NSW Strata is in Clover

Last week I posted about Clover Moore’s proposals to change strata laws (see Clover Moore Reforms NSW Strata Laws) and (wrongly) suggested that things were being delayed.

Well I was wrong (again).

On Friday, 3 December 2010 the Strata Legislation Amendment Bill 2010 was introduced to NSW Parliament by the Hon Clover Moore.  You can get copies of the Bill and her introductory speech from me.

There are 28 main changes in the reform proposals.

The Bill (if passed) is bad news for developers, managers and those connected with them.  It’s also bad news for owners of investment property, anyone found to have breached strata laws, slum lords, cheque paying owners, and executive committees (in some ways).

But it’s good news for insurers, executive committees (in other ways), people in legal disputes, and owners who want more strata information.

It’s hard to say exactly what the impacts of these changes will be but here are my top 5 predictions.

5 Top Results of Clover Moore's Strata Law Changes

1.      There’s a lot more work to do around meetings and meeting notices.

2       There’s a lot more work to do around strata records and disclosing information.

3.      It’s easier to have more strata disputes in more places.

4.      Developers will come under more (and more) scrutiny by owners.

5.      Strata managers will come under more scrutiny by owners.

A summary of the proposed changes in the Bill follows.


Clover Moore's 28 NSW Strata Law Changes

• People must disclose connections they have to original owners before becoming strata manager and owners corporation or executive committees can terminate the strata manager when that connection exits.
• Original owners, and other specified people connected to them, cannot be appointed as a caretaker and owners corporations can terminate a caretaker if that occurs.
• Lawyers must disclose if they are connected to original owners before providing legal services and owners corporation or executive committees can terminate the lawyer when that connection exists.
• People connected with the original owner or caretaker or strata manager cannot be elected to the executive committee unless they disclose the connection.
• It is an offence to be elected to the executive committee without making the required disclosures and an offence each time the person votes at executive committee meetings.
• It is an offence for caretakers and strata managers who are or become connected with the original owner not to disclose the connection.
• The Tribunal can terminate strata managers where there are breaches of these provisions.
• The Tribunal can make orders about disputes in buildings under a strata management statement in more circumstances.
• Penalties for Tribunal contempt increases to 50 penalty units ($5,500).
• It is an offence to contravene a Tribunal or Adjudicator order under Chapter 5.
• Lot owners are jointly and severally liable with the lot occupier for damage caused by the occupier to the common property and can be indemnified by the occupier.
• The maximum number of adults that can reside in a strata lot is 2 times the number of bedrooms or other intended sleeping areas.
• Service of legal documents on owners corporations can be via the chairperson or strata managing agent (where they are the registered address for service) plus posting.
• Service of a strata notice on a person can be via e-mail to provided addresses.
• Owners corporations must lodge consolidated sets of by-laws when registering changes to one or more by-laws.
• Owners corporations can levy more to the sinking fund (as well as the administrative fund) when there are unexpected expenses as a special levy.
• If there is no quorum for an AGM, levies will be the same as the previous year plus CPI.
• Public liability insurance must be for $20,000,000.
• The strata roll must include common property licences, common property building work approvals, loans, and copies of decisions allowing additions, alterations and new structures.
• Courts can’t refuse proceedings because the strata or community title laws provide alternatives but can order costs if it considers it is an inappropriate venue.
• Regulations can be made about how chairpersons and secretaries conduct in meetings and otherwise.
• Levy payments by cheque will not be credited for voting purposes until 5 working days after receipt.
• A poll at general meetings must be requested before the next agenda item is considered.
• The timing of AGMs can be changed by general meeting decision.
• General meetings notices must include an executive committee report explaining any proposed by-law changes.
• General meeting notices must include connection disclosures occuring since the last meeting.
• General meeting notices must include estimates of administrative and sinking fund levies.

So let's get ready for some (if not all) of these changes coming into operation in 2011.

Francesco ...