Changes to strata legislation come into effect

Changes to the Unit Titles (Management) Act (2011) that came into effect on Sunday, 1 November, will change the way strata committees manage their finances, allow improvements that have environmental benefits, and relax the rules for pets.

Strata committees will now also need to provide minutes of their meetings to owners within 14 days, and voting proxies have new limits to prevent the influence of any individual person.

Strata committees will have the ability to split budgets between commercial and residential maintenance, and unit owners may keep a pet in a unit under new provisions in Section 32 of the Act, subject to the owners’ corporation developing or adopting a ‘pet-friendly rule’.

Vantage Strata managing director Chris Miller said the changes are the result of a process that comprehensively consulted across the industry and stakeholders.

“The way the government engaged with stakeholder groups, in all of my professional experience I’ve never seen such a high degree of collaboration between industry and government, and such a high level of consensus between those who were a part of that process,” he said.

Buildings with mixed-use tenancies, such as ground floor businesses with residential units above, will now be able to split costs for commercial tenants from those of residential tenants.

“For example, if a commercial tenancy has bathroom facilities exclusively for the use of customers, maintenance on that bathroom should be paid only by the commercial tenants, not the residential tenants,” said Mr Miller.

“They will still have to collectively contribute to bills that can’t be split, such as strata management or building insurance.”

There are new requirements for developers under the changes. They will now be required to more clearly point out to buyers purchasing off the plan about the use of commercial space in their building, and that the initial use of that commercial space may not stay the same over time.

For example, a developer planning to seek a supermarket tenant for a commercial tenancy in a building must make it clear to people who buy off the plan that the tenancy may be used for a different retail purpose in the future planning for the building.

“There are enhanced obligations on developers in relation to disclosure, to better inform purchasers of what they’re actually buying, and to give them better awareness in mixed-use buildings,” said Mr Miller.

“The developer may not know what’s going to be in those commercial spaces, and it might change during the life of the building. Ten years down the road it could be a gym or a tattoo shop. Buyers purchasing off the plan may not realise that’s the case.”

It also became mandatory for every strata committee to obtain a planned preventative maintenance program by the second AGM for the Units Plan after 1 November, 2020, while developers will need to hand a mandatory planned preventative maintenance program for new developments to the owners’ committee.

“That’s essentially an instruction manual for how these complicated buildings work,” said Mr Miller. “Ultimately, the outcome is that every building will have a plan for preventative maintenance to ensure it’s being serviced in accordance with its needs.”

While the first raft of strata legislation changes has come into effect, consultation will continue with stakeholders and government for some time.

“This is the first stage of a two-stage consultation process,” said Mr Miller. “There will be further changes as the process continues during the next 12 months to two years.”

The Owners Corporation Network of the ACT and Strata Community Association are preparing seminars to help executive committees and strata managers get up to speed on their obligations. Those who are interested can contact either organisation to be added to the register of interest.