meeting notice. Members with a conflict of interest must abstain from voting and discussing the matter.

Meetings

The time period for General Meeting notices increases from 7 to 14 days. Extra days needed for service method requirements, such as by post, must still be considered in addition to the mentioned days.

The existing restriction on the number of proxies that can be exercised at a general meeting will be extended to powers of attorney and company nominees.

Voting Limits for Company Nominees and Persons Acting Under Power of Attorney

Proxies concerning company nominees and persons acting under Power of Attorney has been bought in line with all other proxies where if the strata scheme has less than 20 lots, they can have a maxmium of 1 proxy. For schemes with more than 20 lots, no one can hold proxies for more than 5% of total number of lots e.g. for a building with 60 lots, a person can hold up to 3 proxies.

Transfers between Administration & Capital Works Fund

For internal funds transfers between the Administration and Capital Works Fund, the owners corporation must decide within three months, through a general meeting, whether the funds should be repaid (previously there was no discretion) and, if so, how – via a simple reverse transfer or by special levy.

Works in Excess of $30,000

A minimum of two quotations for works exceeding $30,000 are now required for all schemes (previously applied to large schemes only). Comparative quotations should be from unrelated entities, and an explanation must be provided if this is not possible.

Special Levies Concerning Emergency Repairs

The time period for payment of a special levy for urgent repairs is reduced from 30 to 14 days. This amendment aims to expedite necessary building repairs addressing imminent threats to health and safety.

By-Laws

Owners corporations may consolidate by-laws for the scheme by special resolution even if there has not been any change. Two-lot strata schemes don't need a resolution to issue a 'Notice to Comply' for a by-law breach.

Pets

Restrictions on pets and the requirement of a bond for pet approvals are not permissible. Any by-law that contradicts the Act becomes ineffective. Additionally, clarification is provided on the acceptable proof that can be requested to verify an animal as an assistance animal.

Books & Record

Starting from 1 June 2024, designated records of the owners corporation, including the strata roll, must be maintained in electronic format.

Rental Agent Obligations

Property Managers are now obligated to notify the owners corporation when a lot has been leased or sub-leased. If they don't, the tenant can also be given notice. Copies of by-laws and any Strata Management Statement, and any subsequent updates, must be provided to the tenant.

Strata Renewal

The Land and Environment Court has gained authority to approve a strata renewal plan, even if process has not strictly followed, as long as it doesn't cause substantial injustice. The timeline for a strata renewal committee's role will extend to two years from the current 12 months. All owners must disclose any pecuniary interest in the renewal proposal, but will not be prevented from participated in and voting on the proposal. The Land and Environment Court is able to award costs against dissenting owners without valid reasons or with ulterior motives.

Compulsory Management

The Secretary of Fair Trading has the authority to make an application for the appointment of a compulsory strata manager.

These changes are crafted to elevate the governance, transparency, and operational efficiency of strata and community living. Familiarising all stakeholders with these amendments is crucial for ensuring compliance and fostering harmonious community living. Staying informed about legislative changes can be a complex task, but with Compass Strata, you have a reliable partner dedicated to keeping you abreast of evolving regulations. Our commitment to proactive communication and expertise in strata management ensures that you are well-informed about any legislative shifts, empowering you to navigate the evolving landscape of strata and community living with confidence.

A copy of the Strata Legislations Amendment Bill 2023 can be found here.

Disclaimer: The information provided in this article is for general knowledge purposes only. It is not intended as professional advice. Readers should consult relevant experts or professionals to address their specific concerns or circumstances. The accuracy and applicability of the content may vary based on individual situations, and the information is subject to change.