Author: Liam Kerr

Section 184 Certificates – Six Things You Need to Know

Posted on by Liam Kerr

In a recent SCA NSW fortnightly webinar, Daniel Radman from Grace Lawyers delves into the fundamentals of Section 184 Certificates.

The certificate is an important document that provides important financial information relating to lots in a strata scheme. It’s an important way for those looking to buy into a strata property to understand the financial health of the sceheme.

Here are six things about Section 184 Certificates that you need to know:

 

Who Can Request a Certificate? 

A certificate is a request made to the owners corporation and can be requested by the owner, mortgagee, covenant chargee or a person authorised by them.  

 

Can a Certificate Request be Requested Over the Phone? 

No, the request must be in writing and accompanied by the prescribed fee as per the Strata Schemes Management Regulation 2016 (Schedule 4 – $109 or $94). 

 

When do I Need to Give the Certificate? 

The certificate must be given no later than 14 days after the request in writing.  

 

What Needs to be Included in a Certificate?  

A certificate is not just any piece of paper; it is a comprehensive document that delves into various financial aspects of the lot and the strata scheme. It must include: 

 

  • Details of regular periodic contributions for the lot, including payment periods and applicable discounts. 
  • Any outstanding unpaid contributions, specifying amounts and levy dates. 
  • Information on unpaid common property rights by-laws or by-laws made under section 108. 
  • Details of contributions levied under section 81(4) and any associated rate of interest payable. 
  • Proposals for funding the 10-year capital works fund plan. 
  • Whether a strata renewal committee has been established under the Strata Schemes Development Act 2015. 
  • And any other information necessary to complete the certificate.  

 

Additional resource: Section 184 Certificate 

 

What Else Should Be Included in a Certificate? 

In addition to financial matters, the certificate must also include the names and addresses of each member of the strata committee, strata managing agent and building manager. 

 

What Additional Information Needs to be Included in a Certificate if the Strata Scheme is Part of a Community Scheme? 

 For strata schemes that are part of a larger community scheme, additional information is required in the certificate. This includes details of regular periodic contributions to the administrative and capital works funds of the community association, any unpaid contributions, levy dates and corresponding information for precinct schemes if applicable. 

NSW CPD hours released for 2024/25

Posted on by Liam Kerr

On Thursday, the NSW Fair Trading released details on the new CPD education year, expected hours and training delivery requirements, and what the compulsory topics will be.

Key takeaways:

  • CPD education year is 1 July 2024 to 30 June 2025
  • Class 1 or 2 licence will be required to complete a minimum of five hours CPD training
  • Training delivery requirements remain the same as for 2023-24
  • 4 Compulsory topics: Strata law reforms 2023-24, Introduction to work health and safety obligations in strata management, New Supervision Guidelines for strata managing agencies and Best practice management of building defects, maintenance and repair.

Training delivery requirements remain the same as for 2023-24, including either:

  • an in-person classroom session delivered by a trainer, with a maximum of 40 participants, or
  • an online interactive webinar session, delivered by a trainer, with a maximum of 25 participants, or
  • 10 hours of purely online training, which includes all compulsory topics applicable to the agent’s licence category and additional elective training to make up the 10 hours. Compulsory topics must be delivered by an approved CPD provider.

Compulsory topics are:

  • Strata law reforms 2023-24
  • Introduction to work health and safety obligations in strata management
  • New Supervision Guidelines for strata managing agencies
  • Best practice management of building defects, maintenance and repair

Topic outlines, including learning outcomes, are in the final stages of development and will be sent out by mid-April 2024.

The NSW Fair Trading website will be updated with comprehensive information on the 2024-25 CPD requirements by May 2024, including information on the CPD requirements for agents who hold more than one category of licence.

New Supervision Guidelines

Supervision Guidelines will start on 1 July 2024 in line with the new CPD year. The new Guidelines are in the final stage of development and will be ready to share mid-April 2024. Publication on the NSW Fair Trading website and further communications will follow after that.

Common Questions about Risk Management for Strata Businesses

Posted on by Liam Kerr
Managing Risk in Strata

In a recent SCA NSW fortnightly webinar, Wal Dobrow, Director from BIV Reports, answered common questions and provided insights into effective risk management for strata businesses.  

Here are some common questions addressed during the session, as well as key documents: 

Can an Insurer Conduct Risk Assessments? 

Strata managers may feel uncomfortable performing on-site risk assessments as it is beyond their role responsibilities. However, insurers or other work health and safety professionals can undertake these assessments. In the event that hiring such experts is too expensive, strata managers can do a quick 30-second assessment to mitigate legal liabilities. 

Should Work Health and Safety Reports Be Conducted for All Strata Schemes? 

Yes, work health and safety reports should be conducted for all types of strata schemes, including commercial, industrial and residential schemes. 

Can Strata Managers Be Held Liable If the Owners Corporation Declines Safety Recommendations? 

Yes, strata managers are accountable for ensuring the safety and well-being of occupants in the strata property. To mitigate further liability, strata managers should take proactive measures. This includes documenting the recommendation in official communications sent to lot owners and minute-taking during meetings.  

Additional Resources:

Can the Owners Corporation Choose Not to Implement Safety Recommendations? 

While strata managers can offer guidance and advocate for necessary safety measures, the ultimate authority to enact changes lies with the owners corporation. Should the owners corporation opt not to proceed with recommended safety measures, they assume responsibility for any legal or financial consequences that may result. 

 

Is Ignorance a Defence for Not Undertaking Safety Inspections? 

Strata managers often encounter resistance from owners corporations when recommending safety inspection reports for commercial, industrial and residential schemes. One common argument posed is, “If we don’t know what to fix, we don’t need to fix it.” However, claiming ignorance is not a valid defence.  

As lot owners, individuals are obligated to address potential hazards and maintain a safe environment for occupants. The core of the matter lies in the principle of duty of care. As part of the owners corporation, Lot owners have a duty to ensure the safety and well-being of all occupants in the strata property. This duty extends to identifying and addressing foreseeable risks, regardless of whether they are immediately apparent or not. 

 

Can a Safety Report Substitute a Work Health and Safety Risk Management Plan? 

No, a safety report provides insights into general risks, but a work health and safety risk management plan covers specific risk management processes, procedures, responsibilities and best practices. 

 

VALE JOHN O’BRIEN

Posted on by Liam Kerr

      It is with great sadness that we, at SCA NSW, acknowledge the passing of John O’Brien, a former President of our organisation. John passed away peacefully at his home in Newcastle on Saturday 16th March aged 82 years. He was the fourth President of the Institute of Strata Title Management (ISTM), now SCA NSW, and he was one of three Presidents who were born in New Zealand, the others being Foundation President, Don Cameron (1980-1984) and Rex Schmidt (1994-1996), who followed John O’Brien as our fifth President.

      John O’Brien was born in Christchurch in 1941 and by the time he was 19, he was restless for a change and “looking for youthful adventure” as he himself put it. Pursuing that change, he crossed the “Ditch” in 1960, spending the next two years travelling across Australia, finding work as he needed it. At the end of this time, he settled in Sydney, finding a job with a large company in Meadowbank. He studied at TAFE at night, earning a Diploma in Purchasing, before moving to the Purchasing department of a large tin smelting company in Alexandria.

      In the early 1970’s O’Brien was offered a job in a real estate office in Crow’s Nest and, looking for a new challenge, he took the job, returning to TAFE at night to earn his Real Estate Licence. In 1970, O’Brien married his wife, Suzanne, and by 1977 they made the decision to open their own business. Consequently, they purchased a stock and station agency in the Hunter Valley town of Muswellbrook. This business looked after real estate and property management, as well as selling livestock and rural properties. While running this business, O’Brien first encountered strata management through an association with Don Cameron, Foundation President of ISTM.  Cameron, who was based in Manly, managed two blocks of home units in Muswellbrook and engaged O’Brien to help him run them.

      After more than a decade in Muswellbrook and with their two children growing up, the O’Briens moved to Newcastle, buying a house in Merewether, and setting up an office in Hunter Street in the city. O’Brien decided to concentrate solely on strata management in this new business, becoming the first specialist strata manager in Newcastle, the role previously being carried out by accountants, surveyors, and the like. John O’Brien Strata Management began with six blocks, but quickly expanded to the point that he had to move to bigger premises in Watt Street, employing another strata manager and accounts staff.

      On 29th December 1989, a severe earthquake, measuring 5.6 on the Richter Scale, hit Newcastle, killing 13 people and injuring more than 160. The quake caused widespread devastation throughout the city, damaging 35,000 homes and more than 3,000 commercial buildings. The total damage bill was placed at more than $4 billion. O’Brien’s office was completely destroyed and access to the city was blocked for some time. Thankfully all the business records were backed up, so O’Brien was able to find new premises and begin again almost immediately, but it took several years for Newcastle to get back to normality.  Indeed, one of the blocks O’Brien managed was completely destroyed and many others were severely damaged. This required a great deal of work on behalf of his clients to get them rebuilt.

      O’Brien was, by this time, on the Board of ISTM, a position he held from 1989 until 1995. During these years he was President from 1992 to 1994. He had originally joined the ISTM in 1981, at the behest of his friend, Don Cameron. O’Brien not only travelled to Sydney each month for Board meetings, but also attended all seminars and events organised by the ISTM from the earliest time of his membership. O’Brien was one of those members present at the very first ISTM seminar in February 1981.

      After O’Brien resigned from the Board in 1995, he continued to assist ISTM by running the Induction courses in strata management at the ISTM office in Chatswood. He was elected as a Fellow of ISTM in 1998 for services to the industry. He was further honoured with a Life Membership of SCA(NSW) in 2002.

      John O’Brien is rightly remembered as a pioneer in the strata management industry and tributes to his work have been many this week. Muriel Barasso, the second President of ISTM and the only woman to hold the position said, “I have fond memories of John and his wonderful contributions to the early years of ISTM and particularly the organisation of our early conferences which he helped organise at Muswellbrook.”

      Another former President, Peter Callaghan (1999-2000) said that “John made a significant contribution to our strata industry in its formative years. He was always ready to assist other strata managers freely with advice and guidance.”

Strata industry icon, Richard Holloway added that,” I knew John very well and respected him enormously. I well remember him speaking very emotionally and passionately in a presentation at an ISTM Convention regarding his experiences in the Newcastle earthquake and the difficulties he faced in assisting his clients.”

The heartfelt thoughts and condolences from all of us at SCA(NSW) go to John’s wife, Suzanne, and to his immediate family, Ben, My, Kate, Ella, Max and Eddie. We are immensely thankful for John’s immense contribution to the strata industry in New South Wales.

VALE JOHN O’BRIEN

Proxies in Strata – Six Things You Need to Know

Posted on by Liam Kerr

Proxies can be a confusing concept, but they are important for everyone living in a strata scheme.

A proxy is a written authority permitting a person to vote at a general meeting of an owners corporation on an owner’s behalf. This ensures that all persons have the opportunity to participate in decision-making processes even if they cannot attend the meeting.

In a recent SCA NSW fortnightly webinar, Matthew Jenkins, SCA NSW Board Member/Bannermans Lawyers, delved into proxies.

 

Here are six key things you need to know when it comes to proxies: 

Proxy Appointments 

According to Clause 26 (1) of the Strata Schemes Management Act 2015, a person becomes a duly appointed proxy if they are appointed through an instrument in a form approved by the Secretary. This form must be signed by the person appointing the proxy or executed in a manner permitted by the regulations. 

 

Proxy dates 

Proxies must contain the date on which they were made. This requirement is not only legislated but also serves the purpose of defining the period of the proxy. Proxies are not indefinite; they are only effective from one specified date to another. 

 

Proxy Expiration  

Proxies come with a defined expiration. In particular, proxies will:  

  • Expire on the day specified in the proxy. 
  • If revoked in writing by the appointing person. 
  • If a subsequent proxy is provided to the secretary. 
  • After 12 months or two consecutive annual general meetings—whichever occurs later—unless the proxy specifies a shorter period. 

Missed any fortnightly webinars? 

Webinar Resources – Strata Community Association (NSW)

Proxy Notices 

The process of appointing a proxy involves providing the proxy to the secretary of the owners corporation. In larger schemes exceeding 100 lots (excluding utility or parking lots), proxies must be submitted 24 hours before the first meeting. In smaller schemes with 100 lots or less, proxies should be provided at or before the meeting. 

 

What can proxies do? 

Proxies hold significant powers in the decision-making processes of owners corporations. They can attend general meetings (including via electronic means), speak at general meetings, call for polls and vote on various motions (including procedural ones such as motions to adjourn or amend). 

 

What about Proxy Farming? 

It’s important to note that there are restrictions in place to prevent proxy abuse. Proxy farming, the practice of accumulating numerous proxies to influence decisions, is curtailed by limits on the total number of proxies an individual can hold. For strata schemes with 20 lots or less, one proxy is allowed. For those with more than 20 lots, the number is restricted to not more than 5% of the number of total lots (e.g., schemes with 40 to 59 lots are allowed only two proxies). 

Strata Success – ABS Elevates Strata Managers to Independent Occupation Status

Posted on by Liam Kerr

‘Strata manager’ to receive official recognition as an occupation nationally by the ABS for the first time

In a significant development for the strata sector, the Australian Bureau of Statistics (ABS) has officially recognised ‘strata manager’ as a distinct occupation title. This recognition marks an important step forward for the sector’s growth and professionalism, acknowledging the unique skill set and responsibilities that come with managing strata properties.

Background

 

Until now, the ABS has categorised strata managers under the broader umbrella of property and real estate managers. However, following successful consultations with the ABS, the ‘strata manager’ occupation will be included in the Australian and New Zealand Standard Classification of Occupations (ANZSCO) for the first time.

So what does that mean for the industry?

 

The new classification establishes ‘strata manager’ as a specialist profession with nationally recognised and defined skills, roles and responsibilities. This distinction allows the ABS to collect important data about the occupation, including the number of professionals, their geographical distribution, skill sets and specific duties. Such data is useful for collecting evidence-based data about skilled migration status, vocational education training and industry advocacy.

Additionally, the strata sector gains a powerful tool for industry development. The collected data will serve as a foundation for making informed cases to the government, supporting skilled migration initiatives, expanding educational opportunities and driving positive changes in the sector.

The ABS’s classification will also contribute to the industry benchmark data, aiding initiatives like the Strata Insights series of publications. This data will enhance research efforts undertaken by various institutions, governments and private organisations, providing a comprehensive understanding of the strata landscape and facilitating informed decision-making.

When will the changes take effect?

 

The proposed changes are expected to be implemented this year, and SCA NSW will provide further updates when the changes take effect.

Read the full submission from SCA (Australasia) to the ABS by clicking here.

For more details on what this means, visit the updated ANZSCO page here.

Revolutionising Strata Insurance – SCA Releases Best Practice Guideline

Posted on by Liam Kerr

In a groundbreaking move, property peak body Strata Community Association (SCA) has released an industry-first Strata Insurance Disclosure Best Practice Guideline. This landmark guideline is poised to reshape strata insurance practices, ensuring better outcomes for the association’s members and the broader community of strata insurance consumers.

The strata insurance landscape continues to evolve rapidly and become increasingly complex for Australia’s approximately 6 million strata residents, prompting the need for a comprehensive insurance guide. SCA’s three-step best practice process—disclose, document and communicate—aims to provide clarity and support in navigating this complex terrain.

Key features of the SCA Best Practice Strata Insurance Disclosure Guide include:

  • Inclusion of all eight financial items in quotations and invoices.
  • A straightforward three-step process (disclose, document and communicate) for easy adherence.
  • Templates to standardise information presented to strata committees.
  • Communication principles, processes and timeframes between all parties.
  • Full disclosure of all commissions, conflicts of interest and the allocation of remuneration between parties.

 

Download the guide from your SCA NSW Membership Centre

Speaking on the guide’s launch, SCA National President Chris Duggan said, “It has become clear that the bare minimum is just not hitting the mark for the consumer, and therefore we are implementing a system that ensures that practices are transparent, and consumers are provided with enough information to make informed choices.”

“Our goal is to elevate SCA members in the eyes of strata committees and consumers, eliminate poor practices and bad actors who undermine consumer confidence, and improve relationships between strata managers, committees and residents.”

“When someone sees that a strata manager or practice has an SCA logo, we want them to know that the utmost is being done to ensure complete transparency in the strata insurance process,” said Mr Duggan.

SCA National Vice-President Josh Baldwin has been encouraged by the widespread industry support received for the implementation of these transformative changes.

“Over the last six months, these guidelines have been on an immense journey, having been consulted on across all of the major strata underwriters, brokers, software providers, strata management firms, our specially formed strata insurance taskforce and each of the state and territory SCA boards and executive chapters.

“As a result, we expect these guidelines to bring harmony to insurance disclosure practices for SCA members, and consequently, the majority of lots under management in Australia and New Zealand.

“The insurance services provided by strata managers, brokers and underwriters is not always simple, and thus the unification between these services is essential to positive outcomes, now aided by this critically important set of guides, said Mr Baldwin.”

To ensure the successful implementation of the guidelines, SCA plans proactive engagement and training for its members. The guide will become the practice standard for SCA members, further enhancing their credibility in the eyes of the strata community.

For more information, click here.

Insights from the 2023 Strata Defects Survey

Posted on by Liam Kerr

A new report by has revealed that over half (53%) of strata buildings experienced serious defects between 2016-2022, prompting owners corporations to allocate an estimated $79 million for rectification efforts. 

  • New buildings have experienced a decline in defects since 2020.

  • In NSW, 53% of buildings grapple with serious defects, up considerably from the 39% recorded in 2021.  

  • The most prevalent defects are waterproofing, fire safety, structural integrity, and key service issues. 

  • Rectifying serious defects carries an average cost of $283,000 per building. 

  • A notable 34% of consumers now express more confidence in reporting defects to the regulator. 

 

Collaboratively undertaken by SCA NSW and the Office of the Building Commissioner, the 2023 survey, involving input from over 600 strata managers, indicates a rise in serious defects compared to 2021. However, for schemes registered since 2020, there is a positive trend, with serious defects decreasing from 34% to 27%.

Read the Full Report Here

Key findings from the survey highlight prevalent issues in waterproofing (42%), fire safety systems (24%), building enclosures (19%), structural issues (15%), key services like plumbing and elevators (14%), and non-compliant cladding (8%).  

The findings also indicated a decline in incidents associated with waterproofing, structural defects, and non-compliant cladding, while there was an upward trend in issues related to fire safety, building enclosures, and key services. 

The surge in ‘key services’ defects, covering lifts, garage doors, car stackers, air conditioning, security systems, and smart building technologies, is attributed to the inclusion of newer technologies in the survey. 

Stephen Brell, President of SCA NSW, said: “Tacking building defects continues to be a formidable task and one that is time-consuming, financially burdensome and emotionally draining for all involved. 

 

 

“We are grateful that these survey results show that consumers feel empowered to report defects with the regulator receiving double the amount of serious defects reported (34%) than in 2021 (15%) showing increased confidence in regulation. 

While, regrettably, we have seen an increase in serious defects since 2021, surveys such as this are central to our ability to advocate for the greater strata community and create government reform that ensures we are working towards more positive outcomes in the future.” 

The survey aimed to attain a comprehensive understanding of the impact of serious building defects in the NSW strata community. At present, there are more than 85,000 strata schemes across NSW, with expectations of a substantial increase by 2040. 

Despite the increase in serious defects, the survey revealed optimistic developments in survey participation, showcasing a 30% increase from 492 schemes in 2021 to 642 schemes in 2023. Moreover, almost half (48%) of strata managers agreed that the recent reforms have increased consumer confidence, while 34% of consumers now exhibit heightened confidence in reporting defects to the regulator.  

Acknowledging the challenges posed by these latest survey findings, Stephen Brell said: “We are committed to advocating for consumers and will continue to work hand in glove with David Chandler and the Office of the Building Commissioner to help rectify and prevent building defects, to ensure that every resident and homeowner has a safe place to live.” 

Additional key findings from the report 

  • 94% of buildings had a current annual fire safety statement issued in the past 12 months. 

  • For almost half (48%) of buildings with completed resolution work, serious defects were rectified within a year. 

  • The most common barriers to addressing serious defects included delays from builders or developers (42%), followed by lack of engagement from builders or developers (31%), and upfront costs (28%). 

  • The average cost of rectifying serious defects was $283,000 per building, with 57% of these costs allocated to repairs, 20% to professional costs, and 15% to legal costs. 

 

Read the Full Report Here

What noise levels qualify as a nuisance?

Posted on by Liam Kerr

We get it.  It’s 9:55 pm on a Thursday, and the one person in the block who doesn’t have kids has decided to have a couple of Friday-eve drinks and sing off-key to Hootie and the Blowfish whilst proclaiming they ‘love ‘old’ music’!  

They’re usually done singing by 10:30, and everything is back to normal. But what can you do when noise levels are beyond what is reasonable for living in close proximity?

Under section 153 of the Strata Schemes Management Act 2015 (“SSMA”), both lot owners and occupants are obliged to refrain from causing nuisances or hazards that disrupt the peaceful occupation of any other lot. To ensure these standards are upheld, standard by-laws typically include provisions prohibiting the creation of nuisances.

But what constitutes a nuisance?

In their review of the case O’Riordan v Chu [2023] NSWCATCD 61, Bannermans Lawyers delved into the depths of noise nuisance and found some valuable insights for anyone who is looking to pursue a case against another lot owner for excessive noise, or is facing one against themselves.

Read their full review here

Cost Relief for Strata Owners as NSW Government Plans to Scrap Emergency Services Levy

Posted on by Liam Kerr

The move is expected to save strata owners up to 15% on their insurance bill. 

In a landmark decision, Premier Chris Minns has unveiled a significant overhaul in the funding structure for emergency services. This transformative decision involves removing the Emergency Services Levy (ESL) from home insurance premiums, ushering in a wave of positive changes for strata owners and residents across the state.  

 

What is the Emergency Services Levy (ESL)?

The ESL is a regular contribution towards emergency service departments in NSW, included in annual strata insurance payments. Under the current system, the ESL results in approximately 18% higher insurance costs and has been a persistent source of discontent for strata owners. 

What This Means for Strata 

This groundbreaking move holds the following benefits for strata owners and residents in NSW: 

  • Financial Relief – Strata owners will see a reduction in their insurance premiums. This relief provides more disposable income for strata schemes, allowing for better financial planning (e.g., Administrative and Capital Works Funds), budgeting (maintaining and repairing common property), and resource allocation. 
  • Cost Savings – According to the Insurance Council of Australia, insurers are expected to pass on the savings to strata owners, reducing insurance costs by up to 15%. This cost-saving measure contributes to more affordable strata living, particularly for owners who have struggled to make regular payments towards the ESL. 

 

Read our – SCA (NSW) – article from back in April calling for the removal of the ESL. 

 

Moving Forward 

As the proposed reform enters its early phases, NSW Treasurer Daniel Mookhey is set to initiate consultations with stakeholders and industry experts to advance the necessary changes to the ESL. For strata owners and residents, removing the ESL is a highly anticipated change that signifies the dawn of a new era. Beyond reduced insurance premiums, the move promises fairer funding models, paving the way for a more equitable and thriving strata community.