New strata laws which come into effect in NSW on 30 November
introduce changes to the collective sale and renewal process,
remove some obstacles to owner renovations and embrace modern
technology in the administration of strata schemes.
New rules for collective sale and redevelopment of
As cities become more densely populated, strata arrangements are
becoming ever more prevalent. In NSW more than a quarter of the
population lives in, owns or manages strata. It is estimated that
by 2040 half of all people in NSW will be living in strata
Of all the changes to laws governing strata schemes introduced
by the Strata Schemes Management Act 2015 (NSW), the most
significant – and controversial – concerns the
collective sale and redevelopment process. At present a strata
scheme can be terminated when there is unanimous support from all
Under the new law, a strata scheme will be able to be terminated
with the approval of 75% of owners. However, owners corporations of
existing strata schemes will need to agree to opt in for the new
arrangements to apply. If 50% or more of the owners do not agree to
opt in, this change will not be made to the existing strata
If 50% or more of owners agree to opt in, there are specific
steps to be taken in considering a proposal to sell or redevelop a
strata scheme. These include the formation of a strata renewal
committee with the ability to appoint professionals like lawyers,
tax experts and valuers and the development of a collective sale /
Owners must be given a minimum of 60 days to consider the plan,
which will lapse if it has not been approved by 75% of owners
within 12 months. Once 75% of owners have approved the plan, it
will be referred to the Land and Environment Court for
The Department of Fair Trading will establish a Strata Renewal
Advice and Advocacy Program, which will include a dedicated hotline
for strata owners and additional protections for elderly and
The new process for selling and redeveloping ageing strata
buildings is intended to promote urban renewal and increase housing
supply in desirable suburbs where people want to live, while at the
same time protecting the rights of vulnerable and dissenting strata
Easing restrictions on owner renovations
One eminently sensible change is the removal of restrictions on
minor and cosmetic renovations, such as the installation of picture
A general resolution requiring 50% of the vote of strata owners
will be required for renovations which have a more significant
impact, such as the installation of floorboards. A special
resolution requiring 75% of the vote will need to be passed for
renovations which will have an impact on the external appearance or
the structure of the building.
Use of social media and other modern communication tools
Another practical and welcome change introduced by the reforms
is allowing strata schemes to make use of modern technology for
administrative purposes. This includes circulating information by
email, allowing electronic voting and making use of social media
and teleconferencing for holding meetings.
Reform of model by-laws regarding pets and smoking
The legislation introduces new model by-laws concerning keeping
pets and smoking. Model by-laws are suggested by-laws that owners
corporations can choose to adopt if they wish to do so.
All strata schemes will need to review their by-laws within a
year of the introduction of the new laws on 30 November 2016.
Owners corporations will be encouraged to consider lifting their
ban on the keeping of pets during this review process.
Strata schemes will still be able to determine their own rules
concerning pets. However, schemes will not be able to act
unreasonably in their assessment of written requests to keep a
small pet such as a cat, especially if it is kept inside.
Assistance animals such as guide dogs and other animals which
assist people with psychiatric disabilities cannot be banned by
strata scheme by-laws.
Another model by-law which strata schemes can choose to adopt
covers banning residents from allowing smoke to drift into another
resident's lot or into common property. The new laws define
smoking as a "nuisance or hazard".
As with the model by-law concerning keeping pets, formal
adoption of the smoke drift by-law by the owners corporation is
required for the by-law to take effect.
Owners corporations will also be able to set occupancy limits on
apartments and will be able to call council parking inspectors onto
the property to issue fines when cars are parked without
A lessee will need to demonstrate that the genuine interests of the lessor will be protected if relief is granted.
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