1.      Introduction

  • On 30 November 2016 a suite of new laws relating to strata schemes will come into force including the Strata Schemes Management Act 2015 (“SSMA 2015”), the Strata Schemes Development Act 2015 (“SSDA 2015”) and the Strata Schemes Management Regulation 2016 (“SSMR 2016”).
  • This paper is a summary of the new legislation in relation to works and works by-laws. The paper deals with the key changes that have been made relating to those matters.

2.      Analysis of key provisions of the old Act and new Act

  • The most effective way to highlight the changes made by the new provisions is to identify those in a table that compares the provisions of the Strata Schemes Management Act 1996 (“SSMA 1996”) and the provisions of the SSMA 2015.
New section (SSMA 2015 and
SSMR 2016)
Old section (SSMA 1996) Description Comment
106(1) 62(1) Duty to maintain CP and keep it in a state of good and serviceable repair. No change, same wording used.
106(3) 62(3) Can decide by special resolution not to maintain certain CP (if it will not affect safety or detract from appearance) No change, same wording used.
106(4) New If OC takes action against an owner for damage to the CP, it may defer compliance with the obligation to maintain and repair until that action is determined provided no safety issues. This is a new provision and previously there was no exception to the obligation to maintain and repair.
106(5), (6) New Owner can sue for damages for breach of statutory duty to recovery any foreseeable loss within 2 years after the owner first become aware of the loss. Clarifies uncertainty arising from the previous case law by which there were inconsistent findings.
106(7), New and s54(3) in part Obligation to maintain and repair CP is subject to any CP Memorandum adopted by the by-laws, any s108 by-law (see below) and a CP rights by-law (exclusive use and special privileges under s142). This is similar if not the same as the current position however the Act specifies it more clearly.
107 New The by-laws may adopt a CP Memorandum prescribed by the regulations which may specify whether an owner of a lot or the OC is responsible for the maintenance, repair or replacement of any part of the CP. The regulations (cl 27) provide that the CP Memorandum is as published in the Gazette and on the Director General’s website on 30 November 2016.
108(1)(2) 65A(1) Special resolution required to authorise OC or owner to add to, alter or erect a new structure on the CP for the purpose of improving or enhancing the CP. No change although this work could be deemed a minor renovation (and approved by the strata committee) under s110(6) unless excluded under s110(7)
108(5) 65A(4) If owner is to be responsible for maintenance and repair, need a by-law and owner’s written consent from the owner of the lot on whom the benefit is conferred. No change.
109(1) New Cosmetic Work can be done by owners to the CP without OC consent subject to the owner rectifying any damage to the CP and carrying out the work properly.

Cosmetic work includes:

·         installing or replacing hooks, nails or screws for hanging paintings and other things on walls;

·         installing or replacing handrails;

·         painting;

·         filling minor holes and cracks in internal walls;

·         laying carpet;

·         installing and replacing built?in wardrobes;

·         installing or replacing internal blinds and curtains;

·         any other work prescribed by the regulations for the purposes of this subsection.

 

A by-law can be made to specify additional work that is cosmetic work but can’t be work that is excluded under s109(5).

Some of these items involve alterations to the CP and would have required approval under by-law 5, or a special resolution and by-law under the old Act, but are now specified as cosmetic works not requiring approval.
109(5) New Exclusions – the following work cannot be cosmetic work:

·         minor renovations (s110);

·         structural work

·         work changing the external appearance of a lot;

·         work that detrimentally affects the safety of a lot or CP including fire safety systems;

·         work involving waterproofing or the plumbing or exhaust system of a building;

·         reconfiguring walls;

·         work for which consent or approval is required under any other Act (for example requiring a development application);

·         any other work prescribed by the regulations (the SSMR 2016 does not prescribe any other work as cosmetic work).

A blanket by-law can be prepared to specify that other work is to be included as cosmetic work so that no approval is required provided that work does not fall within the exclusions for the excluded work (e.g. structural work or bathroom renovations (waterproofing)), a by?law is still required authorising such work.
110(1) and Cl. 28 regs New Minor renovations may be carried out by the owner of a lot with approval of the OC by ordinary resolution (a special resolution is not required).

Minor renovations include:

·         renovating a kitchen;

·         changing recessed light fittings;

·         installing or replacing wood or other hard floors;

·         installing or replacing wiring or cabling or power or access points;

·         reconfiguring walls;

·         removing carpet or other soft floor coverings to expose underlying wood and/or other hard floors;

·         installing a rain water tank;

·         installing a clothes line;

·         installing a reverse cycle split-system air conditioner;

·         installing double or triple glazed windows;

·         installing a heat pump;

·         installing ceiling insulation.

There are many items of work that previously required a special resolution and by-law but now only require a resolution (ordinary) and perhaps only need strata committee approval (see below).
110(4) New Before obtaining approval for minor renovations, an owner must give written notice to the OC including:

·         details of the work, including copies of any plans;

·         duration and times of the work;

·         details of the persons carrying our the work including qualifications to carry out the work;

·         arrangements to manage any resulting rubbish or debris.

110(5) New An owner must ensure that any damage caused to any part of the CP by carrying out minor renovations is repaired and the minor renovations and any repairs are carried out in a competent and proper manner.
110(6) New By-laws may provide that additional work is to be a minor renovation for the purposes of the section and permitting the OC to delegate its functions under this section to the strata committee. The OC can pass a by?law providing that all work that is not excluded work (see below) can be classified as a minor renovation and can be approved by the strata committee.  This will ensure greater flexibility without the need for a general meeting each time an owner wants to do minor renovations.
110(7) New Exclusions:  The following works are not minor renovations:

·         cosmetic work (s109);

·         structural changes;

·         changes to the external appearance of a lot;

·         waterproofing;

·         work for which consent or another approval is required under any other Act (work for which a development application is required);

·         work that is authorised by a by?law made under this part or a CP rights by-law;

·         any other work prescribe by the regulations (there is presently no regulation prescribing any other work as being excluded).

Works such as things affecting safety like fire systems and work affecting plumbing or exhaust systems can be made minor works as they are not excluded under s110(7) like they were for cosmetic works under s109(5).
111 New Owner must not carry out work on CP unless authorised under this part or a by-law or a CP rights by-law or a special resolution. This is a specific provision providing that unless approval is obtained under one of the relevant provisions work must not be done which is a new provision that is consistent with the old Act although the old Act only contained the requirement impliedly rather than expressly.
143(1) 52(1) CP rights by-laws (exclusive use or special privilege by-laws) can be made by a special resolution (s141(1)) and with the written consent of each owner on whom the by-law confers rights or special privileges. Clarifies the uncertainty created by the case law and the inconsistent decisions by specifying that written consent is only required from the owner who is conferred rights or privileges under the by-law (and not the owner or owners of lots concerned).

3.      Summary of changes to how works are dealt with.

  • The following table summarises the position in respect of various types of work:
Type of Work Old Act (SSMA 1996) New Act (SSMA 2015)
Installing hooks, nails and screws By-law 5 – written approval required, maintenance and repair obligations not clear. Work can be done without approval.
Installation of built-in wardrobes Special resolution and by-law required if being affixed to a CP wall. No approval required unless work involves structural changes (which is unlikely).
Installing blinds or curtains Special resolution and by-law required if work involves an alteration to the CP (which is likely). No approval required (unless there is a change to external appearance of a lot although such requirements may be interpreted differently moving forward).
Kitchen renovation with appliances staying in same position Special resolution and by-law required if any alterations to the CP. Ordinary resolution required and no by-law (and can be decided by strata committee if power delegated (s110(6)(b)) under a by-law).
Kitchen renovation with exhaust or plumbing changing Special resolution and by-law required if plumbing or exhaust penetrates CP (which is likely). Ordinary resolution only.
Bathroom renovation with no change to waterproofing e.g. changing vanity and shower screen Special resolution and by-law required if the works involve alterations to CP. Ordinary resolution only.  Special resolution and by-law required if change to waterproofing.
Installing or changing recessed light fittings i.e. within ceilings Special resolution and by-law required as the ceiling is most likely CP. Ordinary resolution only (and can be decided by strata committee if power delegated under by-laws (s110(6)).
Installation or replacing wood or other hard floors Special resolution and by-law required if there are alterations to the CP. Ordinary resolution only (and can be decided by strata committee if power delegated under by-laws (s110(6)).
Installing or replacing wiring or cabling or power or access points Special resolution and by-law required if alteration to CP (which is likely). Ordinary resolution only (and can be decided by strata committee if power delegated under by-laws (s110(6)).
Work involving reconfiguring of walls Special resolution and by-law required if alteration to the CP (likely if walls are affixed to the floor or ceiling). Ordinary resolution only (and can be decided by strata committee if power delegated under by-laws (s110(6)) (except if structural walls).
Installation of bathroom exhaust fan Special resolution and by-law required as alteration of the CP. Ordinary resolution only (and can be decided by strata committee if power delegated under by-laws (s110(6)) (except if structural walls).
Installation of reverse cycle split?system air conditioners Special resolution and by-law required for alteration to CP. Ordinary resolution only (and can be decided by strata committee if power delegated under by-laws (s110(6)) (except if structural walls).
Double or triple glazing windows Previously special resolution and by-law required (as windows are usually CP) Ordinary resolution only (and can be decided by strata committee if power delegated under by-laws (s110(6)) (except if structural walls).
Ceiling insulation Special resolution and by-law required if alteration of the CP (above ceiling so usually that would be the case). Ordinary resolution only (and can be decided by strata committee if power delegated under by-laws (s110(6)) (except if structural walls).
Pergolas / Vergolas Special resolution and by-law required if altering the CP (which is most likely). Can delegate to strata committee unless affects external appearance of the lot in which case special resolution and by-law is required (s141 and s142).

 

4.     New by-laws to deal with new provisions

It is anticipated that, upon the new provisions coming into force, a number of by-laws will be particularly useful for owners corporations including the following:

  • Firstly, the types of Works by-laws used under the old Act will still be required for certain types of works that cannot be classified as minor renovations including:
    • structural work (internal walls);
    • work changing the external appearance (pergolas, awnings and possibly solar panels and skylights);
    • work involving waterproofing (most likely in waterproofing of bathrooms).

Section 108(2) of the SSMA 2015 requires that such work be specifically authorised by a special resolution (the same as the requirements under s65A of the SSMA 1996).

  • Secondly, a by-law that provides that all work not excluded under s110(7) is deemed to be minor renovations for the purposes of s110(6)(a) despite ss108(1) and (2) this work can include changing or adding to the common property as long as it is not excluded under s110(7) (i.e. structural, changing external appearance and waterproofing); such by-law would provide that the owners corporation delegate its functions under s110 to the strata committee which will enable the strata committee to approve all work not excluded under s110(7). The by-law would include the usual provisions such as those that apply before work commences, during work and post-work conditions.

5.     Summary

  • There are some quite significant changes to Works and Works by-laws that owners corporations will need to carefully consider moving forward as part of the required by?law review within 12 months of commencement of the new provisions.
  • This is a summary paper only and is not necessarily a detailed analysis of all of the implications of the new legislation. If you require legal advice about these matters, please contact David Edwards.

 

  • Please note that the information contained in this article is not legal advice and should not be relied upon. You should obtain legal advice before you take any action or otherwise rely upon the contents of this article.