New strata legislation a red-tape nightmare for strata schemes

Jimmy Thomson’s  recent article

12 tiny strata law changes that will make a big difference

should really have a thirteenth item that relates to bathroom renovations. 

Inexplicable last minute changes to the draft of Sections 109-111 of the new Strata Schemes Management Bill 2015, which deal with apartment works, will have highly dysfunctional consequences for the everyday operation of strata schemes. 

Earlier drafts of Sections 108-111 reflected  a simple three-tiered apartment renovation approval framework where all routine renovations, including routine kitchen and bathroom renovations, were covered by Section 110 of the bill whereby approval could be granted by an ordinary resolution of the owners corporation. Such decisions are normally delegated to strata committees and indeed currently routine renovations are handled by strata committees and approved subject to conditions which protect the interests of other owners.

In its current final form, the bill explicitly excludes any work requiring waterproofing from section 110 and consequently even routine, everyday bathroom renovations must be approved under section 111 by a special resolution at a general meeting. Unlike matters which are subject to ordinary resolutions, matters requiring special resolutions cannot be delegated to, and decided by, strata committees.  Therefore owners who wish to secure approval for a routine bathroom renovation will have to call a general meeting of their owners corporation, hope that quorum will be achieved and that not more than 25% of the owners will oppose the motion. In a large scheme this is a daunting and expensive exercise to carry out.

According to the new Bill essentially the same type of approval will now be required to carry out a routine bathroom renovation in a strata scheme as that required to terminate the strata scheme itself. This is an absurd, irrational and counterproductive requirement that defies common sense. It will create a nightmare of red-tape and confusion in strata schemes, contrary to the originally stated objective of the strata law review to reduce red-tape.

Note that works which change or modify the common property as it is defined, including apartment renovations which include such works, currently require approval by special resolution at a general meeting under section 65A of the current Act. Section 108 of the new Act represents an equivalent requirement and provision.  This is a sound and logical provision and is not the issue here.

However as it stands, Section 111 of the new act arbitrarily extends this requirement to routine apartment renovations which simply improve or restore the condition of apartments without changing the lot as it is defined in plans and specifications. 

The above distinction between renovations on the one hand and alterations or additions to the common property on the other, is similar to that which separate works that require a DA and those that don’t. It is relevant to note that under the NSW building codes bathroom and kitchen renovations are listed as exempt developments that do not require approval.

The above aspects of the new bill will have absurd consequences. For example, if waterproofing fails in an apartment the owners corporation is obliged to repair it and, under the new Bill, can be sued if it fails to do so. However, if an owner wants to take the opportunity to renovate the whole bathroom in the process, including the waterproofing, and is prepared to pay for the work, the strata committee will not be empowered to approve this, as is now the case. Instead, the owner, according to Sections 110 (7) (d) and 111 would have to call a general meeting. This is red-tape madness.

It seems imperative that the Strata Scheme Management Bill 2015 be amended before it takes effect to correct this anomaly and to restore the originally intended three-tiered approval framework reflected by the earlier drafts of sections 108-111, where all routine lot renovations can be approved under section 110, by an ordinary resolution at a general meeting or by a strata committee.