NSW Government unveils timeline for new strata legislation

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Apartment owners in New South Wales may soon face the prospect of being forced to sell their property with the State Government releasing a start date for parts of its amended strata legislation.

From 30 November 2016, the Strata Schemes (Management) Act 2015 and Strata Schemes (Development) Act 2015 will come into force, which contain more than 90 amendments to how strata schemes in NSW are currently legislated.

The amended legislation is the result of five years’ worth of public consultation and more than 3,000 submissions to the government, which NSW Fair Trading Commissioner Rob Stowe said indicates how keen those involved in strata schemes are to see the legislation updated.

“The last major reform to strata was back in 1973, and parts of the legislation are no longer relevant in this day and age,” Stowe said.

“The number of submissions from the public and major stakeholders indicates a substantial level of engagement and interest in bringing strata legislation into the 21st century,” he said.

Included in those changes to come into force from the end of November will be an updated provision for the collective sale and renewal of buildings under a strata scheme.

From the end of November, strata schemes in NSW will be able to be terminated if 75% of owners in the scheme agree, compared to the current requirement of 100%.

Under the new arrangements, if 50% of owners in a scheme opt in to a renewal process they must then form a strata renewal committee and then devise a renewal plan. Owners will then be given a minimum of 60 days to consider any plan before they have to make a decision.

The renewal plan will lapse if it cannot garner support from 75% of owners within 12 months of it being formed.  

If a plan reaches the 75% threshold it will then be referred to the Land and Environment Court for final consideration.

If a renewal scheme is approved, the legislation ensures owners will receive at least the market value of their lot, plus an extra amount for costs like those associated with moving.

The amended legislation will also give strata schemes greater powers over their by-laws around issues that are often the cause of disputes.

Strata committees will be able to come to an agreement with local councils to allow parking rangers to manage unauthorised parking within their grounds.

Committees will also be able to deem smoke, such as that from cigarettes or barbecues, as a nuisance or hazard and will be able to ban residents from allowing smoke to drift into another person's lot.

The issues of short term letting and overcrowding have also been addressed; residents who breach by-laws in those areas will face heavier fines from the NSW Civil and Administrative Tribunal.

Strata committees will lose some power though, with the amendments to actively encourage more schemes to be pet friendly.

The default option for new by-laws from 30 November will to be allow, rather than disallow pets, though schemes will be able to place conditions on residents who are allowed pets.

Strata committee meetings will also receive a shakeup under the amendments, with proxy-farming to outlawed, while strata professionals who are not owners will also be banned from joining the executive committee.

Owners will also be allowed to participate in meetings via electronic means, such as Skype or over the phone.

While the vast majority of amendments will come into force at the end of November, one major one will be delayed.

The building defects bond scheme, which will require developers to lodge a 2% bond for the final contract price of the building to cover any defective work, will not come into force until 1 July, 2017.

NSW Fair Trading said the bond delay will ensure “builders, developers and the strata community have sufficient time to prepare for the changes.”

This delay also allows for the Australian Standard for building inspections, due in March 2017, to become the standard for the interim and final defects inspection reports that are an integral part of the new inspection scheme.
 

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