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September 15, 2016

Changes to NSW Strata Laws


To modernise strata laws, the NSW Parliament in 2015 passed over 90 changes, which are due to commence on November 30th, 2016. The reforms have been updated in order to fit the current reality of living in a strata townhouse, apartment or unit.  Administered by NSW Fair Trading and NSW Land and Property Information, these amendments to the strata legislation will aim to reduce red tape, help strata communities avoid disputes, and support the sector into the future.

Currently, more than a quarter of NSW’s population are living in, or owning strata units or simply managing those strata units.  These reforms will affect 2 million industry professionals, strata owners, and residents in strata-titled townhouses and units, with more than 75,000 strata schemes worth $350 billion in assets.

Many new requirements will not impact strata communities immediately. This includes allowing time for pre-appointed strata managing agents, building managers and executive committee members to continue in their roles once the law reforms start.

Some of the key changes that will come into effect are:

  • Strengthening of the accountability of strata managers.
  • Allowing owners to adopt modern technology to conduct meetings, vote, communicate and administer their scheme;
  • A process for the collective sale and renewal of a strata scheme;
  • Broadening tenant participation in meetings;
  • A clearer process for dealing with disputes. The new legislation will empower an owner’s corporation to establish a voluntary dispute resolution process for internal disputes which will operate without prejudice to any other rights or remedies.

Under the current law, the termination of a strata scheme can be achieved when there is unanimous support from all the owners. According to the NSW Fair Trading, the Collective sale and renewal of ageing housing stock aims to deliver urban renewal and boost housing supply in the places that people want to live. Under the reforms, 75% of lot owners can agree to end their strata scheme. By establishing a process of collective renewal and sale, lot owners will be empowered to realise the full potential of their strata building and make their own decisions in a democratic and transparent way.

The new reforms will also enable an owners corporation to enter into a payment arrangement with the lot owners to deal with outstanding contributions. Where lot owners defaulted with their contributions, the owners corporation can seek consent from a bankruptcy trustee and/or liquidator to be appointed to assist in recovering such debts. SV Partners have frequently acted as bankruptcy trustees and/or liquidators to recover those unpaid contributions.

If you are interested in the property market, SV Partners and Macquarie Bank have formed a unique and exciting Property Forum. The Property Forum is specifically focussed on the NSW and Sydney markets, with an aim to providing an opportunity for our valued clients to hear from resident experts about the ‘hot’ topics in the property and development space.

Please email [email protected] or call us on 1800 246 801 for more information.

Written by Sean Wann, Senior Manager, New South Wales

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