Co-authored by Emmanuel Solana, Lawyer
The Minister for Lands, Terry Redman, announced this month that the Western Australian Government will proceed with fundamental reforms to WA’s strata title system in 2016.
State Cabinet has given approval for the drafting of a new Bill to amend the Strata Titles Act, and the Minister intends to introduce the amended legislation to State Parliament in Spring 2016.
Since being tasked by the State Government to deliver reforms to the Strata Titles Act 1985 (Act), Landgate have focused on 5 key areas of reform:
- New forms of strata;
- Buyer information and protection;
- Resolving strata disputes;
- Management of strata disputes; and
- Termination of strata schemes.
PROPOSED CHANGES TO THE ACT
1. New forms of strata
The introduction of two new types of Strata title: community title schemes and leasehold strata schemes.
- Community title schemes will allow management of mixed use and multiple schemes in one land parcel, and in a single building.
- Leasehold strata schemes, over freehold land, will give the buyer of a unit a long term lease of between 21 – 99 years, for which a certificate of title is issued.
The reforms will also include proposals to improve the staging of strata developments allowing developers to develop staged schemes, faster and with less red tape.
2. Buyer information and protection
Information given to buyers before signing a contract will be simplified, provide more relevant information (including levies), and set out in an easier to read format.
New forms, for community title schemes and leasehold strata schemes will also be created.
3. Resolving strata disputes
Under the proposed reforms, the State Administrative Tribunal will become the central forum for strata disputes and the Tribunal’s powers will be strengthened to streamline procedures and issue enforcements.
4. Management of strata schemes
Proposed changes to the regulation of strata managers will include imposing key duties and obligations strata managers must perform. Key duties may include:
- holding a trust account for strata funds;
- disclosing conflicts of interest; and
- acting with honesty.
Any disputes in relation to these duties can be taken to the State Administrative Tribunal for resolution.
The minimum public liability insurance required will increase from $5 million to $20 million dollars.
The reforms will also allow electronic communication and voting and record keeping. Additionally, the reforms will provide figures on how many strata managers there are in Western Australia and the State Government will use this information to consider the need for licensing regulation.
5. Termination of strata schemes
Under the proposed changes, the termination of strata schemes requires a 75 per cent majority vote, for schemes of four lots or more. For two or three lot schemes, a majority of owners is required.
Every application must undergo a review by the State Administrative Tribunal for an assessment of procedure and fairness to all owners.
Developers and strata managers will need to continue to keep a close watch on these developments as they fundamentally change the way in which strata titles will be created and managed in WA.
We will keep you updated with any developments as they happen, in the meantime if you have any questions about the reforms and their impact on your business please contact Greg Mohen on (08) 9321 3755.
More information can be found on the Landgate website including a video of the proposed strata reforms.
The information published in this update is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.