NEW STRATA REFORMS
Hi everyone,
Do you own a strata property?? Either as an investment or owner occupied?
Well there are new reforms as of the 1st May 2020 coming into effect.
It is important that you are aware of these changes, especially if you are thinking of selling.
In summary, this information I have copied from reiwa.com.au
Better buyer information
As of 1 May 2020, sellers of strata properties and their agents will have to provide prospective buyers with more information, using the prescribed disclosure form. This single form replaces the Form 28 and Form 29.
Moving forward, sellers and their agents will have to disclose:
- Estimated strata levy contributions over a 12-month period.
- The most recent statement of accounts of the strata scheme.
- Any amount already owed to the strata company by the current lot owner.
- The minutes from the most recent annual general meeting of the strata company or any extraordinary general meeting that’s been held since.
- A full set of the scheme’s by-laws.
- Information about any termination proposal received by the strata company.
Should the seeker be unable be able to provide any of the details listed, then written explanation as to why, is required.
More efficient dispute resolution
As of 1 May 2020, all new disputes will be heard in the State Administrative Tribunal (SAT), existing disputes will continue in the original forum.
The SAT will have broader powers to resolve strata scheme disputes and enforce by-laws.
All strata disputes will be heard by SAT compared to the current systems where strata disputes can be heard in multiple courts and by SAT.
The only exception to SAT’s role as the ‘one-stop-shop’ for strata disputes is the recovery of unpaid levies which are still to go through the civil courts.
A fairer termination process
The terminations process has been amended to allow for majority approvals in some schemes.
For schemes of four lots or less the decision to terminate must be unanimous for the termination to proceed.
For schemes of five lots or more, a comprehensive series of safeguards are now in place including an independent review by the SAT if there are any dissenting owners.
SAT cannot confirm a termination resolution unless it is satisfied the termination process was properly followed, the proposal is just and equitable, and every owner will receive fair market value for their lot or a ‘like-for-like’ exchange.
The new process also includes a more streamlined approach for when all lot owners agree about terminating the scheme.
Improving strata management and by-laws
Changes to by-laws
As of 1 May 2020, there is a new requirement for strata title schemes to lodge a consolidated set of by-laws with Landgate, every time a by-law is added, changed or deleted.
This will improve access to a complete set of scheme by-laws for existing owners and prospective strata buyers.
The reforms also stipulate that by-laws must not be unfair, discriminatory, oppressive or unreasonable. These criteria will be how a by-law is assessed should a dispute arise.
Ten-year maintenance plan
As of 1 May 2021, all schemes of 10 or more lots, or schemes with a building value of $5 million or more, must have a 10-year maintenance plan and reserve fund.
The strata company, or contractor needs to make a list of common property elements that are expected to require maintenance, repair, renewal or replacement in a 10-year period.
This knowledge will assist owners when they are considering how much the reserve fund should contain, and how much it should have established over time.
Embracing modern technology
The amended Strata Titles Act allows for electronic communications including, voting and meetings. It will also be easier to get strata company approval for installing sustainability infrastructure on common property, such as solar panels, and improve disability access on common property.
The process has been simplified should schemes wish to make improvements to common property which go beyond simple repair and maintenance.
The role of the strata manager
Starting 1 May 2020, statutory duties under the amended Act require strata managers to:
- Act honestly, with reasonable skill and care.
- Have a good knowledge of the amended Act.
- Not improperly use information or their position.
- Inform the strata company of any conflict of interest as soon as practical.
- Disclose any benefit/remuneration that’s more than $100 from one source in a year.
Strata managers will also have to:
- Obtain the relevant qualifications in no more than four years from commencement, on or before 1 May 2024.
- Update all management contracts to reflect the new requirements within six months of commencement – 1 November 2020. All New contract must reflect the new requirements from 1 May 2020.
- Obtain a current national criminal record check for themselves and employees who perform strata management functions, starting 1 May 2020 for new contract and November 2020 for existing.
- Have professional indemnity insurance coverage, starting 1 May 2020 for all new contracts. There is a six-month grace period for existing contracts (November 2020).
- Lodge an annual return to Landgate with general information about the schemes they manage. The first annual return will need to be lodged with Landgate between 1 January 2022 and 31 March 2022, and then annually after that for the next four years.
Introducing leasehold strata
A leasehold strata title is a built strata or survey-strata scheme with a fixed term of between 20 and 99 years. As of 1 May 2020, plans for leasehold strata schemes can be lodged with Landgate.
In leasehold scheme each lot has a lease of between 20 and 99 years, with all lots ending on the same day. This will be utilised to provide affordable housing in strategic sites such as round train stations.
Greater flexibility for staged subdivisions
The reformed Strata Titles Act makes it clear when the consent of owners is required to change the way a scheme is being developed. On 1 May 2020, schemes will no longer require a management statement.
Details of staged development will now be set out in the scheme by-laws and are called staged subdivision by-laws. The changes ensure the rights of lot owners who have already bought into earlier stages of the scheme are protected, while making the process less cumbersome for developers.
See below link
More information and supporting documents
For more information, view the PDF handbook or visit www.strata.wa.gov.au.