It’s been almost six-months since the new NSW Strata Laws came into force in 30 November 2016. The changes were a long-time coming and they are far reaching and I think it’s important to look at some of the key changes.
Given how popular apartments are with many investors, I’m going to start with the impact of the new laws on tenants renting in strata buildings. The new rules should help building management run more smoothly and that a good thing not only for the tenants themselves, but also other residents and investors.
Until the new rules came into place, many suggested both formally and informally that tenants living in a strata community were at a disadvantage. The changes do help to create a more stable environment and I would suggest improves the quality of any tenancy and so enhance the investment.
So let’s start with a short review of what the new, now current rules provide, for tenants and their landlords, there are some simple points investors and tenants should take note of.
The big change is that tenants now have the ability to attend meetings of the owners corporation. There are some conditions, but most welcome this involvement. Firstly, each landlord needs to advise the owners corporation that their property is leased, within 14-day of a new lease. This notification is a requirement of the Act.
In some buildings, where 50% of the number of lots are leased the laws go further and it’s now possible to have a tenant representative elected to the strata committee. Under these conditions the strata committee must convene a special meeting of tenants, to elect the representative at least 14-days before the next AGM.
Tenants in eligible buildings then nominate one of their fellow tenants to act at their representative on the strata committee. Given that it is a requirement to notify all leases, I assume that the strata manager is the person who monitors when and if the the 50% leased occupancy is reached.
However, either single tenants or the elected representative still have to work with some limitations. Individual tenants or the elected member of the strata committee can not vote, unless they hold an owner’s proxy. Nor do they make up a quorum. Also, individual tenants as a rule can not speak at meetings with the owners agreement, except the elected representative, who can speak.
Tenants can also be asked to leave a meeting when some matters are debated and this covers financial issues and any time a collective sale proposal was discussed. Importantly however, the tenant’s rep, as a member of the strata committee, is entitled to a copy of the agenda and minutes of any meeting held.
In combination, all of these changes despite what look like reasonable limitations, have been welcomed, they are sensible changes that will enhance a strata community.
Over the next few weeks, I’ll review some of the other changes now that the new act has been around for almost six months, in particular, some staged up-dates set to take effect over coming months.