A Second Phase of Reform

New South Wales is gearing up for significant changes in strata law, as the second phase of recommendations from the statutory review is set to be implemented. The proposed changes, introduced to the NSW Parliament on 20 November, 2024, aim to address a range of issues affecting strata communities across the state.

Key Proposed Changes

While specific details may vary, the proposed changes are expected to cover a broad spectrum of areas, including:

Accountability for Developers

• Enhanced Developer Responsibility: Developers will be held more accountable for the accuracy of initial maintenance schedules and levy estimates provided for new strata developments.

Improved Strata Management

• Stricter Oversight: Increased oversight of strata management agreements to ensure transparency and fairness.
• Building Manager Duty: Introduction of a statutory duty on building managers to uphold specific obligations.

Protecting Owners’ Rights

• Fair Contract Terms: Safeguarding owners corporations from unfair contract terms in standard form contracts.
• Stronger Committee Governance: Imposing new duties on strata committee members to improve governance and decision-making.
• Common Property Maintenance: Reinforcing owners corporations’ obligations to maintain and repair common property.
• Enforcement Powers: Granting NSW Fair Trading additional powers to enforce common property maintenance obligations.

Sustainability and Accessibility

• Sustainability Focus: Encouraging sustainable practices by requiring owners corporations to consider sustainability in annual general meetings and levy estimates.
• Embedded Network Protections: Enhancing protections for owners and owners corporations regarding embedded networks.
• Accessibility Improvements: Facilitating the installation of support infrastructure for owners with additional needs.

 Other Enhancements

• Clarity and Efficiency: Implementing various changes to streamline strata law processes and improve clarity.
• Financial Hardship Support: Providing assistance to owners facing financial difficulties.

Impact on Strata Owners and Committees

These proposed changes are likely to have a significant impact on both strata owners and committees. Strata owners can expect increased protection and greater involvement in decision-making processes. Strata committees, on the other hand, may face additional responsibilities and regulatory requirements.

What’s Next?

As the proposed changes progress through the legislative process, it’s crucial for strata managers, strata owners and committees to stay informed. By understanding the implications of these reforms, you can better prepare for the future and ensure the smooth functioning of your strata communities.

More Information

For more information and insights on the proposed strata law changes visit NSW Government changes to strata laws

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Did you know there are 81,717 strata schemes registered in NSW and every year this number grows by more than 1,000 across Sydney and regional NSW?

That’s why the NSW government has recently recognised the importance of strata living laws and the need to ensure that they stay relevant and address some fundamental issues that have arisen since the laws were re-written in 2015.

An online survey has been developed and the NSW Government is asking you to ‘have your say’ here now.

For all NSW strata legal including by-laws, building defect and levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

Is an owners corporation able to terminate the appointment of a caretaker with whom it is dissatisfied?

In some cases this is possible.

But in recent years, there have been several cases involving attempts by owners corporations to rid themselves of caretakers who they consider are underperforming and these attempts have been spectacularly unsuccessful.

In this article, we review one of those cases Strata Caretaker Agreements

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

Recent research conducted by the University of NSW lists the top 15 common building defects in strata blocks.

To deal with problems caused by defective building work in new strata buildings, the NSW Government introduced a building bond scheme which commenced on 1 January 2018.

The bond scheme will apply to many new strata buildings that are built this year.

So, what do strata managers need to know?

To help you navigate the new laws we’ve prepared this paper Building Defects Bond Scheme that covers everything strata managers need to know.

For NSW strata building defect advice please contact us here or call 02 9562 1266, we’re happy to assist.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

There are new rules an owners corporation must follow before appointing a lawyer or taking legal action (legal services).

If legal services:

• will not cost more than $3,000, or
• are urgent and will not cost more than $15,000, or
• relate to obtaining legal advice before taking legal action, or
• concern the collection of overdue levies,

the strata committee is able to approve those legal services: see section 103 Strata Schemes Management Act 2015 and cl 26 Strata Schemes Management Regulation 2016.

If the above applies, there is no need for an owners corporation or strata manager to send a lawyer’s costs agreement or costs disclosure to owners and committee members under section 105 Strata Schemes Management Act 2015.

The above assumes the power of the strata committee to obtain legal services or spend money has not been restricted at a general meeting and owners who hold 1/3 of the unit entitlements do not block a proposed decision of a strata committee to obtain legal services.

In all other cases, the owners corporation must approve of the legal services by passing a resolution at a general meeting in accordance with s 103(1) Strata Schemes Management Act 2015.

The new rules will reduce the scope for a strata committee to approve legal services as a result of the threshold amount to avoid general meeting approval reducing from $12,500 to $3,000 in most cases.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

The new strata laws will commence on 30 November 2016. Will you be ready?

To help you get ready, the team at Muellers will be running training seminars across Sydney in September and November 2016.

We will explain the most important aspects of the new strata laws and tell you what you need to know to be ready come 30 November.

We will review the new laws concerning strata managers, by-laws, renovations, NCAT, building bonds, collective sales and more.

Look out for the invitations to our training seminars as places are limited and will book out quickly.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.

That’s the concept many strata unit and apartment owners in New South Wales will be faced with if controversial changes to strata laws, proposed by the NSW Government, go ahead in July 2015.

Under the proposal, the consent of only a 75% majority of strata unit owners in a block will be required to consent to its demolition.

This is in stark contrast to the current laws, which require agreement by 100% of strata unit owners for a block to be sold to a developer for demolition. This proposal will effectively enable that 75% to force their neighbours (the minority 25%) to sell their homes, whether they are willing or not. An unpleasant prospect for that minority, despite compensation and relocation assistance.

With many strata blocks within New South Wales becoming quite dated, ongoing maintenance and renovation is, without doubt, an extremely costly process, with the preferred option being to simply demolish the buildings and build more aesthetically appealing higher density buildings. Currently, the 100% agreement strata laws force apartment owners to maintain and repair their buildings, regardless of the cost, and irrespective of whether developers could potentially pay a fair price to demolish and replace the buildings with modern, more liveable apartments. This has been a contentious issue for some time.

There are several positives should this law come into effect. For example, some of Sydney’s trendiest suburbs are host to some of its oldest, and least sustainable, buildings. The reforms would allow for redevelopment rather than expensive maintenance, offering potential increases in tenancy numbers and far more energy efficient buildings. Local council height restrictions could be more effectively adhered to, and, of course, it opens the door for stimulation within the building industry.

There are, of course, anticipated negatives to the proposed reform. There is potential for a small number of developers to over or underpay strata owners for their properties, thereby affecting the property market, and potential for owners to lose their lifelong residence and be insufficiently compensated. However, some safeguards are apparently planned, such as the enforcement of independent valuations, and there is talk of an ”extinguishment commissioner” who will hear appeals against unfair payments.

Should the reforms come to fruition, developers could be encouraged to offer apartment owners options such as ‘first option to buy deals’ and assistance with temporary or permanent relocation.

In circumstances such as these, legal advice will be imperative for strata owners.

“The new strata laws will introduce novel concepts unfamiliar to apartment owners and other stakeholders in the strata industry. These will need to be explained in simple language to make sure all stakeholders know where they stand,” says Bruce Bentley, partner of Sydney strata law firm, JS Mueller & Co.

Bruce specialises in strata law and those areas of the law that particularly affect the development, management and administration of group title communities.

“An apartment is someone’s home and most valuable asset. That is something worth protecting. Knowing where you stand if there is a proposal to sell under the new laws will be vital said, Bruce.”

The focus of the strata reforms is on improving the lives of people living in strata communities by increasing transparency and engagement within strata developments. These are worthy goals. But the proof is in the eating, and time will tell if the Government is able to deliver on its promise to improve strata living through more modern strata laws.

For NSW strata legal or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.