01 Nov Strata Reforms: Fact or Myth?

Strata Reforms: Fact or Myth?

The new strata law reforms are designed to bring strata laws up to date with modern times, covering a broad range of topics from pet ownership to the length of strata management contracts. We have previously covered some of those changes on our previous news article.

Test your understanding of the upcoming law reforms with the following from NSW Fair Trading… are the following statements facts or myths?

1. On 30 November, the old strata rules become invalid. Owners corporations must meet right away to decide their new by-laws

MYTH. By-laws passed by the owners corporation and registered remain valid after 30 November 2016 until removed or amended by the owners corporation. Owners must review their rules by 1 December 2017.

2. Small pets will be allowed in strata buildings but a landlord still needs to give a tenant permission.

MYTH. Yes – tenants still need the landlord’s permission (although, the landlord cannot accept a pet if their strata scheme does not allow the pet). However, it is up to each strata scheme to decide which updates they want to make to their by-laws, if any. So, the owners decide if they wish to keep or change their existing pet rule.To change a by-law, the owners corporation needs to pass a special resolution (ie. a 75% majority vote). The model by-laws are a guide for strata schemes only. These provide options, including rules on pets, for strata schemes to consider. Owners are always allowed to have assistance animals, such as guide dogs.

3. Smoking is banned in all strata buildings from 30 November 2016.

MYTH. Smoking is not banned in all strata schemes. However, occupants must not create a nuisance or hazard or stop others enjoying the strata complex. If smoking is offending someone, the smoker could be taken to the NSW Civil and Administrative Tribunal and penalised. Also, the model by-laws include an example rule restricting smoking. Owners corporations may adopt it or develop their own smoking by-law.

4. Current contracts with strata managers or building managers end on 30 November.

MYTH. If a strata manager was appointed before 30 November 2016, their term ends whichever is the later: 3 years after their term commenced, or 6 months from the start of the new laws. For building managers, contracts in force before 30 November 2016 remain in place until 10 years after the reforms start (unless the contract is for a shorter period, then that will apply).

5. Tenants can now vote at owners corporation meetings.

MYTH. Tenants will have the right to attend and be notified of upcoming meetings. The owners corporation may agree to tenants speaking on a particular matter. However, a tenant may only vote if they hold a proxy to vote on a lot owner’s behalf. In schemes where a least half the lots are tenanted, a non-voting tenant representative can be nominated to the strata committee. This can be helpful so that tenants can identify issues, for example, repairs to fix water leaks affecting common property.

6. If someone who isn’t a visitor parks in my apartment’s visitor parking, the body corporate (owners corporation) can fine them.

 MYTH: The owners corporation cannot fine non-visitors for parking breaches directly. An owners corporation may adopt a by-law preventing owners and occupiers of lots parking in visitor parking spaces. Normal notice requirements for a by-law breach would apply and if the unauthorised parking continued, a penalty may apply. Alternatively, the owners corporation may decide to enter into an agreement with their local council to prosecute car parking breaches on the common property. If the local council agrees to such an arrangement, the owners corporation would need to pass a special resolution vote (that is, 75% of the owners in a meeting agreeing) to enter into a commercial contract. The council would provide all parking signage for the scheme, for a cost that would be outlined in the agreement.  Council rangers could then issue infringement notices to any vehicle breaching the requirements of parking signs on the common property, including visitors.

7. Proxy Voting will be limited.

FACT: Proxy votes able to be held by one person will be limited to; one proxy vote only for schemes with less than 20 lots, or 5% for schemes with more than 20 lots. Limiting proxy votes in this way makes voting fairer and puts an end to ‘proxy farming’ (where one or two owners can control an owners corporation’s decisions by obtaining the majority of votes by proxy).

For further information, visit the Major changes to strata laws page at NSW Fair Trading.  Or if you would like to discuss how these changes may impact your relationship with your clients going forward, then please feel free to contact us. We will be happy to assist.

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