Window Safety Requirements – Reminder compliance due 18 March 2018

More than 50 children fall from windows and balconies in Australia every year. With many families now residing in unit blocks, amendments were introduced into the Strata Schemes Management Act 1996 and Strata Schemes Management Regulation 2010 for window safety requirements. This is a reminder for owners corporations to include a provision for this in their annual budgets. 18 March 2018 may seem far away but dates can creep up on you.

Regulation 31 of the Strata Schemes Management Amendment (Child Window Safety Devices) Act 2013 requires the installation of a screen, lock or a window safety device which must meet all of the following:

  1. Restrict the opening of a window at 12.5cm. This means that there should be a lock at 12.5cm or alternatives to locks may be screens, bars or grills that do not have a gap bigger than 12.5cm. The window may open more than 12.5cm but the lock or other alternatives must be in place.
  2. Resist an outward horizontal action of 250 newtons. This means screens are suitably robust. Generally, ordinary flyscreens do not meet this standard.
  3. Have a child resistant release mechanism, in the case of a device that can be removed, overridden or unlocked.

The above requirements apply to windows that meet all of the following:

  1. A window that can be opened.
  2. A window that is less than 1.7m above the internal floor.
  3. The internal floor is more than 2m above the outside ground below the window.
  4. A window on common property to which access can be gained from a residence in a strata scheme or a window on any part of the building that is part of a residence.

Also, section 64A of the Strata Schemes Management Act 1996 requires:

  • An owners corporation must ensure that there are complying window safety devices for all windows of each building in the strata scheme to which the above applies. Work is carried out at the owners corporation’s expense.
  • An owner of a lot may install a complying window safety device on a window servicing their lot to which this section applies. An owner who does so must repair any damage caused to any part of the common property by the installation of the device, ensure that the device is installed in a competent and proper manner and is in keeping with the appearance of the building.

Owners corporations will face fines if the new window safety requirements are not met by 13 March 2018. Lot owners may conduct the work at any time & inform the owners corporation but before doing so check with your owners corporation to see if they have works planned.

ATO releases a new tax ruling for owners corporations

On 25 November 2015 the ATO issued Taxation Ruling No. TR 2015/3. While it may not sound exciting, Owners Corporations should ensure that their executive committees, strata managers, lot owners and accountants are aware of the new ruling as it contains both legally binding rules and non-binding  guidelines setting out how income tax applies to owners corporations and lot owners.

What type of schemes does the taxation ruling cover?

It covers strata title schemes governed by the Strata Schemes Management Act 1996 (NSW), the Unit Titles (Management Act) 2011 (ACT), the Body Corporate and Community Management Act 1997 (Qld), the Owners Corporations Act 2006 (Vic), the Community Titles Act 1996 (SA) and Strata Titles Act 1988 (SA), the Strata Titles Act 1985 (WA), Strata Titles Act 1998 (Tas) and the Unit Titles Act (NT).

How is an owners corporation treated for tax purposes?

An owners corporation is treated a company for tax purposes and the Taxation Commissioner has the discretion to treat it as a public company. It will not be taxed as a non-profit company even if it includes non-profit clauses in its by-laws.

Generally, levies that form part of a fund used for day to day expenses, general maintenance and repair of the common property are considered mutual receipts and are not assessable to the owners corporation. In addition, generally interest on levies is not assessable but fees to inspect strata records (such as in section 108 inspection fees) are assessable. Any income derived through personal property held by the owners corporation such as interest or dividends through the investment of funds is generally assessable income.

How is common property treated for tax purposes?

Common property can be used to generate income by a) the proprietor of a lot granting the right to use the common property to a tenant of their lot or b) by the common property being leased separately to a lot.

The second type of income is covered by this taxation ruling. Generally, where the common property is used to generate income independently of a lot the income is not assessable income of the owners corporation in its capacity as a trustee. An owners corporation is not entitled to tax deductions in respect of the common property but its lot owners can claim tax deductions in proportion to their unit entitlements.

*This is a general note regarding the new taxation ruling. For detailed taxation advice you should speak to your accountant or tax advisor.

 

 

 

 

 

 

 

Balustrades and Strata Liability

The safety of a strata scheme’s premises for owners, occupiers and visitors should be one of the primary concerns of an owners corporation. If an owner, occupier or visitor is killed or injured on common property, the owners corporation could be held liable and would need to raise significant levies to cover the costs of any uninsured amount.

A defective balustrade is one of the biggest risks to safety on common property, and as such, it is of great importance that an owners corporation ensures that any balustrades in their scheme are structurally sound and comply with the relevant building standards. The current Building Code of Australia (BCA) requires that balustrades meet a minimum height of 1 metre (1000mm) and all newly constructed strata plans must adhere to this requirement. However, previous building standards contained less stringent requirements for balustrades resulting in confusion about whether all balustrades need to comply with the current standards in order to avoid potential liability for the injury or death of owners, occupiers and visitors. Continue reading

NSW Owners Corporations, Security Systems and Privacy – What do you need to consider?

 With increasingly sophisticated security systems having more capacity at a lower cost than ever before many strata and community title schemes are installing security systems and surveillance devices such as keyed swipe passes, smart lighting and closed circuit television (CCTV) systems. What many schemes do not consider is the use of these systems and their legality. Privacy is, rightly, a key concern of many lot owners and occupiers.

The Right to Privacy … is limited

Unfortunately, in NSW there is no general common law right to privacy. There have been two High Court cases where the existence of such a general right was discussed and held not to exist. Although the High Court in Australian Broadcasting Corporation v Lenah Game Meats [2001] HCA 63 left open the development of a concept of common law privacy a general right to privacy has not been established. There is however legislation that should be considered when an owners corporation wishes to install any surveillance system.

The Strata Schemes Management Act 1996 (NSW) (the Act) does not specifically address the power of an owners corporation to install security systems on the common property. However, an owner corporations can, and should, use its power pursuant to section 47 of the Act to pass a by-law regulating the installation, maintenance and operation of any security system (including any surveillance system).

The Surveillance Devices Act 2007 (NSW) (the SD Act) regulates the use of listening and surveillance devices. While there is a general prohibition on the use of listening devices to record private conversation, section 8 of the SD Act does not prohibit the use of optical surveillance devices (think CCTV) provided that there is either express or implied consent from the owner of the land on which the device is installed.

Note that if the common property, or part of it, is also used as a workplace say for a building manager, then the Workplace Surveillance Act 2005 (NSW) also applies and cameras must be clearly visible with signage warning of the surveillance at each entrance.

CCTV Systems

CCTV cameras that do not record sounds can be installed on the common property with the consent of the owners corporation however any recording of private conversations is not permitted. If your common property area is a workplace then all cameras need to be clearly visible and there must be signage advising of the system at each entrance. We recommend signage regardless as it can act as a deterrent.

We also recommend that the placement of any CCTV cameras is carefully considered. In one scheme, while there were genuine security concerns giving rise to the need for surveillance, one of the external cameras unfortunately captured a bedroom window which impacted on how the occupier used the room and caused the occupant serious (and justified) concern about why that camera had been positioned in that way. The moral is that camera placement should be carefully considered.

When installing a CCTV system, we recommend that the owners corporation needs to consider who has access to footage, where the footage is kept, how it is kept (i.e. is it securely held?) and the process for obtaining access to the footage and then to ensure this is encapsulated in a by-law in addition to authorising any necessary services agreements required to install, maintain and operate the CCTV system.

Swipe or Key Cards

While swipe cards or keys may not seem like a controversial security system, they can be. Take for example a strata scheme where the Chairperson decided to “police” the use of car parking lots and where the car spaces were held separately to residential lots with no restrictions on the use of the car space lots. In breach of the Act, the Chairperson decided that if the owners of the car space lots were not residents then they should not be allowed to use their car spaces. The Chairperson instructed the security firm to deactivate the key passes of the car space lot owners who were not residents preventing them from accessing their lots and any common areas of building.

In this instance a clearly worded by-law could have assisted by either setting out a process by which security cards could be de-activated or by establishing who had authority to instruct that security cards / keys be deactivated or restricted (preferably the strata manager or the building manager). Provided adequate controls were established in the by-law it should have been sufficient to prevent the misuse of the security keys.

If your strata scheme is considering installing a security or surveillance system then we recommend they seek legal advice tailored to its needs.

Allison Benson

Legal Practitioner Director

P: 02 4032 7060

E: allison@kerinbensonlawyers.com.au

NSW FACT SHEET 1: Want to do work to your lot? You may need a by-law

Want to do work to improve your lot? If you do, you may need to get a by-law. In most cases, your strata manager or owners corporation will be able to tell you whether or not you need to do so but the general rule is if you are altering the common property in any way you will need to get a by-law passed before doing the work.

Why?

 The simple explanation is that you do not own the common property, the owners corporation (of which you are a part) does. In the same way that you can’t just go and make changes to someone else’s house without their consent, you generally can’t alter the common property without the consent of the owners corporation. In passing a by-law providing you with the special privilege to do the work, the owners corporation is providing that consent.

 The more detailed explanation is that by-law 5 of the model by-laws in Schedule 1 of the Strata Schemes Management Act 1996 prevents an owner or occupier from “damaging or defacing” any structure that forms part of the common property prior to the written consent of the owner’s corporation being obtained.

If the works are of “minor” nature an ordinary resolution motion can be passed at a general meeting of the owners corporation. An ordinary resolution requires a simple majority vote to pass. Minor works includes affixing nails or screws to hang pictures or cupboards.

If works involve alterations or additions to common property you must seek approval under section 52 of the Act for the creation of a new by-law.

Additions include the installation of enclosures and awnings, air-conditioners, flooring, fences and any other items that are affixed or attached to common property. Removal of items such as load bearing walls within a lot also affect the structure of the building and require the creation of a new by-law for the lot.

What is the process of obtaining a by-law?

 First, you need to be certain what work you want to conduct. This is because the proposed by-law will need to describe the proposed works in either words or by annexing plans or by a mixture of the two. This protects both you and the owners corporation as, once passed, the by-law will give clear authority to conduct the specified works.

Second, you should speak to a strata lawyer about your proposed works and provide them with a copy of any plans of the works, the by-laws for your scheme and a copy of the strata plan.

The strata lawyer will prepare a motion for your proposed works and send it to your strata manager for inclusion on the agenda of the next general meeting. If you want to do the work as soon as possible you should ask your executive committee meeting to call an extraordinary general meeting to allow your proposed by-law to be voted on. If they refuse, you will need to requisition a general meeting.

At the general meeting the owners corporation must specially resolve to pass your motion. This means not more than 25% of the unit entitlements (the voting rights that attach to a lot) can vote against your motion. If they do, your proposed by-law is refused.

 What will happen if I do not obtain a by-law before doing the work?

 If an alteration or addition is made to your lot that effects or changes the character of the common property, and you have not received the owners corporation’s consent for that alteration or addition, you may be in breach of the by-laws. The owners corporation may take action against you to have the alteration or addition removed and the common property restored back to its original condition.

 Once I get the by-law drafted can I start works?

 No. The by-law must be passed by special resolution at the general meeting of the owners corporation prior to any works being conducted. The by-law should also be registered prior to commencing works, as the by-law is not effective until it is registered on the certificate of title of the common property of the scheme.

 What if the owners corporation refuses to pass my proposed by-law?

If the owners corporation refuses to grant approval to carry out works, you should attempt mediation with the owners corporation. If that process is unsuccessful you can than file an application with the NSW Civil & Administrative Tribunal for a Strata Schemes Adjudicator seeking an order to approve the works and the proposed by-law.

 What information will we need to prepare the by-law?

 In order to assist us in preparing an improvements by-law for your lot we will need a copy of your strata plan, the current by-laws, specifications of works being done, any drawings or diagrams and the full name of the lot owner for the by-law consent form.

 How do I get a by-law for the purpose of making improvements to my lot?

Call Kerin Benson Lawyers on 02 8706 7060 or email allison@kerinbensonlawyers.com.au or sian@kerinbensonlawyers.com.au for an estimate to prepare and register this additional by-law for your strata scheme.

To clamp, or not to clamp, that is the question: Who does a wheel clamping by-law apply to?

Importantly, by-laws do not bind visitors to the scheme. This means that any by-law regarding visitor parking spaces and parking on common property can only be enforced against a lot owner, occupier, mortgagee or covenant chargee or any lessee or sublessee of any lot or common property.

At most, the NSW model by-laws require a lot owner or occupier to “take all reasonable steps” to ensure that their visitors comply with the terms of the by-laws. Reasonable steps are likely to include lot owners and occupiers informing visitors of the relevant car parking by-laws, requesting that they visitors abide by the by-laws and, if they are advised of a breach, requesting that visitor move their vehicle.

Can we wheel clamp a vehicle on the common property?

This is a very common question, particularly for those who have visitors parking that is visible from the street and their property is near a hospital, shopping centre or commercial strip. The answer is maybe.

Wheel clamping is governed by sections 651B and 651C of the Local Government Act 1993 (NSW). These sections provide that a person (including an owners corporation) cannot immobilise or unlawfully detain a vehicle that they do not own without first obtaining the permission of the person who owns the vehicle. The penalty for doing so can be up to $2,200.

A by-law can provide for wheel clamping however consent to immobilise or detain a vehicle under sections 651B and 651C of the Local Government Act is required. There are very few cases in this area and the jury is still out as to whether section 44 of the Strata Schemes Management Act 1996 (NSW) provides the consent of lot owners and occupiers. It means that the by-laws have the effect of an agreement under seal. It may not however be sufficient to provide the required “consent”. In one QLD case a lot owner argued that they did not give consent (under the QLD equivalent to section 44) and that the consent was forced on them. The QLD Supreme Court agreed and treated the agreements created by way of by-laws between the body corporate and its proprietors as fictional agreements. If this approach was taken in NSW a by-law by itself would not provide the required consent.

To overcome this potential argument we strongly recommend that the consent of all owners and occupiers is obtained to any by-law providing for wheel clamping and our precedent parking by-law provides for this consent together with setting out a detailed procedure which is to be followed prior to any wheel clamping device being used that also includes a warning to the owner of the vehicle.

If your owners corporation is considering amending its by-laws to include the ability to wheel clamp or immobilise a vehicle we recommend they seek detailed advice on such a by-law please contact us at either our Sydney or Newcastle offices.

Allison Benson

Legal Practitioner Director