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Written by Jamie Horner
Our strata team at Empire Estate Agents recognises that a growing number of Western Australians are opting out of large suburban homes, and switching to high-density metro living, close to the amenities they need, and the lifestyle they want. We see it all the time here in Victoria Park, with new complexes and beautifully designed communities developing all around us.
With communal living on the rise, the Strata Titles Act 1985 has undergone reformation, to modernise and simplify the way strata is managed.
A strata manager is responsible for being across all of the changes. And there are a lot of changes to be across: new terminology, new forms and processes, requirements, and even the prospect of forming a 10-year maintenance plan.
But what about those who are self-managing their strata complex? What do the reforms mean for them? And…just what ARE these reforms??
The legislation makes for pretty dry reading…luckily, we’ve broken it down for your convenience.
For the first time in WA, strata managers have clear statutory duties which give clear definition to their role and responsibilities…and yes, self-managers, this includes you too.
STRATA MANAGERS OBLIGATIONS
Statutory duties will require a strata manager to act honestly, with reasonable skill and care, to have a good understanding of the act, not abuse their position, inform the strata company of any conflict of interest as soon as possible, and disclose any remuneration over $100 from one source in a year.
Further, they will also be required to attain educational qualifications, have professional indemnity insurance, and lodge an annual return to Landgate with general information about the schemes they manage.
Volunteer strata managers, those self-managing, are still subject to the statutory duties of a career strata manager. However, unlike a paid strata manager, volunteer strata managers will not need to attain education qualifications or hold professional indemnity insurance under the new reform. They do still need to ensure that they have a written agreement or contract with the strata company, permitting them to manage. Volunteer managers must own one of the lots in the strata complex, and cannot earn more than $250 for each lot in the scheme over a full year.
THE CHANGING PROCESS
If you are self-managing your complex you will need to abreast of the changes in regards to meeting and voting communication, by-laws, disclosure statements in regards to a sale and potentially (depending on the size of your complex) a 10-year plan.
Strata management is being modernised. Gone are the days of snail mail and (physical) paper trails, and finally WA Strata legislation will reflect that. Electronic options are being introduced for scheme communications, voting and meeting attendance. This will streamline the process of attaining strata company approval for upgrading infrastructure and improving accessibility on common property. Needless to say, this will save on time, and make self-management significantly simpler.
Bylaws will be made clearer and fairer. These changes aim to improve management and minimise disputes. Reforms lay out new criteria, providing that by-laws must not be unfair, discriminatory, oppressive or unreasonable. As a self-manager, this will outline what you can and cannot dictate when writing up the by-laws of your complex.
A consolidated set of these by-laws must be lodged with Landgate. This will make it so much easier for existing owners and prospective strata buyers to access a complete and current set of by-laws. Landgate is set to release a guide to the consolidated by-laws soon.
A 10-year maintenance plan and reserve fund will be required to select strata schemes. This is for schemes with 10 lots or more, and schemes with a $5 million replacement cost for building/s or improvements on the common property. These new implementations will enable better long-term planning, and ensure the maintenance of the common property.
Required Insurance. All insurable assets of the scheme must be ensured for replacement value and for events such as fire, storm and tempest, lightning, explosion and earthquake and insured against damage for which the strata company could become liable to an amount of not less than $10 million.
COMPLIANCE
With all that said….it’s time to get compliant! The reforms are here, and whilst there are some grace periods, it is best practice to ensure you are complying with the current requirements and the incoming changes.
Why is compliance so important? Good compliance makes for great communities, in addition, fines make pretty good incentives to operate by the book. Failure to meet your obligations as owners or as a strata manager could see fines in the low range of $1,000 and soon, with the introduction of new reforms, penalties can reach up to $75,000.
As you may have concluded, these changes to the Strata Titles Act are for the benefit of all involved in a strata scheme, promoting fairness, clarity, and transparency in management. The team at Empire sees this as an opportunity for greater knowledge, understanding and better communities. For anyone self-managing, the onus is on you to be well-versed in these reforms. You are responsible for ensuring you are compliant with the incoming reforms…with penalties for those who fail to do so.
The amended Strata Titles Act 1985 took effect on May 1st, 2020.
If you are in a self-managed strata complex and need guidance in regards to how these changes may affect your strata community or any other concerns, please give Jamie a call, as she would be happy to assist.
About the Author
Jamie Horner leads the Strata Management Team at Empire Estate Agents. With more than 20 years experience, Jamie is a member of the REIWA Strata Titles Committee and holds a Masters in Property and a Degree in Business. With a belief to never stop learning, she has spent considerable time developing vital forms, best practices and documents in relation to the new Act. Whilst the timing of the introduction of the Act is during COVID-19, the team at Empire have worked through the very significant legislative change and are ready to support your Strata Company effectively through the changes.
Considering handing the management of your strata scheme to the experts? Talk to our team of professional strata managers at Empire Estate Agents today! We manage strata complexes across the Perth metro region, and as our clients will tell you…we create better communities. Call Jamie and team at Empire Estate Agents on (08) 9262 0400 or email jhorner@empireestateagents.com.
“Everyday heroes…going beyond”
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