The NSW Government has announced more than 90 changes to strata laws this year.  Given the amount of strata titled property in Australia and the high incidence of investment in strata units by businesses and individuals, it is critical to keep abreast of the most relevant changes to the laws.

Defects bond

Developers will need to post a bond of 2% of the value of the building after completion to address defects in the building.  This should shift the balance of power in addressing minor defects discovered soon after completion in favour of the owners, depending on the procedure required for the owners to access the bond, while developers will have to factor this into their financial analysis for new developments.

Forced sales by supermajority vote.

Presently, all unit owners must agree to sell if a developer wishes to purchase the whole building for a redevelopment of the site.  The new laws will lower the threshold and permit a vote of 75% of owners in older buildings to require the remaining 25% of owners to sell up.  This is aimed at increasing the number of older buildings that can be converted to higher density buildings and prevent “hold-outs” from delaying development.

Simplified rules

Currently, a by-law is needed for most renovations in a unit.  The new rules propose that a simple go-ahead and majority vote from the owners will suffice to approve simple renovations.

By default, smoking will now be considered a ‘nuisance’ that building owners can regulate via by-laws which should see restrictions on smoking brought in for many buildings.

The executive committee is expected to be empowered to approve pets without the need to enact by-laws specifically permitting a pooch to move in.

Importantly, by-laws will be able to be enacted by owners corporations to address overcrowding, which is becoming an increasing problem in many parts of Sydney.  A breach of a by-law can carry significant fines of up to $5,500 which will hopefully deter overcrowding of units at the expense of other residents and relieve owners of the risks of fire compliance breaches and the stress on common facilities that overcrowding brings.

Parking

Owners will be at liberty to have council parking inspectors issue fines for parking offences within the common property of the building.  Parking is always a topic of dispute in strata and this change brings a new level of enforcement for owners.

For more information please contact Simon Gallant.