NSW strata reforms to modernise apartment strata living

Strata living could be about to change in New South Wales as the draft Strata Schemes Development Bill and Strata Schemes Management Bill 2015, which contain over 90 changes to strata laws have been released for public exhibition.

Some of these proposed changes, which were announced by NSW Fair Trading Minister Victor Dominello include big changes in the concept of property ownership, whilst there are also minor tweaks and updates to existing laws, bylaws and rules.

This is the first time that there has been a major reform of strata laws since the Strata Titles Act was made in 1973. The aim of this strata reform is to bring the strata laws in line with modern day living and the 21st century, whilst help to guide the strata schemes to best manage their strata community’s needs into the future.

Today everything from walk up unit blocks, high rise apartment blocks in the city, townhouses, office spaces, dual occupancies, retirement villages and mixed use buildings are all covered by strata laws.

So what exactly are these NSW strata reforms and changes which will affect ordinary strata residents, owners and tenants and modernise apartment living? Here are eight important changes to take note of:

1) Collective Sales
One of the most significant strata reforms is where older apartment blocks can be sold for redevelopment if just 75% of owners agree to this sale. Currently, 100% of owners need to agree to this for the apartment block to sell. There are roughly 8,000 apartment blocks that have been identified for redevelopment to build newer and safer buildings, which can house more people, but if one person does not want to sell for whatever reason, then this much needed redevelopment cannot go ahead. However, it is also believed that smaller developments should still require a 100% vote.

2) Defects Bond
Another significant change is the requirement for developers to lodge a bond of 2 per cent of the building’s value. This acts as security to cover any defective work after completion and protects new buyers of brand new units, particularly first home buyers. Currently apartment owners who find defects would have to pay for the repairs themselves or to chase developers through the courts to get what they paid for, if they could afford to do so. If this change occurs then any bad developer that delivers shoddy work will have to pay up, and the intention is for bad developers to increase their quality of work.

3) Renovations
Minor renovation work such as adding a picture hook to the wall will be allowed to be carried out without permission from your strata manager, whilst some larger renovations would only need a simple majority vote from the owners’ corporation.

4) Parking
Parking is one issue that owners and tenants have trouble with, especially from non-residents who take up parking spots that are clearly not theirs. The new reforms will allow owners’ corporations as well as local councils to invite council parking inspectors onto the property to inspect and patrol strata car parks and issue fines to anyone who has parked in a wrong parking spot. This will be good news for residents as it will reduce the number of non-residents who are taking advantage of visitor spots or stealing parking spaces, but could be bad news for residents who might be fined for parking in the wrong spot momentarily.

5) Over-crowding
Owners’ corporations will be able to create bylaws to limit the number of adults who can live in an apartment, whilst fines for over-crowding will be raised to $5,500. However, this limit cannot be set for less than two adults per bedroom. The idea behind this is for health and safety reasons to reduce the number of people living under one roof as well as the negative effects that overcrowding has on other residents and on the building itself.

6) Pets
Pet owners will be pleased to hear that the proposed reforms will make it easier to keep pets, unless the owners’ corporation has a very good reason against the keeping of pets.

7) Smoking
If you are a smoker then your passive smoking behaviour could soon be deemed as a “nuisance” by your neighbours who would be able to raise this as a hazard or a nuisance under the Act and allow them to apply to the tribunal for an order deeming this smoke drift as a hazard or a nuisance.

8) Proxy Farming
Proxy farming will be reduced meaning that owners in a building of 20 units or less will only be allowed to carry one proxy vote. For larger complexes this will be limited to 20 per cent of the votes, or five votes, whichever is less.

Currently over two million people in NSW are strata dwellers according to statistics from the Office of Fair Trading and this number accounts for nearly 25 per cent of greater Sydney’s population.

It is anticipated that by 2040, about 50 per cent of Sydneysiders will be living in strata, and these proposed reforms that are long overdue are extremely important to reflect the needs of modern living today and well into the future.

The draft bills are now open for feedback from the public until 12 August 2015, with the final bills to be introduced to parliament later this year.
Published on 22nd of July 2015 by Marty Stanowich
Marty Stanowich
Marty Stanowich

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