We provide detail on the important new changes enacted December 2023 to the NSW Strata Schemes Management Act.
The purpose of these changes was to address pain points raised in recent years during public consultation, and ultimately, to improve strata living. Under the Strata Legislation Amendment Bill 2023 changes have been made to the four key Acts regulating strata and community land schemes.
We summarise the notable changes which impact key areas of strata management including:
- Strata Committees & Meeting Procedures
- Pets & Assistance Animals
- Renewal Processes & Conflict of Interest Disclosure Requirements
- Financial Management
- Bylaws
Strata Committees & Meeting Procedures
- It is now easier to remove committee members (majority vote of the owners corporation in place of a special resolution).
- An individual will be prohibited from serving again on a strata committee for a period of one year after being removed.
- The committee can be appointed outside of an AGM.
- If a call is made for nomination of strata committee members, this call will need to be made at the same time as the issuing of the notice of the general meeting of the owners corporation.
- Annual General Meeting Notice period increases from 7 days to 14 days, meaning we need to allow additional time to send notice – now a minimum of 23 days including postage.
- New restrictions on how many owners a power of attorney or company nominee can represent – there is now a limit of 5% of lots, similar to proxy limitations since 2016.
Pets & Assistance Animals
- Preventing a blanket ban on pets, and amendments to make it clear that pets cannot be restricted and a bond, fee or insurance cannot be required in relation to approvals to have pets. We are in the process of reviewing all pet bylaws to ensure compliance.
- Clarification is also provided on what proof can be required that an animal is an assistance animal, and that bylaws cannot affect the ability of assistance animals to perform their duty on a lot or common property.
- Clarification that if a bylaw is inconsistent with the current Act it has no force or effect from the time of the change of law.
Renewal Processes & Conflict of Interest Disclosure Requirements
Significant changes have been made to this process:
- All owners must disclose any direct or indirect financial or other interest they have in a strata renewal proposal at key decision points as a renewal plan is developed.
- Allowing a strata renewal committee to operate for two years instead of one year to reflect the length of time it can take for that committee to develop a strata renewal process.
- Allowing for a collective sale of a strata building to proceed even if some of the preliminary steps associated with the sale have not been followed (e.g. non-compliance, inadequate meeting notice periods) if that has not resulted in substantial injustice.
- Allowing dissenting owners who act unreasonably or do not object in good faith, to have costs awarded against them (e.g. where an objecting owner is a developer attempting to obstruct a collective sale to another developer).
Financial Management
- Levies:
- Amendment to section 76 (where an owners corporation uses funds from the capital works fund to pay administrative fund expenses or vice versa) so that the OC can determine (within 3 months) whether the money, or part of the money, should be reimbursed. Currently there is no discretion.
- Schemes may require payment of levies in 14 days (instead of 30 days) for necessary repairs to mitigate a serious or imminent threat to a resident’s health or safety.
- Multiple quotes:
- All strata schemes are required to obtain at least two independent quotes for proposed expenditures over $30,000.
- The strata roll and other mandatory records must now be kept electronically – this begins on 11 June, 2024 – fortunately, at McCormacks, we already do this on your behalf.
- Notices:
- A landlord’s agent is required to:
- Provide notice of a tenancy to the owners corporation.
- Provide a copy of bylaws and any strata management statement to a tenant within 14 days of the tenant signing the rental contract unless notice has already been given under the Residential Tenancies Act 2010.
- Give a copy of any changes to the bylaws and strata management statement to the tenant within 14 days of the change starting.
- Tenants are enabled to provide their own notice of their tenancy to the owners corporation where a landlord or agent has failed to do so.
- A landlord’s agent is required to:
Bylaws
- Clarification that a consolidation of bylaws needs a special resolution, even though the consolidation doesn’t add, delete or change an existing bylaw.
- Clarification that by-laws must comply with the Strata Schemes Management Act 2015 regardless of when they were made.
At McCormacks, we welcome any questions or clarification about these changes, and we look forward to assisting you in managing these throughout the year.