Strata law update AND a Strata Commissioner announced. No pet bonds allowed and a review of the ‘strata renewal process’ to increase housing supply to the market.

The NSW Government has turned its attentions to strata, as John Minns is announced as the Commissioner for Strata and NSW Fair Trading Minister Anoulack Chanthivong plans to submit a new Bill to Parliament, seeking to amend existing strata laws.

While Mr Minns already serves as the Property Commissioner, adding strata specifically into the role will make him responsible for oversight and reform of the entire sector. This is a long-awaited development for strata owners and suppliers alike, given the sheer scale and growth predictors in the strata sector.

In addition to the new appointment, strata laws are up for a change. There is good news for pet owners, a proposed ban on pet bonds, however main focus of the Bill is reform to the Strata Renewal process. Initially introduced in 2016, the process of collective sale to a developer, know as the Strata Renewal Process, was intended to make it easier for owners to sell aging and dilapidated buildings.

The 2016 Act changed the requirement to terminate a strata scheme from a unanimous vote, to a special resolution, with built in protections to support owners not in favour, ensuring a transparent, and fair process. However, in reality, only one scheme has been terminated through this process during the six years since its introduction.

Loop holes in the legislation have allowed developers to purchase a single lot, underbid, and have the majority of owners caught up in legal action for years, until all other interest in the property is lost. In this case the owners were stuck with huge legal fees and an undervalue offer to sell. The updated legislation seeks to amend the requirement that all lot owners must pay the legal fees of any dissenting to the sale.

While the Strata Renewal Process seeks to be a conduit for increased housing supply, there remains conversation to be had about older blocks being demolished and rebuilt with less, more luxurious homes. Reducing stock and affordability instead of supporting supply. This is another matter that will need to be addressed during the approval process.

Finally, the amendment to strata laws will require second quotations/opinions on all works exceeding $30,000.

As strata apartments are built at a rate of 1000 a year in New South Wales, it is apparent that this is an area of life and law that will continue to need attention and reform so as to ensure laws are relevant and protecting owners and tenants alike.