How Reforms Can Morph Into Strata Monsters
When [good] strata laws go bad …
Sometimes what looks like a good and necessary solution to a one-off or small problem can turn out to be overkill and create new problems of its own. Add, some mismanagement and confusion and it just gets worse …
Let me tell you a [not so] funny story about some strata law reforms.
Back in 2003, a well-known Sydney building’s strata committee spent a lot of money running major litigation against the builder and developer with my law firm. It was the catalyst for a few strata law changes because some disgruntled owners and others thought that the committee did not keep owners adequately informed about the litigation and expenditures.
So, the NSW strata laws were tweaked in an attempt to make strata committee activities more visible to strata owners.
Initially, that included requirements that large [more than 100 lot] strata buildings and smaller strata buildings without a notice board had to send strata committee meeting notices and minutes to all owners [SSMA 1996 Sch 3, Cl 6 & 16]. Interestingly there was also a 7-day time limit on sending the strata committee meeting minutes when there wasn’t [and still isn’t] any time limit on sending general meeting minutes to strata owners.
That struck me at the time as serious overkill.
Requiring all large buildings and many smaller ones to send copies of strata committee meetings and minutes [regardless of the content] to all owners simply created a lot of extra work and new costs across the whole of NSW strata titles. I made a submission at the time to the NSW Government that it would conservatively add many hundreds of thousands to NSW strata building operating costs [based on low estimates of 12,500 large and small strata buildings copying and sending 10 pages to 150,000 owners once per year].
That made no difference, and the new requirements to send strata committee notices and minutes became law.
But since then, the requirements have morphed during successive law reform processes so that today;
large [more than 100 lots] strata buildings and smaller strata buildings without a notice board have to send strata committee meeting notices to all owners, and
smaller strata buildings have to send strata committee meeting minutes to all owners, but
large [more than 100 lots] strata buildings only have to send strata committee meeting minutes to owners who have requested them.
This is a weird reversal of the original disclosure provisions: where smaller buildings now have the extra work and costs of always sending strata committee meeting notices and minutes to strata owners but larger buildings [where the committees are typically more active and can spend more money] not having the same obligations.
In practice, I understand that most professionally managed buildings in NSW universally send copies of all strata committee meetings to all owners. But, that’s not the point.
So, through misguided processes [initially and over time], we’ve ended up with a whole new set of strata operational requirements that probably don’t achieve anything for most strata stakeholders except increasing strata operating costs.
After all, doesn’t everyone say strata owners never read the meeting notices and minutes?
April 14, 2021
Francesco