Australia: Residential Focus - 1 June 2016

Last Updated: 9 June 2016
Article by Christine Jones

Strata reform

In our last edition we commented on the aspects of the public consultation draft of the Strata Schemes Management Regulation 2016 (Management Regulation) in so far as they touched on the building inspection and building bond regime introduced in the Strata Schemes Management Act 2015.

In this edition we look at other aspects of the public consultation drafts of the Management Regulation and the Strata Schemes Development Regulation 2016 (Development Regulation).

In the Management Regulation we note that:

  • Clause 4 (Delegating functions) – this provides that an owners corporation can only delegate the following functions to a member of the strata committee or a managing agent:
    • arranging for inspections for the purposes of fire safety;
    • ensuring the owners corporation complies with any relevant requirements under the Work Health and Safety Act 2011.

    As these tasks are often undertaken by a building manager, rather than the strata committee or the managing agent, it is an oversight not to allow for the ability to delegate these functions to a building manager.

  • Clause 22 (Calculation of annual budget) – this clause could be read so that it means the budget must be identical to the amount intended to be levied. A more flexible approach would be to allow the budget to equal the amount expected to be spent in that financial year. This would allow the owners corporation to utilise funds carried forward, or income received during that budget year, and would avoid levies being set too high where there is other income.
  • Clause 29 (Initial maintenance schedule) – this clause lists the items that a developer must include in the initial maintenance schedule that it hands over to an owners corporation. It does not appear to cover all items of property and plant and could be improved by the addition of a catch all provision to ensure that, for example, solar and/or recycled water systems are captured.

In the Development Regulation we note the following in relation to the collective sale / strata renewal process:

  • Landowner's consent - from a practical perspective, once a strata renewal plan is approved by the Land and Environment Court, a developer will need to obtain development consent to the proposed development before being able to obtain finance (this is usually the process) for the development. That finance may include the funding to buy out dissenting owners within the scheme. To obtain development approval, a developer may need to obtain landowner's consent from all apartment owners. It may not be able to obtain this from the dissenting owners. The Development Regulation and Planning Legislation could talk to each other better on this point to facilitate (rather than stymie) this development approval process.
  • Lack of development approval - following approval of a strata renewal plan by the Land and Environment Court, it is unclear what would happen if the developer is not able to obtain the necessary development approval, or the desired development approval, that reflects the strata renewal plan. A clearer process should be adopted to amend the strata renewal plan or for flexibility so that the developer could implement the plan "substantially" in the form approved.

The public consultation period has now closed and we wait with interest to see the nest iteration of this landmark reform of strata laws in NSW.

Liability of PCAs - Chan v Acres

The liability of principal certifying authorities, builders and engineers towards purchasers is back under the microscope following the recent supreme court decision of Chan v Acres [2015] NSWSC 1885, handed down in December last year. The decision in Chan v Acres demonstrates that determining the vulnerability of a person, and subsequently whether a duty of care exists, will depend on the precise nature of the relationship between the parties. In Chan v Acres, significant structural defects were discovered by the new purchasers in a home that they had purchased from an owner-builder. It was found that the owner-builder was liable for structural defects due to a breach of statutory obligations under the Home Building Act 1989 (NSW). In addition, it was found that the council, in its role as a principal certifying authority, was held to have breached its duty of care towards the new purchasers of the home, whilst the engineers did not have such a duty. The primary difference between the positions of the council and the engineers was that the new purchasers relied on the occupation certificate issued by the council when deciding to purchase the home, whereas they had not relied on the design drawings of the engineers. The casedemonstrates that finding a duty of care towards new purchasers of a home will depend on the individual circumstances of a case and whether the new purchasers are relevantly vulnerable to the other party's conduct. The case serves as a warning for principal certifying authorities that a failure to carry out their duties professionally and appropriately may result in liability to subsequent owners. Read more in our Case Note.

In the media

NatHERS or NABERS? Which will be first for a new resi rating tool?

According to industry insiders development of a NABERS tool that can be applied to existing multi-residential buildings is in the works. Under an agreement between Energy Inspection (owners of the AccuRate and the BERS software platforms) and CSIRO, a new version of NatHERS for existing dwellings is also in development (19 May 2016). More...

Australian housing more expensive than it should be: PCA

Housing affordability is very real problem according to the Property Council of Australia, but potential solutions being put forward by policy makers will do little to address the issue (19 May 2016). More...

NSW

Quicker, Safer Pool Certification

Repairs of a minor nature that would make a pool compliant can now be carried out by swimming pool certifiers, thanks to changes in laws (Home Building Act) designed to improve child safety and avoid delays in rectifying defects (13 May 2016). More...

Unlicensed Illawarra Tradie Prosecuted

Craig Geoffrey Nolan of Albion Park was ordered to pay $13,145 fines and costs after pleading guilty to 17 offences under the Home Building Act. The offences included the unlicensed construction of driveways, retaining walls and major landscaping jobs at four properties in the Illawarra region collectively valued at almost $100,000 (13 May 2016). More...

NSW Council Mergers

The NSW Government's plan to reshape local councils will unlock better planning, better infrastructure and better services for the community – said Infrastructure Partnerships Australia (12 May 2016). More...

Published

Australian Bureau of Statistics

Housing Finance, Australia, Mar 2016 (cat no. 5609.0) – 11 May 2016

Practice and courts

NSW BPB: Swimming pool certifiers can help make pools safer, more quickly

The Building Professionals Regulation 2007 has been amended to allow E1, A1, A2 and A3 pool certifiers to carry out minor repairs to make a swimming pool comply with the Swimming Pools Act 1992 (10 May 2016). More...

NSW BPB: Council accreditation not affected by local government mergers

certifiers: accreditation as a council certifier allows you to work as a certifier at any council in NSW (13 May 2016). More...

NSW: Register loose fill asbestos properties

Property owners whose homes have been affected by loose-fill asbestos insulation have until August to register with the Fair Trading Loose-Fill Asbestos Insulation (LFAI) taskforce. More...

Cases

Chahine v Commissioner for Fair Trading [2016] NSWCATOD 63

The decision of the respondent dated 16 April 2015 and 30 July 2015 is set aside

HOME BUILDING – Wide Range of Relevant Industry Experience – Residential Building - Residential building work - Two years' relevant industry experience

Administrative Decisions Review Act 1997; Home Building Act 1989; Home Building Regulation 2004; Licensing and Registration (Uniform Procedures) Act 2002. More...

Oppidan Homes Pty Ltd v Baldwin and Granofsky [2016] NSWCATAP 109

Home Building – Error of law - determination that claims not supported by evidence – Tribunal Member failing to take evidence into account Issue not raised or argued below – whether issue can be raised on appeal Respondent's challenge to factual findings – whether permissible in absence of error of law. More...

Younan v Commissioner for Fair Trading (No 2) [2016] NSWCATOD 60

COSTS – Whether special circumstances warrant an award of costs – Whether respondent's claims had any tenable basis in fact or law – Whether respondent repeatedly failed to comply with the duty imposed upon him under s 36(3) of the Civil and Administrative Tribunal Act 2013 (NSW) – Whether respondent conducted the proceedings in a way that unnecessarily disadvantaged the applicant – Satisfaction that special circumstances warrant an award of costs. Home Building Act 1989 (NSW). More...

CPD Holdings Pty Limited v Baguley [2016] NSWCATAP 103

APPEAL – costs decision in home building case – claims by both builder and homeowners – builder's claim settled – homeowners' claim determined – costs principles when proceedings settle – costs principles when proceedings determined. More...

Li v Ward Building Construction Pty Ltd [2016] NSWCATAP 104

STATUTORY INTERPRETATION – meaning of "decision ... made in the absence of a party" in clause 9(1)(b) of the Civil and Administrative Tribunal Regulation 2013 - application to vary or set aside a decision – whether a reserved decision can be said to be made in the absence of a party. More...

Chandershekar v Hakim [2016] NSWCATAP 100

Home building – consent orders – extension of time for commencement of appeal – no reasonable prospects of success. More...

Pedonese v McRae [2016] NSWCATAP 101

Administrative law, Civil and Administrative Tribunal (NSW), Flooring, defective workmanship, decision not just and equitable, against the weight of the evidence and new evidence which was not reasonably available at the time of the hearing. More...

Legislation

NSW

Non-Government – 13 May 2016

Home Building Amendment (Fees) Regulation 2016 (2016-235) — published LW 11 May 2016.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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Authors
Christine Jones
 
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