Friday, August 14, 2015

Flat out on the Brown Couch - part 1

You may have noted, dear reader, that the Brown Couch has remained empty, at least relatively speaking, in recent times – its grooves gently smoothing and that coffee stain resolutely untreated. There’s a bit of dog hair too.
Rest assured that we love the old sofa as much as ever. We have just been busy finalising submissions relating to three important Bills in the sights of NSW Parliament - the ResidentialTenancies and Housing Legislation (Public Housing – Antisocial Behaviour) Bill, Strata Schemes Management Bill, and Strata Schemes Development Bill.
Our poor neglected couch. Who can lend us that book of kooky stain removal tips?

The bulk of media contributions – quality and otherwise – to discussion of these reforms have concerned the social housing Bill. This is a very worthy topic, though of course the old rorters crackdown line remains as attractive as ever.
But we thought we might take you through how the proposed reforms to strata law will affect renters, too.
Make no mistake, this is a big deal; tenants occupy half of all strata lots in NSW, and this is the first sweeping look at the relevant legislation in half a century. It probably comes as no surprise, then, that we have no one stance on the reform package. There’s certainly much to like – even if it’s mostly a case of heading in the right direction (remember that?) as opposed to a final, lasting achievement of tenant equality. Elsewhere, we’re ambivalent. And other new provisions, particularly those concerning the processes around sale to developers, are cause for real concern and urgent attention.
So today’s entry will be the first of a two-part series, focusing on the most striking of the planned new laws from a tenant’s perspective.

The knockdown job
The redevelopment Bill contains probably the most dramatic change of the package. This reform is also the strong favourite to impact upon renters and other vulnerable people most if passed in its current form.
Under current law, approval for redevelopment of a strata scheme requires the votes of 100% of owners. Even the poorest member  - not just your figurative USAs and Chinas – holds a veto power on any decision to demolish their home.
Can we level it? Yes we can!

To encourage 'renewal', the new law will require only 75% of votes to achieve the same. The implications for long-term residents in hub or hipster neighbourhoods are obvious. Any redevelopment conceived in even the slightest rationality will result in much more valuable lots. For many residents who bought into a scheme decades prior – and did so under the assumption they had attained security - this will mean an inability to buy back into the area in which they have formed a lifetime of connections. Where they will go is anyone’s guess, though we suggest further housing insecurity will often come with the displacement.
For tenants and other renters, the 'renewal' process should mean even less affordable housing in desirable areas. And tenants will not be compensated for the financial and other costs of having to move when the decision is taken to end a scheme including their lot.
It follows, of course, that we strongly support the retention of current provisions requiring 100% of votes for redevelopment of strata schemes.

Peeping through committee cracks
On the strata management side of the package, the headline grabber is the introduction of ‘tenant representatives’. In buildings where tenants occupy more than half the lots, renters will be able to elect a representative to the strata committee.
Unfortunately, this position will not be one of substantive power, as the tenant representative will not be able to vote, hold office, put a motion to the committee, or even be counted towards a quorum. They can also be excluded from the discussion of any financial matter.
Still, a committee’s tenant representative could well provide valuable insight into the impact of governance decisions on tenants and other renters, as well as an ‘on the ground’ perspective a great many owners lack. We say there is no reason why committees where more than half of lots are owner-occupied should be denied this insight - particularly given it would not disturb the balance of committee powers established in the Bill. We also think a tenant representative should have the capacity to move a motion on any matter for which they are present, as a more direct and meaningful expression of tenant sentiment on issues before the committee.

On a similar note, tenants may also have a right observe owners corporation general meetings under a reformed strata law. This will increase transparency, and provide tenants with first-hand notice of any discussions affecting them. We’d like to see the drafting of these provisions tightened to give effect to their apparent intent.
These are, perhaps, the big-ticket items, but there’s much more in the reform package that warrants a closer look. Stay tuned for part 2 next week.

Read the Tenants’ Union’s full submission on proposed reforms to strata law here.
For more on the Strata Schemes Redevelopment Bill specifically, we also recommend the Shelter NSW submission.

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