Strata management relates to the everyday operation and management of a property having multiple owners made up of a number of units, shared areas and common facilities. Strata management is also referred to as ‘body corporate management’.

The various legislation applicable to strata management in NSW are:

Strata Schemes (Freehold Development) Act 1973;

Strata Schemes (Leasehold Development) Act 1986;

Strata Schemes Legislation Amendment Act 2001;

Strata Schemes Management Regulation 2005;

Strata Schemes Management Amendment Act 2002;

Community Land Development Act 1989;

Community Land Management Act 1989; and

Property Stock and Business Agents Act 2002.

Changes Made To Various Strata Management Legislation

The Strata Management Legislation Amendment Act 2008 (Amendment Act) introduced a number of changes to the existing strata management legislation with effect from August 2008. The purpose was to enhance the operation and management of strata schemes. The areas of change can be summarised as follows:

Caretakers and building managers: All on – site caretakers are covered by the Amendment Act, even if they use a different job title such as ‘building manager’;

By-laws about parking vehicles on common property: Under this amendment, the right to park on common property is prevented as was otherwise allowed previously;

Proxies and Power of Attorney: This aims at protecting strata buyers from terms in sale contracts which require them to give proxy voting rights or Power of Attorney to the developer of the strata scheme;

Executive committee members: Executive committee members need to disclose any personal, business or financial connection they have with the developer or caretaker; and

Building disputes: Individual owners in strata schemes shall have the right to lodge a building dispute with the Office of the Fair Trading and arrange for the inspection of building work(s) in common areas.

Strata Schemes Management Regulation 2010

Strata Schemes Management Regulation 2010 (Regulation) replaced the Strata Schemes Management Regulation 2005 and it commenced on and from 1 September 2010.

The objectives of the Regulation are:

To support effective management of strata schemes;

To provide for transparent and accountable management practices; and

To provide mechanisms for dispute resolution.

The key areas of change introduced by the Regulation include:

Receipts: The lot owner’s address is not required to be included on receipts issued by owners’ corporations;

Cash records: Cash records must be balanced at least once every 12 months instead of once every 6 months;

Additional documents to be provided to the owners’ corporation by the original owner: The original owner is required to provide documents to the owners’ corporation as listed in clause 4(1) of Schedule 2 of the Strata Schemes Management Act 1996 and clause 10 of the Regulation and also provide documents relating to the valuation of the building;

Insurance: Insuring the strata building with either a damage policy or building insurance with a limited liability by the owners’ corporations is mandatory;

Expenditure, legal action and priority votes: The financial limits have been revised and increased;

Mediation: Parties to mediation session shall be fully responsible for their own costs;

Fees: A discount mediation fee for pensioners and students have been introduced and fees payable to owners’ corporations for searches and certificates have been increased;

Section 109 certificate: The certificate has been redesigned to make it more user-friendly; and

Proxy appointment form: The appointed proxy is no longer required to sign the said form.

Dispute Resolution

Disputes arising out in connection with management of strata scheme are resolved mainly by way of mediation. Chapter 5 of the Strata Schemes Management Act 1996 empowers an adjudicator and the Consumer Trader and Tenancy Tribunal (CTTT) to make Orders with regard to disputes arising out of operation and management of a strata management. However, the initial application for an Order has to be made before the Registrar of the CTTT.

If the Registrar is satisfied that the matter could have been dealt by way of mediation and the Applicant has not availed himself/herself of this procedure, the Registrar must refuse to deal with the matter. In the event mediation has been unsuccessful or the matter is not appropriate for mediation, the Registrar may accept the application for the Order. Depending on the nature of the Order requested by the Applicant, the application will be dealt with either by an Adjudicator or the Tribunal. The Tribunal may require a person to pay a pecuniary penalty for:

Contravening an Order made either by the Adjudicator or the Tribunal; or

Contravening a Notice served on the person by an owners corporation requiring the person to comply with a particular by-law that the person has previously contravened.

An appeal may be made to the Tribunal against an order of an Adjudicator and to the District Court against an order of the Tribunal.

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