A change is coming: strata title reforms in WA

 

By Jamie Horner & Salina Ng

“The secret of change is to focus all of your energy, not on fighting the old, but on building the new.”

Socrates

The Strata Titles Act (STA) came into inception more than 30 years ago in 1985, which makes many parts of the Act outdated given our rapid change in community living. In the past five to ten years our strata management department at Empire Estate Agents has actively registered quite a large number of additional by-laws for strata schemes that were desperately required to protect the harmonious community living required in strata. Some of these by-laws were as simple as recognising electronic notice and penalties for breach of by-laws.

Why are these changes needed?

By 2056, Western Australia is expected to be home to over 5.6 million people as we move to a focus on community living.

An increasing number of Perth residents are resisting large homes in suburbia and opting for higher density living close to public transport, according to the state’s land agency, Landcorp

The STA reforms are part of preparing for the increased demand for housing this will bring.

 

Key areas of change
  • New forms of strata, which will include more ways to subdivide and develop land as well as a wider variety of types and enhanced support for mixed-use/multiple use.
  • Better buying information and protection with improved disclosure to buyers and greater disclosure requirements by the original proprietor.
  • Resolving strata disputes with clear rights and obligations for strata owners and faster dispute resolution through the State Administrative Tribunal (SAT).
  • Management of strata schemes which will require more accountability for strata managers/strata management companies and better access to information about strata schemes.
  • Termination of strata schemes – a process to replace ‘unanimous resolution’ to terminate a strata scheme.

 

New forms and definitions in the strata reform

  • Strata plan becomes community building plan
  • Common property becomes community property
  • Strata company will be known as community corporation

 

How do these changes affect you?
  • If your strata company is managed by a strata manager

Your strata manager needs to be prepared, understand the new terminology and new concepts and have a good knowledge of the Act. This will mean implementing new forms, processes, assisting owners with their new disclosure requirements and communicating the changes and how it effects the lot owners.

The STA reforms will require original proprietors to make additional disclosures to all buyers with a new separate disclosure form. For developers, greater diligence will be required in organising the set up and planning of the future community schemes and close interaction with a strata manager that is abreast of the reforms.

 

  • If you are a developer

The STA reforms will require original proprietors to make additional disclosures to all buyers with a new separate disclosure form. For developers, greater diligence will be required in organising the set up and planning of the future community schemes and close interaction with a strata manager that is abreast of the reforms.

 

  • If your complex is self-managed

It’s time to get ready for the changes to ensure you are compliant and now is a great time to ensure you meet the current requirements of the Act and the future reforms. Check that the following are in place:

  • a Council of Owners
  • documented Annual General Meetings (AGM) with budgets/financials and levy details
  • insurance covering the buildings and common area.

The STA reforms will require the strata manager/strata scheme to lodge a detailed annual return with Landgate, providing information such as the number of schemes managed, funds held and insurance carried. All structures and improvements will need to be insured and it will be mandatory that insurance arrangements are discussed at each AGM.

If you are an owner in a self-managed strata company, you are just as responsible as the other owners to ensure you are complying with the Act in place and to be ready for new reforms. Currently, low fines of $1,000 are applicable to owners/strata companies not meeting their obligations; reforms will allow penalties of up to $75,000.

 

Enforcing the reforms: State Administrative Tribunal (SAT)

The SAT will have more extensive and flexible powers including the right to:

  • order non-monetary penalties eg. order a party to cease doing something
  • apply penalties for all breaches of by-laws
  • order monetary penalties of up to $75,000 (previously $1,000)
  • award unlimited damages if a breach of statutory duty under the STA results in financial loss
  • remove a council member who breaches their statutory duty to act honestly and in good faith.

 

When is this happening?

The State Government of WA has identified reform of the STA as a key priority and the changes are expected to be enacted through 2017/2018Please note however that amendments to the STA are still being drafted at the time of writing, and whilst key principles and areas of reform have been agreed on, changes made be made as the new Act comes into place.

 

Need more assistance?

The WA Government has given Landgate responsibility for delivering reforms to the WA Strata Titles Act. A short 1:39 video from Landgate titled ‘Strata Titles Act Reform’ is below on what reforms can mean for you.

 

In addition, Landgate has a dedicated page with further videos, timelines and information. The Department of Commerce WA also provides information on strata title property and the reforms.

 Sources: Department of Commerce WA and Landgate.

 

About the Authors

Jamie Horner and Salina Ng have been in the real estate and property industry for over 28 years and are the Empire Estate Agents specialised strata management team. As strata managers at the Victoria Park office, Salina and Jamie have a diverse set of skills including liaising and assisting lot owners and the care of the common area and strata complex. Salina and Jamie work closely with the Council of Owners, lot owners and managing agents of the strata complexes they manage in Perth to ensure that they are satisfied with how the complex is managed. If you have also have a new strata development in Perth, Salina and Jamie are experienced in taking your strata management development from concept to registration and beyond.

 

Need more information on this topic? Or can we help you with other strata management questions? Feel free to call and speak to us at Empire Estate Agents on (08) 9262 0400 or email reception@empireestateagents.com.

 

“Everyday heroes…going beyond.”