What type of resolution must an owners corporation pass in order to authorise a change to common property?

The strata legislation allows an owners corporation to replace common property with the authority of an ordinary resolution.

But the legislation also says that an owners corporation cannot upgrade common property unless it first passes a special resolution.

Where is the line drawn between replacing and improving common property?

In this article we take a closer look at this much vexed issue: Changing Common Property_ An Ordinary or Special Resolution?

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Commencing 30 June 2022, the NSW Government will launch phase 2 of the ‘Strata Hub’, revolutionising strata management which means new reporting requirements for all strata schemes.

The ‘Strata Hub’ phase 1 initially went live on 31 July 2021 launching the Strata Building Bond and Inspections Scheme (IBBIS) functions to be dealt with through the ‘Strata Hub’.

What is ‘Strata Hub’ phase 2?

• ‘Strata Hub’ is a central point of information for all NSW’s strata schemes
• Information held on the ‘Strata Hub’ will increase transparency and access to information for Strata Schemes
• Purchasers will be able to obtain information about Strata Schemes for the purpose of potential purchases
• Current owners will be able to obtain documents/information such as fire inspection and environmental building reports
• Regulators will be able to monitor a scheme’s maintenance and building defects
• People working in strata related industries will now have easier access to much needed information

When does ‘Strata Hub’ phase 2 commence?

• ‘Strata Hub’ commences 30 June 2022
• Your Strata Schemes must be registered on the portal by 30 September 2022

What are the new reporting requirements for strata schemes?

• Within 3 months of an AGM, strata schemes will be required to lodge a return with the Office of Fair Trading (OFT), providing key details about the scheme
• Payable to the OFT annually, a fee of $3 per lot is required to cover administration costs
• For any updates/corrections to existing information you are obliged to update that information within 28 days from the date the secretary or managing agent became aware of the change
• If you do not comply fines of up to $2,200 can be imposed

The information stored on ‘Strata Hub’ will be divided into 2 categories:

• Publicly available information
• Other information available to limited groups

Would you like further information and assistance?

• Strata Schemes Management Amendment (Information) Regulation 2021 (the Information Regulation) on the NSW Legislation website
• A full list of the information required for the report to lodge with the OFT, and recommendations for where it can be sourced, is available here
• For any further assistance you may also contact specialist strata lawyers, JS Mueller & Co Lawyers here

‘Strata Hub’ is intended to be a central access point for residential strata buildings that will make it easier for buyers, owners, regulators, and those working in strata related industries to get the required information they need.

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

NCAT Issues a Warning for Building Managers

A recent decision of the NSW Civil and Administrative Tribunal (NCAT) has broken new ground in making orders for the termination of a Building Manager Agreement.

In particular, the finding in this case was that the caretaker (building manager) had failed to perform the relevant agreement satisfactorily, and that the building manager agreement, in the circumstances of the case, was harsh, oppressive, unreasonable or unconscionable.

Owners Corporations and Unsatisfactory Building Managers

This decision of NCAT provides a comprehensive analysis of the operation of s72 of the Strata Schemes Management Act 2015 and provides a solid framework for an Owners Corporation to consider whether there are grounds to seek the assistance of NCAT to bring an unfair or unsatisfactory Caretaker (Building Manager) Agreement to an end.

Here we share the recent case and outcomes: NCAT Issues a Warning for Misbehaving Building Managers.

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Important Changes to CLMA 2021

The commencement of the Community Land Management Act 2021 (CLMA 2021) on 1 December 2021 has introduced a number of important changes to the laws regulating by-laws in Community Management Statements and Neighbourhood Management Statements.

Are Your By-laws up to Date?

As a result of these changes a number of by-laws contained in Management Statements are no longer valid or enforceable and many by-laws in Management Statements are now redundant.

This means there is a need for community associations and neighbourhood associations to review their Management Statements to ensure compliance with the CLMA 2021.

By-law Reviews – What Lessons Have Been Learned?

In the article below, we share some of the lessons that have been learned from those by-law reviews following the commencement of CLMA 2021. We look at:

• Harsh By-laws
• Pet By-laws
• Leasing
• By-laws Regarding Association Committees and Insurance
• Old Terminology
• Changes to Part 1 By-laws

Read article hear – CLMA 2021 Lessons Learned

Are You Compliant – Need a Review?

Our specialist strata lawyers have reviewed dozens of Management Statements for community and neighbourhood schemes. Need a review – click here now

ARE YOU COMPLIANT? – CLICK NOW FOR A REVIEW!

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

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Did you know that a new Bill Is currently before the NSW Parliament to permanently implement COVID-19 measures for the strata industry?

In the last 24 months, temporary reforms were made to the Strata Schemes Management Act 2015 and the Community Land Management Act 2021 in response to the COVID-19 pandemic.

The COVID-19 and Other Legislation Amendment (Regulatory Reforms) Bill 2022 proposes to make those reforms permanent.

The reforms include:

The New Reforms

The reforms include allowing:

• • strata owners corporations, strata committees and community associations, to meet and vote electronically without passing a resolution to do so;
  • owners corporations and community associations to validly execute documents by affixing the common seal electronically or by not affixing the seal at all; and
  • service of a document on an owner or occupier of a lot to be by email to an address nominated by the owner or occupier for the service of documents.

More Information 

Source: Explanatory note for the COVID-19 and Other Legislation Amendment (Regulatory Reforms) Bill 2022, accessed 17 February 2022.

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

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Who Pays the Compensation?

When an owners corporation is ordered to compensate an owner, who pays that compensation?  The owners corporation, right?  A recent decision by NCAT’s Appeal Panel produced a surprising answer to that question.

Introduction

An owners corporation has a statutory duty to properly maintain and keep in good repair the common property.  This duty arises under section 106 of the Strata Schemes Management Act 2015.  If an owners corporation does not repair defects in the common property, it will breach that duty.  Where that occurs, a lot owner who suffers monetary loss arising from that breach is able to sue the owners corporation to recover that loss.

Previous Cases

There have been a number of cases where both NCAT and the Supreme Court have ordered owners corporations to pay compensation to owners to cover their losses arising from failures to repair defects in common property that typically allow water to leak into and cause damage to lots. In those cases, owners have been awarded compensation for rental loss, alternate accommodation expenses, cleaning costs, repair costs, experts’ fees and legal costs.  But when an owners corporation is ordered to compensate an owner for those losses, who ends up paying that compensation? The answer to that question should be straightforward, right? Not so.

NCAT Case

On 30 November 2021, NCAT’s Appeal Panel handed down its decision in SP 74698 v Jacinta Investments Pty Ltd [2021] NSWCATAP 387.  In that case, an owner had sued an owners corporation for (among other things) compensation to cover the owner’s losses that arose from an owners corporation’s breach of its duty to repair common property.  The owner was successful and was awarded over $250,000.00 in compensation.  NCAT also ordered that the compensation be paid through a contribution that was levied on all owners except the successful owner who won the case.  The owners corporation appealed against that aspect of NCAT’s decision (and others). NCAT’s Appeal Panel upheld the decision.  The Appeal Panel concluded that it would be unjust for the successful owner to have to contribute towards the payment of the compensation the owners corporation had been ordered to pay the owner.  This meant that the owners corporation was required to levy a contribution on all owners (apart from the successful owner) to raise the funds needed to pay the compensation it was ordered to pay.  The owners corporation was also ordered to pay the owner’s costs of the case and those costs were determined to be payable through a contribution to be levied on all of the other owners.

The Wash Up

The Jacinta Investments case provides an example of one of the rare circumstances in which an owners corporation is able impose a differential levy on some but not all owners.  The case also highlights that individual owners can be made liable to pay compensation that an owners corporation is ordered to pay to another owner to cover any damage or loss the owner suffers where the owners corporation does not fulfill its responsibility to repair common property.

The Future

The Jacinta Investments case has broader implications.  It opens the door for owners to argue in legal proceedings in NCAT that they should not be required to contribute to the payment of costs an owners corporation will incur repairing common property or consequential damage to lot property.  So, for example, where an owner sues an owners corporation in NCAT for an order to force the owners corporation to repair common property defects and water damage to the owner’s lot caused by those defects, the owner may now be able to obtain an order from NCAT excusing the owner from having to contribute to a levy that is raised to pay for those repairs.  Stay tuned because there is likely to be another chapter to this story.

Author I Adrian Mueller, Partner I B.Com LLB FACCAL.

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

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Smokers Unknowingly Breaching By-laws

A recent decision of the NSW Civil and Administrative Tribunal (NCAT) has recognised that even though a lot owner smokes inside their lot, they still may be in breach of the by-laws of the owners corporation and  leave themselves open to a penalty being imposed by NCAT.

Why? Because if the smoke leaves their apartment it will almost inevitably penetrate Common Property in one way or another.

A Recent Case…

This recent case illustrates that it is extraordinarily difficult for smokers to avoid breaching by-laws and why it’s important to have a well-drafted by-law if the owners corporation wishes to comprehensively deal with the issue.

Here we share the recent NCAT case article Smoking in Strata Apartments another “nail in the coffin”!

Also below, Warwick van Ede, Specialist Strata Lawyer talks with LookUpStrata on this very case and the many unanswered questions!

It’s definitely time to review your smoking by-law, or to implement one if you do not have one!

NEED A SMOKING BY-LAW OR TO REVIEW YOURS?

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For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

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There has been a substantial increase in the number of electric vehicles (EV) being purchased by residents of strata buildings from cars to bikes and other vehicles.

A Recent Study

A recent study of the ‘future of EV charging in Sydney apartments’ revealed that:

• 48% of respondents plan to have an electric vehicle of some kind, within the next 5 years
• 78% were in favour of installing charging facilities
• 79% would like a user-pays arrangement for individual vehicle spaces

Does an EV Charger Require Owners Corporation Approval?

The fact is that electric vehicles need charging and that means installing electric vehicle chargers in your apartment block is inevitable.

Installation of electric vehicle chargers will normally involve changes to common property that require owners corporation approval through a by-law.

But what should the by-law cover?

There are two key issues which should be covered in the by-law.

First, who pays for the cost of the electricity that will be used by the EV charger?

Second, what happens if the EV chargers requires the building’s electricity infrastructure to be upgraded (e.g. to 3 phase power)? Who pays for the upgrade?

Get your EV By-law from the Experts 

Our specialist team of strata lawyers have drafted many by-laws permitting owners to install electric vehicle chargers in strata buildings. Our EV by-law covers all essentials including:

• Who is responsible for paying for the cost of electricity used to charge electric vehicles
• Any necessary upgrades to the electricity infrastructure in the building

GET YOUR ELECTRIC VEHICLE (EV) BY-LAW NOW!

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist

A recent decision of the Appeal Panel of the NSW Civil & Administrative Tribunal (NCAT) has highlighted the potential risks for owners corporations seeking to impose penalties and other sanctions on lot owners in connection with non-compliance with by-laws.

Careful attention will need to be paid by owners corporations to “cost recovery” aspects of their by-laws to ensure that an otherwise well constructed by-law is not rendered completely invalid.

Here we share a recent case where NCAT Tightens the Screws on Strata By-laws.

Owners corporations who have these by-laws should give consideration to having them reviewed.

For all NSW strata legal advice including by-laws, building defects and levy collections contact us here or call 02 9562 1266, we’re happy to assist.

On Friday 17 December 2021, the Strata Schemes Management Amendment (Information) Regulation 2021 (the Information Regulation) was published establishing a new annual reporting requirement for strata schemes in NSW.

What does the new annual reporting requirement change mean for NSW strata?

Commencing  June 2022, all NSW owners corporations will be required to:

• Provide key details about their scheme, including building, safety and management information
• Help cover the cost of administration and enforcement of the scheme by payment of a lodgement fee of $3 per lot with their annual report
• Submit their first report within 3 months from 30 June 2022 to 30 September 2022
• Upload their report online through the Strata Hub

Further information can be found here:

• Strata Schemes Management Amendment (Information) Regulation 2021 (the Information Regulation) on the NSW Legislation website
• A full list of the information required for the report, and recommendations for where it can be sourced, is available here
• Guidance on the requirements set out in the Information Regulation and on how to submit the report will be provided to strata schemes in early 2022
• For any further assistance you may also contact JS Mueller & Co Lawyers here

For all NSW strata legal advice including by-laws, building defects and levy collections contact us here or call 02 9562 1266, we’re happy to assist.