Changes to Strata Law

  1. New forms of strata are coming
  2. There are two new forms of strata proposed as part of the reform:

    1. Community Strata is a new strata type that will facilitate mixed use within a strata scheme. A community scheme will be made up of a series of sub schemes that might vary in use – for example, retail, residential and office. This type of scheme is ideal for the type of large scale developments that are increasingly a feature of the WA landscape and will continue in future, as a measure to promote density in our city areas and decrease urban sprawl.
    2. Leasehold Strata is a scheme that is set for a defined period of time (between 20 and 99 years). Each lot within the scheme will be issued a certificate of title, and will have an expiry date – just like a lease. A leasehold strata scheme gives WA a new option for owning strata lots over a defined period, and will be helpful in circumstances where land cannot be sold or transferred (for example, land owned by a church or university). Leasehold strata will offer an alternate route to development of this land for the benefit of the community.

  3. Strata Management is improving
  4. The reforms will clarify the roles of strata companies, strata councils and strata managers. Statutory duties are set to be imposed on all strata managers, including the duty to act honestly and in good faith, exercise due care and skill, hold a trust account for strata funds, provide records of management activities and disclose conflicts of interest. Strata Managers will also be required to report on their activities annually, meaning the WA government will gain a clear picture of the number of strata managers in operation and the number of strata properties being managed. The WA government may use this information in future to consider whether licensing of strata managers would be appropriate.

  5. More powers for SAT in dispute resolution
  6. The reforms seek to grant the State Administrative Tribunal (SAT) greater powers and responsibilities in relation to strata schemes, particularly in dispute resolution. This will simplify the resolution process for all parties in the event that a dispute arises.

  7. Better information for buyers
  8. New forms and clearer information requirements will assist any purchaser of a strata property – making this an important reform proposal for agents and sales representatives to be aware of. The proposed reforms will require that details about levies, existing strata management contracts, insurance, and details of funds held by a strata company are all provided to a buyer in advance of their purchasing decision.

  9. Other reforms
  10. Other proposed reforms include Stage of Strata Development, which will simplify the way a development evolves over a period of time and refine the obligations placed on the developer, and Termination of Schemes, which provides an alternative to unanimous resolution while providing protection to all owners via the SAT.

    Although a concrete timeline for legislative change is always difficult to define, these changes look set to be enacted as legislation some time in 2016. Got a question or a thought? Comment below!
    More information on the reforms to the Act can be found on the Landgate website.

    Disclaimer: this article has been created for information only, based on the information available from Landgate as at 12 May 2016 concerning the proposed reform of the Strata Titles Act 1985. This information cannot be relied upon for legal, legislative, compliance or business decision-making purposes.