NSW Needs Strata Reform

Strata Legislation Amendment Bill 2011 - Debate, click HERE to read in full.

Clover's contrinubtion to the debate

(11.12am 14 June 2012, Parliament House Sydney)

I acknowledge the contributions of the member for Wagga Wagga; the Opposition Spokeswoman, the member for Bankstown; and the members for Davidson, Port Stephens, Balmain and Penrith. The Strata Legislation Amendment Bill 2011 was developed following extensive consultation and expert input over a period of three years. In 2009, my office worked with Makinson and d'Apice Lawyers to develop a discussion paper based on many strata cases that the firm had knowledge of or was involved in. The discussion paper was presented at a community forum attended by 200 people in the New South Wales Parliament Theatrette. The more than 40 submissions that were received were assessed by a think tank made up of the Owners Corporation Network; the Institute of Strata Title Management; academics; the strata columnist, Jimmy Thomson; managers; residents; independent councillor Di Tornai; my research assistant; and Makinson and d'Apice Lawyers.

A large number of issues were raised, many outside the span of the original discussion paper. It became very clear that extensive legislation could not cope with the needs and conflicts of the growing number of people who are occupying apartments. I concluded that one bill could not cover all the concerns raised, but that a number of smaller bills would make it easier for the community and stakeholders to understand the implications. We are dealing with people's homes, and I believe that understanding is important. This first bill reflects the simple, practical changes that can be made quickly and easily and would make a real difference to people living in apartments and to owners and occupiers of apartments. Other issues that I was working through included proxies, delivery of documents by the original owner, short-term rentals and tribunal expertise.

While I welcome the commitment of the Minister for Fair Trading to reform, and the Government review of the legislation that has commenced in response to my bill, I am concerned about the complete rewriting of the Act. Presenting all the changes needed in an omnibus bill will reduce the scrutiny of the proposals, because they will be too large for anyone to assess and understand. It will be hard enough for people working in the industry to understand, but very difficult for the lay person. If there is a wholesale rewrite of the legislation, the meaning of the present legislation—determined after much extensive litigation—will need to be relitigated. This raises a serious risk of unintended consequences in a field of law that is complex. It should be remembered that it is an area that has a day-to-day impact on the lives of people in their homes.

Richard d'Apice and Beverley Hoskin-Green, who are experts in this field, have stressed to me that even experts could not identify all the impacts of a rewritten Act. They cite the 1993 rewrite of the Local Government Act, where exemptions that were retained but rewritten into plain English clearly gave rise to the possibility of relitigating issues that had been litigated over a period of 85 years. The Government saw the sense of retaining the existing wording and avoided that expensive pitfall. There is no problem with the structure of the Strata Schemes Management Act 1996; it does not require a complete rewrite. Reforms are needed in a number of key areas, many of which have a wide consensus and can be addressed immediately. The Government should focus on key areas through an on-going process. After undertaking the consultation process I can say that that is the best approach for the Government to take.

I believe that the Strata Legislation Amendment Bill 2011 would complement that Government process. Richard d'Apice and his team would be willing to assist the Government and build on work that they have done already. It is disappointing that the Government refuses to engage with my bill, despite it stemming from a process that commenced more than three years ago. With all the work done, passing this bill would enable some reform now that could make a difference and still allow a review of these and many other desirable changes. We could have a code of conduct for executive committee members. We could stop developers controlling building management to avoid pursuing defects liability. We could strengthen disclosure requirements for manager positions. We could improve access to information by owners.

We could ensure all emergency works can be funded through a special levy. We could ensure levies could be raised at the consumer price index if an annual general meeting quorum is not achieved. We could increase the minimum public liability insurance to a level that would cover serious incidents like balcony collapse. We could empower owners corporations to act against over-crowding. We could ensure important notices for owners corporations actually get served, and we could provide for electronic means of communication. I think it is a pity that the Government has not assessed this bill on its merits. The Government should be looking at what could be done to help people now, while it proceeds with its strata process. To say, "We are taking care of it" is not good enough. An omnibus bill will take a long time to get right and there are many risks that could cost unit dwellers dearly.

I was disappointed to hear the comments of the members for Wagga Wagga and Port Stephens. Their comments reflect the fact that the Minister for Fair Trading has refused to engage with this bill, which will result in strata owners and occupiers being denied immediate relief in key areas. I respond to their comments about concerns raised by the Australian College of Community Association Lawyers and concerns of the New South Wales Law Society. The Minister referred to these concerns but he did not seek a response to their comments from me. For example, both organisations say proposals to prevent over-crowding should be dealt with through planning legislation. This is exactly what the City of Sydney has done through its 2006 standard consent condition for multi-dwelling units. However, planning legislation cannot be used for apartments built before the consent conditions were introduced, nor has the Minister considered provisions in my bill that both organisations support.

As a number of members have acknowledged, apartments make up a growing share of our housing mix. Most building approvals now relate to multi-unit dwellings. Apartments make sense: they use land more efficiently, and enable more people to live within existing urban infrastructure, while avoiding the need to clear native bush and arable land. Apartments are an essential housing option in the face of a growing population. Many people are choosing to live in apartments because of the sense of community they create. However, the potential for problems to arise is real and I do not believe the law is strong enough to protect people. After hearing the stories of many people from the public forum, I was appalled at the distressing situations that so many people were facing on a regular and daily basis. I went home and said to my husband, in a throw-away line that, until we got that reform, we had better stay in our Redfern terrace because of my concern about the very distressing experiences that people are having. That highlights how difficult it is for people right now.

High-density living creates challenges that do not exist in detached dwellings. Residents live in close proximity to each other, share common property and have to manage expenses collectively. Legislative reform is needed to protect owners' assets and occupiers' enjoyment of their homes to ensure that apartment living is attractive, equitably managed and sustainable. In such a complex field, ongoing reform is needed and a myriad of concerns emerge constantly. My electorate has the highest proportion of multi-unit dwellings and apartment living. People who live in apartments should not be made to feel that apartment living is the second-best option. Strata reform is a massive task. To date the Government has done nothing but reduce insurance claims for structural defects, which is a major concern for owners of new apartment buildings. This first move made by the Government clearly favours developers rather than those in apartment buildings. It would be a pity if the Government, in its desperation to get an independent voice out of this place, were to reject not only my proposals but also the work of many experts, as well as the input of many strata dwellers, and delay the reforms.

I find it extraordinary that after being in opposition for 16 years the O'Farrell Government does not even have a plan, a reform or a bill. Whereas I, as an Independent member with very limited resources compared with members of major parties, have engaged in consultation and worked with experts over a three-year period. At the commencement of this new term of Parliament I had prepared a bill for the reform of something that is needed urgently and that is very long overdue. It is incredibly disappointing that the Government, having been in office for 16 months, is only now carrying out a review. In conclusion, I thank all those who have worked with me on this bill, particularly Richard d'Apice, Beverley Hoskin-Green, Suzie Broom and their staff—all of whom are busy lawyers who gave up their time without pay to draft this important legislation. I recommend that the Government work with them. I also thank Tammie Nardone, my parliamentary research officer. I commend the bill to the House.