Strata Schemes Management Act 2015 and Strata Schemes Development Act commenced 30 Nov 2016

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1 STRATA

2 Strata Schemes Management Act 2015 and Strata Schemes Development Act 2015 commenced 30 Nov 2016

3 The new terminology Owners Corporation Strata Committee (formally Executive Committee) Strata managing agent Building manager (formally Caretaker)

4 General Meetings

5 Convening General Meetings The secretary may convene a general meeting at any time s19(1) Act The secretary must call a meeting within 14 days of getting a qualified request s19(2) Act

6 Submitting motions for General Meeting A motion must be in writing to the secretary and include the name of the person making the requirement, and include an explanation (max 300 word) Sch 1 4(2) Act An owner can put a motion even if not financial. Sch 1 4(5) Act

7 New quorum rule for General Meetings If after half an hour there is no quorum the chairperson can either adjourn the meeting for at least 7 days, or declare a quorum and proceed with the meeting Sch 1 17(4)(b) Act

8 Proxies for General Meetings There is now a limit on the number of proxies a person can use 1 proxy per owner in 20 lot or less schemes, 5% in over 20 lot schemes Sch 1 26(7) Act

9 Minutes of General Meetings Minutes of the general meeting are to be given out within 14 days to each member of the strata committee to each owner, if the strata is not a large scheme to an owner, of a large scheme, if the owner makes the request within the period of 14 days Sch 1 22(2) Act

10 Tenants and General Meetings Tenants on the strata roll are to receive notices of meetings OR it must be displayed on the notice board, and may give copy of other docs - OC discretion Sch 1 11 Act Tenants on the strata roll are entitled to attend meetings but not vote unless they hold a proxy for an owner Sch 1 21(1) Act

11 Tenants and General Meetings Tenants are not entitled to address the meeting unless a majority vote allows them Sch 1 21(2) Act OC may determine tenants (other than tenants who hold duly appointed proxies) are not to be present for financial matters Sch 1 21(3) Act Tenants are not required to be given minutes, except in the instance of a tenant representative By absence in Sch 1 22(2) Act

12 Using technology to attend meetings The OC may determine the means of voting at meetings, including attending by skype or teleconference, voting by or other notice There can be pre-meeting electronic voting so votes are sent in before the date and time of the meeting General meetings Sch1 28 Act and c14 & 15 Reg SC meetings Sch 2 10 Act and c14 &15 Reg

13 Strata Committees

14 Strata Committee OC must have a strata committee It can have between 1 and 9 members, and in a large scheme it must have at least 3 members s30(2) Act

15 Strata Committee meetings Secretary may convene a SC meeting at any time s39 Act Secretary must convene a meeting if requested by 1/3 members within 14 days, or 28 for large schemes s39(2) Act

16 Notice for Strata Committee meetings Min notice 3 days; to each other strata committee member (incl tenant member) and to each owner For large schemes: notice by mail, or service and noticeboard (if any) For all other schemes: notice to go on noticeboard or by mail, or service Sch 2 Part 2 Act

17 Strata Committee meetings Voting to be in person, unless SC passes a motion adopting other forms of voting Sch2 10(1) Act If a member, or the owner who nominated them, becomes unfinancial, they are not entitled to vote Sch 2 9(4) Act A quorum is required for each motion Minutes must be given to owners and SC members within 7 days Sch 2 17(3) Act

18 Officers of Strata Committee The members of the SC must appoint a chairperson, secretary and treasurer; and one person can hold all positions NCAT can remove an SC member or officer s238 Act

19 Persons not eligible for SC The following are not eligible for election to SC (unless they are also an owner): the building manager, an agent who leases lots to tenants, a person connected to the original owner, unless they have declared that connection before the election, or an owner who is unfinancial. An elected member who becomes ineligible must disclose this to the secretary/chairperson as soon as possible at a meeting or in writing all s32 Act

20 Conflict of Interest of SC members A member of the SC must disclose a pecuniary interest in any mattes being discussed at an SC meeting $1,100 penalty The disclosure must be noted in a SC book kept for this purpose. The SC determines whether that person is to be present during any related deliberations or votes on the related motion. Sch 2 18 Act

21 Liability of SC members SC members are to act with due care and diligence. s37 Act Section 260 provides protection from personal liability for members of strata committees who act in good faith. SC members should ensure meetings are conducted according to the legislation. If the SC has concerns about any particular issue they can refer it to a general meeting of the OC

22 Tenant representatives on SC In a scheme where more than half the residents are tenants and are on the strata roll those tenants may elect a representative to be on the SC s33 Act The person who convenes the AGM must convene and chair a meeting of tenants. The required notice is 14 days and the meeting is to be held at least 7 days prior to AGM c7 Reg Tenants nominate themselves, or others c7 Reg

23 Tenant representatives on SC What can a tenant representative do? They are not entitled to vote, put motions or nominate a person for office, They cannot be an officer of the SC, and They cannot be counted for a quorum. The SC can decide the rep may not attend on financial matters. All s33 Act

24 New Developments

25 Building defect bond from 1 July 2017 The developer is to lodge a 2% defect bond for buildings 4 stories and over s207 and s191 Act The developer is to get a building defect report by a building inspector approved by the OC within 18mths s199 Act NSW Fair Trading is to arrange for the appointment of an inspector if the OC and developer can t agree on one s196 Act The bond money is only to be spent on defect work, the balance goes back to the developer s210 Act

26 Collective Sale

27 Collective sale Proposal SC meeting Majority decision GM Vote to proceed Strata Renewal Committee GM Vote on Plan Notice to owners GM Vote to go to L&EC Land and Environment Court Majority decision Creates plan Special resolution 75% return Majority decision Order made

28 Collective Sale cont d The Court will be able to reject a renewal plan if: it has not followed proper processes or been developed in 'good faith', or the terms of settlement were not just and equitable in all the circumstances

29 Licensed Strata Agents

30 Term of Appointment If appointed at 1 st AGM max of 12 months Thereafter max 3 year appointment s50(1) Act No rollover, but can be reappointed at a GM Can be extended on a 3 monthly basis by SC s50(4) Act Strata Agent must give written notice to OC of end of term at least 3 months prior to end, or 1 month prior to end of 3 monthly extension s50(6) Act Can be terminated by general resolution at a GM s50(3) Act

31 Appointing a Strata Agent for a new scheme A person cannot be the Strata Agent if the person is the developer or someone connected to the developer, until 10 years after registration s49 Act

32 Gifts and commissions Strata Agents must not accept a gift or benefit unless it is - a gift or benefit less than $60 money paid by OC a commission, if in agreement or otherwise approved by OC a training service if in agreement or approved by OC s57 Act $2200 penalty

33 A Strata Agent must: Commissions continued report commissions or training services at AGM for previous 12 months penalty $2200 report at AGM of expected commissions or training services for next 12 months penalty $2200 disclose any variation of these to the SC penalty $2200 NCAT can order Strata Agent to pay amounts to OC eg for undisclosed commission s60 Act

34 Insurance Quotes A Strata Agent must provide 3 quotes for insurance from different providers for each type of insurance required, or provide a written reason why not s166 Act

35 Reporting Strata Agents must record the exercise of any function immediately after its exercise and provide the OC a copy each year. s55 Act

36 Return of records at the end of a compulsory management period In cases where NCAT has appointed a Strata Agent with full, some or specified powers of OC and officers - the agent must not later than 14 days before end of term, cause a GM to be held; and the books and records are to be handed over at or before this meeting All s237 Act

37 Termination by NCAT For Strata Agents and Building Managers - NCAT may make: - an order terminating the agreement, - an order requiring the payment of compensation to a party to the agreement, - an order varying the term, or varying or declaring void any of the conditions, of the agreement, - an order that a party to the agreement take any action or not take any action under the agreement, - an order dismissing the application. If terminated, NCAT can order return of books and records Application must be made by OC s72 Act

38 Building Managers

39 Building Managers The provisions to appoint a Building Manager have not changed, in that a contract signed before registration by original owner, will expire at the 1 st AGM signed after registration (under the authority of a general resolution at a general meeting), will expire after a maximum of 10 years s67 Act Must disclose connection with original owner or pecuniary interest in scheme $5500 penalty s71 Act May have exclusive possession of property s66 Act

40 Building Managers As we briefly discussed earlier, a Building Manager is not eligible to be a Strata Committee member (unless they are an owner) s32 Act And Like anyone else, a Building Manager can now only use 1 proxy (or 5% in over 20 lot schemes) Sch 1 26(7) Act

41 Record Keeping Records must be kept for 7 years s180 Act The timeframe for inspecting the books, after submitting a request along with the prescribed fee, remains as 10 days s183(2) Act

42 Insurance The minimum value of public liability insurance has increased to $20 million s164 Act and c40 Reg

43 Annual General Meeting

44 Annual General Meeting An OC must hold an AGM once each financial year s18 Act The OC is to prepare financial statements and a statement of key financial information for each AGM s92-94 Act The statements of key financial information summarise the balance and totals of transactions of each account. s94 Act c20 Reg

45 Financial statements The statements of key financial information are to be sent out with the notice of each AGM. s9 Act An owner can request a copy of the financial statements prior to the AGM. They must be provided at least 2 days before the meeting. s10 Act The OC can determine to send out financial statements with notice. s10 Act

46 More adaptable Levies Administration Fund for the day to day expenses of the scheme. Capital Works Fund for major capital works An OC may now enter an agreement with owners or occupiers to provide them with a service. s117 Act

47 Unpaid levies If an owner has not paid their levies by one month after they are due, the OC may: issue the owner a notice of action that states the amount owing including any interest and expenses, and what action will be taken, and allow 21 days for payment before taking action. After 21 days the OC may apply to the Local Court for debt recovery NCAT for debt recovery, but only if the OC is seeking other Orders under the Act. s86 Act

48 Getting things fixed

49 New Provisions for Owner s work to Cosmetic changes Common Property An owner may do cosmetic work to common property in connection to their lot without OC approval, including- installing picture hooks, nails, screws, installing hand rails, painting, laying carpet. An owner must repair any damage caused. s109 Act

50 Minor renovations An owner may do minor renovations to common property in connection with the owner s lot, with the OC s approval by general resolution at general meeting, including - renovating a kitchen, replacing electrical wiring, reconfiguring walls. Before doing the renovations, the owner must give OC written notice of proposal. OC may impose conditions and cannot unreasonably withhold consent The owner must repair any damage s110 Act

51 Duty of OC for common property The OC must repair and maintain common property. An owner can bring a compensation claim against an OC for any reasonably foreseeable loss due to failure to repair or maintain must be within 2 years of loss s106 Act

52 Common property rights by-law This replaces exclusive use by-laws. A common property rights by-law must be passed at a general meeting by special resolution with the owner s consent. The by-law must state whether the OC or the owner is responsible for repair and maintenance of that common property. The OC may charge the owner for the benefit they receive.

53 Common property memorandum The OC may adopt a common property memorandum in its by-laws The memorandum specifies whether an owner or the OC is responsible for the repair and maintenance of any part of common property A common property rights by-law will prevail over the memorandum s107 Act and c27 Reg

54 By-laws

55 By-laws Your by-laws will remain as they are unless OC changes them at a general meeting. You can use your by-laws to set guidelines for how you, as a community, want owners and tenants to behave. They can be as free or as restrictive as you want. They cannot be unjust and should take into account the interests of all owners. The OC is to review their by-laws within 12 months of the new legislation's commencement

56 Pets An owner or occupier of a lot may keep an animal on the lot, if the owner or occupier gives the owners corporation written notice that it is being kept on the lot. The notice must be given not later than 14 days after the animal commences to be kept on the lot. If an owner or occupier of a lot keeps an animal on the lot, the owner or occupier must: (a) keep the animal within the lot, and (b) supervise the animal when it is on the common property, and (c) take any action that is necessary to clean all areas of the lot or the common property that are soiled by the animal.

57 Smoking and smoke drift An owner or occupier, and any invitee of the owner or occupier, must not smoke tobacco or any other substance on the common property. An owner or occupier of a lot must ensure that smoke caused by the smoking of tobacco or any other substance by the owner or occupier, or any invitee of the owner or occupier, on the lot does not penetrate to the common property or any other lot.

58 By-laws around Airbnb Compliance with planning and other requirements The owner or occupier of a lot must ensure that the lot is not used for any purpose that is prohibited by law. The owner or occupier of a lot must ensure that the lot is not occupied by more persons than are allowed by law to occupy the lot. Owner must not use lot to create nuisance or hazard Owner must not use or enjoy the lot, or permit the lot to be used or enjoyed, in a manner or for a purpose that causes a nuisance or hazard to the occupier of any other lot.

59 By-laws in General By-laws can be made at general meeting with a special resolution vote and then they must be registered at Land and Property Information within 6 months s141 Act All by-laws must be consolidated when your next by-law is registered c24 Strata Schemes Development Reg 2016

60 Breach of By-laws Penalties for by-law breaches can now be paid to the OC s147 Act Up to $1,100 for first breach Up to $2,200 for second breach

61 Unauthorised Parking The owners corporation can enter an agreement with their local council to have its Parking Officers fine unauthorised parked cars. s112 Act and s650a of the Local Government Act 1993

62 When things go wrong

63 NSW Fair Trading s role Provide information Clarify legislative information Provide strata mediation

64 RESOLVING DISPUTES IN STRATA SCHEMES Talk about it Get information Notice to comply with a by-law Mediation NCAT NCAT District Court

65 NSW Fair Trading for more information Phone