OCN Submission to Strata Law Review | Owners Corporation Network

OCN Submission to Strata Law Review

The NSW Fair Trading Minister, the Hon Anthony Roberts, initiated the Strata Laws Review earlier this year. OCN prepared a submission based on the input of many of our members and a discussion at the March 2012 General Meeting. The submission is in three parts: Improving Strata Living and Governance in NSW, Improving and Enhancing Strata Legislation, and OCN Strata Renewal Model. Read more for our submission and a summary of our recent follow-up discussion with the Minister’s office. The Government’s discussion paper to be released during the next few months will provide further opportunities for OCN comment. In the meantime, please post any further comments on our Forum under the Legislation heading. Strata Review - OCN Submission – Key Points Strata ownership and strata living in NSW is now well-established but in many ways problematic: Owners in new strata schemes are exposed to major building defects and long-term building management agreements, put in place at the behest of developers, which are contrary to their interests. Lack of consumer protection in this area exposes owners to unacceptable costs and is giving strata ownership a bad name. Due to its minimalist style, the Strata Act is not an effective governance instrument for guiding Executive Committees managing the operation of strata schemes. Some provisions regulating the operation of strata schemes are ineffective and open to abuse. Combined with a general lack of appreciation of the nature of strata ownership this often leads to mismanagement and unnecessary disputes in strata schemes. Ambiguities in the Act lead to confusion and misinterpretation of its intent, resulting in unnecessary complexity and cost in the operation of strata schemes. NSW Fair Trading does not have the power to definitively clarify the Act and CTTT decisions are sometimes arbitrary and ignore practical consequences. This results in excessive legal cost for owners and owners corporations and excessive dispute resolution costs for government. The unanimous agreement required to terminate or renew strata schemes is unattainable in practice, resulting in strata schemes that are no longer viable to operate. The measures needed to address the problems and deficiencies would deliver high impact benefits to the public at relatively low cost and generate political goodwill for the government: A public awareness and education campaign to improve the level of understanding of strata ownership, strata living and strata management. An overhaul of the building construction approval and certification process to ensure that when an Occupation Certificate is issued for a new strata building, prospective purchasers can assume that it is essentially free from defects. In the exceptional cases where defects are uncovered by owners, building insurance should cover rectification costs for 10 years for structural defects and 5 years for non-structural defects. Reshaping and augmenting the Strata Schemes Management Act: As an effective governance instrument that provides guidance for the organisation and operation of various types and size of strata schemes To prevent long-term service contracts to be implemented in new schemes before the new owners, independent of the developer, gain effective control of the scheme To streamline general meeting voting and procedures, and other governance arrangements, in strata schemes To clarify the boundary between lots and common property and the intent of the Act by defining terms where ambiguities exist (e.g. section 65A of the Act) To implement more realistic provisions for the termination or renewal of strata schemes that would require agreement by 80% of lot owners (rather than 100%) for strata schemes consisting of more than 4 lots. To address the numerous items outlined in OCN's submission and others.

What Members Say

"The whole strata community owes a huge debt of gratitude to you and the OCN executive. Much appreciated."

Robert, Darlinghurst

"I am very pleased with my membership of OCN, the discussions through sharing emails is very valuable in increasing my knowledge of strata living, the laws and EC responsibilities. I think I am better armed to tread the minefield of the managing agent responsibilities and the necessary action of the EC to monitor the contradictory interests of the agent."

Jim, Wollstonecraft

"I so appreciate being part of the OCN email forum. It provides a great opportunity for sharing ideas and learning"

Ingrid, Neutral Bay

"I must say that I have enjoyed and found consolation in the discussions that have been part of the email chain (forum). I did attend one general meeting and found that it was informative and the people "running the show" were knowledgeable and dedicated to the tasks that had taken on. In short, well done. You and the committee have and continue to support the Strata Community in a very professional manner."

Greg, Parramatta

"Nothing is easy in Strata World and we have been in building defects “mode” for some years – hopefully almost at an end but that process has been most demanding and difficult but again – greatly helped by the experience and wise counsel of other members of OCN."

Pat, St Leonards

"Keep up the good work, as many (if not most) strata schemes need your help, advice and representation at all levels of government."

Jann and John, St Ives

"I belong to OCN because of its professionalism.  I have found the meetings I have been to extremely well presented, to the point, and of course very topical and informative. Speakers on the whole certainly know their topic.  My role of Secretary last year was certainly assisted with the coverage regarding TPG & other subjects. Member newsletters are also of benefit as the topics are specific to strata matters."

Graham, East Balmain

I have enjoyed attending the quarterly OCN meetings and the exchange of emails between other Executive Committee Members and think OCN is playing an increasingly important role as a voice for strata dwellers and representing us at Government level. I wish the organisation continuing success in the future."

Pauline, Kings Cross

"The [forum] response to my question was amazing and really useful.  The OCN community is wonderful so thanks."

Jenny, Killara

"I would like to thank you all for the important effort that you are all putting in to look after apartment owners and tenants. It is so valuable and you are heroes. I would not have been able to deal with my duties as a strata chairman without your advice and assistance." 

Angela, Mascot

"The OCN is invaluable – many thanks."

Bill, Surry Hills

"OCN is proving invaluable"

Sue, Neutral Bay

"Thanks to all at OCN for your continuing efforts to keep us up to date with current strata information and advice...it has been very helpful to us"

Kate, Coogee

"When my wife & I first encountered a problematic Executive Committee I heard that OCN was a great help (from a Strata manager whom I knew) so we both joined and have gratefully used the on-line information sources. We continued to happily rely on OCN’s assistance when we progressed to Committee status & later as Chair & Secretary of our Committee. I still use OCN in my current role as Treasurer."

Peter, Chiswick

"Thanks to OCN for being such a rich resource of trustworthy information about strata matters."

Peter, Chiswick

"I wanted to extend my personal thanks for the very informative & interesting event today. The OCN team did an outstanding job in the organisation of this event & I enjoyed it thoroughly. The quality of speakers, the flow of conversation & interaction from the attendees - first class …& of course, the amazing Jimmy T - always a delight."

Sue, Epping

"OCN does a great job in providing a really valuable service to Strata owners."

Lois, Wollongong

"I am sure my appreciation of your good works is echoed by many in the Stratasphere. Keep up the good work."

John, Elizabeth Bay

"Once again, being able to discuss such things through this forum, helps clear the mind, puts things into perspective and helps one to understand their rights and to form a strategy if needs be. As a simple EC member trying to do what is in the best interests of lot owners, I truly value OCN and am grateful."

Pamela, Point Lookout

"The OCN is probably one of the best, most informed and most informative groups I have been involved with."

Alan, Maryville