Watch this presentation for an overview of the proposed strata reforms.
The WA Government has given Landgate responsibility for delivering reforms to Western Australia's Strata Titles Act 1985.
The proposed reforms aim to provide more flexible and sustainable housing options to benefit developers, strata owners, investors, residents and tenants. They aim to improve the way strata schemes work but not to change current strata owners' land titles and boundaries.
Landgate has refined its original proposals released for public consultation, based on the feedback received and further research. The Minister for Lands has announced Cabinet’s approval to draft the proposed amendments to the Strata Titles Act 1985 following their consideration of Landgate’s recommended reforms.
In October 2014 Landgate released a paper detailing the proposed changes for consultation. At the completion of the public consultation, 154 registered participants, including 35 organisations, submitted 1,160 official comments.
The proposals were refined based on that feedback and further research.
The Reform Statement is available online which outlines the main concepts approved for drafting.
Further information and detail of these concepts will be made available in February. We encourage you to continue to check this web page for these additional updates as they become available.
Areas of reform
New type of strata: community title
Community title allows for multiple strata titled schemes on one land parcel or in one building, under an overarching (or umbrella) body corporate.
Currently a strata scheme can only have one strata company and one set of rules (known as ‘by-laws’) that set out standards of behaviour and other management arrangements for that scheme. The introduction of community title will enable multiple schemes to be managed individually under one umbrella management structure; to be known as the community corporation.
This will be particularly beneficial where there are different uses in a single building (such as a mix of retail areas, office spaces and residential apartments), or where common property needs to be restricted to one group or to one building within the strata community. Community title will provide a sustainable structure for this and allow a clear allocation of management responsibility and costs for each strata of the community.
For example, where there are multiple apartment buildings within one complex but one building has a pool that owners maintain for their own use, it will be possible to have one community corporation maintain areas used by everyone such as driveways, and separate strata companies to manage the needs and levies of each individual building.
New type of strata: leasehold strata
Leasehold strata is a strata scheme which gives the landowner the ability to enter into a long-term lease arrangement (between 21 and 99 years) to create a leasehold strata scheme, where a Certificate of Title is issued for each of the leasehold strata lots.
At present, some land owners may not be in a position to sell their land, but wish to have it developed. This applies, in particular, for institutions such as churches and universities. The new leasehold strata reform will allow a land owner to retain the freehold ownership of the land and develop a strata scheme which can operate for up to 99 years. Buyers of units in this leasehold scheme will obtain a long-term lease of the unit, will be issued with a Certificate of Title and will be able to obtain a mortgage over the unit. Buyers of units in a leasehold scheme will also be able to sell the unit without needing the consent of the land owner.
Management reforms will clarify the roles of strata companies, strata councils and strata managers whilst specifically allowing for the use of technology in meetings and voting. The reforms will also improve the financial management of strata companies.
The Strata Titles Act 1985 sets out the management arrangements for strata schemes.
The proposed changes aim to:
- promote greater transparency and accountability in financial management and to have specific topics, such as insurance, discussed at every annual general meeting
- improve communication between the strata company and its members by specifically allowing the use of technologies such as email and electronic voting
- better define the role of a strata manager by imposing statutory duties including the duty to act honestly and in good faith, exercise due care and skill, hold a trust account for strata funds, provide records of management activities and disclose conflicts of interest.
Strata managers will be required to lodge an annual return with Landgate.
There will also be an increase in the minimum public liability insurance that strata companies need to obtain.
Clearer and easier ways to resolve strata disputes
Strata disputes will be resolved simpler and faster by granting the State Administrative Tribunal (SAT) increased powers and responsibilities including the ability to resolve disputes for the new types of strata.
When there are disputes and disagreements in a strata title scheme, the current Act sets out how some can be resolved. However, these processes are complex and the result has been a confusing framework with strata disputes able to be heard in four different forums, including SAT and various Courts. The jurisdiction of SAT will be increased to make SAT the central specialist forum for strata disputes. The proposed changes increase SAT’s powers, including strengthening enforcement of breaches of by-laws, increasing the limit on monetary orders and enabling SAT to resolve disputes involving strata managers.
Better buyer information
The reform looks at ways to ensure effective and relevant information given to potential buyers is provided in a user-friendly format. Additional requirements for new forms of tenure being introduced have also been evaluated.
Anyone selling a property must give certain information to a buyer before a contract is signed. For strata properties, this will now include additional details about the levies, strata manager contracts, insurance, and details about the funds held by the strata company. Whilst previously it may have been difficult to understand what information was most relevant to a specific property, the new forms aim to make this clearer for potential buyers.
Staged strata development
Staged strata development reform aims to simplify the way in which a development is undertaken over an extended period of time. It seeks to simplify the existing obligations on the developer to get consent to variations, while at the same time retaining a level of certainty for owners in the development.
‘Staging of developments’ is where one large development is undertaken section by section. This allows earlier completed buildings and units to be sold, whilst other buildings are still under construction. The reforms identify that minor changes sometimes need to take place and that it can be difficult to obtain consent from all owner occupiers and investors in the development. Further, it is proposed that developer obligations be made clearer by separating them from the by-laws which dictate the day-to-day running of the scheme making it easier for owners to understand what they can expect in later stages of the development.
Termination of schemes
Providing an alternative to unanimous resolution to terminate a scheme whilst ensuring the rights of all owners are adequately considered through a procedure and fairness review by the State Administrative Tribunal (SAT).
While there are existing and ongoing pathways to terminate a strata scheme, this new process aims to provide a fair alternative for strata schemes. The strata company must follow specific guidelines and obtain a minimum 75 per cent resolution in favour of terminating a scheme if the scheme is four or more lots. For two and three lot schemes, a majority of owners (namely one owner for a two lot scheme and two owners for a three lot scheme) must vote in favour of the termination. If this resolution is obtained, the proposal is progressed to SAT for a review based on procedural and fairness principles, including consideration of the condition of the buildings, the ongoing maintenance and costs incurred, and the impact on all owners, including those who object. All termination proposals which have obtained the required majority resolution must be reviewed by SAT. The Tribunal will only order a termination if the procedure was properly followed, if every owner gets fair (market value) compensation for their lot and if the termination is just and equitable. Owners will be given access to advice and advocacy to help them respond to a termination proposal.
Steps to reform
These have been completed:
- September 2013 to October 2014 - Reform concepts developed and consultation with industry and strata experts
- October 2014 to January 2015 - Public consultation paper released for comment, receiving more than 1,160 comments
- January 2015 to October 2015 - Feedback and research assessment, proposals refined and recommendations put to Government
- January 2016 - Minister for Lands announces Cabinet approval to draft the Bill
These are still to be achieved:
- Parliamentary Counsel's Office (PCO) drafts the Bill in accordance with the assigned drafting priority
- the Minister introduces the draft Bill into Parliament and requests that it is printed
- the Bill passes through the upper and lower houses of Parliament
- the Bill is passed
- the amended legislation comes into effect.
For any enquiries about the Strata Titles Act 1985 reforms please email StrataTitlesActReform@landgate.wa.gov.au or call Landgate's Customer Service team on +61 (0)8 9273 7373.
Please note: Landgate is Western Australia's statutory authority responsible for the administration of the Strata Titles Act 1985 (the Act) and associated Regulations. The Act does not provide Landgate with any judicial powers to enforce legislation. Under the Act, the State Administrative Tribunal is empowered with this function. Landgate is responsible for registration matters only and cannot provide advice pertaining to existing strata management or other strata living matters.