by Nick Allingame – UDIA WA President www.udiawa.com.au
Strata title reform in Western Australia has progressed in recent months, with legislation introduced to state parliament on June 28 and is currently making its way through the parliamentary process.
The reform legislation covers a broad range of strata related issues, with the primary aim to bring WA’s strata regime into the modern age. One aspect of the legislation that has attracted significant attention is in relation to changes around the processes for the termination of schemes.
Some concerns have been raised due to the fact that under the new legislation there is a move away from the requirement for a unanimous resolution of all owners to terminate a scheme.
The new legislation outlines that a scheme with five or more lots will require at least 80% of lots in favour of a termination, and schemes with less than five lots retain the need for unanimous support from lot owners for a termination proposal to proceed.
The new legislation introduces several new safeguards to protect owner’s rights and it is important to understand that the process will be extremely transparent. New safeguards include the need for a detailed proposal to be prepared that will require a full review by the State Administrative Tribunal (SAT). Vulnerable owners will also have access to funding for assistance to respond to the termination proposals including legal advice.
Overall, the SAT must be satisfied across a range of areas with the proposal, including that each owner who objects to the proposal will receive at least fair market value for their property and be no worse off financially. This includes taking into consideration any loss that may occur from removal expenses, conveyancing and legal costs, and capital gains and any other duties.
The section of the legislation that addresses termination of schemes, Part 12, was also recently referred by the Upper House to the Standing Committee on Legislation to undergo even further rigorous review before the legislation is passed.
The Committee considered Part 12 in great detail and, over several weeks, heard a range of evidence from citizens and other stakeholders.
The Committee’s final report back to Parliament notes that having considered the evidence presented, the Committee generally supports the policy behind Part 12 and the process it provides for the termination of strata titles schemes.
The Committee has provided a total of 10 recommendations that it believes will further enhance the safeguards in place for those subject to a termination process. These include a requirement that following the receipt of a full termination proposal, the strata company must refer it to an independent advocate to review the proposal, identify vulnerable owners and provide those owners with additional advice as to their entitlements under the relevant legislation.
Overall, the legislation has undergone rigorous examination to ensure that owners are protected and the reform process should bring very positive outcomes to the strata property sector.