52 Fullarton Road, Norwood
PO Box 4040, Norwood South
South Australia 5067
P: 08 8333 5200
F: 08 8333 5210
E: mail@unitcare.com.au
Strata & Community Title Reforms April 2011
Proposed changes
Legislation before S.A. Parliament April 2011
Linksat the bottom of the page are to the Attorney General's summary to Parliament and the Bill before the House.
The Bill is subject to passage through the Parliament and assent by the Governor. Click here for Media release April 8th 2011
Summary of the Bill:
The following is a summary of the proposed amendments to the Strata & Community Titles Acts before Parliament in April 2011. For more detail see our links at the bottom of this page.
Under the bill, owners and purchasers of community and strata titled properties will receive extra protection and access to free information and advice.
Body corporate managers (BCMs) can have their contracts terminated at any time and they must hold professional indemnity insurance to protect community and strata corporations from negligence by BCMs. For the first time Strata Corporations will be able to impose fines, up to $500, for breaches of their Articles.
Free Advisory Service:
The bill provides funding for a new free advisory service. This will be provided by the Legal Services Commission.
“This can be a difficult area of law,………, I’m sure many people will welcome a new specialist telephone service, to be run by the Legal Services Commission, to provide expert information and legal advice on community and strata titles.” Attorney General April 2011.
Body Corporate Managers:
- Must not have a relevant criminal conviction, have been banned from another regulated occupation or be an undischarged bankrupt.
- Must have a signed contract in order to draw fees
- Must make contract related documents available to body corporate members at least 5 days before appointment is to be decided. These include their contract and other documents as prescribed by regulation
- Can have their contracts terminated by ordinary resolution at any time despite any terms to the contrary. The BCM has 3 days to hand over all records and funds. Contract terms are limited to a maximum of two years.
Extract for the Bill: Despite any agreement to the contrary the contract may, without prejudice to any other rights, be terminated by the corporation, at any time by written notice (and any term of the contract that purports to restrict or impose a condition on the right to so terminate is void and of no effect).
For example, if the contract requires a period of notice prior to the right to terminate being exercised, that term of the contract would be void as it imposes a condition on the right to terminate.
Writers note: This is in response to a growing trend by some managers to require three months notice.
- Must at all times have at least $1.5 million of professional indemnity insurance.
- Must provide each member of the corporation at any time in business hours access to inspect the records of the corporation in the possession or control of the BCM.
- Must upon request, supply body corporate members with the contact details of all owners at the body corporate. Writers note: Some managers refuse to provide owners with contact details. This law will fine them if they continue the practice.
- Must disclose direct or indirect pecuniary interests eg: maintenance & insurance commissions, ownership of management firm by a maintenance firm or vise versa.
- Must provide quarterly financial reports to owners upon request.
- May preside at a body corporate meeting if agreed by the majority of owners present and entitled to vote.
- Must provide search document requests (pending sale of unit/lot) within 5 working days. Writers note: We have received complaints of managers taking up to two weeks or seeking above regulation payments to speed up processing..
- Will be licensed under the National Occupational Licensing System due to commence in mid-2012. This will bring in a national license for property agents including BCMs.
Fines of up to $15,000 apply for breaches by BCMs.
Meetings:
- Members can attend meetings by telephone, video-link, internet connection or any similar means of remote communication (provided that no obligation lies on a community corporation to provide such facilities to members who wish to attend or vote in such a manner) We have successfully used Skype to enable a Sydney based owner to attend her group’s AGM.
- Person(s) attending or presiding at a meeting who have a direct or indirect pecuniary interest in any matter to be voted on at the meeting, must disclose the nature of the interest to the members present at the meeting before the vote is taken. Maximum penalty: $15,000.
- Special resolutions are made easier for strata corporations – 25% or less of owners at meeting (in person or by proxy) rather than 66% of all owners having to agree. This will help deal with apathy at some groups.
Insurance:
- Body corporates will be required to have fidelity cover. This must be at least $50,000 or the maximum funds held over the previous three years. This insurance is against the theft of corporation funds.
- Community corporations
- may agree to collectively insure.
- may impose penalties for owners who fail to prove they have insured their respective lot / building.
Budgets & Funding for the Future:
The bill encourages body corporates to plan for their future capital costs. These may include repainting of the group or gutter replacement. At the annual general meeting a statement setting out the following information must be presented:
- (b) the estimated expenditure of a recurrent nature and the estimated expenditure of a non-recurrent nature to be made by the corporation in the current financial year;
- (c) the estimated expenditure in future years for which funds should be raised now and held in reserve;
- (d) the amount to be raised by way of contributions from unit holders to cover the expenditure referred to in paragraphs (b) and (c).
Developer deals:
Developers will be restricted in their dealings in relation to monies held, proxies and contracts.
Prosecutions: The Bill provides funding that can be used to pay for investigation and prosecution of breaches of the community and strata titles legislation and confers power to prosecute breaches of the legislation on the Commissioner for Consumer Affairs. .
Attorney General's Report to Parliament |
Bill before Parliament |
Unitcare Submission
|
