By Lyn Drummond

18 January 2012 – ACT has radically overhauled its strata legislation, especially in relation to sustainability retrofits. Now the NSW Government is undertaking its own review.

NSW Minister for Fair Trading, Anthony Roberts told The Fifth Estate that environmental sustainability of buildings and ways to reduce energy costs are important issues for strata and community schemes.

Mr Roberts was commenting on a review underway of the state’s strata and community title laws because he says they no longer address issues associated with ageing buildings and changing demographics.

The review followed complaints that the 50-year-old legal framework does not cater to the growing size and complexity of today’s apartment precincts.

The government has called for public comment on the proposed changes by 29 February.

More than 100 comments had been received in the month since the forum opened on 15 December. “The numbers of people reading the forum and adding their comments is expected to step up in the coming weeks as everyone starts coming back from their holidays,” he said.

Mr Roberts said no starting date has been set for the new rules.

In an earlier statement, Mr Roberts said: “There are now 10 separate pieces of legislation directly regulating strata and community title in NSW, totalling more than 1000 provisions. “

“There is general consensus that the laws have become outdated and do not adequately meet the current or future needs.”

Present laws also made it hard to enforce building-specific rules for pets, parking and parties, right up to the demolition and renewal of outdated buildings.

“Since the first strata scheme was registered, strata has developed into the fastest growing form of residential property ownership, “ he said.

“More than two million people now live in over 70,000 strata and 1500 community schemes in NSW.

“Within 20 years, half the state’s population are expected to be living in strata and community schemes.”

Mr Roberts said the current laws were designed primarily for small, self-managed blocks of flats.

“Strata and community schemes now include city high rises, townhouses, dual occupancies, offices, retirement villages and mixed-use, recreational and tourism-focused developments,” he said.

Mr Roberts said as far as was known the ACT and NSW are so far the only territory and state to undertake changes in these strata laws.

Strata laws, which vary slightly from state to state, not only make it very difficult to make changes, but in some instances they also cut apartment owners out of incentive schemes altogether.

In NSW strata law requires at least 75 per cent consensus of owners to make changes in common areas of apartment blocks, such as installing more efficient hot water systems, rainwater tanks or a green roof. To vote for such changes the strata committee (made up of residents) must call either an extraordinary general meeting of the owners corporation or wait for the annual general meeting.

Founder of Green Strata Inc Christine Byrne said she believed sustainability definitely needed to be considered in the review.


Changes to ACT law expected in May

Changes to the ACT’s strata and community title laws are expected to be in place on or before 3 May, 2012, an ACT government spokesman told The Fifth Estate.

Section 23 of the Act is designed to make it easier for owners’ corporations to install sustainability infrastructure such as photo-voltaic cells and water tanks) on the common property.

A key breakthrough is that an owner’s corporation will be able to approve installation of sustainability infrastructure on the common property by an ordinary resolution of 51 per cent. NSW law currently requires a special resolution of 75 per cent.

The ACT legislation follows NSW, Victoria and Queensland by splitting its strata legislation into two separate Acts covering the development/subtitling//registration of schemes and the management of schemes.

The legislation is remaining substantially the same, with the exception of the following new provisions:

  • removing unnecessary barriers to the adoption of sustainability measures and utility infrastructure
  • introducing a code of conduct for executive committee members
  • changing the resolution for annual administrative and special purpose fund budget approval from special to ordinary, which removes an excessive restriction on managing owners corporation funds
  • clarification of financial provisions to clearly link budgets, contributions and
    expenditure for each type of fund
  • providing guidance for ACAT approval of developer control period contracts
  • clarification of insurance requirements

The ACT bill imposes rules on the owners’ corporation, including consideration of site and maintenance plans and details of financing arrangements. The owners’ corporation also has to be satisfied that the long-term benefit is greater than the cost of installing and maintaining the infrastructure. NSW does not have these requirements.