Three Key Things to Research when Considering Buying a Strata Unit: Don’t Shy Away From It

Across Australia the growth of strata title buildings is continuing. Over the Christmas break NSW residents would have looked on in horror at the structural defect concerns raised at the Opal Tower building in Olympic Park causing an evacuation of the complex. The most important thing you can do to prevent a similar situation is to do your due diligence in three key areas. Read more here. 

By-Law Consolidations: The Obligation and Getting Them Right

The commencement of the Strata Schemes Management Act 2015 (the new Act) on 30 November 2016 means that schemes are now required to keep a consolidated list of the by-laws in force for their scheme and register the consolidated list with any new change of by-law. As all strata schemes in NSW are governed by by-laws which provide for the management, administration, control use and enjoyment of the lots of common property, it is important that a consolidated set of by-laws not only incorporates all the changes in force for the scheme, but that the correct by-laws are identified in the first instance. This article will outline the importance of identifying which by-laws apply to your scheme, as well as examine what the obligation to keep and register consolidated by-laws means for owners and owners corporations.

Since the Conveyancing (Strata Titles) Act 1961, strata legislation has provided sets of model by-laws to apply to, or be adopted by, strata schemes. Changes to legislation over time has meant that some schemes, particularly those registered before the commencement of the Strata Schemes Management Act 1996 (ie before 1 July 1997), have seen statutory changes to their model by-laws.

The new Act has again changed the model by-laws (see our article ‘Which By-Laws Apply to Your Scheme’). What all this means is that for many schemes, changes in legislation, bringing in new model by-laws, and changes to by-laws have left those schemes with multiple by-laws in similar terms, odd numbers, and duplication were care has not been taken to consult by-laws already registered on title prior to making changes.

Prior to the commencement of the new Act, changes to the by-laws were made (once passed by the owners corporation as a special resolution) by submitting the appropriate form to Land and Property Information (LPI) who then recorded each change of by-law on the title under a unique dealing number. This provided an accurate, albeit it, lengthy record of the changes to by-laws. The new Act requires the secretary of the owners corporation to keep a consolidated set of by-laws. The new approved LPI form to register a change of by-law requires that not only the change of by-law to be set out in full, but that a consolidated set of the by-laws for that scheme be set out in full incorporating the new change. The LPI has also made clear that old change of by-law notifications will be removed from the common property title and will be replaced by the dealing which notifies the most recent change of by-law along with the consolidated set of by-laws.

The LPI has indicated that the purpose of the consolidations is to make it easier to access the by-laws in force for a scheme. Indeed, a lot owner, future lot owners, and owners corporations will no doubt welcome the change in that it becomes much easier to determine which by-laws are in force rather than trawling through numerous dealings and to find out whether a by-law has been repealed, or replaced. However, owners corporations in particular should be aware that the by-laws in force for a scheme are those notified on the title, and care should be taken to always ensure that the most recent set of consolidated by-laws are annexed to change of by-law forms since the old unique change of by-law notifications will be deleted. This is most important during the first by-law consolidation since it will be the last time the unique dealings will be easily searchable.

A by-law consolidation by Kerin Benson Lawyers takes into account the year the scheme was registered, an examination of the changes made to the by-laws, and consideration as to which by-laws apply to the scheme. It should be also noted that schemes are required to undertake a review of their by-laws by 30 November 2017. A review (aka audit) is an additional step which examines all the by-laws and considers their validity and enforceability. Please contact us for more information on consolidations and/or reviews.

If you require any assistance with a by-law consolidation or audit/review, or require a quote, please contact Kerin Benson Lawyers on (02) 8706 7060 or email enquiries@kerinbensonlawyers.com.au 

Building and Construction Legislation Amendment Act 2016 – What You Need to Know

On 20 August 2016, the Building and Construction Legislation Amendment Act 2016 (the Legislation) commenced operation. The Legislation is the culmination of several years of consideration by the ACT Government and amends the following laws:

  • Building Act 2004;
  • Building and Construction Industry (Security of Payment) Act 2009;
  • Building (General) Regulation 2008;
  • Construction Occupations (Licensing) Act 2004;
  • Construction Occupations (Licensing) Regulation 2004; and
  • Planning and Development Act 2007.

The Legislation is focused on improving building quality in the ACT as well as the accountability of various construction industry protagonists. Broadly speaking, the Legislation addresses the following issues:

  • under the Building Act 2004 and Building (General) Regulation 2008 – building certification and stage inspections, certificates of occupancy and use, statutory warranties, residential building work contracts, building inspections and inspectors and exempt building work conditions;
  • under the Building and Construction Industry (Security of Payment) Act 2009 – power to make a code of practice for authorised nominating authorities; and
  • under the Construction Occupations (Licensing) Act 2004 and Construction Occupations (Licensing) Regulation 2004 – notifying loss of eligibility and changes of register details, licence applications and renewals, corporate and partnership licenses and nominees, ongoing eligibility, interim and automatic suspensions, powers of ACAT in relation to occupational discipline orders, rectification orders and mandatory qualifications and codes of practice.

The key amendment for apartment owners is the application of statutory warranties to buildings higher than three storeys (previously statutory warranties only applied to buildings of three storeys or less not including basement carparking). Unfortunately, this amendment (together with the appointment of building inspectors) did not commence on 20 August 2016. Rather, the new statutory warranty regime will commence on a day fixed by the Minister but must commence within 12 months of notification (ie no later than 19 August 2017).

Further, statutory warranties are only available to owners corporations and lot owners by virtue of the fact that contracts to carry out residential building work are taken to contain statutory warranties by force of section 88 and that such owners corporations and lot owners are successors in title to the developer. This means that once the new regime in relation to statutory warranties comes into force, it is only contracts to carry out residential building work entered into after this commencement date that will give owners corporations and lot owners the right to sue builders for breach of statutory warranties (once the relevant buildings are completed).

Allison Benson Christopher Kerin
Legal Practitioner Director Legal Practitioner Director
Ph: (02) 4032 7990
allison@kerinbensonlawyers.com.au
Ph: (02) 8706 7060
christopher@kerinbensonlawyers.com.au