Author: Liam Kerr

1. Your Reasons for Painting

• Involve the Owners’ Corporation Members: Start by engaging as many members of the Owners’ Corporation as possible to determine the primary reason for painting. This collaborative approach helps in understanding their needs and expectations.
• Determine Painting Needs: Consider the specific reasons for painting, which could include refreshing the building’s appearance, changing colours, making repairs, undertaking complete renovations, protecting the building or performing annual maintenance.

2. Deciding on Who to Call for Scope of Works and Product Specifications

• Assess Project Requirements: Understand the project requirements and any risks to understand the full scope of your project. This helps in identifying the specific needs and risks associated with the painting job.

3. Considerations in Sourcing a Reputable Painting Company

• Experience and Specialisation: Look for painting companies that are established and experienced in the strata industry. Ensure that they are specialists for the specific project requirements.
• Check Reputable Sources: Utilise resources like the SCA Trades Directory website to find a list of relevant and reputable painters who meet your criteria.

4. Things to Look Out For

• Quality of Paint: Avoid using cheap brands of paint that might compromise the quality and longevity of the work.
• Project Schedule Hold Points: Confirm that there are hold points on the project schedule to ensure quality checks at various stages.
• Detailed Cost Schedule: Ensure you receive a detailed schedule of costs, including any subcontractors involved, to avoid unexpected expenses.

Important Dates for New Provisions

The provisions of the new Bill are expected to commence as follows:

Early November 2024 – This marks the start of higher penalties for existing obligations and changes to NSW Fair Trading’s enforcement powers.

Early February 2025 – The remaining provisions will come into effect, including new disclosure obligations and the prohibition on receiving commissions when the owners corporation obtains an insurance quote and arranges for its payment separately from the agent.

Understanding the Key Changes:

Property and Stock Agents Act 2002 (PSAA 2002):

1. Section 55 No Entitlement to Commission

There will no longer be any entitlement to commission or expenses without an agency agreement. The new subsections restrict the inclusion of prohibited provisions defined by Section 55(2) regulations.

2. Section 57 Rebates, Discounts and Commissions

Approval from the owners corporation is now required for any commissions or training services, which must be detailed in the motion. This includes:

• Amount and calculation of any commission.
• The monetary value of any training or an estimate if unknown.
• Nature of the relationship between the strata managing agent and the provider of the commission or training.
• Explanation of why the commission or training serves the best interests of the owners corporation.
• Confirming that accepting the gift or benefit does not breach obligations under the Property and Stock Agents Regulation 2022.

Strata Schemes Management Act 2015 (SSMA 2015)

3. Section 60 Disclosure of Commissions and Training Services

Strata managing agents must update the strata committee as soon as practicable upon becoming aware of discrepancies in commissions or training services provided versus what was disclosed at the annual general meeting. This disclosure must include detailed explanations for any variations.

Additionally, the Tribunal can order a strata managing agent to repay undisclosed commissions or training services. Significant penalties apply for non-compliance, including 500 penalty units for corporations and 100 penalty units for individuals.

4.Section 71 Strata Managing Agents and Building Managers Interests

Strata managing agents or building managers are now required to disclose interests before the appointment, with the maximum penalty for non-compliance being 50 penalty units.

5. Section 166 Insurance Quotations

Strata managing agents must provide at least three insurance quotations detailing new specific information, including base premium amount, commission, stamp duty, broker fees, levy amount, etc. SCA’s Best Practice Insurance Disclosure Guide can help you understand what you need to do in further detail.

Enhanced Penalties

Overall, the scope of NSW Fair Trading’s powers has been expanded, allowing investigations and inspections of records at your office upon receipt of most types of complaints.

What You Need to Do:

1. Develop Comprehensive Disclosures

Starting now, you should revise your Agency Agreements to include expansive disclosures of commissions, training services or other benefits. This will help avoid the need for owners corporation approval at a general meeting once the new requirements are enforced.

2.Create Template Documents

Create template documents that:

• Update motions to appoint strata managing agents to include additional disclosures under the amendments to Section 71 of the SSMA 2015.
• Update your report on commissions and training services to reflect additional disclosure requirements under Section 60 of the PSAA 2002.
• Providing notices to the strata committee regarding variations in disclosure reports to reflect these additional requirements.

3.Update Meeting Agendas

Prepare the following agendas to ensure compliance with the new requirements:

• Include additional disclosure requirements for appointments and reports on disclosures.
• Provide for additional disclosure requirements at the Annual General Meeting and approval of any additional benefits by ordinary resolution.
• Ensure Extraordinary General Meeting agendas reflect the new disclosure requirements for appointments and reports.
• Include the receipt of notices regarding new connections or contracts related to the strata managing agent for committee meetings.

4.Prepare New Disclosure Documents

Draft new disclosure documents, including:

• Notice to Committee regarding connection to supplier or original owner.
• Notice to Committee regarding contract entry

1. Who is Responsible for Common Property Defects?

In NSW, under the Strata Schemes Management Act 2015, the owners corporation (also known as the body corporate in other states) holds the primary responsibility for the maintenance and repair of common property. Specifically, Section 106 of the Act states:

(1) An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation.

This means that any defects or issues affecting common property areas—such as hallways, gardens, roofs and shared facilities—fall under the responsibility of the owners corporation.

Potential Liable Parties for Common Property Defects

While the owners corporation is responsible for managing and repairing common property, they may seek compensation or repairs from various third parties, including:

A. Builders and Developers

If defects are related to construction or design faults, builders and developers may be liable. Under the Home Building Act 1989, builders and developers must adhere to statutory warranties that cover structural defects and certain non-structural issues.

B. Subcontractors

If defects are due to the work of subcontractors (e.g., electricians, plumbers), they might also be held accountable under the statutory warranties.

Home Building Statutory Warranties provide protections and avenues for claiming repairs or compensation for certain types of defects. They generally cover a period of 6 years for major defects and 2 years for all other defects from the date of completion.

2. When Should You Engage a Building Consultant?

You should engage a building consultant as early as possible when defects are suspected. If you suspect issues with the construction or condition of the common property, a building consultant can provide a detailed inspection and report on the nature and extent of the defects.

3. When Should You Engage a Lawyer?

As a starting point, you should not engage a lawyer until you have solid evidence of building defects. Once defects have been identified, you should engage a lawyer to pursue legal action if the owners corporation has neglected their duty to repair and maintain common property.

4. What Should You Do from the Onset?

A. As soon as defects are identified, you should document them. This includes taking photos, keeping records of any correspondence and noting the nature and extent of the defects.

B. Report defects to the owners corporation. They are responsible for repairing and maintaining common property.

C. If necessary, hire a building consultant to assess the defects and provide a detailed report. This report will be important for examining the nature of the defects and deciding whether to pursue legal action.Top of Form

The guide begins by introducing the basics including the role and power of a strata committee, advancing to the statutory requirement regarding strata committee meetings, and then delving into complex issues related to liability, pecuniary interest and removal of strata committee members.

Part 1: The Basics

• What is a “strata committee”?
• What are the roles of secretary, treasurer, and chairperson?
• What is the proper way to appoint a strata committee?
• What limits are there on a strata committee?
• Can strata committee members be paid for services performed?

Part 2: Meeting Procedures and Meeting Minutes

• How do you set up a committee meeting?
• What is a recommended method of chairing committee meetings?
• What is a pecuniary interest notice book and how do you create and manage it?
• What are some things to watch out for when preparing meeting minutes?

Part 3: Common Issues, Liabilities, and Removal of Strata Committee Members

• What are the common issues that strata committees deal with?
• What are the liabilities of strata committee members?
• What do we do if the strata committee is not acting appropriately?
• How can we help?

Get Strata Committee Smart by CLICKING HERE and downloading the guide from the Bannermans’s website.

Who’s Responsible for Supervision?

Principal Licensees and Licensees in Charge are responsible for supervision. Their responsibilities include:

• Ensuring Proper Oversight – They must oversee all business activities.
• Recognising Supervision Failures – They should be able to identify when supervision is inadequate or failing and take corrective actions.

• Covering All Areas – Their supervision should extend across all areas of the business.
• Ensuring Compliance – They need to make sure that all employees understand and adhere to the rules and standards set by the business.

What Does Supervision Involve?

Supervision is more than just observing employees; it includes effective leadership and ensuring adherence to legal standards. The three components are:

1. People Leadership

Licensees in charge should provide the team with the necessary guidance and support, not just through oversight but by actively helping them with their professional development.

They should also offer comprehensive induction programs for new employees and continuous training to ensure they understand their roles and responsibilities.

2.Legal Compliance

Develop and maintain procedures that ensure your business adheres to all relevant legal requirements. Regularly update these procedures to reflect any changes in legislation.

3.Conduct Monitoring

Regularly monitor employee conduct to ensure it aligns with business standards.

New People Leadership Requirements

1.Licensing Compliance

Clearly define which roles within your business require specific licenses. Ensure that all employees involved in regulated functions possess the necessary certificates, licenses or accreditations.

2.Qualifications and Training

Licensees in charge are now required to stay current with relevant legislation. Completing compulsory CPD units alone is not sufficient; they must actively stay informed about the latest legal developments.

Additionally, they must maintain accurate records of CPD activities and ensure that work experience for assistant agents and Class 2 licensees is documented and verified properly.

3.Professional Conduct

Develop and implement written procedures for handling complaints. This includes informing consumers of their right to contact regulators if necessary

Licensees in charge should also Implement policies to handle issues related to gifts, conflicts of interest and information security. Ensure compliance with Australian Consumer Law, which prohibits misleading and deceptive conduct, false representations and unfair contract terms.

What’s Changing?

From February 2025, e-mobility devices sold in NSW must comply with new safety standards. Lithium-ion batteries used in these devices will be considered ‘declared electrical articles’ under the Gas and Electricity (Consumer Safety) Act 2017. This means they must meet specific safety requirements before they can be sold.

Why Are These Changes Important?

Lithium-ion batteries are popular due to their energy efficiency and environmental benefits. However, they can pose significant fire risks if not manufactured to strict safety standards. The new regulations aim to ensure that only safe, compliant products are available, protecting consumers and improving overall safety.

The new standards will ensure that the e-mobility devices you buy have been tested and certified for safety. For tips on safe handling, charging and disposing of lithium-ion batteries, visit the Lithium-ion Battery Safety Awareness page. 

For more details on compliance, testing and certification, visit the Approval of Electrical Articles page.

For further details on the key dates for the new standards head to the NSW GOVT page.

How This Affects SCA NSW’s Position

The introduction of these new safety standards aligns with SCA NSW’s ongoing efforts to address the safety risks associated with lithium-ion batteries. SCA NSW supports the Australian Competition & Consumer Commission’s recommendations for consumer education and stricter safety regulations to reduce battery-related incidents. The new standards will bolster these efforts by ensuring that e-mobility devices in strata schemes comply with rigorous safety requirements.

SCA NSW continues to advocate for:

• Educational initiatives designed to inform residents about safe practices for charging and using lithium-ion batteries.

• Tailored By-laws that restrict the use of non-compliant e-mobility devices and ensure regular servicing of approved devices.

Defining Conflicts of Interest

A conflict of interest arises when personal interests interfere with the professional responsibilities and performance of strata managers. This could include financial relationships with service providers, ownership interests in managed properties or accepting gifts that may compromise impartiality.

Why Manage Conflicts of Interest?

The question of why we manage conflicts of interest is fundamental. It boils down to maintaining integrity in decision-making processes and effective strata management. When personal, financial or other interests conflict with the objective performance of duties, it can undermine trust and lead to legal consequences.

SCA NSW Best Practice Guide

SCA NSW is committed to continuous improvement, aligning with the PSS requirements and engaging with the Professional Standards Authority. Recent audits have highlighted areas where improvements in conflict of interest management can make a significant impact. This will also mean better compliance with existing legislation, including the Property and Stock Agents Act 2022, Strata Schemes Management Act 2015 and other fiduciary obligations at general law.

The SCA NSW Best Practice Guide on Managing Conflicts of Interest serves as a comprehensive resource for strata managers. Key elements include:

• Disclosure and Assessment
  • Upon disclosure, higher management evaluates the conflict’s implications and takes measures to mitigate its influence on decision-making.

• Record Keeping
  • All disclosed conflicts are documented in a Conflict of Interest Register, ensuring transparency and accountability.
• Education and Training
  • Training sessions to be conducted to educate staff on identifying, disclosing and managing conflicts of interest.
• Monitoring and Enforcement
  • To enforce compliance, regular audits are conducted, and violations of conflict of interest policies are met with fair disciplinary actions.

To download the Best Practice Guide & Templates – head to the ‘Best Practice Guide’ section under ‘NSW Resources’ in your Membership portal to download the guide – ‘Conflicts of Interest’.

Where are Lithium-ion Batteries Found? 

Lithium-ion batteries are commonly found in cars, e-bikes, e-scooters and other electronic devices. They can be categorised into two main groups: batteries for cars and batteries for e-bikes and e-scooters. Among these, e-bikes and e-scooters pose a higher risk in strata buildings due to their higher flammability and tendency to catch fire when the cells are damaged. 

Do Lithium-ion Battery Explosions Change the Landscape for Insurers in Strata? 

Yes, insurers are increasingly focusing on the installation and management of these batteries in strata buildings to assess and mitigate financial risk. From an insurance point of view, key challenges include: 

• Diverse applications and uses of lithium-ion batteries. 

• Variability in operational conditions and risk factors. 

• Complexity in establishing uniform safety measures. 

• Lack of standardised regulations and standards. 

• Challenges in fire control and environmental risks. 

• Difficulty in implementing intervention procedures during fires or explosions. 

• Limited historical data. 

What Should You Do to Mitigate Lithium-ion Battery Risks?

To mitigate the risks associated with lithium-ion batteries, you should: 

• Implement evacuation plans to ensure there are escape routes in the event of a battery fire. NSW Fire and Rescue can assist in developing these plans (Click here for more information). 

• Establish by-laws to regulate the use of lithium-ion batteries, particularly for e-bikes and e-scooters.  

• Avoid installing EV charging stations in basements as they do not provide optimal fire protection. 

What Should You Tell Residents to Do in the Event of an EV Fire?

Strata managers should advise residents to: 

• Keep e-scooters and e-bikes in spaces far away from living areas, as the time from ignition to a major fire is very short. 

• Ensure that e-scooters and e-bikes are not stored in places that block escape routes. 

If a By-Law Prohibits E-scooters and E-bikes in the Building, can the Owners Corporation Designate a Safe Area for Them?

Yes, a by-law can be created to establish an external charging box. This box can contain any fires caused by battery ignitions, limiting damage to the box itself rather than the entire building. You can also implement other by-laws to regulate the use, location and management of lithium-ion battery vehicles to improve safety in your scheme. 

It is with great excitement that we announce Joshua Baldwin as the next President of Strata Community Association Australasia, becoming the youngest president in SCA’s history.

Joshua’s appointment is the latest progression in a bright career in the strata industry and with SCA, a career that has already spanned decade.

As you may be aware, Joshua’s journey with SCA began in 2013 on the SCA (SA/NT) Board, where he quickly became a key figure within the organisation, subsequently serving as President of the SA/NT Chapter for six years.

His tenure with the chapter was marked by significant achievements, including the pivotal merger of the South Australian and Northern Territory chapters. The merger stands as a testament to his vision of fostering greater cohesion and collaboration within the industry.

Speaking on his appointment, Mr Baldwin said it was an honour to be elected as SCA Australasia President:

“Firstly, I would just like to extend such a massive thank you to outgoing SCA Australasia President Chris Duggan, who has left an incredibly strong legacy of achievement and collaboration that I hope to build on,” said Mr Baldwin.

“Chris has been such an invaluable member of SCA and his contribution to the strata industry really cannot be understated. From his leadership on strata insurance affordability, availability and transparency, to increasing professional standards across the country and driving the creation of the fledgling SCA RTO, he has been a clear and unifying voice for the strata industry.

Mr Baldwin has flagged four areas he will be focusing on during his term of presidency:

“I’m incredibly excited to commence the role at a pivotal time for our organisation and the industry,” he said.

“I like to think of myself as someone who is innovative and collaborative, and I never shy away from a challenge.

“I have a lot of ideas and a great team of volunteers and staff around me to start implementing them.

“Increasing SCA’s brand identity, delivering consistent standards of education, fostering a good working environment for our staff and volunteers and building our ethical standards will be my priorities, and I’m rolling up my sleeves and setting to work straight away.”

SCA Australasia CEO Alisha Fisher welcomed Josh to the role, and spoke warmly about Chris’ contribution to the sector.

“Chris has been an incredible president and will leave a lasting legacy for SCA as someone who always chose collaboration and conversation and knitted so much of the industry together,” she said.

“He has achieved so much in the three years with SCA Australasia, and he will be missed.

“At just 33, Josh has already accumulated 13 years of experience in the strata industry and his career journey of choosing and specialising in strata from the beginning of his career showcases an industry growing in stature and recognition.

“He’s committed, he’s bright and he cares about the industry – I’m really looking forward to continuing to carry out the Board and the organisation’s shared vision with him at the helm,” said Ms Fisher.

Please join us in welcoming Joshua Baldwin as our new SCA Australasia President. As we embark on this new chapter, we encourage all members to get involved, share your ideas, and support Joshua in his efforts to lead our association forward towards even greater heights.

The proposed reforms include:

• Raising the maximum penalties and penalty infringement notices to deter non-compliance, particularly regarding existing obligations by agents to disclose information about commissions.
• Strengthening the conflict-of-interest disclosure requirements to prevent agents from exploiting their positions for personal and/or financial gain.
• Prohibiting agents from receiving a commission on insurance products in cases where they do not assist residents in securing the best deals, ensuring fairer practices.
• Improving NSW Fair Trading’s enforcement and compliance powers to ensure agents adhere to the new regulations.

See SCA NSW’s Statement on the reforms

These reforms follow an $8.4 million investment to bolster resources for the Strata and Property Services Commissioner as part of the NSW 2024-25 Budget.

Anoulack Chanthivong, Minister for Better Regulation and Fair Trading, emphasised the reform’s role in building trust and confidence in strata living.

” The new laws are designed to take immediate action to help restore confidence in living and investing in strata schemes, ensuring more people consider apartment living as a housing option”

Moving forward, the government plans to engage with key stakeholders, including the Owners Corporation Network and Strata Community Association NSW, to refine the draft laws before their presentation to Parliament later this year.