NSW makes significant steps into Strata reform, will the ACT follow suit?
On the 20th of November the Strata Schemes Legislation Amendment Bill 2024[1] was introduced to the NSW state parliament. The Bill is a significant step taken by NSW lawmakers to better regulate and curtail bad practice in the Strata industry.
These proposed laws include:
1. Greater disclosure requirements for strata managers;
2. Strata management agreements can be assessed as if they were consumer contracts as under Australian Consumer Law;
3. NSW Fair Trading can order owners corporations to comply with their duty to repair and maintain the common property;
4. Prohibition of rules that block sustainability infrastructure on the basis of external appearance;
5. Levies to be accompanied by NSW Fair Trading information about an owner’s options in paying levies, such as payment plans, to address cost of living concerns; and
6. Lowering the voting threshold to a majority vote for charges to common property for accessibility purposes;
Minister Anoulack Chanthivong stated in his second-reading speech of the Bill that 50% of New South Wales residents are expected to be living in strata schemes within the next 15 years.[2] With pervasive issues identified in the NSW strata industry through the 2021 statutory review of the Strata Schemes Development Act 2015 and the Strata Schemes Management Act 2015, the Bill comes down especially hard on Owners Corporations who fail to appropriately repair and maintain the common property.
The ABC reported that the Bill allows NSW Fair Trading to enter apartments in strata schemes without a warrant when investigating whether an Owners Corporation has maintained the common property.[3] Unit owners that fail to comply face a $2,200 fine. If an Owners Corporation fails to repair the common property following NSW Fair Trading compliance notices and NCAT orders, the Owners Corporation could then face up to a $22,000 fine.
This Bill represents a reckoning with an unruly strata industry with harsh and far-reaching reforms. Watching debate over the Bill by critics and proponents alike will be useful in understanding whether the ACT should also go down such an extraordinary legislative route in addressing the hot-topic of strata mismanagement.
[1] Strata Schemes Legislation Amendment Bill 2024 (NSW).
[2] New South Wales, Parliamentary Debates, Legislative Assembly, 20 November 2024, 2 (Anoulack Chanthivong Minister for Minister for Better Regulation and Fair Trading, Minister for Industry and Trade, Minister for Innovation, Science and Technology, Minister for Building, and Minister for Correction) (‘Strata Schemes Legislation Amendment Bill 2024 Second Reading Speech’).
[3] Amy Greenbank, ‘NSW strata watchdog seeks power to enter apartment buildings without a warrant, fine owners if common property not maintained’, Australian Broadcasting Corporation (online, 22 November 2024) <https://www.abc.net.au/news/2024-11-22/nsw-stateline-strata-laws-enter-apartment-buildings-defects/104629604>.