WELCOME
In the last newsletter issued in October 2019 we provided details of changes with the Strata Titles Reforms, relation to the duties of the Strata Manager, and the Council of Owners. This newsletter will give you another glimpse of several changes to come into effect with the Act.
MAKING IMPROVEMENTS TO COMMON PROPERTY
Currently a strata company only has a duty to maintain, repair and where necessary renew or replace the common property.
Reforms will give strata companies the power to improve or alter common property:
1. subject to the expenditure controls of the strata company; and
2. where the expenditure exceeds an amount provided in the regulations, a special resolution of the strata company will be required to approve the alteration or improvement of the common property (and details of that improvement / alteration will have to be provided to owners before the vote).
The expenditure controls of a strata company are:
1. the annual budget, which is approved by an ordinary resolution of the strata company.
2. spending (calculated on a per lot basis) that is less than the amount allowed by the regulations (currently $65) or another maximum amount per lot as approved by a special resolution of the strata company or
3. expenditure approved by the notice process. The notice process is: all owners and first mortgagees are given written notice of the purpose and amount of the proposed expenditure. The expenditure is approved unless, within 14 days, written objections are received from the owners or first mortgagees of either:
Disputes about the improvement of common property will be resolved by the State Administrative Tribunal.
SUSTAINABILITY AND UTILITY INFRASTRUCTURE
Reforms will also make it much easier to install sustainability infrastructure (like solar panels) or utility infrastructure on common property within a strata or survey-strata scheme.
The infrastructure (such as solar panels) can be owned by:
the strata company (as personal property)
all of the owners jointly (as common property)
one or some of the owners or
a third party (such as a renewable energy supplier).
If the infrastructure is owned by a third party or one / some of the owners, the strata company:
1. can approve the installation of sustainability or utility infrastructure
on common property by passing an ordinary resolution
2. the owner of the infrastructure will have access to the infrastructure
through a statutory easement and the details of the arrangement will be contained in an infrastructure contract between the strata company and the owner of the infrastructure.
INCREASE MINIMUM PUBLIC LIABILITY INSURANCE
At present, a strata company is required to insure the scheme against public liability for at least $5 million. This minimum will be increased to $10 million.
It was found most managed schemes already have at least $20 million cover, and the $5 million minimum, imposed in 1995, is no longer considered sufficient to cover potential liabilities and costs in the case of damage, injury or death claims.
The difference in annual costs for cover to increase from $5m to $10m is minimal for each lot.
Every scheme must also discuss the insurance arrangements at each Annual General Meeting (AGM). This is to make sure the owners have to regularly consider whether or not their insurance is adequate for the risks faced by their scheme.
GUIDANCE ABOUT BY-LAWS
Schedule 1 by-laws are about the operation of the strata company. Schedule 2 by-laws set out acceptable behaviour of owners and occupiers.
Each schedule has a different voting protocol. A current problem for strata companies is where a new or amended by-law may be incorrectly classified resulting in the wrong voting protocol being applied. The amended Strata Titles Act 1985 will provide clear guidance on what type of resolution is required to make, amend or repeal each bylaw.
By-laws will be classified as one of two types:
A governance by-law means any of the following:
A conduct by-law means any of the following:
As a result of clearly classifying two types of bylaws, some by-laws previously in Schedule 1 will be moved to Schedule 2 to reflect their
‘conduct’ nature. These are:
COMPLIANCE WITH EXCLUSIVE USE BYLAWS
A by-law that grants exclusive use rights over the common property to a person within the scheme is an exclusive use by-law. Exclusive use of common property is where the common property is used exclusively by:
Typically, an exclusive use by-law may impose conditions (to do certain things or pay specified sums of money) on the person(s) who
is given the exclusive use of the common property.
LIMITING THE USE OF PROXIES TO PROTECT OWNERS
The reforms will also protect owners against the abuse of proxy votes.
POWER TO ENFORCE A BREACH OF A BYLAW
Enforcing by-laws is difficult under the current Act. The Tribunal can only make an order imposing a penalty for breach of a by-law, if that by-law specifically states that a penalty is to be paid. Most schemes do not have any penalties stated in their by-laws. Before the Tribunal can order a penalty be imposed for breach of a bylaw, the strata company must establish that the owner has wilfully and persistently breached the by-law.
Reforms will give the Tribunal the power to:
The strata company, owners and occupiers can apply to the Tribunal for an order to enforce a bylaw (including an order that a penalty be paid).
If the Tribunal finds that:
1. the breach of the by-law is serious or
2. that the by-law has been breached by
that person on 3 occasions or
3. that the strata company served notice on a person notifying them they have breached a by-law and that person then breaches the same
by-law again the Tribunal can order the person who breached the by-law to pay a penalty to the strata company.
OBLIGATION TO ACT REASONABLY TO OWNERS
A strata company will be required, in performing its functions, to have the objective of achieving outcomes that are not, having regard to the use and enjoyment of lots and common property:
1. unfairly prejudicial to or discriminatory against an owner or occupier or
2. oppressive or unreasonable
After Hours Emergency Maintenance
Please click your property below to download the Emergency Maintenance Information Sheet. If your property is not listed, please download the Standard Emergency Maintenance Information Sheet.
