The NSW Government will move forward on critical reforms to strata laws this week, implementing changes to make the system fairer and more transparent.
Strata laws govern community living arrangements like apartment buildings or townhouses, they put owners corporations in charge of making key decisions on repairs, maintenance or collective sales.
Despite around 1,000 strata schemes being registered every year for the last decade, the previous government did not act to implement recommendations from the 2021 Report on the statutory review of these laws.
To help bring a new focus to strata living and to implement the changes needed, John Minns will add strata to his responsibilities, becoming the state’s Strata and Property Services Commissioner.
At the moment the Property Services Commissioner is charged with setting professional development requirements for agents and setting the rules supervision of agency businesses.
Elevating strata into the Commissioner’s role will make him responsible for oversight and reform across the whole sector, with strata at the centre.
The NSW Government will move ahead with its first phase of reforms to give immediate benefits to people living in strata. Legislation before Parliament this week will:
- Make the strata collective sale and renewal process more transparent by ensuring owners must disclose conflicts of interest and letting courts award costs against those acting unreasonably. This will help close the loopholes that have seen some strata residents hoping to sell their buildings stuck in courts for years because an alternative developer owns several apartments.
- Make it easier and fairer for residents to keep pets by banning fees, bonds or insurance as a condition of having a pet. Currently, some strata schemes are charging application fees to consider an application to keep a pet or imposing a bond on keeping a pet. These fees or bonds are costly, unnecessary and unreasonable. Owners already pay levies to finance the administration of their scheme and the cost of insurance for any damage to common or association.
- Ensure goods and services are obtained at competitive prices, by requiring owners corporations to get a second opinion when the bill for work will be over $30,000. Currently, only large strata schemes are required to obtain two quotes. The change ensures that competitive quotes are obtained for significant expenditure, regardless of the size of the scheme.
- Give Fair Trading the ability to ask the NSW Civil and Administrative Tribunal to appoint a compulsory strata managing agent to help manage dysfunctional strata schemes. Currently, owners and certain other persons such as creditors can apply to the Tribunal. The changes mean that NSW Fair Trading can also apply to the Tribunal to protect owners where a scheme is so dysfunctional that it is not undertaking its core duties.
Minister for Fair Trading and Better Regulation Anoulack Chanthivong said:
“Across government we’re working to get more homes built, but we’re also making sure we’ve got the right systems and laws to manage them.
“There are currently over 85,000 strata schemes in NSW compared to just 50,000 in 1996, so getting this right will be critical.
“As the number of strata schemes in the state has grown rapidly, the rules haven’t kept pace.”
Minister for Customer Service and Digital Government Jihad Dib said:
“We are now seeing safeguards that were intended to support owners in renewing their strata schemes being used against them.”
“This reform will help restore balance, improve transparency and boost protections for owners in the collective sale and redevelopment process.”
The President of the Strata Community Association, Chris Duggan said:
“The appointment of John Minns is a genuine reflection of the Government’s authentic commitment to the strata sector and consumers.
“Strata is the engine room for solving the housing supply crisis and having an experienced and engaged commissioner such as John is welcome news to the industry.
“John has excelled in his role as Property Services Commissioner through active industry and consumer engagement and advocacy and a deep understanding of the challenges and opportunities presented to community living.”