Planned Reforms for Strata Laws – What’s in the Pipeline?

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The growth of Strata Development and Strata Living as a lifestyle choice for many is on the rise. The nature of future Strata Living is currently a hot topic in light of the proposed reforms to legislation in NSW. The Draft Strata Schemes Developments Bill 2015 and Strata Schemes Management Bill 2015 were released for public viewing and public consultation and comment. The comment period has now closed and the Bills are being finalised with over 70 reforms proposed.

Key Changes

Some key changes that impact on day to day living include:

  • For new strata constructions there will be a developer bond, independent defects report, and a maintenance and servicing schedule to be prepared by developers. This will be used to proactively limit escalating costs, disputes and damage arising from defects.
  • Pet friendly units will be encouraged, though not mandated, by reversing the current default provision in the model by-laws banning pets.
  • Passive smoking being specified as a potential “nuisance” or hazard and smokers may incur penalties arising from “smoke drift” from areas such as common property and balcony spaces.
  • The potential to prevent over-crowding may be averted if Owners agree to introduce a scheme with an upper-limit rule on occupiers per bedroom.
  • The ability for Owners Corporations to invite Council Parking officers to patrol apartment block garages.
  • Addressing the practice of “proxy vote harvesting” by placing a limit on proxy votes held by one person to 5% of the total number of units.
  • Enabling modern forms of electronic communication which will include the option for a strata scheme to keep and issue electronic records, issue email updates and for lot owners to attend meetings “virtually” which will serve to enable greater participation in schemes.

Can you be Forced to Sell?

A key proposal for change that is on the horizon is allowing the forced sale or redevelopment of apartment buildings if only 75% of unit owners agree, rather than the current requirement of 100% owner agreement. The move seeks to address urban renewal but is no doubt the most controversial as it will result in the right for private citizens to compulsory acquire property.

So the question arises, what checks and balances are in place so vulnerable person/s such as the elderly aren’t forced to move especially in the case of when they can’t afford to buy in? Votes will be on “one unit- one vote” not on a unit entitlement basis and safeguards such compensating lot owners based on market value payment as a minimum payment based on independent valuations and a form of legal recourse for appeals against unfair payments.

More details and information on these proposed changes are available on the Fair Trading website.

The team at Osborn Law will continue to monitor the progress of the passing of the Bills through Parliament and will provide an update once amended legislation is enacted.

If you would like to discuss anything further please contact our property team on 4927 2900.

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