- Garnishee rent grabbing for unpaid rates
- AGMs: Tenant Invasion!
- Crackdown on corrupt gifts
- Councils cashing in on new car park fines
- No Strata renewal/rebuild without committee approval
There are more than 90 changes to strata laws coming into effect 30 November 2016 under the Strata Schemes Management Act 2015 (“SSMA”) and the Strata Schemes Development Act 2015 (“SSDA”). These include owners corporations taking owner’s rents to satisfy unpaid strata contributions; tenant attendance at AGMs and council fines for illegal parking.
Should you be concerned?
If you live in a strata lot, have an investment property or are thinking of downsizing, you should be informed of the changes. Here are the top 5 new provisions and what they mean.
1. Garnishee rent grabbing for unpaid rates
Owners corporations will be able to recover unpaid contributions to the strata fund*. If a lot owner fails to make contributions to the strata fund, the owners corporation can obtain a Court order over the tenant’s rent for the debt to be paid straight to the owners corporation.
This gives the owners corporation the power to reach around the lot owner and take rental income without affecting the tenant’s rights or obligations. Interestingly, this could be a way to get back unpaid contributions from an owner overseas, one who is not communicating or who simply doesn’t want to pay.
* by way of garnishee order (a court order obtained by a judgement debtor to satisfy an unpaid debt).
2. AGMs: Tenant Invasion!
Tenants will be able to barnstorm owners corporation AGMs and ordinary meetings from November this year. The new laws remove the exclusive right of lot owners to attend. If you are a tenant, you will be entitled to receive notices of, and attend general meetings as an observer unless authorised to speak by the owners corporation. Other new rights include being able to nominate a tenant representative to the strata committee if at least half the lots are tenanted (s33 SSMA).
Tenant or their representatives can have their say, but not vote. Tenants will not be entitled to attend meetings when financial matters are being discussed or determined (clause 21(3) of Schedule 1 SSMA).
3. Crackdown on corrupt gifts
Strata management agents will be banned from receiving gifts. It has been viewed as a cause of preferential treatment to some lot owners. From 30 November, strata management agents are banned from requesting or accepting gifts used to curry favour from anyone. The only exception is for gifts worth $60 or less under the draft regulations to the SSMA (section 57(2), (Draft Regulations s62)). The maximum fine for accepting a gift is 20 penalty units ($2,200 fine).
4. Councils cashing in on new car park fines
On the topic of fines, ever thought you would get a ticket for parking in a strata lot? Now you can! The Local Government Act 1993 will be amended to allow owners corporations to enter into agreements with Local Councils for the use of part of the common property as a strata parking area.
Councils can cash in on issuing more fines if they are permitted to erect parking signs and patrol the strata car park (S650A to be inserted in the Local Government Act 1993 pursuant to part 4.16 of Schedule 4 SSMA). You could be fined for parking whilst restricted use for residents or visitors applies, exceeding the maximum time limit and using a disabled car space without a disability sticker.
5. No Strata renewal/rebuild without committee approval
The biggest change coming is redevelopment of a strata scheme or collective strata lot sales must go through a Strata Renewal Committee. Under the SSDA, a strata committee may form a Strata Renewal Committee if it deems a proposed renewal plan warrants “further consideration” (s157(3) SSDA). The new laws allow any person, residing there or not, to give a written proposal for the collective sale or redevelopment of a strata scheme (s156 SSDA). Interestingly, there is no requirement that the building be in disrepair or nearing the end of its useful life for a proposal to be made.
The strata renewal committee must prepare a strata renewal plan. With 75% support, the owners corporation may resolve to apply for a court order enacting the plan (s178 SSDA). A dissenting owner or another person required to be served with the notice of the strata renewal plan may object to the strata renewal plan within 21 days of being notified of the proposed development. Their objection may be heard when the Court considers making an order under s178 or during a mediation. Fortunately, if a redevelopment plan is ordered by the Court, a dissenting owner may be compensated for the value of their lot or the value they would have gained had they not dissented to the proposal by the strata developer (s182 (1) (e), (f) SSDA).
Bay Legal’s team of excellent solicitors are experienced in all property sales / purchases, strata disputes and advocating for you in all NSW Tribunals and Courts.
If you have a property issue you would like to discuss please contact us now on (02) 9344 0682 to make an appointment.
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