Strata Reforms

Have you heard about the recent Strata Titles Reforms?

On 1st May 2020, while much of the state’s attention was on the nationwide lockdowns in response to the COVID-19 pandemic, a number of changes were made to Western Australia’s strata laws.

So, what are they?

Well, the Strata Titles Act 1985 (WA) and corresponding Regulations now together make up a total of 554 pages, up from approx. 398 in the previous rendition.

Here are some of the key changes:

It is now mandatory for ‘designated’ strata companies to maintain a reserve (sinking) fund to cover anticipated future maintenance expenditure. These designated Strata Companies will also need to have a 10-year maintenance plan in place which will need to be reviewed at least once every 5 years. This applies to strata schemes with 10 or more lots, or those defined under Regulation 79.

Buyers of strata lots must now receive a “Precontractual Disclosure Statement” from the seller, together with associated documents including but not limited to the strata plan and by-laws, minutes of the most recent annual general meeting and a statement of the strata company’s accounts.

Electronic voting and resolutions determined outside of meetings are now permitted to improve flexibility for owners, provided that proper procedures are followed in accordance with strata company by-laws.

Official notices and records of the strata company are now permitted to be sent and stored electronically.

The State Administrative Tribunal’s (SAT) jurisdiction has been widened to become the “one-stop-shop” for strata disputes, with the exception of debt recovery matters.

Strata managers are now required to abide by a set of statutory duties, adhere to new contract/disclosure requirements; and meet a prescribed standard of education prior to May 2024. Note for strata councils, if you haven’t received a new contract from your strata manager immediately before or since the changes to the Act, your contract may no longer be enforceable.

Leasehold tenure has been introduced to allow for the registration and purchase of leasehold strata schemes/ strata lots for fixed terms of 20 to 99 years with a goal to improve affordable housing options.

Attempts were made to simplify the process for owners wishing to install sustainability and utility infrastructure on common property, however it remains to be seen whether this will work in practice.

Recent SAT decisions which have significantly widened the definition of a ‘structural alteration’ mean owners may in fact face more hurdles should they wish to install solar panels on a roof that is not common property, by virtue of the onerous approval process under Section 87 of the Act.

It is more important than ever that anyone managing a strata complex has a full working knowledge of the Strata Titles Act, including these reforms, to ensure the strata company is maintaining full compliance and not exposing owners to any unforeseen risks and liabilities.