NSW Strata Law Reform Deja Vu
Shall we do this strata law reform one more time …
Although we all want better strata laws, is this latest NSW strata law reform process another pointless paper trail and talkfest, or, can we make real improvements?
[7:00 minutes estimated reading time, 1395 words]
Late last year the NSW ministers for Better Regulation and Innovation, Hon. Kevin Anderson and for Customer Service, Hon. Victor Doninello, announced the discussion paper and consultation process for the review of some NSW strata laws.
You can access the discussion paper here – which invites submissions by 7 March 2021.
But, without trying to be cynical, I really wonder what the point of this is? Plus, I feel like I’m having multiple deja vu experiences; having been through a lot of NSW strata law reform processes over the last 25 years myself.
Despite that, I’m preparing analyses and comments to help get better strata outcomes this time too and will be publishing them as series in this newsletter.
Plus, I’m not sure that the revised NSW strata laws introduced in 2015 have been explored, tested, and ruled about enough to provide meaningful feedback.
But, it’s going to happen as explained on page 7 of the discussion paper as follows:
‘This discussion paper seeks feedback from any member of the public interested in the laws governing the development and management of strata schemes in NSW.
Public feedback is vital to the 2020-21 statutory review of the Strata Schemes Development Act 2015 (the Development Act) and Strata Schemes Management Act 2015 (the Management Act) which is required by sections 204 and 276 of those Acts respectively.
The Acts require a report on the statutory review to be tabled in NSW Parliament within one year of the commencement of the review – that is, 5 November 2021.’
So, I’ll be preparing analyses and comments to try to help get better strata outcomes this time too and will be publishing them as series in this Newsletter.
So, let’s begin with some basics.
Strata laws only being reviewed
The consultation process concerns 2 pieces of NSW strata title law; the Strata Schemes Development Act 2015 and the Strata Schemes Management Act 2015.
But, sadly, our poor Community title cousins miss out once again [maybe next year?].
And, I guess those even more distantly related Company title buildings are left in the corporate law wilderness.
NSW strata law reform history
Although the 2020 discussion paper says on page 8 that:
‘while the original 1961 Act was reviewed and replaced in 1973, the 2015 reforms to strata laws in were the first major review of NSW strata laws since their inception’
That’s not quite true as there have been more than 13 substantive strata law changes over the last 60 years as follows.
1961 Strata Titles (Conveyancing) Act 1961 introduced and strata begin in NSW and Australia
1974 Strata Titles Act 1973 introduced to replace the 1961 Act
1978 Major amendments to the 1973 Act
1987 Even more major amendments to the 1973 Act
1997 Strata Schemes Freehold Development Act 1973 & Strata Schemes Management Act 1996 introduced to split the 1973 Act into 2 and make major strata law changes
2002 Changes to the 1973 Development & 1996 Management Acts via the Strata Schemes Legislation Amendment Act 2001
2003 Even more changes to the 1973 Development & 1996 Management Acts via the Strata Schemes Legislation Amendment Act 2002
2004 More changes to the 1973 Development & 1996 Management Acts via the Strata Schemes Legislation Amendment Act 2004
2008 More changes to the 1973 Development & 1996 Management Acts via the Strata Schemes Legislation Amendment Act 2008
2013 More changes to the 1996 Management Act via the Strata Schemes Legislation Amendment [Child Window Safety Devices) Act 2013
2016 Strata Schemes Development Act 2015 & Strata Schemes Management Act 2015 begin and introduce significant strata law changes
2018 Changes to the 2015 Management Act via the Strata Schemes Management Amendment (Building Defects Scheme) Act 2018
2020 Changes to the 2015 Management Act via the COVID-19 Legislation Amendment (Emergency Measures—Miscellaneous) Act 2020
This history makes me worry that those in charge of the review may not fully grasp the history of NSW strata laws, reforms, and issues raised by stakeholders over that period.
Policy and purposes aren’t clear
At page 7 of the discussion paper the purpose of the strata law review is described as follows:
‘the purpose of the review is to determine whether the policy objectives of the Acts remain valid and whether the terms of the Acts remain appropriate for securing those objectives’.
But, there’s not a lot available about the policy objectives for strata laws or the relevant NSW government departments [although I’m trying to find more about that] and the objectives of the Acts are quite limited as follows.
Strata Schemes Development Act 1201 Objectives:
Section 3 says the objective is to provide for:
1. The subdivision of land, including buildings, into cubic spaces to create freehold and leasehold strata schemes;
2. Dealings with lots and common property in strata schemes;
3. The variation, termination, and renewal of strata schemes.
Strata Schemes Management Act 1201 Objectives:
Section 3 says the objective is to provide for:
1. To provide for the management of strata schemes, and
2. To provide for the resolution of disputes arising from strata schemes.
Frankly, without clear government policy objectives [not apparent] and based on these generalised objectives, assessing how effective existing laws are and what should be changed becomes very subjective and whimsical.
Two government departments involved
The two laws being reviewed cover quite different aspects of strata title operations:
the titling for strata building development and changes to plans, titles and management documents; and
the ongoing operation of strata complexes;
with a few consequences as follows.
Both are big topics requiring serious consideration and thought. So, that’s a lot of ground to cover in one law reform exercise for stakeholders and regulators.
The two laws are administered by different parts of the NSW government.
The Office of the Registrar General administers the development Act.
NSW Fair Trading administers the management Act.
So, the reforms must navigate both departments; including their policies, internal departmental processes, Ministers, and bureaucrats.
Key areas I’m considering
So, I’m approaching my review and writings about the 2021 NSW strata law reforms in a few categories as follows and will publish newsletters on each of them over the next 9 weeks until the review closes.
1. Policy considerations and objectives that do and should apply to strata development and operational laws [which differ and may conflict] as guides to the reforms. Without guidance from agreed policy objectives, how can we make better strata laws? Read the newsletter on this topic here.
2. What did we and can we learn from the previous NSW strata law reform processes so we can build on those ideas, thoughts, and efforts; rather than starting with a clean sheet of paper.
3. Part strata scheme issues that are negatively impacting the development and operation of these complexes. There may be fewer part strata complexes than regular strata buildings, but they are generally larger, involve more money, and have given rise [in my experience] to disproportionately more disputes.
4. Information issues in strata buildings that are holding stakeholders back since they’re based on 20th-century thinking and processes.
5. Decision making in strata buildings covering powers, processes, and consequential responsibilities that have become slow, disconnected, [in my view] dysfunctional, and unrepresentative.
6. Financial matters in strata buildings that, like information, are based on 20th-century thinking and processes yet represent a significant number for owners, other stakeholders, and the NSW economy.
7. Strata building structure issues [allocation between stakeholders, original defects, disrepair & long-term management, changes, liability, etc] since the building structure is fundamental to strata title existence and dealing with the building represent a significant proportion of day-to-day strata operations.
8. Housekeeping the legislation to fix errors, omissions, and gaffes in the strata laws from 2015 that have been identified by stakeholders, Courts, and others. That’s just common sense.
9. Non-issues in the discussion paper [and there are quite a few] that are not important, do not warrant changes, and why that is.
So, why not join me for this little strata journey to better NSW strata laws?
And, feel free to send me your ideas, thoughts, comments, and criticisms along the way since I can include them in a readers’ views article at the end of this process.
Francesco …
Jan 11, 2021