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Strata Titles Act Reform




The State Government has set Strata Reform as a key priority and Landgate has been tasked to deliver reforms to the Strata Titles Act 1985, in 2015, including Tenure reform and the Community Titles Advisory Committee amendments. The reforms will ensure Western Australia has a modern Strata Titles Act to better meet the State’s needs in light of future growth, and help provide more flexible, affordable and liveable housing options, which in turn will benefit strata owners and residents.

LATEST NEWS 2 July 2014

The latest Tenure Reform discussion paper has been made available and has also been distributed directly to a number of stakeholders. The team has also been engaging in stakeholder discussions which are based on this updated paper. The remaining discussion papers continue to develop and it is anticipated that stakeholder consultations, based on these papers, will be underway soon.

The information below has been updated to keep you well-informed of the progress of the reforms. New information includes additional detail under the section titled, ‘How Landgate is progressing the reform agenda’. Additionally, a timeline will soon be made available depicting the process required to progress the reforms.



1. Increased densities need to be supported by flexible tenure arrangements that are marketable (known as tenure reform) ;

arrow    Layered Schemes - to permit land developments of sufficient size and complexity as to require multiple management levels, including an “umbrella strata company” and various “subsidiary strata companies”. There should be the potential to include a variety of uses such as retail, residential and hotel-type facilities. This option is commonly known in other states as “community titles”. Layered schemes provide for multiple levels of management to facilitate large-scale, mixed use phased developments.

arrow    Mixed Use Developments in non – layered schemes - to permit multiple strata schemes in one building, to manage different uses (such as residential, commercial and retail).

arrow    Leasehold Strata over Freehold Land – this will permit a landowner to retain ownership of the land and to enter into a long term lease arrangement with a developer, authorising the developer to undertake a strata development on the site. Overall this will permit a valid housing option that is potentially more affordable.

arrow    Simplified staged development for existing and new strata schemes – to permit more flexible staged development procedures in schemes already registered, to enable minor variations from the development plans disclosed to the initial strata lot owners.

arrow    Management provisions - amended to support the effective implementation of tenure reform.


2. Urban development via redevelopment of areas to upgrade/ replace old housing stock:

arrow    Termination of strata schemes- investigating options to provide flexible methods for terminating strata schemes with safeguards if 100 per cent agreement is not reached.


3. Targeted management reform

Close quarter living attracts a higher incidence of neighbourhood disputes compared with living in freestanding dwellings. The increasing number of strata developments being built in Western Australia, and the proposed tenure reforms, are likely to generate more disputes. Rather than undertaking a major review of all management provisions (which in every other state has taken many years), the changes proposed to the Western Australian Strata Titles Act are to:

arrow    Simplify the dispute resolution provisions and expand the powers of the State Administrative Tribunal (SAT) within the theme of SAT being the one-stop shop for strata dispute resolution.


arrow    Combine the Community Titles Advisory Committee amendments (which include some management provisions such as recognising strata managers, providing some governance over strata managers and improving the insurance provisions) with tenure and management reforms, where compatible.

    The current focus is on targeted consultation with key stakeholders to define the details of, and reach agreement to, the elements of strata reform. As the reforms are being progressed on a fast tracked basis, any additional areas for improvement that are identified as part of the consultation may be considered. Due to the complexity of the reforms and short timeframe for implementing them however, it may not be possible to include additional items as part of this current program of reform.


    arrow    For developers, the reforms will permit more flexible staged development procedures. Layered schemes procedures in building developments will permit multiple strata schemes in one building so that different uses can be managed.

    arrow    For residents and owners it will help provide more flexible, affordable and liveable housing options. The reforms will also enable improved dispute resolution procedures.

    arrow    The reforms will align with the State’s primary planning frameworks, Directions 2031 and the State Planning Strategy, that outline the need for more flexible tenure options for housing, mixed use and community living.

    A modernised and streamlined Strata Titles Act is key to achieving this.


    The Strata reform team is in the process of incorporating relevant learnings from the NSW trip, research on other jurisdictions’ legislation and feedback from targeted consultation with stakeholders into the draft discussion papers on tenure reform, body corporate (management) reform, dispute resolution and strata manager reform.

    The team’s focus is on reforms that are necessary and effective for the new forms of tenure. The process includes identifying the issues that currently cause problems in strata schemes and developing proposals for managing those problems in the current schemes and schemes created under new forms of tenure. A full rewrite of the Strata Titles Act 1985 is not being undertaken in the timeframe for the reforms.

    The process further includes identifying and assessing the impacts of the proposals on stakeholders, planning for the changes and change management process.

    Targeted consultation is continuing in relation to tenure, strata managers and dispute resolution. Key issues on body corporate management are being identified and developed prior to targeted consultation.

    Consultation

    Targeted consultation continues with key stakeholders here in WA to define and agree on the elements of reform. The STA reform team are also investigating the strata legislation and practices in other states: different models are in place in the different jurisdictions, each with varying levels of success. The aim is to learn from other jurisdictions, identifying what lessons learned can be applied to meet WA’s needs.

    NSW is in the final stages of a review of the strata legislation, and this provides the ideal opportunity for WA to learn from their findings and experiences. A small team from the project headed to NSW in April to consult with Land and Property Information, Fair Trading, other agencies and industry representatives to gain insights into strata in NSW.


    Strata titles now comprise one third of new lots created in Western Australia, playing a significant role in providing flexibility in development as urban and rural land use changes to smaller lot sizes and multilevel apartment living. Land use in older urban areas is changing, with more multi-use developments, resulting in land owners seeking innovative ways to subdivide and redevelop land.

    Strata titling is an accepted process for residential, commercial and industrial land and has gained acceptance in both new and historic building renovation schemes as well as in rural and resort developments. A subdivision under the STA gives the ability to build closer to boundaries, and the initial costs for a developer (e.g. power, water and gas) are substantially less than for a greenfields site under the Transfer of Land Act 1893. These factors make strata titles an attractive development option.

    Western Australia’s changing needs

    In recent decades, Western Australia has experienced sustained population growth, and all indicators suggest this will continue. The Australian Bureau of Statistics’ projections suggest that the State’s population could increase from 2.5 million currently to at least 3.5 million and possibly more than double to 5.4 million by 2056 (State Planning Strategy [final draft October 2013] p18 Department of Planning). The composition of the population is also changing and this demographic shift will impact on most aspects of the economy, in particular the structure of the labour force, healthcare, education and social services, and the mix of dwelling types.

    Plans to manage this are outlined in Government polices and strategies such as Directions 2031 and Beyond – Metropolitan Planning Beyond the Horizon (2011) and the State Planning Strategy (in final draft). In these, and other, strategic documents the need for more affordable, flexible, liveable and mixed-use developments is seen as fundamental to help address the challenges and meet the future needs of the State: in particular, more urban infill, increased density of housing and more community living. Strata developments, and the legislative framework that underpins them, are recognised as key enablers to support this growth.

    It is estimated that by 2031, around 35 per cent of total residential development in the Perth and Peel region will be infill, often using strata title as a means to subdivide the land. Of this 35 per cent, approximately 121,000 dwellings will be located in the central Perth sub-region (this includes the corridor from Fremantle to Vincent and east to Bassendean and Belmont) (Directions 2031 and Beyond – Metropolitan Planning Beyond the Horizon (2010), p. 27.Western Australian Planning Commission).


    Increased community living and mixed-use developments mean more people living, working and undertaking a range of activities in closer proximity.

    With the higher density nature of the living environment, sharing of common facilities and the mutual dependence of one lot on another in a strata scheme, the STA sets up processes and structures to cope with that environment and to promote harmonious co-existence. The STA standard bylaws ensure standards of behaviour, building maintenance and management are maintained.

    Although the STA has served Western Australia well, the need for it to be modernised and streamlined has been known for some time, and Landgate has been pursuing meaningful reform with stakeholders. Now, more than ever, as the demand for strata as a viable development option to help address housing affordability increases, the need for a robust and suitable legislative framework to support strata in Western Australia is critical. This was confirmed by the Western Australian Cabinet’s advice in August 2013, for Landgate to fast track its strata reform activities to meet this growing demand.


    Government understands that the scope of the reforms being progressed is big, and that a collaborative effort, with input from industry and government, is essential if they are to be delivered on time.

    In addition to the changes that are needed to the STA, there are also major IT system, policy and business process changes required, for Landgate, the Office of State Revenue and other agencies. Also, new processes for industry and the public will need to be implemented requiring extensive education and awareness raising efforts.

    Delivering the proposed STA reforms will help WA to meet the needs of a growing population:

    arrow   Housing diversity – Communities provide diverse housing opportunities for different income levels, lifestyle choices and household types.
    - This recognises that current forms of tenure may be limiting and that new forms of tenure (e.g. layered schemes) are proposed.

    arrow   Demand for community living – Communities provide increased density, diversity and affordability of living through mixed use and transit orientated developments and are well-serviced by infrastructure.
    - This recognises that it is important to identify those aspects of current strata title arrangements that mitigate against people choosing strata and identifying ways to improve the quality of life in such communities, and to ensure that appropriate management arrangements are put in place in the more complex and diverse communities created by the new forms of tenure.

    arrow   New and existing tenures that help underpin the State’s economy.


    The Strata Titles Act Reform team would like to acknowledge and thank the following stakeholders for their ongoing contributions to the reform process. This list will continue to grow as the project progresses:

    The stakeholder consultation process is ongoing and support from across industry and government for the approach being undertaken is positive.

      Stakeholders   
      Urban Development Institute of Australia (UDIA)
      State Administrative Tribunal
      Ernst & Young
      Law Society of Western Australia
      Water Authority
      Building Commission
      Office of State Revenue
      Exclusive Strata Management
      Strata Community Western Australia (SCAWA)
      Real Estate Institute of Western Australia (REIWA)
      Surveying and Spatial Sciences Institute (SSSI)
      Western Australia Local Government Association (WALGA)
      Landcorp
      Atco Gas
      Department of Planning
      Department of Housing
      Department of Lands
      Planning Institute
      City of Perth
      City of Belmont
      City of Swan
      City of Rockingham
      City of Bayswater
      City of Stirling
      Property Council
      Landgate Subject Matter Experts


      Interstate Consultations
      Land and Property Information New South Wales
      Strata Community New South Wales (SCANSW)
      Insurance Council New South Wales   
      Fair Trading New South Wales
      Urban Development Institute of Australia New South Wales   


    Quote from UDIA URBAN express newsletter (16 January 2014) -

    “UDIA is continuing to discuss the Strata Titles Reform project, meeting yesterday with the team from Landgate. A document has been developed after the initial round of meetings which is trying to capture the ideas of industry and regulators and poses a range of questions on which they are seeking feedback. UDIA appreciates the way in which this consultation is being undertaken, with a “work in progress” document being circulated and updated after meetings with key stakeholders – this approach is far superior to simply releasing a finalised discussion paper for feedback with no previous input.”

    Reproduced by permission of Debra Goostrey at UDIA.


    The STA reform team has been expanded, enhancing the collective knowledge and significant experience of the team. Dedicated groups of team members are working on each stream of the reform program (tenure, management, strata managers and dispute resolution), developing and continuing to evolve the reform elements within the discussion papers.



      Alison Fleming Lead Lawyer for Strata Titles Act Reform Project
      Brad Clarke Project Manager
      Hannah Wreford Lawyer and research officer
      Kelly Whitfield Senior Policy Officer for management reform
      Kirsty Tippett Senior Lawyer for management reform
      Lara Bandarian Director Policy and Legislative Reform, and Project Sponsor
      Sean Macfarlane Senior Lawyer for dispute resolution reform
      Steve McFadzean Senior Lawyer for tenure reform
      Taryn Linfoot Policy officer
      Terry Hawser Subject Matter Expert on Strata Plans
      Vince McMullen Principal Consultant Planning and Development



    Four discussion papers are being developed across the main reform areas: tenure, management, strata managers and dispute resolution. These papers, in varying stages of development, are evolving as meetings with stakeholders continue.

    As the project progresses, the other reform discussion papers will also be made available.

    arrow    Land Tenure Options Discussion Paper (Draft) V4 PDF 970 KB


    For any enquiries about Strata Titles Act Reform,
    please email to StrataTitlesActReform@landgate.wa.gov.au

    Last updated on 2 July 2014

    Western Australian Land Information Authority