Improved management

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The Strata Titles Act 1985 (the Act) provides the regulatory framework for the management of strata companies. It also sets out the establishment, constitution, duties and powers, along with meeting and voting arrangements for strata companies and for the councils of those strata companies (referred to in this paper as the strata councils).

Reforms to the management framework of the Act will make strata better by introducing more flexibility and require people who manage the scheme do so in a more accountable and transparent way.

Strata managers will be regulated and made more accountable. Owners will have more of a say in the running of their scheme.  The management of the strata company will be improved. Scheme developers and members of the council of a strata company will be more accountable.

Owners will be empowered to improve their scheme and retrofit their scheme to benefit from renewable energy sources, better ongoing maintenance of schemes will be facilitated and enforcing by-laws will be easier.

Regulating strata managers

Strata managers will be regulated and made accountable to provide a far greater level of consumer protection than currently exists.

The regulation of strata managers will:

  • impose comprehensive statutory duties on strata managers
  • empower strata companies to enforce those statutory duties on their strata manager.

Statutory duties imposed on strata managers

The reforms will impose a comprehensive set of statutory duties on strata managers, as listed below.

The strata manager:

  • must act honestly and in good faith to the strata company
  • must exercise a reasonable degree of skill, care and diligence
  • must hold minimum education requirements as set out in the Regulations (the Regulations will list what qualifications a strata manager must have and the timeframe by which they must have obtained that qualification)
  • must hold a current police clearance
  • must have a good working knowledge of the Strata Titles Act
  • must not make improper use of information acquired as strata manager for a strata company to gain an advantage for themselves or someone else, or cause a detriment to the strata company
  • must not make improper use of the position of strata manager to gain an advantage for themselves or someone else, or cause a detriment to the strata company
  • must take reasonable steps to ensure that the strata manager’s employees comply with the Act
  • must have professional indemnity insurance to cover any loss arising from any act or omission of the strata manager
  • must inform the strata company in writing as soon as a they are aware that they will obtain a financial benefit which conflicts with their duty to the strata company (ie: a conflict of interest)
  • must inform the strata company in writing as soon as they are aware that they:
    • have received a commission or
    • are likely to receive a commission (such commission will have to be above a specified value as set out in the regulations and won’t include a small gift, such as a box of chocolates)
  • must have a written contract with the strata company containing details including:
    • the strata manager’s name and address for service
    • the duration of the strata manager’s contract
    • the duties and tasks (scheme functions) the strata manager is to perform and any conditions that are to apply to the performance of those functions
    • the basis of payment of the strata manager
    • the details of which account the strata manager will operate for the money received on behalf of the strata company
    • the requirements for a strata manager to give written reports to the strata company about the functions performed and
    • the statutory grounds for termination (which are detailed below)
  • must control the funds of the strata company in:
    • a separate trust account for the strata company or
    • a pooled trust account for several strata companies (that the strata manager provides management services to), or
    • the strata company’s own account
  • must be able to account separately for money that the strata manager pays or receives on behalf of the strata company
  • must provide the strata company, within a reasonable timeframe, with accounting information about:
    • the name and number of each account operated by the strata manager on behalf of the strata company
    • the balance of money held in those accounts
    • details of money paid to or received by the strata manager on behalf of the strata company, and
    • details of any transaction that the strata manager enters into on behalf of the strata company
  • must give the strata company’s auditor access and any other information in relation to accounts operated on behalf of the strata company.

Contract termination and damages claim

A breach of any of these statutory duties by a strata manager or a breach of the strata management contract is grounds for the strata company to terminate the contract as set out below.

Furthermore, if a strata manager does breach a statutory duty or the strata management contract and the strata company suffers a financial loss, the strata company may apply to the State Administrative Tribunal (the Tribunal) for an order for damages. The Tribunal may order damages be paid by the strata manager to the strata company, provided the strata company can prove:

  • the strata manager breached the statutory duties or the contract and
  • that the breach caused the strata company to suffer a financial loss.

Non-disclosure of a commission

If the strata manager fails to inform the strata company of any commission received, the strata company can apply to the Tribunal for the commission to be paid by the strata manager to the strata company. This is not intended to prohibit commissions being paid, but to ensure strata managers disclose the commissions they receive.

Terminating a strata manager contract

The strata company may serve notice of a breach (a show cause notice) on the strata manager if a strata manager:

  • breaches the statutory duties under the Strata Titles Act 1985
  • breaches the strata management contract
  • becomes bankrupt or insolvent, is wound up or goes into liquidation, goes into voluntary administration or enters into an arrangement or compromise with creditors
  • is convicted of an offence punishable by imprisonment for twelve months or longer (in WA or elsewhere) and the strata company believes the conviction affects the strata manager’s suitability to perform the strata manager’s functions.

The strata manager will have 14 days to provide written reasons for why the contract should not be terminated.

If a strata company is satisfied that there are proper grounds for termination of the contract after the show cause notice has been served, the strata company may notify the strata manager in writing that the contract will terminate on a day at least 28 days from the date of the notice. The strata company must inform the strata manager of their right to apply to the Tribunal for review of the decision.

The strata manager can apply to the Tribunal to review the strata company’s decision to terminate the contract with the strata manager. If the strata manager makes such an application, the termination of the strata management contract is postponed until the Tribunal makes a decision. Disputes between a strata manager and the strata company will be heard and resolved by the Tribunal.

Where a strata manager’s contract has been terminated, the strata manager must deliver to the strata company any of the strata company’s records, keys and property the strata manager has under its control within 28 days of the termination of the contract.

Definition of Strata Manager

The Strata Titles Act 1985 does not currently refer to strata managers. The amended Act will define a strata manager as a person who is authorised by a strata company to perform a specified scheme function.  A scheme function means a function of the strata company, or the council of the strata company or a function of an officer of the strata company.

A person who supplies services to the strata company, such as gardening or maintenance, will not be considered a strata manager because they are not authorised to perform the functions of the strata company (gardening or maintenance are not functions of the strata company).

The council or member of the council of the strata company is not regarded as a strata manager when they perform the functions of a council member.

What a strata manager cannot do

Strata managers will not be permitted to perform these scheme functions:

  • authorising a person to perform a scheme function other than as an agent, employee or contractor of the strata manager
  • determining contributions
  • entering into, varying, extending or terminating a contract with another strata manager
  • terminating a contract for amenities or services where that contract has run for more than 5 years
  • commence an action on behalf of the strata company in a court or tribunal
  • authorising a person to sign documents on behalf of the strata company, the council or an officer of the strata company
  • perform a scheme function declared in the regulations as something that should not be performed by a strata manager.

If the Act requires the strata company to pass a resolution in a general meeting of the strata company before the strata company can perform a specific function, that function can only be performed by the strata manager if the required resolution has been passed.

Exemptions for volunteer strata managers

Some of the duties on strata managers will not apply to an owner who serves as a strata manager for the scheme in which they own a lot, if they do so:

  • as a volunteer (for no fee) or
  • for an honorary payment or reward only.

Volunteer strata managers will not have to take out professional indemnity insurance or obtain educational qualifications. Rather than a contract with the strata company, they will need a written ‘volunteer agreement’.

To encourage owners to volunteer to provide management services to a scheme on a voluntary basis, there will be an exclusion of liability in any civil proceedings for any act done in good faith when that person performs the role of volunteer strata manager.

Statutory duties not applied to lawyers

The statutory duties on strata managers will not apply to a certificated legal practitioner providing legal services under the Legal Profession Act 2008 (WA). Lawyers are already subject to a stringent regulatory system.

Scheme developers

There will be more accountability for scheme developers.

A scheme developer is the person who:

  1. for the initial subdivision of a parcel by registration of a strata titles scheme is the original proprietor or
  2. for any subsequent subdivision of a strata titles scheme to which staged subdivision by-laws apply, the owners of lots that are subdivided by that subdivision together constitute the scheme developer.

Duty to disclose commission

Service contracts entered into by scheme developers in the strata context are unique because such contracts:

  • are typically signed by the scheme developer on behalf of the strata company when the scheme developer controls the strata company (i.e. prior to the lots being transferred to buyers)
  • bind the strata company – meaning that once the scheme developer sells the lots, the new owners become responsible for paying for this service contract and may have to wait years before they can shop around for a better price and or service.

In this context, there is an incentive for the scheme developer to commit the newly created strata company to expensive service contracts to obtain a commission for the scheme developer.

As part of the reforms:

  • The scheme developer will be required to inform the strata company of any commission the scheme developer will make or intends to make as a result of committing the strata company to a service contract.
  • If the scheme developer breaches this duty to disclose the commission they receive (or expects to receive) from such a service contract, the strata company may apply to the Tribunal for an order that the scheme developer pay the commission to the strata company.

Delivery of key scheme documents

The scheme developer will be required to:

  • retain all key scheme documents they receive
  • then deliver the key scheme documents they have received to the strata company at the first Annual General Meeting (AGM).

If a key scheme document is received by the scheme developer after that first AGM, the scheme developer will have to give that document to the strata company as soon as reasonably practicable.

If the scheme developer is subdividing the scheme in stages, the scheme developer will be required to:

  • retain all key scheme documents for stages in the subdivision they receive
  • deliver the key scheme documents for stages in the subdivision to the strata company at the next Annual General Meeting

Key scheme documents include:

  • the registered scheme plan
  • the by-laws for the scheme
  • the unit entitlement schedule for the scheme
  • certificates of development approval, subdivision approval, building approvals and occupancy permits for the scheme
  • official notices for the scheme
  • specifications, diagrams and drawings for the scheme and buildings within the scheme (including any specifications, diagrams and drawings that show utility conduits, utility infrastructure or sustainability infrastructure)
  • warranty documents and operational and servicing manuals for equipment and infrastructure on the common property
  • certificates and schedules of insurance for the scheme
  • contracts, leases or licences that will bind the strata company
  • accounting records of the strata company
  • any other document relating to a stage of subdivision that would be a key scheme document.

These key scheme documents are essential for the operation of a scheme. There are occasions where key scheme documents are not supplied to the scheme at the first AGM, which can cause great difficulties and lead to unnecessary expense for the strata scheme. If the scheme developer fails to deliver the key scheme documents, the strata company may apply to the Tribunal for an order that the scheme developer provide these key scheme documents to the strata company.

The council of the strata company

There will be more accountability for members of the council of the strata company.

The council of a strata company is the council elected by the lot owners to manage the scheme for the benefit of all. The council varies in size depending on the number of lots in the scheme. In small schemes all the registered owners may form the council.

A common complaint received from strata owners is that some councils make poor decisions, sometimes due to a council member’s self-interest. The Act does not currently require council members to act in the best interests of the strata company. Under the amended Act this will change.

The duty of council members to the strata company

Members of the council will have these statutory duties imposed upon them:

  • a duty to act honestly, with loyalty and in good faith in the performance of their functions
  • a duty to exercise a reasonable degree of care and diligence in the performance of their functions
  • a duty to ensure they do not make improper use of their position as a member to gain, directly or indirectly, an advantage for themselves or for any other person or to cause detriment to the strata company
  • a duty to inform the council in writing of any conflict of interest as soon as is practicable after they become aware of the conflict. The duty to disclose a conflict of interest does not relate to the council member’s ownership of a lot in the scheme.

Council members will not be able to vote where they have a conflict of interest.

Council members who breach one of these statutory duties may be removed from the council, on application to the Tribunal.

Council members are protected

To encourage people to volunteer for the council, the Act will state that a council member is not liable in any civil proceedings for any act that they do in good faith when performing the role of a council member.

The use of common seals

A strata company will be able to execute a document either by:

  • applying the strata company’s common seal to the document (the common seal of the strata company may be electronic) or
  • having the document signed by a person who is authorised by a resolution of the strata company to sign documents on behalf of the strata company. That person could be a member of the council, an owner or a strata manager.

A common seal will be optional for strata companies.

New powers and obligations for the strata company

On registration of a strata titles scheme, a strata company is created. All lot owners are members of the strata company.

Greater use of technology

Technology has changed significantly since the Strata Titles Act 1985 (the Act) was written. Email, word processing, memory storage, ‘the cloud’, teleconferencing, voice/video calls over the internet, are now widely used. Reforms will allow schemes to take advantage of new technologies, such as storing scheme documents online and conducting meetings by teleconference. However, the Act currently requires physical copies of documents and for meetings to be conducted in person.

Reforms will enable the use of electronic means to perform the strata company’s functions. For example, the common seal of the strata company may be electronic. Each scheme will still need to perform their obligations (for example storing information for a certain period) and will need to consider whether the different electronic options help them carry out their obligations.

Schemes will be able to tailor their methods to their own requirements and abilities, however, the obligations to keep and provide certain information will still apply.

  • An individual lot owner will be able to indicate a preferred method of communication, either using hard copy or electronic means
  • Votes, both for resolutions put forward at a meeting and for the election of the council of the strata company, can be received via email or in real time such as Skype or teleconferencing, if the strata company has provided for electronic voting in the notice of the meeting
  • The option to use electronic methods will not be mandatory. Any lot owner can still insist on receiving a hard copy of the information, if they wish. Use of electronic means will also be limited to the resources reasonably available to a strata company.

Voting outside of a meeting

The Act will be amended to allow voting to occur outside of a meeting (the usual notice requirements will apply).

Power to audit the accounts

A common problem for strata companies is the quality of their financial records. The lack of an express power to audit can make it difficult to quickly identify situations where financial mismanagement has occurred. A strata company will be given the power to audit the strata company’s accounts.

Power to enforce a breach of a by-law

Enforcing by-laws is difficult under the current Act.

The Tribunal can only make an order imposing a penalty for breach of a by-law, if that by-law specifically states that a penalty is to be paid. Most schemes do not have any penalties stated in their by-laws.

Before the Tribunal can order a penalty be imposed for breach of a by-law, the strata company must establish that the owner has wilfully and persistently breached the by-law.

Reforms will give the Tribunal the power to:

  • make an order imposing a penalty for the breach of any by-law (whether or not that by-law specifies a penalty for breach)
  • make an order that the person who breached the by-law must take action to:
    • stop breaching the by-law; or
    • fix the breach of the by-law.

The strata company, owners and occupiers can apply to the Tribunal for an order to enforce a by-law (including an order that a penalty be paid).

If the Tribunal finds that:

  1. the breach of the by-law is serious or
  2. that the by-law has been breached by that person on 3 occasions or
  3. that the strata company served notice on a person notifying them they have breached a by-law and that person then breaches the same by-law again

the Tribunal can order the person who breached the by-law to pay a penalty to the strata company.

For more information on new powers of the Tribunal see ‘simplified dispute resolution’.

Power to carry out functions generally

A strata company has specific powers listed in the current Act Strata Titles Act 1985. These powers are not wide enough for some strata companies to carry out all their functions.

A strata company will be given, subject to this Act, all the powers of a natural person that are capable of being exercised by a body corporate.

Obligation to act reasonably to owners

A strata company will be required, in performing its functions, to have the objective of achieving outcomes that are not, having regard to the use and enjoyment of lots and common property:

  1. unfairly prejudicial to or discriminatory against an owner or occupier or
  2. oppressive or unreasonable.

Reserve fund and maintenance plan

Sometimes strata companies don’t set aside enough money to cover foreseeable maintenance. This can cause distress when maintenance becomes urgent, resulting in large special levies. Where maintenance has been deferred for a long time, it can lead to so much deterioration that the cost increases substantially.

Reforms will require that any scheme which:

  • has ten or more lots or
  • has a building replacement value as set out in the Regulations (there are some schemes with less than 10 lots which have a very high building replacement cost)

must:

  • have a reserve fund. The Act will not specify how much money needs to be held in a reserve fund.
  • prepare a 10 year maintenance plan setting out:
    • the maintenance, repairs and renewal or replacement of common property in the scheme and the personal property of the strata company likely to be needed over the next ten years, and
    • the estimated cost for the maintenance, repairs and renewal or replacement.

The 10 year plan must be revised at least every 5 years, and when revised must cover the next 10 years. Forecasts like this maintenance plan are required in other States and may guide the strata company in deciding how much money the strata company needs to set aside in the reserve fund.

Utility services

Ensuring owners can connect to a utility service after the scheme has been created

Currently, after a strata or survey-strata scheme is registered, it can be very difficult to connect to a utility service (such as water, electricity, sewerage or telephone service) if the pipes, wires, cables or ducts required to connect to that service have not been installed.  This is because the utility conduits (such as pipes, wires, cables or ducts) will often need to be installed on common property or even across another owner’s lot. Getting approval to install a utility conduit after a scheme has been registered is difficult under the current Act.

The reforms will provide that a utility service easement exists for each lot and the common property in a strata titles scheme, so that utility services can be provided to each lot and the common property, even after the scheme is registered.

Disputes arising from a utility service easement

If there are any disputes about whether the utility conduit is even needed or whether it could be installed in another part of the scheme, the State Administrative Tribunal will have the power to resolve the dispute.

Common property

Making improvements to common property

Currently a strata company only has a duty to maintain, repair and where necessary renew or replace the common property.

Reforms will give strata companies the power to improve or alter common property:

  1. subject to the expenditure controls of the strata company; and
  2. where the expenditure exceeds an amount provided in the regulations, a special resolution of the strata company will be required to approve the alteration or improvement of the common property (and details of that improvement / alteration will have to be provided to owners before the vote).

The expenditure controls of a strata company are:

  1. the annual budget, which is approved by an ordinary resolution of the strata company
  2. spending (calculated on a per lot basis) that is less than the amount allowed by the regulations (currently $65) or another maximum amount per lot as approved by a special resolution of the strata company or
  3. expenditure approved by the notice process.

The notice process is: all owners and first mortgagees are given written notice of the purpose and amount of the proposed expenditure. The expenditure is approved unless, within 14 days, written objections are received from the owners or first mortgagees of either:

  • 25% or more of the lots in the scheme, or
  • 25% or more of the sum of the unit entitlements of all the lots in the scheme.

Disputes about the improvement of common property will be resolved by the State Administrative Tribunal.

Sustainability and utility infrastructure

Reforms will also make it much easier to install sustainability infrastructure (like solar panels) or utility infrastructure on common property within a strata or survey-strata scheme.

The infrastructure (such as solar panels) can be owned by:

  • the strata company (as personal property)
  • all of the owners jointly (as common property)
  • one or some of the owners or
  • a third party (such as a renewable energy supplier).

If the infrastructure is owned by a third party or one / some of the owners, the strata company:

  1. can approve the installation of sustainability or utility infrastructure on common property by passing an ordinary resolution
  2. the owner of the infrastructure will have access to the infrastructure through a statutory easement and the details of the arrangement will be contained in an infrastructure contract between the strata company and the owner of the infrastructure.

Insurance

Increase minimum public liability insurance

At present, a strata company is required to insure the scheme against public liability for at least $5 million. This minimum will be increased to $10 million.

It was found most managed schemes already have at least $20 million cover, and the $5 million minimum, imposed in 1995, is no longer considered sufficient to cover potential liabilities and costs in the case of damage, injury or death claims. The difference in annual costs for cover to increase from $5m to $10m is minimal for each lot.

Every scheme must also discuss the insurance arrangements at each Annual General Meeting (AGM). This is to make sure the owners have to regularly consider whether or not their insurance is adequate for the risks faced by their scheme.

Insurance monies to restore the building

Currently when a strata company receives money from an insurer, it must be used to rebuild, replace, repair or restore the building. Reforms will mean the strata company can decide (through a resolution without dissent) not to apply the money to rebuild, replace, repair or restore the building.  The decision must include how the money will be used or distributed amongst owners. The location of the damaged / destroyed building must be made safe.

Insurance in single tier schemes

Decisions about insurance in a single tier strata scheme will be decided by simple majority. In the case where there has been a previous resolution not to insure a building on the common property, this can also be revoked by an owner serving a written notice on the strata company or other owner.

By-laws

By-laws are the rules which the strata company, owners, occupiers and the owner of a leasehold scheme need to abide by. The strata company has broad powers to make, amend and repeal by-laws.

By-laws cannot be unreasonable or oppressive

Having regard to the interests of all the owners and their use of the lots and the common property, reforms will provide that the by-laws must not be:

  • oppressive or unreasonable or
  • unfairly prejudicial to or discriminatory against one or more owners.

In addition, by-laws cannot be inconsistent with the Strata Titles Act 1985, Regulations or any other WA legislation.

The State Administrative Tribunal will be given the power to amend or repeal a by-law on the basis that a by-law is:

  • oppressive or unreasonable or
  • unfairly prejudicial to or discriminatory against 1 or more owners

By-laws can’t ban assistance animals

Currently the Strata Titles Act 1985 prohibits by-laws that ban the keeping of a guide dog on a lot or using a guide dog as a guide on a lot or common property. This will be expanded to include that by-laws cannot ban any assistance animal trained to assist a person with a disability who lives on the lot or visits the scheme. Assistance animal has the meaning given in the Disability Discrimination Act 1992 (Commonwealth) section 9(2).

Guidance about by-laws

Schedule 1 by-laws are about the operation of the strata company. Schedule 2 by-laws set out acceptable behaviour of owners and occupiers. Each schedule has a different voting protocol. A current problem for strata companies is where a new or amended by-law may be incorrectly classified resulting in the wrong voting protocol being applied. The amended Strata Titles Act 1985 will provide clear guidance on what type of resolution is required to make, amend or repeal each by-law.

By-laws will be classified as one of two types:

  • governance by-laws which can be made, amended or repealed by a resolution without dissent
  • conduct by-laws which can be made, amended or repealed by a special resolution.

A governance by-law means any of the following:

  • the by-laws set out in Schedule 1
  • the by-laws that deal with the governance of a scheme or the corporate affairs of a strata company
  • the by-laws that deal with the subdivision or development of the land subdivided by the scheme
  • the by-laws relating to exclusive use of common property in the scheme
  • the by-laws that deal with the constitution or procedures of the council of a strata company
  • the by-laws that deal with contributions, levies or money payable by an owner to a strata company
  • an exclusive use by-law.

A conduct by-law means any of the following:

  • the by-laws set out in Schedule 2
  • a by-law which deals with specified conduct of an owner or occupier
  • a by-law that deals with a matter relating to the management, control, use and enjoyment of a lot or common property.

As a result of clearly classifying two types of by-laws, some by-laws previously in Schedule 1 will be moved to Schedule 2 to reflect their ‘conduct’ nature. These are:

  • vehicles and parking
  • use of common property and
  • decoration of common property.

Compliance with exclusive use by-laws

A by-law that grants exclusive use rights over the common property to a person within the scheme is an exclusive use by-law. Exclusive use of common property is where the common property is used exclusively by:

  • one owner or
  • several owners.

Typically, an exclusive use by-law may impose conditions (to do certain things or pay specified sums of money) on the person(s) who is given the exclusive use of the common property.

Meetings

If a quorum isn’t present owners can proceed with the meeting after thirty minutes

Owner apathy can sometimes make it quite difficult to convene a quorum for a meeting (a quorum is the minimum number of people who must be present before the meeting can go ahead, usually 50 per cent of the people entitled to be there). This can cause considerable delays and expense in re-booking strata managers to hold the reconvened meeting. The current provisions, which allow for a second meeting in one week’s time, are ineffective as generally less people attend the second meeting.

Reforms will allow those owners who are present to declare a quorum thirty minutes after the appointed meeting time (note this does not apply to two lot schemes). This means the meeting can proceed and doesn’t have to be reconvened. However, if those present determine that it is appropriate, the meeting can still be reconvened in a week’s time.

Moving general meeting provisions out of the by-laws and into the Act

The requirements relating to general meetings of a strata company (including voting rights) are currently set out in Schedule 1.  Schedule 1 by-laws are only default by-laws and such by-laws may be repealed or amended at any time.

The requirements relating to general meetings of a strata company will be moved into the Act so that the key governance of those general meetings (including voting rights) of owners will not be subject to change except by amendment to the Act.  This is consistent with how other States specify strata company meeting requirements in their legislation (instead of in the by-laws).

The requirements relating to general meetings that will become part of the Act are:

  • the requirement to hold an annual general meeting (AGM) (except for 2 lot schemes)
  • the following matters must be included on the agenda for each AGM:
    • election of council members
    • consideration of accounts
    • the presentation of copies of certificates and schedules for the insurance required under the Act, current as at the date of the meeting
  • that an extraordinary general meeting (EGM):
    • may be convened by the council as the council thinks fit and
    • must be convened when owners, who have at least 25% of the unit entitlement, make a written request to the council
  • every owner must be given at least fourteen days’ notice of every general meeting
  • the notice of a general meeting can set out the method of voting (by electronic communication or otherwise)
  • no business may be transacted at a general meeting unless a quorum is present
  • a quorum for a two-lot scheme is both owners
  • a quorum for a scheme of more than two lots is 50% of the people entitled to vote
  • if, after thirty minutes, a quorum is not present at a general meeting the people entitled to vote who are present are taken to constitute a quorum (this does not apply to two lot schemes)
  • the chairperson may adjourn the general meeting with the consent of those present
  • only people who are entitled to vote may move a motion at a general meeting
  • resolutions may be passed at a general meeting by a simple majority (ordinary resolution) unless the Act otherwise provides
  • an owner is not entitled to vote at a general meeting where the resolution is an ordinary resolution or a special resolution unless the owner has paid:
    • all contributions payable for the owner’s lot and
    • any other money payable by an owner to the strata company under the Act
    • an owner is entitled to vote on a resolution without dissent or unanimous resolution even if they owe money to the strata company
  • unless a poll is demanded by a person who is entitled to vote, and is present at a meeting, votes at a general meeting must be by show of hands
  • a show of hands may be given by:
    • raising a hand at the meeting
    • making an oral statement at the meeting
    • giving a written statement to the chairperson or
    • a method set out in the notice of the meeting (eg: by voting electronically)
  • a proxy vote may only be exercised where the proxy has been appointed in writing.

Limiting the use of proxies to protect owners

The reforms will also protect owners against the abuse of proxy votes.

  • the regulations may impose limitations on a strata manager being appointed as a proxy, including limitation on how many lots the strata manager can wield a proxy vote for.
  • if both an owner and the person the owner appointed as their proxy are at a general meeting, only the owner may vote.

Strata managers to provide information to Landgate

The regulations may require strata managers to lodge an information statement with Landgate providing aggregated information about schemes they manage (for example, how many schemes they manage and how much strata company money they have under management).

Landgate may choose to publish a list of the names of strata managers who provide this information. The aggregated information will be kept confidential and will be used to develop policy and enable the State government to design the best possible solution for regulating strata managers based on industry and consumer needs.

Other issues

Tenants

Tenants must abide by the by-laws that apply to owners as set out in the Strata Titles Act 1985. Many people have commented that enforcing by-laws on tenants is difficult. Reforms make enforcing the by-laws easier and more straightforward. More information about how by-laws will be enforced is set out in simplified dispute resolution.

Pets

The issue of pets in strata is a difficult one to solve. Feedback from the public was split between wanting a default by-law which allows pets and wanting one which bans pets. Given the lack of clear consensus and the fact that keeping pets and deciding what kinds of pets can be kept is different for each scheme, decisions on this issue should continue to be made by the strata company by amending their by-laws.

The reforms:

  • introduce a requirement for by-laws to not be:
    • unreasonable, oppressive (referred to as a reasonableness test) or
    • unfairly prejudicial to or discriminatory against 1 or more owners
  • strengthen the strata company’s ability to enforce those by-laws.

Smoking

The issue of smoke drift was raised by some respondents who asked for default by-laws to ban this. In the same way that pet by-laws will differ on a scheme-by-scheme basis, every scheme will have a different view. Each scheme will need to decide whether or not to ban or limit smoking and may amend the by-laws.

Introducing a reasonableness test for by-laws and making it easier for owners to enforce by-laws should aid owners who feel their rights are being infringed either by being subject to smoke drift or being unable to smoke on their property.


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V11.0


Disclaimer

This information has been prepared for the purposes of informing stakeholders and the community on the nature and scope of the proposed reforms to the legislation relating to strata title. Every effort has been made to ensure the information presented is accurate at the time of publication. Because this information avoids the use of legal language, information about the law may have been summarised or expressed in general statements. This information should not be relied upon as a substitute for professional legal advice or reference to the actual or proposed legislation. The contents should not be relied on as a guide for current or future legislation relating to strata title or community title in Western Australia or in relation to current or future subdivision or development proposals, commercial transactions or dealings in strata title.

This page was last updated on: 19 Jul 2018