NSW begins consultation on overhauling complex strata rules

A three-month online consultation aimed at rewriting 50-year-old NSW rules governing the ownership and management of apartments will kick off today, led by NSW Fair Trading Minister Anthony Roberts.

The consultation process will seek to draw input and feedback from strata professionals, apartment owners and the general public and is hosted by public policy think-tank Global Access Partners.

There are currently 70,000 strata schemes in NSW comprising more than 700,000 apartments, numbers that are set to grow, with unit developments forecast to constitute half of Sydney’s new housing by 2040.

Strata schemes apply to anyone who owns an apartment or unit where quarterly fees are paid towards the upkeep of the building and maintenance of common areas. Members of strata schemes must also pay money into “sinking funds” to cover future long-term expenses such as painting the building or replacement of guttering.

Schemes may also contain rules restricting renovations, stating where you can and cannot park your car and whether you can keep pets, but the current complex rules are difficult to enforce.

The launch of the online consultation follows an escalation in strata cases heard by the Consumer, Trader and Tenancy Tribunal, the body that handles residential property disputes.

The end result will be the simplification of the current set of complex regulations.

“An improved, modern and more flexible framework for strata and community schemes is essential,” says Roberts. “Many people waste thousands of dollars in legal fees because the law is not simple and clear.”

“The original strata Act only had 29 sections. Not only have schemes become larger and more complex since then, but we now have five separate acts plus five associated regulations, with more than 1,000 provisions, regulating the development and management of strata and community schemes.

“The laws have become like a tired, rundown block of flats, with various amendments tacked on over the years to try to cover up the cracks.”

“The construction of new schemes, and service delivery to existing schemes, is a multibillion-dollar industry. Reforming the strata laws can play a vital role in improving the NSW economy,” he says.

The NSW Office of Fair Trading is seeking input on the following four questions:

Q1. What are the main areas of the existing strata and community scheme laws you would like to see changed?

Q2. Can you see any future issues that need to be addressed in the legislation?

Q3. How could the management of strata and community schemes be improved?

Q4. Are there any changes needed to the way disputes in strata and community schemes are resolved?

The legislation was last amended in 2008, with changes including giving strata owners greater protection on proxy voting in owners’ corporation meetings.

Feedback on strata rules can be submitted here.

This article first appeared on Property Observer.