108 Problems in the new Section 109 Certificates

Yesterday ISTM ran a breakfast seminar about the new NSW Strata Schemes Management Regulations (see Today we have a Surprise !!  New NSW Strata Laws) and highlighted the surprising and un-foreshadowed changes to the information certificate NSW strata schemes have to give prospective purchasers under section 109.


The new format requires a lot more information than before that's causing concern like -

• More details about the levies due for the lot like the period each levy covers, the actual due date, and why the levy is in credit or deficit (this applies separately to administrative fund, sinking fund and special levies)
• More details about the amounts due for costs of proceedings under section 229
• Details of the office bearers (chairperson, secretary and treasurer)
• Explanations about why the levies payable to a building management committee or community scheme are in credit or deficit
• Details of any amounts the strata scheme must pay for things that are not connected with maintenance or insurance of common property like the payee, the purpose of the payment, the next payment amount and due date, any amounts in credit and the total outstanding

The speakers explained that it was unlikely that any existing strata management software could automatically generate the new certificates and that they needed to be done manually.

And, it seems that there is not likely to be any change to these requirements in a hurry.  And, in reality what's wrong with giving owners and purchasers more and better information ???

So, what do schemes and their managers need to do ?  Well a few things seem clear (to me at least).

1. Any certificates issued now must be in the correct form and contain the required details to be valid ... so whatever needs to be done must be done
2. It's hard to imagine that the government will make changes to reduce the amount of information to be disclosed in the certificates ... so the changes are here to stay
3. Some definitional matters in the new information are unclear ... so schemes and managers need to get advice and take view about what's in (and out)
4. ISTM should issue a best practice guide about what it's members should do ... as a member service 
5. Strata software providers should upgrade their software to be compliant ... quickly
6. Owners and purchasers should expect that certificates will take longer to produce ... and understand that it's the fault of the government's surprise changes
7. It's likely that just being paid the prescribed fee (now $104) will not be enough to cover the extra work ... so managers may have to negotiate fee increases with schemes

Change is always a challenge but action is always the best solution.

I'm interested in your views about the changes to setion 109 certificates and how best to implement them too.

Francesco ...