Month: September 2019

New Strata Laws to Benefit All

Late last year the ABS released Population Projections for Western Australia – 2017 to 2066[1]. In it, various estimates based on assumed levels of births, deaths and migration would see WA’s population slowly increase 0.7 to 1.7 per cent per year and rise up to 2.9 million in 2027, depending on interstate migration.

By 2066, WA could have 4.5 to 5 million people with the Greater Perth region housing 81 per cent [2].

This rise in our urban population would, without doubt, feed our need to meet infill housing targets still estimated at 47 per cent (or 380,000 homes)[3]. The majority of which will be medium density housing (strata / survey-strata).

While the government is focused on developing housing opportunities along major public transport routes through Metronet[4], the long term viability and resilience of our strata buildings will be just as important as their location, connection to transport, building design and construction quality.

The timely and much needed new Strata Title Amendment Bill 2018 helps to make strata better, address problems that have risen in strata, introduce a new form of land ownership (leasehold strata title schemes) and modernise the language and structure of the Act[5].

By November 2019,  Strata Titles (General) Regulations 2019 – Management  with provisions governing the Amendment Bill will finalise the 10 main improvements to our Strata Laws.

These include the following (as provided by the Bill):

1. Strata managers will be regulated and made more accountable. Statutory duties will be imposed on strata managers to make them more accountable and to encourage higher standards of professional service to be delivered to strata companies
2. Owners will have more of a say in the running of their scheme. Owners will have more of a say in how their scheme is managed by allowing voting to occur outside of a meeting, permitting electronic voting, and expressly allowing strata companies to keep records and send notices electronically. Restrictions will be imposed on the use of proxies. Owners will have a forum to review by-laws and resolutions that are unreasonable, oppressive or discriminatory.
3. Buyers will receive better information about the strata lot they are buying. This includes: estimated contributions a buyer will have to pay in the 12 months after settlement; the minutes from the most recent AGM; a statement of accounts of the strata company; any debts owing against the lot to the strata company; whether the lot has the benefit of exclusive use by-laws and information about any termination proposal received by the strata company.
4. The management of the strata company will be improved. Strata companies will be able to keep records in electronic format to allow owners to more easily inspect those records. By-laws cannot be oppressive, unreasonable, unfairly prejudicial to or discriminatory against one or more owners. Strata companies will have streamlined procedures for executing documents. The standards of strata councils will be raised with statutory duties imposed on members of the council of a strata company. Council members will not be able to vote where they have a conflict of interest.
5. Owners will be empowered to improve their scheme and retrofit their scheme to benefit from renewable energy sources. The owners, who make up the strata company, will be empowered to improve the common property within their scheme. It will be easier to obtain approval from the strata company for owners or the strata company to install sustainability infrastructure like solar panels onto common property.
6. Better ongoing maintenance of schemes will be facilitated. Every strata company for larger schemes will need to prepare a 10 year maintenance plan and to have a reserve fund. The 10 year maintenance plan is aimed at assisting the strata company in deciding how much money it should set aside in their reserve fund. Larger strata schemes will need to prepare a 10 year maintenance plan to detail expected yearly costs.
7. Enforcing by-laws will be easier. Owners, occupiers and the strata company will be able to apply to the State Administrative Tribunal to enforce by-laws.
8. Strata disputes will be resolved quickly, cheaply and efficiently through a single specialist forum. The State Administrative Tribunal will become the one-stop-shop for strata disputes and will be given sufficient powers to resolve those disputes.
9. Providing for more flexibility in staged development. Staged subdivision of strata / survey-strata schemes will be made more flexible. If a scheme developer needs to vary a stage of subdivision, they will need to obtain: a. A unanimous resolution and b. the consents of all people with a designated interest (defined to include mortgagees, etc).
10. Safeguards for the termination of schemes. The first strata schemes in Western Australia were constructed over 50 years ago. Scheme buildings are ageing and many are costing owners large amounts in maintenance. Based on experience in other jurisdictions, termination and redevelopment of strata / survey-strata schemes will become increasingly common. To protect the assets held by all strata owner, the process of terminating a strata scheme will be revised.

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Resources.

[1] The population projections presented in this publication cover the period 2018 to 2066 for Australia, the states and territories, capital cities and rest of state regions. https://www.abs.gov.au/AUSSTATS/abs@.nsf/39433889d406eeb9ca2570610019e9a5/566071abb7fdcfc6ca257c2e0017255c!OpenDocument

[2] This latest Population Projection of estimates are lower than previous predictions in 2013 as we were at the tail end of the mining boom. https://www.abs.gov.au/AUSSTATS/abs@.nsf/Previousproducts/3222.0Main%20Features112012%20(base)%20to%202101?opendocument&tabname=Summary&prodno=3222.0&issue=2012%20(base)%20to%202101&num=&view=

[3] The Perth and Peel regions now stretch more than 150 kilometres from Two Rocks in the north to Bouvard in the south. Of the 800,000 new homes needed for the projected population increase, almost half – at least 380,000 or 47 per cent – will be provided through increased density and greater infill development in strategic areas such as around transport hubs, including the new METRONET station precincts and activity centres. Most of these will be built within existing suburbs in the Central sub-region. (Source: https://www.dplh.wa.gov.au/perth-and-peel-@-3-5-million-frameworks)

[4] With approximately 72 km of new passenger rail and up to 18 new stations, METRONET is a catalyst to turn over 5,000 hectares of land around new stations to desirable places for investment in housing, jobs and services for growing communities. As one of the largest single investments in public transport that the city has seen, METRONET will help positively change how people live and travel in Perth. (Source: https://www.metronet.wa.gov.au/about)

[5] Strata Titles Amendment Bill 2018. http://www.parliament.wa.gov.au/parliament/bills.nsf/07FA9EA0FF54B548482582B90023602D/$File/EM%2B80-1.pdf