Press Release

FOR IMMEDIATE RELEASE

PROPOSED STRATA LAW CHANGES IN THE BEST INTERESTS OF THE MAJORITY

Western Australia -

700,000 apartment owners, residents and service contractors are being told to expect improved regulation and accountability, greater transparency and significantly improve management provisions under new Reforms currently before the WA State Parliament.

And the peak body for Western Australia’s strata sector says it will immediately improve the lives of residents living in apartments along with the greater industry which is on track to hit $100 billion within the next 10 years.

The most controversial aspect of the Strata Titles Amendment Bill 2018 has been the proposed changes to the termination of schemes provisions which outline the process that a strata company (body corporate) would need to undertake in order to wind up their strata scheme.

“There are a range of reasons that may instigate a group of owners to consider winding up their strata scheme, from unaffordable maintenance costs for old, rundown schemes to lucrative development opportunities in areas that have been rezoned for higher density” says Scott Bellerby, President of Strata Community Association WA the peak body representing people who own and work with strata property.

“The most concerning for us are the many ageing buildings around Perth that are in a severe state of disrepair, to the extent that they pose a health and safety hazard to occupants, yet the owners cannot afford the costs required to rectify the issues. This then places residents in a position where they are living with a deteriorated asbestos roof, for example, because they can’t afford the hundreds of thousands of dollars they have been quoted to rectify it”.

“We are aware of a number of owners that would benefit from termination but are unable to achieve this outcome due to one dissenter or in many cases, an absent owner who simply is uncontactable and will not cast a vote. As an example, one single owner in say a block of 100 apartments can halt the wishes of 99 other owners who may support a redevelopment option.”

The current legislation typically requires a unanimous resolution which is seen to offer protection for those small minorities who do not want to sell their property; however, the current legislation also provides an avenue for one person to instigate termination through the District court which occurred recently.

“This option seems to have been overlooked during parliamentary debate and when you take this in to account, you realise that the proposed changes actually offer more protection through a fairness review process”.

The proposed provisions, which following negotiation in the Legislative Assembly, would require agreement of at least 80% of owners (or 100% in the case of small schemes up to 5 lots in size) with a comprehensive fairness review process to then be undertaken by the State Administrative Tribunal.

“The purpose of this review process is to ensure that the owners who have voted against the proposal to terminate have an opportunity to express their reasons for their objection; and if the termination is to proceed, to ensure the objecting parties receive fair compensation based on their specific circumstances”

Strata Community Association WA says a unanimous voting system can bring communities to a stand-still on much needed change, and these new laws represent a democratic overhaul of living in a strata community.

“On behalf of all strata stakeholders we applaud the State Government for helping strata schemes collectively make fair and open decisions about the future of their building.”

“For years one of the biggest bug-bears of living in a strata community has been how difficult it is to get things done, and these new laws will pave the way for communities to be address the needs of their owners.”

“We’ve seen these proposed changes dubbed the ‘boot a granny bill’ but in reality they stand to deliver much needed options for owners when things go wrong. It is also important to remember that the termination provisions only represent one aspect of a much larger reform package which the industry has waited for for over 20 years.”

“Western Australia has not avoided Australia’s building defects crisis, encompassing flammable cladding, concrete cancer and infinity cabling and there are hundreds of affected buildings along the Western Australian coast that will benefit from the proposed changes by allowing more flexibility on the sale of property.

“Some of these buildings face multi-million dollar repair bills and the sensible thing is to redevelop these sites and give the owners some relief from buildings that hold no value to them or the market.”

However, Mr Bellerby says ultimately the ‘boot a granny’ factor is a reality and to ensure all owners have rights, he wants to see some sensible safeguards built in if there are owners opposing to the plan and believes the draft Bill has achieved this.

“Too many apartment owners in Western Australia are watching their property investments lose value because sensible options are being derailed by the minority, and these changes will give these communities much needed options.”

Mr Bellerby says a priority of the Western Australian strata sector has been to communicate the importance of strata reform which addresses so much more than the termination of schemes.

“Our members, which include strata owners, have been pushing for reforms for over a decade and we do not want to see any further delays in passing this incredibly important legislation”

These reforms are needed to capitalise on the strong rates of growth that Western Australia is experiencing and to keep up with new laws already taking rank in other states.

“Unfortunately, after recent discussions with other stakeholders in this legislation it is our understanding that while there was solid bipartisan support for this bill during drafting, the opposition proposed further amendments during the Second-Reading debate in the Legislative Assembly. These amendments will now require further consideration by the government before the legislation can be passed, therefore the Reforms may not be enacted until next year.”

This is a significant blow to the strata and property industry as a whole, and questions need to be raised as to why after 12 years of industry wide consultation and drafting, which occurred under both major parties, they are now playing politics over this matter.

There are certain members of Parliament that need to stop taking advice only from local constituents with a vested interest in delaying these reforms and look to the broader good they will deliver to the 700,000 West Australians living, owning, working and contracting to the strata industry.

Key Facts and Figures

700,000 apartment owners, residents and service contractors are being told to expect improved regulation and accountability, greater transparency and significantly improve management provisions under new Reforms currently before the WA State Parliament.

About

Strata Community Association (WA) Inc. (SCA (WA)) is the peak industry body for people and organisations living or working in the strata titles profession and associated industries in Western Australia. Membership includes Owner Strata Companies, Strata Management Businesses, support staff and industry suppliers of products and services to the industry.


SCA (WA) members manage property worth an estimated replacement value of in excess $80billion. SCA (WA) proudly fulfils the dual roles of a professional institute and consumer advocate.
Website: http://wa.stratacommunity.org.au/

(ENDS)

Contact Details

Scott Bellerby
President
08 9382 7700

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