6 strata trends to watch out for after NSW elections
The results from the New South Wales elections will determine how the various impending legislative changes stand to affect the strata industry.
According to the National Strata Data Report 2018, apartment living is on the rise and in NSW alone, the number of apartment residents are as high as 15%. There is also an increased preference for community living and strata property ownership. This means strata-managed apartments will require more focus around their governance and management.
In the upcoming government elections NSW stands to play a key role in defining new policies and regulations around strata apartment living:
- Legislative reforms in the pipeline
The present Liberal government had previously sought feedback from the strata community and proposed certain key reforms to bring into effect a new strata legislation and a long-pending community legislation.
However, these reforms are currently parked in light of the upcoming elections. Various strata matters such as licensing of strata professionals, building compliance, cladding, Airbnb-type short-term letting, etc. have been under scrutiny for a while now and will most likely be covered in depth after the elections.
- Appointment of a Strata Commissioner
The recommendation for this role comes in the wake of the building defects highlighted in the Opal Tower case. The Strata Commissioner will play a key role in overseeing strata matters in the state such as compliance and dispute resolution.
Owner disagreements are a part of strata living and they could range from neighbour conflicts around sharing boundaries, managing common areas between private properties, to by-law breaches or grouses over general strata mismanagement.
Typically, the onus of resolving disputes either falls on Fair Trading or the Tribunal (NCAT).
However, having a dedicated strata commissioner’s office to manage such issues may be a big help to the strata community and ease the burden on government bodies.
- Building regulations and compliance
With building defects raising public concern, property developers, builders, inspectors and certifiers are under the scanner for non-compliance.
The present laws require developers to set aside 2% of the building cost as a bond for any defects that may be found upon inspection. Since this provision doesn’t cover all kinds of strata properties and the bond amount may not be enough to cover the cost of defects, there may be more significant changes to the bond amount and scrutiny on the developers and inspectors.
The government assures that all existing buildings and new builds will be monitored for safety and compliance. There will be more frequent audits and checks, and non-compliant inspectors and certifiers will be taken to task.
PICA Group note: If your building has unsafe building material such as combustible cladding or asbestos loose-fill insulation, you should get them replaced with safer alternatives to remain compliant with government regulations.
- Taxes and levy fee changes
A recent article in the Financial Review points to a few writings on the wall regarding renters taxes and strata levy fees if the Labour party gets elected.
Home ownership and investment in strata properties is expected to see an upward growth. So, there may be less subsidised taxes for rented properties.
There may be more stringent rules around strata property management in term of budgets and levy fees. The cost of maintaining existing buildings to ensure new laws around compliance may mean that your levy fees may go up.
- Short-term letting trends
Another key reform that may happen is around the Airbnb-type short-term letting practices.
Presently, the laws are fairly relaxed and in favour of tourism. The liberal government had previously planned to enforce a ‘Code of Conduct’ to regulate short term letting in strata. However, this proposal hasn’t taken off as intended since the strata community and political parties haven’t seen eye to eye on the matter so far.
While some strata property owners are happy with the extra cash they’re able to pocket from short-term guests, other owners are against the trend. Owners corporations believe that transient guests increase security risks, damage common property and disturb the peace.
The labour government may tighten regulations and mandate owners to register their holiday lets, which may pacify irate owners corporations and committees.
- Sustainability and energy efficiency
Energy Matters claims that if the coalition government comes to power in the state, it will make new laws to promote the use and storage of solar energy in apartments.
The coalition promises to invest an extra $20 million in the state’s Emerging Energy Program and encourage the private sector to invest in utility-scale renewable energy and storage projects.
What this means for strata properties is that for this reform, the owners corporation voting threshold may be reduced. This flexibility may encourage owner corporations to opt for clean, green solar energy and install electric vehicle charging points.
These are a few interesting trends in the horizon that may impact strata apartment living in the state.