12 Reasons Why NSW Strata Managers Should Put Up Their Fees

This week’s NSW Government’s strata law reform package may just be the straw that breaks the camel’s back for the strata management business model as we know it.

In the same week we debated the future of strata management fees, the NSW Government introduced strata law reforms in the NSW Parliament. The planet, and those with disabilities, are the big winners. Building surveyors, registered training organisations, and lawyers, did well too. 

The big losers are developers, and, you guessed it, strata managers. 

Managing strata in NSW just got harder… again.

The level of government control of privately owned property asserted by these proposed laws is extraordinary.

In no particular order, here are some of the key points in the draft legislation, and their likely impact on strata managers – 

• Compulsory training for committee members, which will probably make it harder to fill committees, and the educational requirements will have to be monitored by strata managers.
• Legal duties on the behaviour of committee members have been increased.
• Meeting chairpersons, very often strata managers, will have a duty to maintain order at meetings, follow the agenda, facilitate fair, constructive and open discussion and encourage all members to have their say. Lawyers will have a field day with this one!
• Australian consumer laws about unfair contracts will apply to strata management agreements. Liability can’t be limited to a fixed amount, unless you are a member of a Professional Standards Scheme (a big win for SCA – or is it?).
• The government will have rights of entry to lots and common property to check on the performance of owners corporation duties, and will have the power to interview, inspect, record, and do destructive testing. Strata managers will be at the front line of these investigations.
• Levy notices must be accompanied with prescribed information about financial hardship and repayment plan options. There must be reasonable grounds to refuse a repayment plan. The data to be collected about the financial position of owners claiming hardship is extensive, and must be kept confidential by strata managers.
• Time limits for lot owners to sue owners corporations for failing to maintain and repair will be extended from two years to six years.
• Written reasons must be given within three months for refusing minor repairs.
• Owners corporation certificates are to be amended to include information about embedded networks.
• Accessibility infrastructure requirements must be considered in each years’ budget, and will have a reduced special resolution threshold for installation and financing.
• Each AGM must consider environmental sustainability, including actual energy and water consumption.
• Initial maintenance schedules and levies must be certified by an independent building surveyor. More care will be required if working for developers, and fewer managers will want to do this work.

So, if ever there was a case to put up strata management fees, the government made it for you yesterday.

If strata managers hold their fees like they have always done in the face of increased regulatory burden, then this reform package might just be the straw that broke the camel’s back.

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