Strata Schemes Management Legislation Amendment Act 2008

11 Oct Strata Schemes Management Legislation Amendment Act 2008

This Act commenced on 1 August 2008 and makes important changes to Strata Title Law in NSW. The changes are as follows:

1. Caretakers and Building Managers

The Strata Schemes Management Act 1996 (“the Act’) is amended by adding section 40A(4) as follows:

For the purposes of this Act, a person is taken to be a caretaker for a strata scheme if the person meets the description of a caretaker set out in this section, regardless of whether the title given to the person’s position is caretaker, building manager, resident manager or any other title.

This extends the protections for strata owners in relation to caretaker contracts if the caretaker by their role meets the description of a caretaker set out in the Act regardless of what their title may be.

2. Proxies and Powers of Attorney

Clause 11(7) of Schedule 2 to the Act which deals with meetings and procedures of owners corporations is amended by the addition of clauses 7AA, 7AB and 7AC. The effect of these sections is that an original owner or person connected with the original owner may not cast a vote by means of a proxy or power of attorney given by another owner of a lot in the strata scheme concerned if the proxy or power of attorney was given pursuant to a term of the sale contract for the lot or pursuant to another contract or arrangement ancillary to the sale contract. This means that in off the plan sales, the developer can no longer use proxies which it obtains on settlement from the purchasers. The amendment does not affect the use of proxies which are in force immediately before the commencement of the Act.   For the definition of a person connected with the original proprietor see point 5 below.

3. Disclosure requirements for members of the Executive committee

Schedule 3 to the Act which concerns the Constitution of the executive committee of the Owners Corporation is amended by adding clause 3A and provides that:

• a person who is connected with the original owner or caretaker of a strata scheme is not eligible:

(a) to be elected as a member of the executive committee ;or

(b) be appointed to stand in the place of a member of the executive of a strata scheme,

unless the person discloses that connection at a meeting of the owners corporation at which the executive committee is to be elected and before the election is conducted or in the case of (b) before the consent of the executive committee is given to the appointment.

• A person who becomes connected with the original owner or caretaker after being appointed must make the relevant disclosure as soon as possible after the person becomes aware of the connection. This disclosure is to be made to the secretary or the chairperson who must endure that the disclosure is on the agenda for the next general meeting of the owners corporation.

Clause 4 to the Schedule is amended by the addition of sub clause 4(4) which provides that if a motion is proposed to determine that a person’s office as a member of the executive should be vacated, the original owner  (or its nominee in the case of a corporation) shall have only 1 vote for each 3 lots in respect of which the original owner is entitles to vote, unless the original owner owns less than one half of the lots. The original owner is also not allowed to vote on the motion as a proxy for any person.

The determination that a person’s office as a member of the executive committee is vacated requires a special resolution against which not more than one quarter in value ascertained in accordance with clause 18(2) and (3) of Part 2 of Schedule 2 of votes is cast (unit entitlement basis with diminished votes for the original owner).

4.  Exclusive Use By-laws regarding parking

Clause 56 of the Act has been repealed which means that although an owners corporation can make by-laws giving rights to an owner of the exclusive use of or special privileges in relation to and area of the common property (including car spaces) it can no longer do so during the initial period.

This does not affect any by-law that was registered by the Registrar General before the repeal of the By-law or any proposed By-Law for which written approval has been given under section 56 but which has not yet been recorded by the Registrar General.

For further information please contact Jennifer Graves or Alexandra Tzavellas.