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After a lengthy consultation period, 30 November 2016 is the day that the much-anticipated, and some would say overdue, strata reforms will come into effect.

There are more than 90 changes to the NSW Strata Management Act, some of which have been controversial. While consumers were expecting sweeping changes to strata legislation, the Strata Schemes Management Act, 2015 (NSW) has largely re-enacted existing strata laws with some new legal concepts or changes under categories.

At Premium Strata, we have been preparing for these changes to ensure our staff and you as our owners of units under our management are prepared for these changes before they come into effect.

To help you absorb the key changes, we have written this to-the-point pocket guide to the legislative changes.

Seven main changes to the NSW Strata Management Act

1. Recognition of the electronic age in which we live

For example, an Owners Corporation may now specifically elect (by way of ordinary resolution) to permit email voting and/or postal voting. It will also be possible to attend meetings via telephone or internet.

2. Transparency of those involved with the strata scheme

For example, a developer of a strata scheme, or a person connected with a developer, cannot be appointed as the strata managing agent for the scheme until 10 years after the registration of the strata plan for the scheme. Further, the term of appointment of a strata managing agent will be limited 3 years for any other appointment, with any reappointment also limited to maximum terms of 3 years. Strata managers will be need to disclose insurance commissions received. The number of proxy votes any one owner can use will be limited, making the dreaded ‘proxy farming’ a lot more difficult.

3. Financial management

It will now be required that developers set realistic levies during the establishment of the strata scheme and the expiration of the initial period and for the subsequent year after. This helps avoid unusually low strata levies, which will then increase exponentially once all the lots have been sold by the developer. Books and records of the Owners Corporation will now be required to be kept for 7 years.

4. Standard by-laws

For example, it is now expressly recognised that smoke drift constitutes a nuisance. Smoking, per se, however, is not banned so presumably it will be up to the Owners Corporation to prohibit smoking at the scheme by way of a special resolution by-law. In relation to pets, the default position will now be that buildings are pet friendly.

5. Tenant representatives:

Tenant representatives may be elected and attend meetings of the Owners Corporation. However, for this to apply, at least 50% of the lots must be tenanted. Tenants will not be able to vote and can be prevented from certain discussions. Owners Corporations will be able to set occupancy limits on units, which will avoid over-crowding and the associated building fire safety risks.

6. Building defects

Some level of protection has been afforded to high-rise strata owners (that are not covered by the Home Building Compensation Fund) by way of the introduction of the following key concepts. For example, mandatory defect inspection reports will be required to be paid for by the developer (by an inspector approved by the Owners Corporation) together with the requirement of the developer being required to provide a building bond. Further, the occupation certificate is not to be issued unless the Secretary has first received the bond in the requisite amount. The original owner will be required to prepare and the Owners Corporation required to consider the initial maintenance schedule for a new scheme. As a side note: the building defects bond scheme won’t come into effect until 1 July 2017.

7. Renovations

A distinction is made between ‘Cosmetic Work’ and ‘Minor Renovations’. Everything falling outside these categories will require a special resolution

Cosmetic Work

This update will focus on the changes to how renovations will now be permitted to be carried out to strata lots. To some extent, the requirements for renovations have been relaxed.

So, under the new regime, the following newly defined “cosmetic works” will not require approval whatsoever from the Owners Corporation:

installing or replacing hooks,
nails or screws for hanging paintings and other things on walls,
installing or replacing handrails,
painting,
filling minor holes and cracks in internal walls,
laying carpet,
installing or replacing built-in wardrobes, installing or replacing internal blinds and curtains,
any other work prescribed by the regulations for the purposes of this subsection

However, for this to apply the below conditions must be met:

the work that does not constitute minor renovations as defined for the purposes of section 110,
the work does not involve structural changes,
the work does not change the external appearance of a lot, including the installation of an external access ramp,
the work does not detrimentally affects the safety of a lot or common property, including fire safety systems,
the work does not involve waterproofing or the plumbing or exhaust system of a building in a strata scheme,
the work does not involve reconfiguring walls.

Minor Renovations:

The concept of “minor renovations” has been introduced and now only requires approval from the Owners Corporation by ordinary resolution:

renovating a kitchen,
changing recessed light fittings,
installing or replacing wood or other hard floors,
installing or replacing wiring or cabling or power or access points,
work involving reconfiguring walls,
any other work prescribed by the regulations for the purposes of this subsection,

However, similar conditions as the ones listed under Cosmetic Work must be met.

All other works, which fall outside the definitions of “cosmetic works” and “minor renovations”, will require a special resolution pursuant to new Section 108 (Changes to Common Property By-law) and/or a new by-law Section 142 (Common Property Rights By-law). For more on by-laws click here. Bathroom renovations, for example, will automatically require a new by-law (because they typically involve waterproofing). While kitchen renovations appear to have lowered requirements (and now only require an ordinary resolution), it is difficult to imagine a kitchen renovation being carried out without the application of waterproofing, except, of course, if only, say, the cabinetry was being replaced.

Some regulations are still being finalised and are expected to be made public over the coming weeks. The final regulations will be published on the NSW legislation website.

We hope you found this article useful. Please remember that this is a summary of all changes. This article is not intended to be exhaustive and we recommend you speak with your strata manager in first instance.

If you have any questions, please don’t hesitate to contact us at 02-9281 6440, and we’ll be happy to help you.

When you are considering renovating your strata unit, apartment, townhouse or villa there are a number of important aspects to consider before you start any work, make sure to read the full article.

Despite the much anticipated “pet-friendly” amendments to the new strata legislation, animals are still not automatically permitted in strata schemes even if they are kept wholly within the boundaries of an individual’s apartment.

To determine what the keeping of animals position is in relation to any particular scheme you must refer to all the by-laws registered on the certificate of title for the common property.

Schemes in NSW registered before the 1996 Legislation

If a scheme was registered before the 1996 legislation, and the old Schedule 1 model by-laws applied to your scheme, and there is NO special by-law which repeals or amends the standard position, the keeping of animals stance is now governed by the Strata Schemes Management Regulation 2016 (NSW), Schedule 1 By-law 16 Keeping of animals:

“Subject to section 157 of the Strata Schemes Management Act 2015 , an owner or occupier of a lot must not, without the approval in writing of the owners corporation, keep any animal on the lot or the common property.”
“The owners corporation must not unreasonably withhold its approval of the keeping of an animal on a lot or the common property”.

Schemes in NSW registered after the 1996 Legislation

If a scheme was registered after the commencement of the 1996 legislation, the by-laws adopted or registered will determine the position. What the new legislation has introduced is a new model by-law which has a default position which expressly permits the keeping of animals (on conditions). Note, however, that the model by-laws must be adopted by a scheme or lodged with the strata plan at the time of registration”.

Also note that if no option is nominated (or left blank), the default position (Option A) permits the keeping of animals:

Option A
(1) An owner or occupier of a lot may keep an animal on the lot, if the owner or occupier gives the owners corporation written notice that it is being kept on the lot.
(2) The notice must be given not later than 14 days after the animal commences to be kept on the lot.
(3) If an owner or occupier of a lot keeps an animal on the lot, the owner or occupier must: (a) keep the animal within the lot, and (b) supervise the animal when it is on the common property, and (c) take any action that is necessary to clean all areas of the lot or the common property that are soiled by the animal.

Option B
(1) An owner or occupier of a lot may keep an animal on the lot or the common property with the written approval of the owners corporation.
(2) The owners corporation must not unreasonably withhold its approval of the keeping of an animal on a lot or the common property and must give an owner or occupier written reasons for any refusal to grant approval.
(3) If an owner or occupier of a lot keeps an animal on the lot, the owner or occupier must: (a) keep the animal within the lot, and (b) supervise the animal when it is on the common property, and (c) take any action that is necessary to clean all areas of the lot or the common property that are soiled by the animal.
(4) An owner or occupier of a lot who keeps an assistance animal on the lot must, if required to do so by the owners corporation, provide evidence to the owners corporation demonstrating that the animal is an assistance animal as referred to in section 9 of the Disability Discrimination Act 1992 of the Commonwealth.

In case of Option B, the Owners Corporation must be reasonable and consider each application for the keeping of animals on a case by case basis on its merits.

Is an animal-free strata building possible?

Overall, however, it is still open to the Owners Corporation to have an animal free building (provided it passes a by-law to that effect, assistance animals excepted). Importantly, such by-law could not ban existing pets, and would only apply to future pets from being accepted in the strata scheme. It would require 75% of the owners at a general meeting to agree to this updated by-law.

The new legislation retains rights for interested persons to make application to NCAT to have an animal removed from the building if it is proven that it causes a nuisance or hazard to another owner/occupier or unreasonably interferes with the use or enjoyment of another lot or of the common property. An interested person includes an Owners Corporation, a strata managing agent, a lot owner or occupier.

Assistance animals as defined in the Disability Discrimination Act are exempt

The only animals which cannot be prohibited within any strata scheme are assistance animals (footnote 2) as referred to in Section 9 of the Disability Discrimination Act 1992 of the Commonwealth (footnote 3). The Owners Corporation may pass a by-law in connection with a person who keeps an assistance animal on a lot to prove to the Owners Corporation that the animal is a duly qualified assistance animal.

An assistance animal is defined as a dog or other animal which is properly accredited or trained in such a way so as to assist a person with a disability to alleviate the effect of the disability and to meet standards of hygiene and behaviour that are appropriate for an animal in a public place.

What about tenants and their pets?

Tenants can raise any pet related matters to their landlord. They could ask the landlord to submit a motion to consider adopting a pet-friendly by-law, however the landlord is not obliged to do this. Changing to a pet friendly by-law could help other owners rent out their unit in the same strata scheme.

Footnote 1: The options are set out in STRATA SCHEMES MANAGEMENT REGULATION 2016 – SCHEDULE 3 – Model by-laws for residential strata schemes

Footnote 2: Section 54A Disability Discrimination Act 1992 of the Commonwealth provides that it is not unlawful to discriminate against a person with a disability if, for example, the assistance animal has an infectious disease.

Footnote 3: See Section 139(5) which states that “A by-law has no force or effect to the extent to which it purports to prohibit or restrict the keeping on a lot of an assistance animal (as referred to in section 9 of the Act) used by an owner or occupier of the lot as an assistance animal or the use of an assistance animal for that purpose by a person on a lot or common property”.

Please note: This article covers legislation as per the Strata Schemes Management Act, 2015 (NSW), which was introduced on 30 November 2016. Any pre-dating articles on this website covering similar topics might no longer accurately reflect current legislation.

This article is not intended to be comprehensive nor does it constitute legal advice. The article provided is general and for your information and interest only.

Under the NSW strata legislation, the Owners Corporation has received powers to tow vehicles in breach of by-laws. On the downside, the Owners Corporation must tolerate the offending vehicle for at least five days before it may take any action.

Upon service of a compliant “removal notice”, a car that blocks an exit or entrance or proper use of the common property may now lawfully be moved by the Owners Corporation and the Owners Corporation may make application to NCAT to recover its costs.

The vehicle may be moved to another less obstructive position on the common property or another lawful place off the common property. However, the car cannot legally be moved until the expiration of a period of at least five days in compliance with the removal notice.

The legal requirements for a removal notice are set out in Regulation 34 of the Strata Schemes Management Regulation, 2016 (NSW).

A NSW Owners Corporation enforcing a removal notice should exercise a high degree of care and caution when moving vehicles to avoid liability for any damage caused to an offending vehicle.

The legislation also enables an Owners Corporation to enter into an agreement with local council in relation to a strata parking area if approved by special resolution. Then, local council would erect signage on the common property and would be empowered to issue parking infringement notices.

The offending person is guilty of an offence which carries a maximum penalty of 5 penalty units. A penalty unit varies from state to state, however, the monetary value of a penalty unit in New South Wales is set out in Section 17 of the Crimes (Sentencing Procedure) Act, 1999 (NSW) and equates to $110 per unit, therefore, the parking fine could be up to $550!

Breach of a by-law and penalties

Residents in breach of any by-law risk that the Owners Corporation makes an application to NCAT for the imposition of a civil penalty for breaching the by-law. Such penalties are quite severe. This penalty carries a monetary penalty of up to 10 penalty units (which is $1,100). A repeat offender (ie one who was fined $1,100 and breached the by-law again within 12 months of being fined) can be fined $2,200.

Any owner who is in breach of the occupancy limits set out in the legislation are potentially liable to fines of $5,500 and $11,000.

In the event that an owner breaches a NCAT Order to, for example, stop smoke drift, or remove an animal, Section 72 (3) of the Civil and Administrative Tribunal Act 2013 provides for a civil penalty. These penalties have increased to up to $11,000 for an individual and $22,000 for a corporation.

Restrictions on by-laws

The strata legislation has enacted a restriction on by-laws, namely, that a by-law cannot be unjust, harsh, unconscionable or oppressive. Whether or not a by-law falls afoul of these restrictions is determined by NCAT. Further, any such by-law may be invalidated by NCAT.

This article is not intended to be comprehensive nor does it constitute legal advice. The article provided is general and for your information and interest only.

The aim of this article is to explain how a typical strata meeting, such as an Annual General Meeting (AGM) or Extraordinary General Meeting (EGM) is run.

Please note: this article does not reflect the NSW Strata Schemes Management Act 2015 which came into effect on 30 November 2016. It is based on the NSW Strata Schemes Management Act 1996. Please use this article for information only, and check with your strata manager to ensure you comply with the most up-to-date legislation and requirements.

To make the best of each meeting, all owners are encouraged to attend any meeting in person and participate in the affairs of their Owners Corporation. In this way you will have the opportunity to contribute to the preservation and enhancement of the value of your unit.

Strata Meeting Notice & Proxy Form

If you cannot attend the meeting and wish to cast a vote, we recommend that you fax or post a proxy form to your strata manager. A proxy form enables an owner to appoint another person as your representative at an owners corporation meeting, in case one is not able to attend in person.

You can download a proxy form from our website here. You should read the statutory information carefully to ensure you understand the circumstances in which you will be entitled to vote at the meeting.

Please note that if your building contains more than 100 residential lots (excluding utility lots), your proxy must be received by the Secretary of the Executive Committee, or Strata Manager at least 24 hours before the start of the meeting.
If you have any questions about your meeting notice, the financial report or your entitlement to vote we strongly suggest you contact your strata managing agent prior to the meeting. This will help ensure the meeting runs as smooth as possible and avoids delays.

Voting instructions for the Annual General meeting (AGM)

You can exercise your voting rights at the meeting in person or by proxy. If you are a corporation your voting rights may be exercised only by your company nominee in person, or by proxy appointed by the corporation.
You or your company nominee cannot vote on a motion for an ordinary or special resolution unless the following amounts have been paid before the meeting:

all contributions levied by the Owners Corporation that are payable at the date of the notice; and
any other money that is recoverable by the Owners Corporation from you at the date of the notice.

If you are an owner, you cannot vote if a vote is cast by:

the mortgagee shown on the strata roll for your lot;
the covenant charge shown on the strata roll for your lot; or
in the case of multiple mortgagees or covenant charges – the priority mortgagee or charge shown on the strata roll for your lot.

Determining a Quorum for your meeting

A motion submitted at a General Meeting of an Owners Corporation cannot be considered, and an election of new committee members cannot be held, unless there is a quorum present to consider and vote on the motion or on the election.

There is a quorum for considering and voting on such a motion or at such an election if:

at least one quarter of the number of persons entitled to vote on the motion or at the election is present, either personally or by appointed proxy; or
at least one quarter of the aggregate unit entitlement of the Strata Scheme is represented by the person who are present and entitled to vote on the motion or at the meeting
Should a quorum not be present within the next half-hour after the relevant motion or business arises for consideration at the meeting, the meeting stands adjourned for at least 7 days.

What are typical Strata Meeting motions?

The below example motions are typically for Annual General Meetings. They provide you with an idea of which motions you can expect on the agenda for your building. The wording of a motion is of importance. An incorrectly worded motion and subsequent vote could be declared invalid if it is not worded correctly and or properly setting out the intentions of the motion.

To aid the reader, each motion is in blue text with further clarification text below the relevant motion in italics. Use of Capitals is intentional.

MOTION 1
Minutes of Previous General Meeting

THAT the minutes of the last General meeting of the Owner’s Corporation be confirmed as a true and accurate record.

MOTION 2
Adoption of Financial Statements
THAT the financial statements for the last financial year a copy of which accompanied the notice of this meeting be adopted.

Typically, general financial queries cannot be answered at the meeting due to time constraints. It is generally requested that queries should be referred to your Strata Manager prior to the meeting.

MOTION 3
Confirmation of Insurance

THAT all Owners Corporation insurance currently in force be confirmed as appropriate and adequate.

Having appropriate insurance cover for your building is of the utmost importance, and this and subsequent motions ensures that all owners are comfortable that the insurance cover is sufficient for their building.

MOTION 4
Office Bearers Liability & Fidelity Guarantee Insurance

THAT the Owners Corporation confirms the following additional insurance that are currently in place and decide if they should be adjusted.
a) Cover for executive committee members for office bearers liability insurance as provided in section 88(2) (a) of the Strata Schemes Management Act 1996 (“the Act”; and
b) Insurance of the kind referred to in section 88 (2) (b) to cover against misappropriation of money or other property of the Owners Corporation

MOTION 5
Building Valuation

THAT the Owners Corporation authorise and instruct the Managing Agent to obtain on behalf of the Owners Corporation a building valuation or update thereof.

An up-to-date building variation is important in ensuring that the building is insured for the appropriate amount. For example, in case of destruction of the building following a fire you want to be sure that the insurance company will pay out sufficient funds to repair or rebuild the building.

MOTION 6
Appointment of an Auditor

THAT the Owners Corporation appoint an auditor for the current financial year.

An independent auditor ensures that all financial records are accurate and reliable.

MOTION 7
Election of Executive Committee

THAT an election of the Executive Committee be conducted and the number of executive committee members for the coming year be set.

No Strata Plan functions without the volunteers who run the day-to-day operations and interact with the strata manager. The Executive Committee is elected at each Annual General Meeting. It can have up to nine (9) members and once elected, decides who is to hold the office bearers positions of Chairperson, Secretary & Treasurer as required under Section 18 of the Strata Schemes Management Act 1996. One person may be appointed to more than one office under this section.

MOTION 8
Restrictions on Powers of Executive Committee

THAT for the purpose of Section 21(2) (b) of the Act, the meeting consider and determine the types of matters, if any, that are to be decided only by the Owners Corporation in general meeting.

This enables the owners to restrict the authority of the Executive Committee beyond what the legislation already restricts the committee. You could choose to limit the maximum amount of repairs the EC can approve before they have to convene an Extraordinary General Meeting to obtain approval. For example, it makes sense to allow the EC to approve basic repairs and maintenance, however significant repairs should be taken to an EGM for approval by the majority of owners. This helps streamline the daily operations.

MOTION 9
Adoption of Budget & Raising of Levies

THAT:
a) In accordance with section 75(1) and (2) of the Act the Owners Corporation estimates that in respect of the determined period it will need to credit to its administrative and sinking funds for actual and expected expenditure referred to in those subsections the amounts set out in the budget that was attached to the notice of the meeting at which this resolution was passed; and

b) In accordance with section 76(1) of the Act, the Owners Corporation determines that the following amounts are to be levied to raise the estimated contributions:

i. To the administrative fund, the sum of $ xxxxx and
ii. to the sinking fund, the sum of $ xxxxx and

c) those amounts are to be paid by regular periodic installments on the first day of [insert month]

d) THAT the levy installment due [insert date] for both the Administrative and Sinking fund be payable quarterly until re-determined by the Owners Corporation and such figure shall be

Administrative Fund $xxx per quarter
Sinking Fund $xxx per quarter

e) THAT all contributions be levied by notice from the Treasurer of the Owners Corporation in accordance with section 78 of the Act.

Your strata manager will typically prepare a budget for the new year based on prior year actual spend and expected or planned spend in the new year. The total amount for the year is divided by the unit entitlements. To read more about Unit Entitlements, please refer to this article we wrote previously.

MOTION 10
Debt Collection

THAT The Owners – Strata Plan 12345 RESOLVE pursuant to the Act including section 80 D, for the purpose of collecting or recovering levy contributions to authorise the Strata Managing Agent and/or the Executive Committee to do any one or more of the following:

a) To engage or appoint the services of a debt collection agency, obtain legal advice and or retain legal representation on behalf of the owners Strata Plan 12345
b) To commence, pursue, continue or defend any court, tribunal or any other proceedings against any lot owner, mortgagee in possession and/or former lot owner in relation to all matters
c) arising out of the recovery of levy contributions and the recovery of other debts, including penalties, interest, legal and other costs:
d) Enforce any judgment obtained in the collection of levy contributions including commencing and maintaining bankruptcy of winding up proceedings.
e) Filing an appeal or defending an appeal against any judgment concerning the collection of levy contributions and
f) Liaise, instruct and prepare all matters with the Owners Corporation’s debt collection agents, lawyers and experts in relation to any levy recovery proceedings.

To help ensure sufficient funds are collected to run the building, one needs to ensure the levies due are collected in a timely manner. This motion enables the strata managing agent to chase up any moneys due and if required engage the services of a debt collection agency to retrieve the funds. This is imperative for cash flow purposes.

MOTION 11
Sinking Fund Plan

THAT a consultant be appointed to assess the actual and expected sinking fund requirements in accordance with section 75(2) of the Act.

It is a legal requirement to perform a Sinking Fund Plan. The purpose of a Sinking Fund Forecast is to estimate future expenses generally over a 10 year period, such as significant maintenance works. This in turn will help you put funds aside each year to help pay towards these major works when they are due. It also helps owners to get an idea of what maintenance is required and when, in order to keep the value of your investment. It could prevent long discussions on whether certain work is really a requirement, and instead you can focus on when the works should be started.

MOTION 12
Work Health & Safety Act 2011

THAT the Owners Corporation acknowledge the Work Health and Safety Act 2011 and Regulations and RESOLVE to:

a. As required, consult, confer, allow inspections and provide assistance (and/or documents) on any matter so far as is reasonably practicable, on work health and safety matters under the Work Health and Safety Act 2011 and Regulations with its agents, employees or contractors or any health and safety representative for its agents, employees or contractors,
b. As required, prepare and maintain any register or document reasonably required (including an asbestos register if so required) under the Work Health and Safety Act 2011 and Regulations and make such register or document available to its agents, employees or contractors or any health and safety representative for its agents, employees or contractors.
c. Engage a contractor to carry out a Safety Report as the preliminary process in compliance with the Work Health and Safety Act 2011.

It is important that your building complies with the relevant WH&S regulations. Engaging a specialist to prepare a Safety Audit will help ensure your building complies and is a safe place to work for owners, their guests and the contractors your building might engage with.

MOTION 13
Notification to Land Property & Information

THAT pursuant to Section 239 of the Act 1996 Premium Strata Pty Ltd be authorised to notify the Land Property & Information Office of the Owners Corporation change address for service of notices to be care of Premium Strata Pty Limited.

This motion is applicable when you have recently engaged the services of Premium Strata. It is important that the registered address for your scheme is properly recorded with the Land Property & Information

Many more motions could be added to an agenda, the exact contents and wording depend on the issues at hand, however the above are typical motions you will find on your AGM agenda to be considered annually by an Owners Corporation. If you find certain motions missing or incomplete, you should ask your strata managing agent. It might be time to change agents!

As always, if you have any questions, please do not hesitate to contact our friendly strata managers. We will be happy to assist you!

We hope you found this little guide useful. Please keep your eyes open for future articles, as we will continue to work towards making the somewhat complex world of strata management just that little bit easier to understand.

Last month, the government introduced a new bill prohibiting owners from charging fees or bonds to residents who own pets. The government has stated that these fees are deemed costly, unnecessary, and unreasonable since property owners already contribute to strata schemes.

According to an article in the Sydney Morning Herald (SMH), the government intends to introduce a new bill that will prevent owners from imposing fees or bonds on residents who own pets. The changes aim to streamline laws that have previously hindered housing supply efforts through the redevelopment of aging apartments.

In 2016, the government passed previous changes to increase housing supply by allowing 75% of owners to agree to sell their buildings to developers seeking to boost the overall number of units. However, these laws contained provisions that led to legal fees being paid by the majority when minority or single objectors raised objections. Authorities intended the reforms to protect homeowners from developers, but evidence suggests that, in some cases, they had the reverse effect.

Customer Service Minister Jihad Dib emphasized that the reforms aim to rectify a situation where “safeguards that were intended to support owners in renewing their strata schemes [are] being used against them.” The Strata Community Association has warmly welcomed these changes.

The move to ban pet ownership fees in NSW aligns with the broader goal of making housing supply more efficient and homeowner-friendly. As the number of strata schemes in the state has grown rapidly, the rules are being updated to meet the current demand.

Current Pet Permission Process in Your Building (NSW)

Before bringing a pet into your strata-managed property, it’s essential to follow the correct procedure to obtain permission from the owners corporation. The process typically involves the following steps:

1. Review the Scheme’s By-Laws: Start by checking your strata scheme’s by-laws. These by-laws outline the specific process for seeking pet permission and provide details about what information is required for approval.
2. Write to the Secretary or Strata Manager: Most owners corporations will require you to submit a written request to either the secretary or the strata manager. In your request, you should include the following details:

It’s essential to provide comprehensive and accurate information to facilitate the approval process. Once your request is submitted, the owners corporation will review the information and make a decision based on the by-laws and their guidelines.

By following this process, you can seek permission to have a pet in your strata-managed property while adhering to the established rules and regulations. More information, visit nsw.gov.au

This article is not intended to be comprehensive nor does it constitute legal advice. The article provided is general and for your information and interest only.

In a previous article, we explained how a Strata Plan is funded. All owners in a building are required to pay Strata Levies.

In this article we will provide some more details around strata levies, also known as strata fees, and strata management fees.

Strata Levies

Strata Levies are typically raised quarterly and collected on behalf of the Owners’ Corporation. The exact amount is usually agreed once a year during the Annual General Meeting. Previously, we covered that these levies normally consists of two components, the Administration and Capital Works Fund.

The funds raised are used for the day-to-day management and operation of the building. Typically, money is also put aside for ongoing maintenance & repairs of the building. It is in the interest of all owners to keep the building well kept and well maintained.

Each owner is required to pay their fees. Any unpaid levies typically attract 10% interest, if not paid within 1 month of its due date. Did you know that any outstanding levies will be deducted of the final settlement amount, in case an owner decides to sell out of a building?

Strata Management Fees

If a building has engaged the services of a professional Strata Management Company, the Owners Corporation will be required to pay the agreed monthly management fees. This will cover the services of the appointed strata manager and cover their costs, such as salaries, telephone, printing, postage and archiving. These expenses are commonly known as disbursements. Many Strata Management agencies charge a management fee, and then a separate charge for these disbursements. This makes a clear and upfront understanding of their fees often very difficult. At Premium Strata, we believe in full transparency and as such all regular disbursements are covered in our fees. This avoids nasty surprises. When comparing potential strata managing agents, it is very important to have a detailed understanding of what is included, and what is charged separately in the contract.

Before we move on, on the topic of Archiving fees. Did you know that most records of a Strata Plan must be kept by the Owner’s Corporation for a minimum of seven years? Details on which records must be kept can be found here.

Are lower levies always a good thing?

When it comes to strata levies, are lower levies always a good things? At first glance, you might think it is. It may mean lower monthly expenses for you, but there are a number of potential issues you should look out for?

The amount you pay in strata levies is typically a result of the following factors:

The location of your building: a building in Sydney CBD is typically more expensive to keep than a building in Townsville. This is related to the higher cost of living in Sydney.
The quality of the building: a solid, well-built building using durable materials might cost more when acquiring but typically costs less over the life-time of a building.
The facilities offered in the building: a gym, extensive gardens, 24 hour concierge, electronic garage doors are all features which can drive up the levies significantly. You pay for the convenience and added security.

Levies can be kept artificially low

There are a number of ways in which a building can be ‘creative’ in reducing the levies it needs to raise:

Self Management

This could be an attractive option for smaller buildings, as the cost for a strata managing agent makes up a proportionally large share of their total levies. However, whether this is a sensible option depends on the quality of the Executive Committee. In most cases owners either do not have the required expertise, time or will to take on this responsibility. In this case they would hire the services of an experienced, licensed strata manager.

Quality of Strata Management Agency

Like in any industry, there are varying levels of quality and service when it comes to strata managers. Which strata management company is right for your building depends on the level of expertise and quality of service you expect from your strata manager. Larger buildings are often more complicated to manage, and if you have building defects you would want an experienced manager who can offer you solid and reliable advice.

Capital Works Fund

By not raising any or insufficient sinking fund levies you are not reserving funds for maintenance work which all buildings require at some stage. When considering acquiring a new unit, it pays to investigate the amount of money in the sinking fund of a building. A low or non-existing sinking fund may indicate Special Levies may need to be raised in the future.

Not maintaining the building

You would want to safeguard the investment you made in your building. By not maintaining it properly you devalue your investment and will almost certainly increase the maintenance costs over the long-term. Every building needs regular maintenance.

Developer Funded Levies

In the case of new developments, it is not uncommon for the developer to hold a majority of the units. They may choose to do a lot of the maintenance work themselves, helping to keep levies lower than would normally be the case. This saves them money in reduced levies and will also help attract potential buyers. There is nothing wrong with this. Just be mindful that eventually your levies are likely to have to increase.

Stagnant Levies

By not adjusting the levies for CPI (Consumer Price Index) changes each year, the revenues of a strata scheme will increasingly not match the expenses. The building will eventually be in deficit. Loans can cover this debt, but interest is due and eventually this loan will need to be repaid.

All of the above, highlights the need to do your homework before buying into a Strata building. A Strata Search by a trained professional is highly recommended, as it will help avoid unpleasant surprises at a later stage.

Remember, low strata levies are good only if it genuinely covers the costs of running and maintaining a building. Ultimately, you always get what you pay for!

We hope you found this little guide useful. Please keep your eyes open for future posts, as we will continue to work towards making the somewhat complex world of strata management just that little bit easier to understand.

It is easy to get confused with all the jargon flying around! Let us try and explain the difference between a Strata Manager, a Building Manager/Caretaker and a Property Manager.

A licensed Strata Manager is a licensed professional who manages the day-to-day affairs for a strata titled or community titled scheme or building. They ensure the scheme is properly managed for the enjoyment of all lot owners and tenants. This includes the conducting of meetings, collecting strata levies, arranging repairs and maintenance, managing a scheme’s financial affairs and strata insurance. Your strata manager also handles issues and complaints between residents and raises these with the Executive Committee for resolution. A Strata Manager may also be know as owners corporation managers, strata managing agent, or body corporate manager. Different titles tend to be used in different states and are often based on state legislation or terminology used in the past.

In future posts we will cover the various aspects of Strata Management in greater detail. Watch this space!

A Building Manager, or Caretaker, within the context of strata management is somebody who is usually stationed onsite at a building and performs daily cleaning and maintenance services. The onsite building manager reports any need for repairs to the Strata Manager and is the contact for any contractors performing work on common property. He or she typically works during normal business hours and reduced hours over the weekend.

A Caretaker is either appointed by the original owner or developer or by the owners corporation. Any caretaker, or building management agreement between the original owner and the caretaker must end at the conclusion of the first Annual General Meeting (AGM). The agenda of the first AGM must have a motion on whether to appoint a caretaker and if so which duties this person should perform. From 10 February 2013 the Act limits the duration of any building management agreement to 10 years, however both parties may agree to renew the agreement. Any agreement signed prior to this date and that is for a period longer than ten years is valid for the full term.

It is important to note that under the Act certain strata responsibilities can only be delegated to strata managing agents, who hold the appropriate license. It is important to seek appropriate advice before you appoint a building manager. Ideally you appoint a Caretaker through your Strata Manager as this will ensure you are covered and can rest assured. It also guarantees close cooperation between the Caretaker, Strata Manager and the Owners’ Corporation which will deliver the optimum outcome for your property.

Finally, a Property Manager typically works for a real estate agency and primarily represents the owner, or landlord, of a property and its tenants. This property could be a house or a strata titled lot, or unit. They manage tenants of the property, collect their rent, payment of certain bills and organise repair and maintenance. If the property is a unit, any repairs and maintenance relating to the airspace within the apartment is managed by the Property Manager, any issues relating to common property are handled by the Strata Manager. If the tenant raises any strata related issues, the Property Manager will take these up with the Strata Manager. A tenant typically has no direct dealings with the Strata Manager, who only represents owners of a lot.

Premium Strata offers both excellent Strata Management and Building Management services. Call us today for an obligation free chat! We are happy to answer any questions you may have.

In a previous article, we explained what Strata Title is: it is an ownership structure established for apartment buildings. ‘Strata’ is another word for a multi-level building. We covered what a Strata Plan is and that once it is registered with the government the Owners Corporation comes into being. Click here if you want to read the original article.

But what happens with a Strata Title building, or Strata Scheme once it has been established? What is required to effectively and efficiently manage a building? Who manages the building? How is strata title managed? In this article we will shed some light on Strata Title Management, also known as Strata Scheme Management, or Body Corporate Management.

Body Corporate vs Owners Corporation

Let us start with clearing up a common misconception: A Body Corporate is the same as an Owners Corporation. The term ‘Owners Corporation’ is the modern day equivalent, which came into use following legislative changes many years ago. Old habits die hard and hence the fact that both terms are still used today.

Self Manage or a Licensed Body Corporate Strata Manager?

Although it is not a legal requirement, most Owners Corporations hire the professional services of a licensed strata management, or body corporate management agency. Owners Corporations are entitled to manage their own affairs, however in most cases owners either do not have the required expertise, time or will to take on this responsibility.

Funding of the Strata Plan

It all starts with financial funds. An Owners Corporation must have sufficient funds available to pay the day-to-day management and operation of the building. How else will the bins be emptied and gardens kept? At the same time, money must be set aside to pay for the ongoing maintenance & repairs of the building. It is in the interest of all owners to keep the building well kept and well maintained to ensure it will appreciate in value and not the opposite.
As mentioned in a previous article, all owners in a building are required to pay Strata Levies, a typically quarterly contribution to the owners’ corporation. The exact amount is usually agreed once a year during the Annual General Meeting.

This levy normally consists of two components, sometimes complemented with a third levy:

Administration Fund, or Admin Fund contribution
Sinking Fund Contribution
Special Levies

What is an Admin Fund?

The Admin Fund, covers day-to-day expenses such as cleaners, gardeners, replacing of light bulbs, and let’s not forget the management fees for the strata manager. These are typically recurring, operational expenses.

What is a Sinking Fund?

The Sinking Fund is intended for so-called capital investments, which typically benefit the building for many years. Examples are lift upgrades, a roof replacement, or repainting the building. We will cover the importance of a Sinking Fund Forecast in a future article.

What is a Special Levy?

If the Owners Corporation has to pay a debt that was not budgeted for in either the Admin Fund or Sinking Fund estimates, a Special Levy must be agreed at a General Meeting and paid to the Admin Fund. When expenses are incurred and not enough funds are available in either the Admin or the Sinking Fund, owners may agree to raise a so-called Special Levy. A special levy is usually short-term in nature. For example, many older buildings in recent years have had to upgrade their fire safety systems to meet stringent fire safety regulations. This could cost into the many hundreds of thousands of dollars. Funds many buildings simply did not have. The Owners Corporation could then agree to either take on a bank loan, or to raise special levies.

How are strata levies calculated?

Your Strata Manager usually proposes a draft budget for the financial year for the Executive Committee to review prior to the Annual general Meeting (AGM). If they are comfortable with the proposed amounts, the draft budget will be attached as an agenda item to be discussed during the AGM. During the AGM, all owners or their representatives will get to ask questions and ultimately vote on the proposed budget. Owners can vote against the proposed budget, or suggest a different budget. Once the exact budget has been confirmed, your body corporate manager will divide the agreed budget required by the Unit Entitlements. There is full transparency and your strata manager will happily answer any questions you may have. For more information on how Unit Entitlements are established, please refer to this previously mentioned article.

Strata Insurance: Building and Public Liability

Another very important function of the Owners Corporation is the annual Building and Public Liability Insurance renewal for the Strata Scheme. It protects the building against the costs of fire, floods, explosions and accidental damage. It may also cover the building for emergency repairs, provides temporary alternative accommodation in case your unit becomes uninhabitable following a flood or fire. This insurance also comes with a legal liability component and typically covers a building for $20 million.

It is important to understand that this insurance only covers Common Property. Individual owners will still need to take out personal content insurance if they wish to cover the own property. For example, in case a water leak originates from a unit above you. The strata scheme’s insurance will typically only cover the locating and repair of the water leak and any damage to common property. If your furniture has water damage this will typically need to be claimed on your personal content insurance. Strata Insurance and what exactly is and is not covered is often rather complicated and can vary from strata scheme to strata scheme. We recommend you check with your Executive Committee or your Strata Manager to ensure your property is adequately covered.

Premium Strata offers both excellent Strata Management and Building Management services. Call us today for an obligation free chat! We are happy to answer any questions you may have.

You may have heard of the following terms mentioned in your regular strata related dealings: Strata Schemes, Strata Plan and Strata Title.

You may even understand that somehow they are all related, but how exactly, that remains a bit of a mystery. In this article we will try and demystify this terminology for you.

What is Strata Title?

Strata Title is a type of ownership structure established for multi-level apartment buildings and horizontal sub-divisions with shared, common areas. ‘Strata’ is another word for a multi-level building. Believe it or not but this ‘system’ was invented here in New South Wales, Australia and is now exported to the world. Countries such as New Zealand, Canada, South Africa, India, Dubai and Indonesia have all adopted the Australian system or a variation of it.

The NSW Conveyancing (Strata Titles) Act, 1961 came into force on 1 July 1961. A few weeks later the first Strata Plan in the world was registered in the suburb of Burwood, a block of 18 units named Lindsay Gardens. It would be the beginning of NSW strata living and has led to a thriving NSW strata community!

The innovation that Strata Title offered was that it enabled individuals or businesses to own a section of a property, or a ‘Lot’ and combined this with the shared ownership of Common Property. The day-to-day management is done through the Owners Corporation.

The Strata Title system gradually replaced the so-called ‘Company Title’ system where one holds a share in a company which owns the actual building you live in. These shareholders hold exclusive use of one of the units. The owners are so-called Tenants In Common, which is a form of co-ownership. Financial institutions were not keen to loan to buyers of Company Title units, and purchasers were typically charged higher interest rates as a consequence.

What is a Strata Title Scheme?

Quite simply a Strata Scheme is any building set up under the various Strata Schemes Acts and Regulations in NSW. This could be your typical multi-dwelling unit (MDU) or apartment complex but can also cover retirement villages, resorts and even caravan parks. Both the terms ‘Strata Title Scheme’ and ‘Strata Scheme’ are used interchangeably.

What is a Strata Plan?

Each parcel of Real Property land, i.e. land used for the purpose of residential or commercial property, on which a Strata Scheme building is built must be subdivided into a Strata Plan (SP). In other words, all Strata Schemes are represented by means of a Strata Plan.

Each NSW Strata Plan must be registered with the NSW Government’s department of Land & Property Information (LPI). In order for a SP to be registered a number of criteria must be met. The requirements are quite specific and details, so I have provided a summary below:

Administration Sheets must be completed which summarise all administrative information, such as name and address to be used for servicing of notices, applicable by-laws, a schedule of unit entitlements, approvals and relevant certificates for the SP and to make it all official signatures and seals.

Before we continue, let me briefly explain the terms By-Laws and Unit Entitlements:

By-Laws stipulate the ‘rules’ applicable to owners and tenants who live in the building and could cover anything from the keeping of pets, use of common property, parking and the installation of air-conditioning units. By-Laws will be covered in a future article, so what’s this space.
The Schedule of Unit Entitlements breaks down for each unit, or ‘Lot’, what their ‘weighting’ is compared to other lots. Despite common believe that this is based on the floor space of a Lot, this is in fact based on the perceived “market value” of the Lots on the date of registration of the Strata Plan, as determined by the developer of the building. It reflects the relative value of one Lot compared to the other Lots in a building.

For example, a residential apartment building consists of 10 units. The units all have 2 bedrooms and identical floor plans. There are 2 penthouse apartments with spectacular views of the City and harbour. In this instance, the unit entitlements for these 2 penthouses could be “20” each, whereas the other units have “10” each. This brings the aggregate to 120 (8 x 10, plus 2 x 20). This means that the owners of the penthouses have a 20/120 = 16.67% share in the overall vote, whereas the other owners would have an 8.33% vote (10/120). It also means the penthouse owners pay a higher share of the strata levies and sinking fund payments.

It is also important to note that everything within the parcel of land which does not form part of a Lot is deemed to be Common Property.

Plan Drawing Sheets must be provided and contain details on the exact geographical location of the building. It shows how the building sits in relation to the land parcel’s boundary. A floor plan must also be provided and is used to define the new strata lots.
Encroachments, previously covered in a blog post (click here), must also be clearly defined. The council must be satisfied that the encroachment(s) does not endanger the public safety or interfere with neighbourhood amenities. There are a number of conditions that need to be met, but covering these goes beyond the scope of this article.
Easements, which give somebody the right to use a section of land which they do not own, must also clearly be marked on the location and floor plan. Easements are typically used to gain access to a part of the parcel of land.

If you are keen to understand the details, I suggest you have a look at the website of the NSW Government Department of Land & Property Information. You can find them here.

Once a Strata Plan is registered a unique code will be allocated. This is the code you typically find on your Annual General Meeting (AGM) documentation or levy notices, for example ‘SP62199’.

What happens once a Strata Plan is registered?

Once the plan and administration sheets have been processed by the Department these will be placed on public record. From then onwards all common property sits with the Owners Corporation and a so-called Certificate of Title is issued for the common property and individual lots. Once a Strata Plan is registered, it effectively means that the Owners Corporation comes into existence!

Newly registered Strata Plans are typically owned by developers who will put the units on the market for sale, if they haven’t already sold them “off the plan”. There are specific rules & regulations guiding developers.

Premium Strata offers a tailor-made solution for developers and will assist them every step of the way in getting their property registered as a NSW Strata Plan. Premium Strata offers both excellent Strata Management and Building Management services. Call us today for an obligation free chat! We are happy to answer any questions you may have.

NSW strata residents in breach of any by-law, risk that the Owners Corporation makes an application to NCAT for the imposition of a civil penalty for breaching the by-law. Such penalties are quite severe.

This penalty carries a monetary penalty of up to 10 penalty units (which is $1,100). A repeat offender (ie one who was fined $1,100 and breached the by-law again within 12 months of being fined) can be fined $2,200.

Any owner who is in breach of the occupancy limits set out in the legislation are potentially liable to fines of $5,500 and $11,000.

What are the restrictions on these by-laws?

The new strata legislation has enacted a new restriction on by-laws, namely, that a by-law cannot be unjust, harsh, unconscionable or oppressive. Whether or not a by-law falls afoul of these restrictions is determined by NCAT. Further, any such by-law may be invalidated by NCAT.

This article is not intended to be comprehensive nor does it constitute legal advice. The article provided is general and for your information and interest only.

The new legislation introduced in NSW in November 2016 has recognised that smoking may cause nuisance or hazard to another person. Further, it has introduced a new model by-law (which must be adopted) regulating smoke drift.

It offers two options to restrict smoke penetration in by-laws. If neither option A or B is selected, option A will apply.

Option A
(1) An owner or occupier, and any invitee of the owner or occupier, must not smoke tobacco or any other substance on the common property.
(2) An owner or occupier of a lot must ensure that smoke caused by the smoking of tobacco or any other substance by the owner or occupier, or any invitee of the owner or occupier, on the lot does not penetrate to the common property or any other lot.

Option B
(1) An owner or occupier of a lot, and any invitee of the owner or occupier, must not smoke tobacco or any other substance on the common property, except: (a) in an area designated as a smoking area by the owners corporation, or (b) with the written approval of the owners corporation.
(2) A person who is permitted under this by-law to smoke tobacco or any other substance on common property must ensure that the smoke does not penetrate to any other lot.
(3) An owner or occupier of a lot must ensure that smoke caused by the smoking of tobacco or any other substance by the owner or occupier, or any invitee of the owner or occupier, on the lot does not penetrate to the common property or any other lot.

So, for example, if Option A were adopted, smoking would be permitted within an individual’s apartment provided that no smoke escaped into another apartment or into common areas.

Even if the Owners Corporation does not have a by-law which prohibits smoking or smoke penetration, the Owners Corporation could stop a person from smoking under the nuisance/hazard provisions of the legislation if the Owners Corporation could prove such nuisance/hazard being caused.

Breach of a by-law and penalties

In NSW, residents in breach of any by-law risk that the Owners Corporation makes an application to NCAT for the imposition of a civil penalty for breaching the by-law. Such penalties are quite severe. This penalty carries a monetary penalty of up to 10 penalty units (which is $1,100). A repeat offender (ie one who was fined $1,100 and breached the by-law again within 12 months of being fined) can be fined $2,200.

Any owner who is in breach of the occupancy limits set out in the legislation are potentially liable to fines of $5,500 and $11,000.

Restrictions on by-laws

This article is not intended to be comprehensive nor does it constitute legal advice. The article provided is general and for your information and interest only.

More and more new housing estates are set up as community, precinct or neighbourhood associations.The large developments in Sydney’s outer suburbs spring to mind.

They typically offer a mix of strata titled apartment buildings, townhouses and shopping centres with shared promenades and parklands. A great recent example is Breakfast Point in Sydney.

The developers of these locations typically market the lifestyles that come with buying a property in their estates. They offer bicycle tracks through parks, swimming pools and playgrounds.

Community Title Management

Community Title Management involves the management of property within these gated estates, which typically consists of various strata title schemes and shared infrastructure, such as roads and various facilities. Another way of describing it, is that they are a subdivision of land with shared property, not dissimilar to strata title. Please note that there are some technical differences and variations from state to state.

Community Title Schemes typically maintain their own roads, parks and gardens, and garbage collection. This explains the popularity of this model with many councils. Residents still pay council levies, however only receive limited services from their council, as most are funded by themselves. You could call them “mini councils”.

Association and Association Property

The Community Land Management Act 1989 and the Community Land Development Act 1973 are the two acts that detail how community schemes should be run. The NSW Department of Fair Trading is currently reviewing these Acts.

The joined, collective ownership model is a corporation, named the ‘association’ and the communal owned property, such as roads, promenades and parklands are called ‘association property’.

Community, Precinct and Neighbourhood Associations

In New South Wales, there are three types of associations, the previously mentioned community, precinct or neighbourhood associations. To give you an idea of the popularity of these associations, in 2014 there were over 700 community schemes, approximately 30 precinct schemes and over 1,400 neighbourhood schemes. This pales in comparison to the approximately 75,000 strata schemes in NSW, however don’t forget that some of these developments are in fact suburbs. They can be vast!

A Community Plan is typically used when a developer wants to build a large scale development consisting of various release stages with a multi-tiered management structure. It divides the land in Association Property and lots for development. A Community Association can consist of Precincts, Neighbourhoods and Strata Schemes.

Precincts are pretty rare, mainly because they are a combination of Community Plans and Neighbourhood Plans albeit with certain restrictions. Let me spare you the details.

Finally, Neighbourhood Associations with over 1,400 registrations in NSW is the most popular form and can be used in tiered, stand-alone and staged developments. It lets you subdivide lots in a Community Plan, a Precinct plan or conventional ‘strata’ lots.

Still confused? I cannot blame you. Effectively, they all offer developers ways to gradually develop a parcel of land without restrictions without really affecting the individual lot owners.

How are these Community Schemes managed?

By now you would have gathered that these type of associations are very complex to manage. They usually consist of a mix of residential, commercial and retail lots often with conflicting interests. As in strata, the schemes are managed through resolutions tabled at meetings. There is the community scheme committee for more day-to-day issues and general meetings attended by all owners for larger topics.

What about by-laws?

The by-laws of your strata titled building apply, as well as the by-laws of the community scheme. This means you might have to apply for permission of both committees to make changes.

Management Statements

All by-laws in a community scheme are detailed in a so-called Management Statement, which is lodged with each plan. Due to the varying nature of these scheme you don’t get the standardised by-laws as with strata schemes.

If you are interested in reading more about these changes and associations in general, check out the website of the NSW Department of Fair Trading. They also created this handy guide.

A Strata Title, or Strata Plan Search can be described as a thorough investigation of the records including minutes of meetings and the financial records of a particular Strata Scheme. It is also known as an Owners Corporation Records Inspection or Section 182 search. The Section 182 refers to the relevant section of the NSW Strata Schemes Management Act 2015, which covers Strata Searches, and should not be confused with a Section 184 certificate, more on this later.

Why perform a Strata Title Search?

Any prospective buyer of an apartment or unit in a Strata Scheme, Community Title or Company Title residential or commercial/industrial building would be wise to investigate the exact ins & outs of the building. After all, this is one of the largest purchases in your life and you want to avoid surprises after you sign the contract. A pre-purchase report will highlight major defects, noise issues, expected large expenses and much more.

Even though the benefits are obvious, the majority of potential purchasers often pass on the opportunity to do a search. Time, cost or the fear of missing out may all play a factor.

Who performs a Strata Plan Search?

Anybody can perform a search, but there are many specialists who can provide this service at a fee. Engaging the professional help for a Strata Inspection report will ensure nothing will be missed or misinterpreted. Consider it like commissioning a Building Inspection Report which is common when considering buying a house, rather than a unit (for the avoidance of doubt, a Building Inspection Report can of course also be carried out on strata titled properties, not just houses). It is very common and suggested to use the services of fully qualified, professional Strata Inspection consultancies with either a Real Estate or Legal background. They are best placed to interpret the vast amount of information.

What to watch out for when doing a Search?

An inspection of the Owners Corporations records should confirm who owns the unit you are considering buying. It will confirm basic information such as your quarterly levies and whether the current owner is fully paid up. A search will also confirm your voting rights and the previously discussed Unit Entitlements. For more on Unit Entitlements, please refer to this article.

If you intend to bring your pet, it will confirm whether the By-Laws allow you to have pets. Are there any other By-Laws you should consider, or that are frequently causing issues within the building, such as noise and parking? Or, are there any special By-Laws to the specific lot you are looking at buying? Is there any evidence of disharmony or disputes within the building? Is there current or future litigation involving the building?

In addition, it will give you an insight in potentially crucial information regarding existing or planned special levies for major building work or the remediation of building defects. These could be accompanied by costly legal disputes. These major expenses would need to be adequately covered through the Admin Fund or Capital Works Fund, so it pays to investigate these financial accounts. For more on Admin and Capital Works Funds, please read this article. Relating to the Capital Works Fund, is the Capital Works Fund Forecast (10 year plan), which provides you with a detailed overview of expected capital expenses over the coming decade. This covers your routine maintenance from new carpets to a fresh coat of paint.

Like with anything of value, you would also want to confirm that the building is adequately insured.

What is a Section 184 Certificate?

Some of the critical information previously mentioned is provided as part of the so-called Section 184 certificate or “Strata Information Certificate” as it is now known, which is also covered under the NSW Strata Schemes Management Act 1996.

In summary, an Inspection Report or Strata Information Certificate will give you a good idea of how well the building is maintained and managed by the Owners Corporation, and therefore your potential investment, is looked after. After all, you would want your investment to appreciate in value and not the opposite!

How do you organise a Strata Search?

If you feel comfortable enough to perform your own searches, you will need to contact the relevant Strata Managing Agent to make an appointment. If you use a professional, they will arrange this for you. An appointment is important as it gives the Strata Manager the time to ensure all relevant minute books and documents are up-to-date and available. It will ensure any recent minutes have been pasted into the official records.

It is important to have written authority to perform the search. This can be obtained via the real estate agent. The records of the strata scheme are private information, which cannot be sighted without proper permission. As a potential purchaser this approval cannot reasonably be withheld from you on the basis you have provided the written consent required.

How much does a Strata Search Cost?

Besides the fee your Search Agent charges, you will also be required to pay the Owners Corporation a search fee. There are scheduled fees, which cover photo copies, a time-based charge for making records available for inspection under section 182 and for the Section 184 Certificate. Details can be found here. Exact charges vary, as it is charged on a time basis and on the number of copies made during the search.

In summary, a Strata Search is well worth the investment and will help avoid surprises or disappointment. It is highly suggested you engage a trained professional to perform the search for you.

In a previous article, we wrote about the possibility for a strata titled building to be self-managed, rather than appointing a strata managing agent. Owners Corporations are legally entitled to manage their own affairs, however usually owners either do not have the required expertise, time or are willing to take on this responsibility.

In this article, we will explain what it takes to become and remain a fully licensed strata manager, and why you are typically much better off appointing a well-regarded and trained professional.

Strata professionals are experts in their field. They have the knowledge and skills to manage the day-to-day running of the Owners Corporation, adhering to complex regulations and laws which vary from state to state. They also possess the ability to achieve consensus amongst the owners of the strata plan. If you have ever attended an Annual General Meeting, you will know that this is an often underestimated skill!

Duties of a Strata Manager

Your Strata Manager ensures the strata scheme is properly managed for the enjoyment of all lot owners and tenants. This includes the conducting of meetings, collecting strata levies, arranging repairs and maintenance, managing a scheme’s financial affairs and strata insurance. Your strata manager also handles issues and complaints between residents and raises these with the Executive Committee for resolution.

What does it take to become and remain a Licensed Strata Manager?

1. Certificate of Registration

Everybody wanting to work in Property Services in NSW is required to apply for a Certificate of Registration with the NSW Fair Trading Office, which involves gaining a Certificate of Registration qualification. A Certificate of Registration can be obtained in a number of categories: Real Estate sales person, Stock and Station sales person, business salesperson/broker, property manager and strata manager. Once you have successfully completed your Certificate of Registration in Strata Management and meet the eligibility requirements of the NSW Fair Trading Office, you are legally allowed to work in the Strata Services industry in NSW.

2. Strata Managing Agent Licence

However this does not make you a fully qualified, licensed strata manager. In order to apply for your Strata Managing Agent Licence you must complete Certificate IV in Property Services. This is an additional in-depth training of the entire strata management process. The training consists of 5 modules or courses:

Certificate of Registration (Strata)
Trust Accounting
Strata Management Agency Practices
Financial Management
Staff Management

Once you have completed all modules, students may apply to the NSW Fair Trading for their Strata Agent licence, ultimately making you a Licensed Strata Manager.

3. Continuing Professional Development (CPD)

To enable to renew your registration with the NSW Fair Trading Department annually, both Certificate and License holders must complete a certain amount of study each year. This is called Continuing Professional Development or CPD. Licence and certificate holders undertake CPD by doing courses or learning activities that are delivered by training providers and industry experts. There are 15 CPD topics, which offer a choice of relevant and interesting topics for your expertise. One must undertake activities in at least one of the 15 CPD topics and earn at least 12 points per year.

Training can be obtained through a number of service providers. In addition, all reputable licensed strata agents are typically a member of industry bodies.

Premium Strata is a member of Strata Community Australia (SCA)

Premium Strata is a long-standing and proud member of Strata Community Australia (SCA). The SCA is the leading industry body, representing more than 80% of strata management businesses. Membership is open to anybody who works in the Strata industry. The Real Estate Institute of Australia (REIA) is another industry body representing the broader Real Estate industry.

Engaging a strata manager that is a member of Strata Community Australia (SCA) is an important step to ensure the professional and compliant administration of a strata scheme. Members of SCA practising as strata managers are required to keep abreast of all changes in the relevant legislation through a program of continuing professional development and also maintain professional indemnity insurance. Not least, they are required to adhere to an ethical Code Of Conduct.

It is highly recommended you verify whether your strata management company is registered with NSW Fair Trading and with the SCA or REIA. (Use the links provided)

What is a Senior Licensed Strata Manager?

You may have noticed how some strata managers use the word ‘Senior’ in their title. This is not an additional formal qualification, but is typically used to indicate that the manager has a certain amount of experience.

Do not underestimate the value of experience! Theoretical knowledge is an important foundation, but real life experience in complicated strata matters really makes all the difference when looking to appoint a strata managing agent. These high caliber managers have the ability to identify and address potential issues early on, before they escalate, and by doing so they could save the strata scheme a lot of time and money.

All of Premium Strata’s strata managers are fully licensed and maintain their continuing professional development. We utilise both external and in-house trainings to keep all of our staff across the latest industry developments. All our managers boast many years of experience in the industry. Feel free to give us a call if you have any questions.

We hope you found this information useful. Please keep your eyes open for future posts, as we will continue to work towards making the somewhat complex world of strata management just that little bit easier to understand.

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