Recent Key Changes to Strata Law and Recommendations

Written on the 17 December 2020

AN OVERVIEW OF RECENT KEY CHANGES TO STRATA LAW

There have been a number of important changes made to strata laws over the last 6 months. This includes changes to legislation and recent court and NCAT decisions. We provide an overview of those key changes to help you get across them and make recommendations as to what you should do get the most out of them and to ensure you comply with them.

Builders now owe a duty of care to avoid defects

On 10 June 2020, new legislation commenced which imposes on designers, builders, subcontractors and others a duty to exercise reasonable care to avoid financial loss caused by defects. The new legislation is retrospective and covers buildings constructed within the last 10 years. The legislation also applies to all types of strata buildings including commercial and industrial buildings. The legislation entitles claims to be made for up to 6 years after an owners corporation suffers loss arising from defects and gives owners corporations new rights to make defect claims against designers, builders, subcontractors and others.

New rules for removing abandoned goods and illegally parked vehicles

On 1 July 2020, changes were made to the laws regulating the power of an owners corporation to remove abandoned goods and illegally parked vehicles from common property. Under these changes, the right of an owners corporation to remove goods from common property now only applies to abandoned goods rather than any goods which have been left on common property. The changes also introduce new time periods for notices that must be given before an owners corporation is able to dispose of abandoned goods left on common property.

Developer by-laws and common property rights by-laws cannot approve building works done by owners

On 30 September 2020, the Appeal Panel of NCAT held that a developer by-law and a common property rights by-law cannot authorise an owner to carry out alterations or additions to common property. The Appeal Panel concluded that the only way in which an owner can obtain authority to alter or add to the common property, or do major building work on common property, is by a special resolution and by-law passed by an owners corporation under section 108 of the Strata Schemes Management Act 2015. This decision means that there are many developer by-laws and common property rights by-laws which wrongfully permit owners to carry out building works on common property. Any such by-laws which are unenforceable will not impose on owners the responsibility for the maintenance and upkeep of any works they do on common property

No Pets By-laws are invalid

On 12 October 2020, the NSW Court of Appeal held that a by-law prohibiting the keeping of animals in a strata building is invalid. The Court concluded that a "no pets" by-law is harsh, unconscionable or oppressive and therefore unenforceable.

NCAT can award damages

On 11 November 2020, the NSW Court of Appeal held that NCAT is able to award damages or compensation to a lot owner who suffers financial loss as a result of defects in the common property that an owners corporation does not repair in breach of its statutory duty to repair common property under section 106 of the Strata Schemes Management Act 2015. This decision will make it easier for owners to make compensation claims against owners corporations to cover losses they suffer when, for example, water leaks into and damages a lot as a result of common property defects that an owners corporation does not repair.

For further information, contact our office on 1300 242 083.