An Insight into the Strata Titles Act Reform

After years of anticipation and hard work, the amendments to the Strata Titles Act 1985 (STA), and the introduction of the Community Titles Bill, have finally been introduced into Parliament.

Strata titles were introduced to Western Australia in the 1960’s and the current Strata Titles Act was passed in 1985 with updates to the act passing in the mid-1990’s. As such these reforms to the legislation have been a long time coming!

So, what does this mean for owners?

Owners can take comfort in knowing that the changes to this legislation do not affect your ownership of your property. It may affect the way that your complex is governed and the way some tasks are conducted moving forward.

One of the seven focus areas in the reform was improving the management of the scheme. Being that the legislation was written so long ago, before Strata Managers, and before emails were commonplace, the reforms have focused on empowering owners to update their processes in keeping with the times. This means that electronic communication will be explicitly permitted, and this alone could have an enormous affect on the way strata company’s conduct their business. This in conjunction with the changes to obtaining quorums, could vastly change the Annual General Meetings for owners.

For example, at the moment owners either have to attend in person or send through a proxy for the meeting. If 50% of the owners aren’t represented, then the meeting must be adjourned until the following week. Under the new proposed legislation, owners can send through their votes and proxies prior to the meeting, attend in person, phone in to the meeting, or skype in to the meeting (where the facilities allow for this). After half an hour, those represented can decide that the number in attendance constitutes a quorum and the meeting proceeds as planned. This will make representation easier for owners and save the strata company costs of adjourning meetings.

If a difficult situation presents itself, the State Administrative Tribunal has the ability to help resolve issues within strata communities. The changes here will allow for better enforcement of by-laws which will increase the enjoyment for owners who may be experiencing frustration with repeat offenders within their community.

What does this mean for my Strata Manager?

As previously mentioned, Strata Managers have not previously been acknowledged under the STA, with no definition or standards in place. The changes will define the role of a Strata Manager and put in place further defined statutory duties. A non-regulated and non-defined industry has resulted in a wide variety of quality of service being received by home owners. The changes introduced will mean that all paid Strata Managers will have a standard level of service that they must adhere to. In the past any person has been able to start up a Strata Management Company with little or no level of knowledge or qualifications required and entrusted to hold funds of a Strata Company however they decided. The new legislation will introduce a minimum level of knowledge, make police clearances a requirement, and ensure funds are held in trust accounts or the schemes own account.

Here at Blackburne our Strata Team receives regular industry training, operates under a Real Estate license and all of our clients funds are held in regularly audited trust accounts. We anticipate that the changes will improve the level of professionalism and knowledge across the industry, and raise the standards that all clients should expect to receive.

What is a new tenure?

In the past, the only form of tenure was Freehold (i.e. a house). This was changed with the introduction of Strata Titles, and it is expected that Community Titles and Leasehold Titles will again change the options of land ownership available.

This is aimed more at new developments and sub-divisions and will generally not affect current strata owners however Community Titles are very similar to Strata Titles, however it is a tiered level of ownership and is usually a very large scale. This form of tenure has been available in other states of Australia for many years and the size of these schemes is often comparable to a suburb.

Leasehold is very similar to Strata Titles, except that there is a long-term lease in place (up to 99 years) which can be bought and sold similarly to a normal property, and mortgaged against.

Am I likely to lose my home under the new termination of schemes?

It is often miscommunicated that only 75% of owner’s votes are needed to terminate a scheme. The reality is that while 75% of agreement is required, a much more structured process from the one currently available is being implemented, which will ensure that all owners circumstances and wishes are being considered appropriately. The process which will take between 6-24 months to proceed through, ensures an evaluation for fairness is undertaken by the State Administration Tribunal and even makes provision to ensure at risk owners can access legal advice with regard to their situation.

As you can see, many changes are about to take place in the strata community. Fortunately, the Bills were introduced into Parliament before the Parliamentary Recess, which is now in place until August. After this time, it will be debated in the Legislated Assembly before going to the Legislative Council. During this time, the team at Landgate will be preparing the Regulations in anticipation of the reforms passing.

For more information about the reforms, you can visit the Landgate website. To obtain your own copies of the Bills, click on the links below!

STA Amendment

Community Titles