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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. The reforms will ensure Western Australia has a modern Strata Titles Act to better meet the State’s needs for future growth. Reforms will also help provide more flexible, affordable and liveable housing options, to benefit developers, strata owners and residents.

LATEST NEWS 26 Sep 2014

Strata reform continues to progress as discussion papers develop. A number of papers are undergoing initial consultations with key stakeholders, before being released for wider comment. Other papers are becoming more refined in their development and are preparing to begin the process of combining into a singular discussion paper ready for public consultation in the coming months.

The team have also provided some presentations to specific stakeholder groups in preparation for the public release of the combined discussion paper.


WHAT IS CHANGING?


The following areas are being investigated by the reform team, for their suitability and practicality within the current reform process:

1. Tenure Reform : Increased densities need to be supported by flexible tenure arrangements that are marketable (Known as tenure reform).

arrow    Community Title Schemes - to permit land developments of sufficient size and complexity consider multiple management levels, including an “umbrella strata companies” and various “subsidiary strata companies”. There should be the potential to include a variety of uses in a development, 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, and staged developments.

arrow    Community Title in a building - to permit multiple strata schemes in one building, to manage different uses ie: 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, that will 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. Vendor Disclosure


It will be necessary to know what disclosure is required, optional and authorised under the new forms of tenure. It will also be established how and when that disclosure is to be made.


3. Termination of Schemes: Redevelopment of areas to upgrade and, or replace old housing stock:

arrow    Investigating options to provide flexible methods for terminating strata schemes with safeguards, if 100 per cent ownership agreement is not reached. Defining criteria by which a strata title can be terminated when a building reaches an age where renewal is more cost effective than ongoing maintenance.


4. Management of Strata Schemes

arrow    Focus of reforms is on the creation, role and function of strata companies in the new forms of tenure
arrow    Other matters for effective and efficient management under the new forms of tenure

arrow    Improved financial reporting


5. Strata Manager


arrow    Defining the role of the strata company
arrow    Defining the relationship between Strata Manager and Strata Company
arrow    Models for regulation other than licensing


6. Dispute Resolution


arrow    SAT to be the “one stop shop” for external resolution of strata title disputes by broadening their powers.
arrow    Streamline Dispute Resolution processes
arrow    New provisions for the new forms of tenure


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 priority 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.


For residents and owners:

arrow    More choice of livable housing options
arrow    Improved standard of service by strata managers
arrow    Improved handover of schemes by developers to owners
arrow    Improved and more affordable dispute resolution procedures
arrow    Titles for leasehold strata may provide improved security for loans

For real estate agents:

arrow    Improved disclosure documentation at point of sale
arrow    New sale transactions

For the State's needs:

arrow    Alignment with the State’s primary Planning frameworks, Directions 2031 and the State Planning Strategy

For strata managers:

arrow    Fostering development of the industry
arrow    Definition of the role
arrow    Clarity of rights and responsibilities
arrow    Access to SAT for disputes

For developers:

arrow    More flexible staged development procedures
arrow    Multiple strata schemes in one building for different uses
arrow    More options for subdivision of land and land development

A modern Strata Titles Act is key to achieving this.


WHY IS THERE A NEED TO MAKE CHANGES?


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, is 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 key need is to provide flexible and affordable housing options (able to be used as a security by lenders) for a population estimated to be at around 5.4 million by 2056. Directions 2031 target: 121,000 dwellings of infill will be strata in the central Perth area.

How is this proposed to be achieved?

arrow    Urban infill
arrow    Increased density and
arrow    Community living in mixed-use environments


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 updated 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 prioritise its strata reform activities to meet this growing demand.


HOW IS THE REFORM BEING PROGRESSED?


arrow    Developing discussion papers in conjunction with key stakeholders, incorporating their feedback and also the lessons learned from other states
arrow    Conducting public consultation via the web: All discussion papers will be merged into a single combined discussion paper and be made available on the Strata Titles Act Reform webpage for public consultation
arrow    Developing submissions to Cabinet: A final recommendations paper will be developed
arrow    Writing the Legislation changes: Drafting process will begin
arrow    Taking new laws to Parliament: Strata Reform Bill to be passed

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 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.


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

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.


WHO HAS BEEN CONSULTED?


Our stakeholder engagement process is following a phased approach to ensure we proactively involve as many people as possible.

An initial phase of briefings and presentations to key stakeholders in Government and Industry is being undertaken. The next phase will call for submissions via on online consultation tool on the Landgate website open to all interested parties.

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   
  Australian Institute of Conveyancers WA (AICWA)
  Allen Partners NSW
  ATCO Gas
  Australian Property Institute
  Body Corporate Brokers (BCB)
  Building Commission (Dpt of Commerce)
  CHU Insurance
  Customer Service Council
  Department of the Attorney General
  Department of Commerce
  Department of Finance – Office of State Revenue WA
  Department of Housing
  Department of Lands
  Department of Planning
  Department of Water
  Ernst & Young
  Exclusive Strata Management (ESM)
  Faculty of Law, QLD University of Technology
  Faculty of Law, NSW University of Technology
  Fair Trading NSW
  Fini Group of Companies
  Insurance Council of Australia
  Land and Property Information NSW
  Landcorp
  Landgate SMEs
  Law Society of WA
  Catholic University of Australia Victoria
  LGA – City of Armadale
  LGA – City of Bayswater
  LGA – City of Belmont
  LGA – City of Perth
  LGA – City of Rockingham
  LGA – City of Stirling
  LGA – City of Swan
  Local Government Planners Association (LGPA)
  Metropolitan Redevelopment Authority (MRA)
  Planning Institute
  Property Council of Australia
  State Administrative Tribunal (SAT)
  Strata Community Austrlalia NSW
  Strata Community Australia VIC
  Strata Community Australia WA (SCAWA)
  Surveying & Spatial Sciences Institute (SSSI)
  WA Local Government Authority (WALGA)

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.



GET INVOLVED


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

Landgate will call for submissions via an online consultation tool in the coming months. We welcome your feedback and invite all interested parties, and those directly affected to comment, (such as developers, agents, owners, landlords, tenants, prospective buyers, seniors, strata companies and property managers etc) - as this will be vital to delivering the reforms.

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 26 Sep 2014

Western Australian Land Information Authority