Monthly Archives: October 2016

A case of reform for reform’s sake

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face-1430523_640The first iteration of the strata laws of NSW in 1961 was delightfully short. It did all the important work you want a piece of legislation to do and left everything else to common sense. There were disputes, for sure, but the records reveal they were over matters of importance not pernickety matters of procedure.

The simple days of the sixties are long gone and round after round of law reform has attempted to save the people from themselves, with ever increasingly complex rules and procedures for most everything, including how we might have a dispute. This comes to us in the 2016 strata law reforms in the form of a provision for the establishment of an internal disputes resolution procedure.

By the new law, our strata corporations may establish a voluntary process for resolving internal disputes. It’s not compulsory and, as if to denude it of any force at all, the relevant section counters that whether or not one engages in such a process has no impact on other mediation or dispute resolution procedures. Bravo – so here’s something you might want to do but if you don’t it doesn’t matter.

Experience from other states and territories where this has been tried with a little more authenticity – because it’s compulsory – is that if you create these processes they become used and not always for good.

We should be all about dispute resolution, but let’s not create forms and procedures where none are necessary.

New strata laws don’t fix the old and broken inspection process

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One of the great lost opportunities of the reform of NSW strata laws is the laws relating to the inspection of records by purchasers and other interested parties.

Presently in a city of 4.5 million people strata inspectors drive from office to office looking at bundles of papers that are often out of date and irrelevant to the key questions that purchasers need to know. This is not the fault of strata managers nor strata inspectors, it is simply that the process of inspecting minutes and carefully composed letters has been replaced by electronic communications and these are too voluminous to present and to be read in the time available for a strata inspector to do a search and for an acceptable fee.

The real information that purchasers need apart from the accounts and levy details of the lot concerned might usefully be confined to this list:

  • Rules about pets
  • Unremedied building defects
  • Outstanding common property repairs and maintenance
  • Status of any litigation
  • The latest insurance certificate of currency
  • The latest AFSS
  • A comparison of the sinking fund balance against the forecast balance in the last report
This information, if usefully provided in one page, would do more for understanding of strata rights and responsibilities than anything else sought to be achieved by the new laws.
Like all matters of law reform we are not limited to the ways our legislators prescribe things to be done. If we were brave we would produce strata inspection reports this way without requiring legislative approval to do so.

Strata committee members are in the firing line thanks to new strata laws

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Strata committee members will feel the pinch from two new strata laws; the duty to exercise due care and diligence in everything they do and the right of lot owners to sue for damages if they suffer loss because of a failure to attend to repairs and maintenance of common property. These provisions, more than any others in the new strata laws, will impact on the ability to get good people to serve as office bearers.

The damage will be done in the making of the claims rather than their prosecution to finality. Indeed, history would suggest most threats will not go the distance. Plaintiffs lose interest in pursing their claims for justice when heat of battle subsides and the prosecution becomes taxing on their time and money.

The accusations will get old quickly and good people will want to protect themselves and their reputations from the claims. No matter how weak a threatened claim might appear as soon one is made the owners corporation insurer will have to be advised. This will take time and money, but there’s an even bigger cost that will be paid.

Anyone that has been the subject of a spurious claim will know that no matter how weak the accusation they hurt, particularly when you are a volunteer. Strata managers should get used to hearing good people say; ‘I don’t need this in my life.’

Children no longer – new by-law provisions will let us all grow up

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Sometimes in law reform it’s the smallest of changes that have the biggest impact. That might be the case with the new model by-laws for residential schemes. They provide some very good new rules to live by and owners corporations could do worse than adopt them in their entirety.

In keeping with the new law that by-laws must not be harsh, unconscionable or oppressive the Government’s new model, compared with previous versions, shows signs of moving towards reasonableness, which we might not be accustomed to in the nanny state that is New South Wales.

For example, under the new model by-laws children are allowed to play on common property without supervision except where it may be dangerous. Previously children were out of luck unless there was an adult was around. That might have been fine for three-year-olds but many a 12-year-old thinks they are beyond supervision in the backyard and most reasonable parents would agree.

This small change brings strata back to society’s norms where responsible people know what’s safe and what’s not, and as children enter their early teens they are free to roam further from their nest as a normal part of learning and developing independence. Bravo regulators.

The new model by-laws can be found here, and you can read my summary of the new by-law provisions here.

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