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Strata overhaul to give more power to tenants

05 November 2013 Brendan Wong

The New South Wales government is set to implement the biggest changes to strata laws in 50 years, dealing with issues such as pets in units, noisy floors and smoking on apartment balconies.

NSW Fair Trading minister Anthony Roberts, who announced the changes over the weekend, said there were more than 72,000 strata schemes in NSW, and it was estimated that more than 30 per cent of the population lived or worked in strata. 

With this set to expand to 50 per cent of the state’s population, current strata laws are outdated and do not meet the current or future needs of population in an efficient or effective way.

“For example, the laws were introduced before the age of social media and other flexible forms of communication,” he said.

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“They do not cater for today’s world where, for example, many investor-owners do not live in NSW and cannot physically attend strata meetings.

“The legislative framework is overly formal and complex. It is confusing for both tenants and owners, who often do not understand their rights and obligations, and the dispute mechanisms can be onerous and unclear.”

One of the changes includes encouraging owners and residents to take an active interest in the management of strata schemes, including serving on committees and attending meetings.

Current laws require owners to be physically present if they want to personally vote on a motion, and meeting papers need to be supplied in hard copy.

“We will give corporations the flexibility to use modern technology, like teleconferencing and online tools, to hold meetings and vote on motions if they wish to do so,” Mr Robert said.

Owners corporations will have more flexibility in terms of when to hold general meetings and will only be required to hold an annual general meeting each financial year.

To support greater opportunities for tenant participation, the proposed law will give tenants the right to attend and participate in meetings of the owners corporation. However, they will not have any new voting rights, and tenants can be excluded on certain matters.

The law will also ensure decisions in strata are made in a transparent and accountable way.

“Conflicts of interest, real or perceived, are very common in strata and are at the heart of many complaints to Fair Trading and the Consumer Trader and Tenancy Tribunal,” he said. 

“Trust can be eroded if conflicts are allowed to exist, and can lead to decisions being made that are not in the best interest of the owners or residents.”

Under the reform, committee members are required to disclose any conflict of interest and the committee will decide if they are to be excluded from any vote.

Non-owners with a financial interest in a scheme, including managing agents, letting agents and building managers, will not be allowed to become committee members.

“These reforms will further professionalise the strata management sector, safeguarding its independence and ensuring managing agents make decisions in the best interests of their clients,” Mr Roberts said.

Mr Roberts also announced a new set of model bylaws that would cover smoke drift and allow pets.

“Fair Trading receives numerous complaints from people who are forced to choose between living in strata and keeping a pet," he said.

“While many schemes would be happy to allow pets, it is often the default rule that they are banned, and potential owners and tenants are not always in a strong position to see the bylaws changed.”

The reform package will be finalised ahead of the introduction of a Bill in parliament early next year, with a commencement by the middle of next year.

“The government is firmly focused on delivering an outcome that will meet the needs of the strata community for the next 50 years, as we strive to make NSW the leading jurisdiction on strata once again,” Mr Roberts said.

Strata overhaul to give more power to tenants
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