Improving strata management
Strata schemes now benefit from better by-laws, modernised scheme management, statutory duties for strata managers and in some instances, the introduction of a 10-year maintenance plan and reserve fund.
Who needs to know?
- Strata owners and tenants
- Strata managers
- Strata companies and councils
What's changed to by-laws?
By-laws are the rules set by a strata company to regulate itself which all lot owners and tenants must follow. Changes to by-laws aim to improve scheme management, minimise disputes and make living in strata fairer.
- The strata reforms provide that by-laws must not be unfair, discriminatory, oppressive or unreasonable. These criteria will be important if a dispute arises.
- The improvements to by-laws will also deliver clearer guidance to strata companies on the nature of by-laws and the type of vote that must be achieved to change them.
- There is also a new requirement for strata title schemes to lodge a consolidated set of by-laws with Landgate - every time a by-law is added, changed or deleted. This will improve access to a complete set of scheme by-laws for existing owners and prospective strata buyers. Landgate has recently published a guide to consolidated by-laws that further outlines these changes.
Introduction of 10-year maintenance plan and reserve fund
A 10-year maintenance plan and reserve fund is required for select strata schemes to better support the long-term planning and upkeep of common property.
- This requirement applies to strata schemes with 10 lots or more and for schemes with a $5 million replacement cost for building/s or improvements on the common property.
- The regulations set out the requirements for the 10-year plan.
- The plan should include a list of common property elements that are expected to require maintenance, repair, renewal or replacement in a 10-year period. This knowledge will assist owners when they are considering how much the reserve fund should contain, and how much it should have established over time.
What’s changed within scheme management?
The running of strata schemes better reflects modern strata management needs, with strata owners and council members having access to better tools to improve scheme management.
- Electronic options have been introduced for scheme communications, voting and meeting attendance.
- It will be easier to get strata company approval for installing sustainability infrastructure on common property, such as solar panels, and improve disability access on common property.
- It will also be easier to make improvements to common property which go beyond simple repair and maintenance.
What’s changed for strata managers?
For the first time in WA strata managers have clear statutory duties which define their role and responsibilities. This will deliver industry-wide clarity on the consistent standards that should apply to this role.
Statutory duties under the Act will require strata managers to:
- act honestly, with reasonable skill and care
- have a good knowledge of the Act
- not improperly use information or their position
- inform the strata company of any conflict of interest as soon as practical
- disclose any benefit/remuneration that’s more than $100 from one source in a year.
Strata managers will also be required to:
- attain educational qualifications
- have a written contract between them and the strata company, specifying the functions they are contracted to perform
- obtain a current national criminal record check for themselves and employees who perform strata management functions
- have professional indemnity insurance
- lodge an annual return to Landgate with general information about the schemes they manage. (This annual return will enable the government to determine if the licensing of strata managers is viable or required in the future).
Grace periods will be applied for strata mangers to meet select new requirements. These are specified in the Act.
Strata companies will be able to end strata management contracts if the strata manager has breached the Act or the strata management contract. Disputes between a strata manager and the strata company can be heard by the State Administrative Tribunal.
What about volunteer managers?
Schemes can still have a volunteer strata manager. The Act ensures they are subject to the statutory duties of a strata manager, with the following conditions included:
- Volunteers must have a written agreement or contract with the strata company.
- Volunteers must own one of the lots.
- Volunteer strata managers cannot earn more than $250 for each lot in the scheme, over a full year.
Please note: Volunteer strata managers do not need to attain educational qualifications or hold professional indemnity insurance.