Gary Adamson, Managing Director of Strata Management Services NSW
“A lot of the new legislation is what we wanted for over a decade, however there are some idiosyncrasies which have created more work and don’t provide benefits to anybody.
‘Statement of key financial information’
“There is also a new form called ‘statement of key financial information’ in a prescribed format which the average person simply cannot understand.
“The majority of people are untrained in accounting and only understand the basic format of a profit and loss account and balance sheet, and are completely lost with this new format. I am a qualified chartered accountant and even I have difficulty understanding it.”
New animal by-law
Gary added that the new Schedule 2 model by-laws of the 2016 Regulations automatically apply to strata schemes registered before 1 July 1997, with an option to accept the new animal’s by-law. This excludes the former by-laws of ‘no animals’ and the no smoking option, which is included in the new optional Schedule 3 model by-laws.
“The former 2010 model by-laws provided an indication of the type of animal which could be kept, but the new model by-laws provide no indication on what type or size of animal is acceptable - so someone could apply for an elephant and still comply with the new model by-law.
“This new model by-law needs to be amended to be clear, and this clarification needs to be drafted separately now by each strata scheme prior to being passed and registered. This is somewhat inefficient and could be resolved by including an indication about size and type of animal.”
Unnecessary admin work
Gary added that parts of the new Act have also resulted in a substantial amount of additional and unnecessary administration work.
This includes the requirement to convene tenants’ meetings, provide a copy of the strata schemes records each year, keep records for seven years instead of five, and keep records of every delegated authority.
“These matters have increased strata managers’ workloads significantly, which is increasing strata owners’ levies to cover the cost with no perceivable benefit.”
Carolynne Pitt, Strata Manager at Gilbey Strata Management Pty Limited
“The new legislation has created a phenomenal amount of extra work.”
Minor renovations
“The new legislation surrounding minor renovations that can be approved by the owners corporation in a general meeting without the need for a by-law, creates issues.
“We have been reliably advised by a solicitor that any conditions imposed by the owners corporation on the approval will transfer to any successor in title.
“This effectively means that a minor works register must be maintained that runs parallel with the by-laws because those conditions, even though they are minuted, will not be remembered in 10-15 years’ time when a property is sold and the inspection on the books and records is only done for the past seven years.”
Tenant meetings
“I agree with tenant meetings for commercial, industrial and retail properties where most tenants are on a 5x5 lease with options and therefore have a vested interest in how the property is run and what is being done to maintain or improve the property.
“However from our experience on the residential side there is complete apathy. Tenant meetings are being convened and minutes completed (at expense to the strata scheme) where there are no tenants attending.”
Carolynne has also called for clarification from NSW Fair Trading on statutory warranties to be discussed at each AGM on if they are to be associated with new buildings only, or all buildings.
Proxies
“The new proxy rulings are creating issues because owners and agents are only able to hold 5% of the total units worth of proxies and owners are increasingly frustrated that their vote may not count.
“This will prove very difficult when a controversial motion is placed on an agenda and a person is sent multiple proxies and can only use one. Which one do they use if the proxies are voting differing ways?
“There are many other areas of the new legislation that are creating a lot of extra administration work for strata managers and others that work with the strata industry (solicitors, insurers etc).
“It will not be apparent how some sections of the legislation are to be interpreted until there are tribunal cases that owners and managers can rely on. Until then we will do the best we can to keep our owners happy and well informed.”