Strata laws change – Garth Brown

Strata laws are changing and they will have an impact on the millions of people living in strata properties in NSW. The new strata laws take effect from the end of this month – November 2016 so if you own a Strata property in New South Wales you will need to understand the changes and we give you an overview today. Also these laws are likely to spill over into other Aussie states.


Kevin:  The next interview is a New South Wales-only story, but it’s a major story because as we’ve seen sometimes, what happens in one state is going to then maybe run around to all the other states, as well.
Just by way of introduction, I’m going to talk to Garth Brown from Brown & Brown Conveyancers about the major strata law changes that are taking effect in New South Wales from the end of November.
Garth, thank you very much for your time.
Garth:  Thanks, Kevin.
Kevin:  These changes, as I said, take effect on the 30th of November. Just give us a bit of an overview about what some of the key changes are in this legislation.
Garth:  Probably eight of the most significant ones are to do with overcrowding, parking, pets, smoking, renovations, proxy harvesting, and collective sales. There’s one on defects bonds, which is really interesting and this is coming into effect on the 1st of July, 2017.
Kevin:  What is the defects bond? Tell us about that? How is that going to impact landlords?
Garth:  With a lot of apartment buildings going up in Sydney over the last 20 years, there are a lot of people moving into apartments. What they’ve found, and what I’ve found with my conveyancing work, is that these buildings are quickly whacked up, put together haphazardly – not all of the, but some of them – developers get out of there and after settlement, say, within the first three years after settlement, all of these defects start to appear in buildings.
Lo and behold, all of these developers have either left or they just push it back and make it so hard to try and rectify.
Kevin:  I’ve heard a lot of those stories, particularly out of New South Wales, for some reason. What’s going to happen? How does the defects bond work?
Garth:  It’s interesting for everyone to know about this. Actually, the developer will have to place a bond of 2% of the value of the building to cover any potential defects after completion.
Kevin:  It’s likely that 2% is probably going to be tacked onto the purchase price, I would have thought. Developers will add that to the figure?
Garth:  Probably will spread it out across the apartment building, yes.
Kevin:  It’s logical that that would happen, but I guess the upside, therefore, is for owners. If they know that 2% bond is there, that’s going to help them with any defects, as you said, that may emerge.
What are some of the major defects? Is it to do with water getting in and leaking?
Garth:  Water penetration is a big one. You have cracks in walls. You have a settlement: as the building starts to settle, you get cracks in walls, pipes start to break. Or maybe the floor or the ceiling just haven’t been done, haven’t been constructed property. Tiling hasn’t been tiled property, or the glue hasn’t been in the right consistency.
Kevin:  This is coming in on the 1st of July next year, which means that any new buildings after that period, once they’ve been registered, this bond will have to be in place?
Garth:  Definitely. Yes.
Kevin:  There’s no retrospectivity on this, at all?
Garth:  No, not according to legislation here.
Kevin:  Earlier in our chat, you said that the changes that are coming into effect, there are eight major ones: overcrowding, parking, the defects bond – which you just told us about – pets, smoking, collective sales, renovations, and proxy harvesting.
One that interests me that I think will also interest a lot of people too is about pets. What’s happening in that area, Garth?
Garth:  Just at the moment, you have to write for body corporate approval to have a pet in the apartment and it’s not to be unnecessarily withheld – the consent. With this new regime, they’re trying to make it easier for pet approval.
A lot of people have pets and a lot of people are moving into apartments, but what you find is that there are some really restrictive owners who don’t want pets and will make it very hard to get pet approval.
Kevin:  I’ve actually seen some sales fall over on the fact that they can’t have a pet, so it does mean a lot to a lot of people.
Smoking: does that mean that restrictions on smoking will be tightened a bit?
Garth:  Yes, there will be restrictions that smoking is to really take place outside of the apartment building.
Kevin:  All right. They’re the laws that are going to come in place at the end of November, and the one about the defects bond clicks in from the 1st of July, 2017, and you’re going to see a lot more about that.
Just before I let you go, Garth, I notice on your website, too, that you have a number of e-books that are available. Once again, New South Wales, if you’re looking at any sort of conveyancing, these e-books are absolutely free on your website?
Garth:  Yes. We have an e-book on buying a property, what to expect, and also on selling a property, what to expect and what documents are required, all designed to try to give you a heads up, relieve stress and the fear of the unknown.
Kevin:  Mate, it’s a very stressful time, whether you’re buying for investment or you’re buying for a home. The website to go to is and you’ll find the e-books there, written on the homepage. Garth Brown has been my guest.
Garth, thank you for your time.
Garth:  Thanks, Kevin. I appreciate it.

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