Tuesday, October 20, 2015

Three easy fixes for better strata living

The new strata laws are in parliament, and the debate most likely starts today. The laws comprise of two separate bills, the Strata Schemes Development Bill, and the Strata Schemes Management Bill. There has been a lot of discussion of the issues around the Strata Schemes Development Bill, but today we'd like to look again at the Strata Schemes Management Bill which governs the day-to-day ways in which strata living is managed.

At the moment the bill misses an opportunity to reflect their 21st century context, for more than half of the people who live in strata in NSW. We've previously shared our detailed thoughts on the bill, but there are three easy ways to make sure strata living is fair and balanced for all residents, including tenants.

1. Tenant representation

Tenants who live in schemes where 50% or more lots have tenants living in them will be able to elect a tenant representative to sit on strata committee meetings and participate in committee meeting discussions, but will have no vote, no capacity to move motions, and can be excluded for a number of decision-making processes.
All tenants of all schemes will be informed that a strata committee meeting is taking place and will be able to attend, but not participate in any way.

We think all schemes should allow tenant representatives- arguably, it is the schemes where there are fewer tenants that most need to be reminded of their existence and concerns. Tenant representatives could also be empowered to move motions and vote on non-financial matters, such as new by-laws. There are no schemes where a tenant representative could vote their motion through against the will of the majority of owners, so this change would go a long way to making the community a better place to live, with no harm to owner-occupiers or investors.

The easy fix: Remove s33(1) to allow all schemes to have a tenant representative (if the tenants choose)
The bonus: We also recommend an amendment to allow a tenant representative to move a motion on any matter for which they are not excluded.

2. Unfair by-laws

For tenants, by-laws are perhaps the most significant aspect of a strata management scheme. In the absence of provisions allowing direct participation in a scheme – such as those discussed above – a tenant’s interaction with a strata scheme will usually be in relation to its by-laws. If the by-laws are unlawful, harsh, unconscionable or oppressive, they can be challenged at Tribunal and possibly overturned... but not if you're a tenant being subjected to those by-laws.

Tenants are excluded from challenging by-laws, and the Tribunal not permitted to overturn them, even if the tenant could demonstrate they were unlawful. This could then be used by a strata committee to issue fines and again, the Tribunal may not be able to refuse, simply because they are being applied against a tenant and not an owner. This is clearly an unfair situation.

The easy fix: Allow tenants to challenge unfair by-laws under sections 148-150.
The bonus: Allowing tenant representatives to move motions and vote on non-financial matters will mean better by-laws.

3. Overcrowding

We accept the need to address overcrowding in strata schemes for a range of reasons, but think it's important to remember that overcrowding is very often a symptom of broader dysfunction across the housing system – most notably the lack of affordable housing in the private rental market and ever-increasing restrictions on eligibility for social housing assistance.
The main method of pursuing overcrowding will be through the issuing of fines by the strata committee- $5500 for the first offence after a warning. However, this fine could potentially be directed at any person who is residing in the place, even if they are the exploited sub-tenant. We think that whether it is the owner of the property or the head-tenant, the person profiting from the overcrowding should be held responsible for it, not the people living in cramped and sometimes dangerous situations.

The easy fix: Amend s 147 so that penalties can be applied to 'a person with an identifiable interest in the lot' (whether they are an owner or a tenant), and not simply 'a person.'
The bonus: Introduce a section preventing strata blocks 'locking out' residents by cancelling swipe cards without good reason.

For more on Tenants Union policy platforms including law reform and previous submissions, visit our website!

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