Proposed Strata rules: A good start

According to NSW Fair Trading Minister, Anthony Roberts, the proposed new laws are going to bring strata rules into the 21st century. Will they become a reality: and when do some of the other important things get addressed? Tony Rowe gives his opinion.

The results are in, and apparently, the Minister (and his department) “has listened to concerns on the ground” and will “continue to do so in order ensure the real issues affecting strata owners, strata industry professional organisations and other stakeholders” are considered with the new laws on strata management, to be introduced in mid-2014.

“We can make things a lot simpler and more certain for people. Consumer protection is a guiding principle in the government’s review, as is democratic process, transparency, accountability and appropriateness.” (I can almost hear Sir Humphrey Appleby speaking!)

I hope as readers can forgive my cynicism! I will withhold my enthusiasm for these changes until the final product is revealed – rather than the Press Releases from the Minister’s office trumpeting how good and fair the proposed new laws will be.

The new regulations (drafted by Fair Trading) are being touted as a panacea for all the ills of strata living! They promise to provide a positive outcome for everyone – owners, investors, tenants, and managing agents.

New “model by-laws” will cover smoke drift and allow pets by default, rather than having to seek special permission, as is now the case. Issues with owner renovations, overcrowding, building defects, levies, debt recovery, sinking funds, insurance, money management, dispute resolution, compliance and enforcement are all to be covered.

Nearly 60 percent of all schemes in NSW are currently managed by a licensed strata managing agent and that figure is closer to 100 percent in large and complex schemes. About 25 percent of all disputes reported to Fair Trading are about the conduct of managing agents.

There’s close to 72,000 registered strata plans ranging from 2 unit complexes through to massive mixed residential & commercial blocks.

Proxy votes will be restricted in schemes of more than 20 units to 5 percent of the ownership. In buildings of 20 units or fewer, owners will only be allowed to carry one proxy vote. Postal votes, secret ballots, online teleconferencing, electronic voting, flexibility in the timing of annual meetings, and greater transparency will be part of the package.

Presumably, Fair Trading will also mandate the compulsory attendance by owners at AGMs in this brave new world! So many of the problems faced by strata managing agents will be solved with this legislation – Minister Roberts said so!

The number one enquiry to Land and Property Information and NSW Fair Trading from strata and community schemes across the state is about common property maintenance (more than 500 calls per week). It is often quite a complex matter, with the many anomalies between schemes registered under different Acts. A simpler method of dealing with common property maintenance is desperately needed, and Minister Roberts has the solution.

According to the Minister so-called Phoenix companies and planned bankruptcies will be no more: “There will be serious consequences and ultimately offenders will be removed completely from the industry. This is frankly a disgusting practice and there will be zero tolerance.”

The ”too-hard” basket is pretty full though! Extinguishment of strata title; the vexed issue of short-term and/or holiday lettings in residential buildings; and the perennial problem of rogue parking have apparently been set aside for now (to be addressed later next year).

I shall withhold both my enthusiasm and final judgement until we see what treasures are to be found in the legislation.