Community Land Management Act 2021 (NSW)

Community Land Management Act 2021 No 7 An Act with respect to the management of community, precinct and neighbourhood subdivision schemes; and for other purposes. Part 1 Preliminary 1 Name of Act This Act is the Community Land Management Act 2021. 2 Commencement This Act commences on a day or days to be appointed by proclamation. 3 Objects of Act The objects of this Act are as follows— (a) to provide for the management of community, precinct and neighbourhood schemes, (b) to provide for the resolution of disputes arising from those schemes. 4 Interpretation (1) The Dictionary to this Act defines certain terms used in this Act. Note. The Interpretation Act 1987 contains definitions and other provisions that affect the interpretation and application of this Act. (2) Notes included in this Act do not form part of this Act. 5 Resolutions of associations (1) In this Act, a resolution of an association is a special resolution if— (a) it is passed at a properly convened meeting of the association, and (b) of the value of the votes cast— (i) not more than 25% are against the resolution, or (ii) if the resolution is a sustainability infrastructure resolution—less than 50% are against the resolution. (2) In this Act, a resolution of an association is a unanimous resolution if it is passed at a properly convened general meeting and no vote is cast against the resolution. (3) For the purposes of determining the value of a vote for a special resolution or a poll of a community association— (a) the value of the vote of a subsidiary body is equal to the unit entitlement of the former community development lot that was subdivided to constitute the subsidiary body, and (b) the value of the vote of the owner of a community development lot is equal to the unit entitlement of the community development lot. (4) For the purposes of determining the value of a vote for a special resolution or a poll of a precinct association— (a) the value of the vote of a subsidiary body is equal to the unit entitlement of the former precinct development lot that was subdivided to constitute the subsidiary body, and (b) the value of the vote of the owner of a precinct development lot is equal to the unit entitlement of the precinct development lot. (5) For the purposes of determining the value of a vote for a special resolution or a poll of a neighbourhood association, the value of the vote of the owner of a neighbourhood lot is equal to the unit entitlement of the neighbourhood lot. (6) However, if the total unit entitlement of lots for which the original owner is entitled to a vote is not less than half of the total unit entitlement for the association, the value of the vote in respect of those lots is taken to be reduced by two-thirds, ignoring any fraction. Note. A motion or election that is not required to be approved by a special resolution or unanimous resolution is passed by a simple majority of votes, unless there is a poll (see Schedule 1, clause 13). (7) In this Act— special resolution of a strata corporation has the same meaning as in the Strata Schemes Management Act 2015. 6 Connected persons (1) For the purposes of this Act, a person (the principal person) is connected with another person if the other person— (a) is a relative (within the meaning of the Local Government Act 1993) of the principal person or, if the principal person is a corporation, is a relative of the holder of an executive position in the corporation, or (b) is employed or engaged by the principal person or is a business partner of the principal person, or (c) if the principal person is a corporation—holds an executive position in the corporation, or (d) is the employer of the principal person, or (e) is employed or engaged by, or holds an executive position in, a corporation that also employs or engages the principal person or in which the principal person holds an executive position, or (f) has another connection or association with the principal person of a kind prescribed by the regulations. (2) However, the principal person is not connected with a member of an association, or the committee of an association, merely because of any dealing, contact or arrangement the member has with the principal person in the capacity of a member of the association or committee. (3) In this section, executive position in a corporation means the position of director, manager or secretary of the corporation, or any other executive position of the corporation, however those positions are designated. Part 2 Management of schemes Division 1 Functions of associations 7 Association responsible for management of scheme (1) The association for a scheme has the principal authority for the management of the scheme. (2) An association has, for the benefit of members of, and owners of lots in, the scheme— (a) the management and control of the use of the association property, and (b) the administration of the scheme. (3) An association has responsibility for the following— (a) managing the finances of the scheme (see Part 5), (b) keeping accounts and records for the scheme (see Parts 5 and 10), (c) maintaining and repairing its property (see Part 6), (d) taking out insurance for the scheme (see Part 9). 8 Functions of associations generally (1) An association has the other functions that are conferred or imposed on it by or under this or any other Act. (2) An association must not delegate any of its functions to a person unless the delegation is specifically authorised by this Act. 9 Other management bodies and persons who assist the association An association may be assisted in the carrying out of its management functions under this Act by 1 or more of the following— (a) the association committee of the association, (b) a managing agent for the scheme appointed in accordance with Part 4, (c) a facilities manager for the scheme appointed in accordance with Part 4. 10 Association may employ persons to assist in exercise of functions (1) An association may employ the persons it thinks fit to assist it in the exercise of any of its functions. (2) An association must ensure that a person employed to assist it in the exercise of a function has the qualifications, if any, required by this Act or any other law for the exercise of that function. 11 Functions that may only be delegated to member of association committee or managing agent (1) The following functions of an association, association committee or officer of an association may be delegated to or conferred only on a member of the association committee or a managing agent— (a) the preparation of estimates for the purposes of section 83, (b) the levying of contributions, (c) the receiving of, acknowledgement of, banking of or accounting for money paid to the association, (d) having custody of any money paid to the association or making payments from money paid to the association, (e) taking out insurance required or permitted by this Act, (f) the conduct of meetings of the association and handling of correspondence, (g) the maintenance of records required to be kept under this Act, (h) other functions that are prescribed by the regulations. (2) This section is subject to sections 58 and 105. Division 2 Meetings of associations 12 First AGM must be held within 2 months after initial period (1) The original owner of land subdivided by a community plan, precinct plan or neighbourhood plan must convene and hold a general meeting of the association, in accordance with this Act and the regulations, within 2 months of the expiration of the initial period. Maximum penalty—10 penalty units. (2) An original owner who fails to comply with this section remains liable to the penalty for the contravention even if the Tribunal makes an order under this Division or a meeting is convened or held in accordance with the order or otherwise. (3) An original owner required to convene the first annual general meeting of an association must give at least 14 days notice of the first annual general meeting to— (a) each member of the association, and (b) each first mortgagee or covenant chargee of a development lot or neighbourhood lot who is shown on the association roll, and (c) each tenant of a neighbourhood lot or strata lot who has been notified to the association in accordance with this Act as a tenant of the lot. 13 Matters to be determined at first AGM The agenda for the first annual general meeting of an association must include the following items and may include other items— (a) to decide whether the amount of a contribution required to be made to the administrative fund or capital works fund should be confirmed or varied, (b) to determine the number of members of the association's committee and to elect the committee, (c) to decide whether insurances taken out by the association should be confirmed, varied or extended, (d) to decide if any matter or class of matter is to be determined by the association in general meeting, (e) to decide whether by-laws should be made or changed, including by-laws controlling, prohibiting or otherwise regulating the passage of persons through, and the activities of persons on, private access ways and, to an extent not inconsistent with this or any other Act or law, open access ways, (f) to decide whether an agreement to which section 122 applies should be ratified, (g) to decide whether a managing agent should be appointed by the association and, if appointed, what functions of the association should be delegated to the managing agent, (h) if there is a managing agent—a form of motion to consider the report by the agent as to whether, and what, commissions have been paid or are likely to be payable to the agent for the following 12 months, (i) to decide whether a facilities manager should be appointed and, if appointed, what functions the facilities manager should exercise, (j) to receive the documents required to be provided under section 14, (k) to consider the accounting records and last financial statements prepared, (l) to consider the initial maintenance schedule, (m) to decide whether an auditor should be appointed and to appoint an auditor, (n) if the association is a community association or is a neighbourhood association that is not part of a community scheme—to consider whether a revised schedule of unit entitlements should be registered under the Community Land Development Act 2021, (o) any item prescribed by the regulations for the purposes of this section. 14 Documents and records to be provided to association at first AGM (1) An original owner required to convene a meeting under this Division must deliver the following to the association at least 14 days before the first annual general meeting of the association, or within 3 years after the scheme is registered, whichever is earlier— (a) all plans, specifications, occupation certificates or other certificates, diagrams, depreciation schedules and other documents (including policies of insurance) relating to the scheme parcel, (b) without limiting paragraph (a), all planning approvals, complying development certificates and related endorsed plans, approvals, "as built" drawings, compliance certificates (within the meaning of the Environmental Planning and Assessment Act 1979), fire safety certificates and warranties relating to the scheme parcel, (c) the association roll and any notices or other records relating to the scheme parcel, (d) a copy of the diagram illustrating the situation of all service lines referred to in section 34 of the Community Land Development Act 2021 that have been installed within the scheme under which the association is constituted, (e) the initial maintenance schedule prepared by the original owner, (f) any other document or item relating to the scheme parcel that is prescribed by the regulations for the purposes of this section. Maximum penalty—100 penalty units. (2) An original owner is only required under this section to deliver to the association a thing if that thing is in the possession or control of the original owner or may be obtained by the original owner by taking reasonable steps to do so. (3) This section does not require an original owner to deliver to the association a document that exclusively evidences rights or obligations of the original owner and that is not capable of being used for the benefit of the association or any of the other owners. (4) In this section— scheme parcel of an association that is— (a) a community scheme—means the community parcel, or (b) a precinct scheme—means the precinct parcel, or (c) a neighbourhood scheme—means the neighbourhood parcel. 15 Tribunal may order initial documents to be provided The Tribunal may, on application by an association, order an original owner required to convene a meeting under this Division to provide to the association a document that was required to be but was not delivered to the association at its first annual general meeting. 16 AGM must be held An association must hold an annual general meeting once in each financial year of the association. 17 Other general meetings (1) The secretary of an association or an association committee may convene a general meeting (that is not an annual general meeting) of the association at any time. (2) The secretary of the association, or another officer if the secretary is absent, must convene a general meeting (that is not an annual general meeting) of the association as soon as practicable after receiving a qualified request. (3) A meeting may be convened on a qualified request even if the first annual general meeting has not been held. (4) A request is a qualified request for the purposes of a meeting of a community association or a precinct association if it is made by 1 or more owners of a development lot in the scheme or 1 or more subsidiary schemes and the total unit entitlements of the development lot or former development lot subject to the subsidiary scheme are at least one-quarter of the total unit entitlements of the community scheme or precinct scheme. (5) A request is a qualified request for the purposes of a meeting of a neighbourhood association if it is made by 1 or more owners of neighbourhood lots in the scheme and the total unit entitlements of those lots are at least one-quarter of the total unit entitlements in the neighbourhood scheme. (6) A request for a meeting may not be signed on behalf of a subsidiary body without the authority of a resolution of the body. 18 Tribunal may appoint person to hold first AGM and other meetings (1) The Tribunal may, on application by an association, a member of an association or a mortgagee or covenant chargee of a development lot, neighbourhood lot or strata lot within the scheme, order a person to convene and hold a meeting of the association within the time specified in the order if a meeting has not been convened and held in accordance with this Act. (2) The person who is to convene and hold the meeting is to be a person nominated by the applicant, or appointed by the Tribunal, who has consented to the nomination or appointment. 19 Unanimous or special resolutions to be amended or revoked in same way (1) A unanimous resolution or special resolution of an association about a matter that is required by or under this Act or the by-laws of a scheme to be determined by a resolution of that kind cannot be amended or revoked other than by a subsequent resolution of the same kind. (2) However, a unanimous resolution of an association dealing with association property may be amended by a special resolution. 20 Notice to be given of right to cast vote at meeting of association (1) Person with right to vote at meetings must notify association A person who has an interest in a development lot or neighbourhood lot that, subject to this Act, gives the person the right to vote either personally or by nominee at meetings of an association must give the association written notice of that interest (an association interest notice). (2) Contents of association interest notice The association interest notice must specify the following information and, if the interest is a mortgage, include confirmation by the mortgagor or be verified by statutory declaration of the mortgagee— (a) the person's full name and an address for service of notices, (b) the lot concerned and the exact nature of the person's interest, (c) the date on which the person acquired the interest, (d) in the case of a corporation, specify the full name and an address for service of notices of the nominee of the corporation who is to exercise the voting entitlement. (3) Other matters to be specified in notice The association interest notice must specify the manner in which the interest arose and be verified by statutory declaration if any of the following applies to the interest— (a) the interest is that of the executor or administrator of the estate of a deceased person, (b) the interest is that of the liquidator or receiver in bankruptcy of any person, (c) the interest has arisen by the operation of law or the order of any court, (d) the interest has arisen in any other manner otherwise than by transfer of the interest from some other person or the discharge of a mortgage. (4) Association may require notice to be given The secretary of an association may, if of the opinion that a person has failed to give notice as required under this section, by a written notice given to the person require the person— (a) to state, within 14 days, whether or not the person is a person required to give notice under this section, and (b) if the person is so required, to give that notice. (5) Person prevented from voting if certain requirements not met A person is not entitled to vote at a meeting of an association if the person has not complied with a notice given to the person under subsection (4) or, in the case of a vote to be tendered through a nominee, if the nominee's full name and address for service of notices have not been notified under this section. (6) Changes in certain information to be notified A person who has given notice under this section may by further notice advise a change of nominee or of the person's or nominee's address for service. 21 Meeting procedures and voting Other procedures for general meetings of associations and voting at those meetings are set out in Schedule 1. 22 Order invalidating resolution of association (1) The Tribunal may, on application by a person entitled to vote on a motion at a meeting of an association or the first mortgagee or covenant chargee of a lot of which the owner is so entitled to vote, make an order invalidating a resolution of, or election held by, the persons present at a meeting of the association if the Tribunal considers that the provisions of this Act or the regulations have not been complied with in relation to the meeting. (2) The Tribunal may refuse to make an order under this section only if it considers— (a) that the failure to comply with the provisions of this Act or the regulations did not adversely affect any person, and (b) that compliance with the provisions would not have resulted in a failure to pass the resolution or affected the result of the election. 23 Order where voting rights denied or due notice of item of business not given (1) The Tribunal may, on application by a person entitled to vote on a motion for a resolution of an association at a general meeting, order that a resolution passed at the general meeting be treated as a nullity on and from the date of the order. (2) The Tribunal must not make the order unless the Tribunal is satisfied that the resolution would not have been passed but for the fact that the applicant for the order— (a) was improperly denied a vote on the motion for the resolution, or (b) was not given due notice of the item of business in relation to which the resolution was passed. (3) An application for an order may not be made unless— (a) an application for mediation of the dispute was made not later than 28 days after the date of the meeting at which the resolution was passed, or (b) if an application for mediation was not made, the application for the order was made not later than 28 days after the date of the meeting at which the resolution was passed. (4) If a resolution that is to be treated as a nullity by an order changes the by-laws and the order has been recorded in the Register under this Act, the by-laws have force and effect on and from the date the order is so recorded to the same extent as they would have had if the change had not been made. (5) Subsection (4) is subject to the by-laws having been or being changed in accordance with this Act and to any relevant order made by a superior court. 24 References to "first annual general meeting" For the purposes of this Act, the first annual general meeting of an association is— (a) the meeting held under section 12, or (b) if the meeting is not held—the meeting held in accordance with an order under section 18, or (c) if the meeting is not held and an application for an order is not made—the first meeting of the association, however convened and whenever held, that has the agenda specified in section 13. Division 3 Limitation on functions during initial period 25 Restriction on powers of associations during initial period An association for a scheme must not, during the initial period for the scheme, do any of the following things unless the association is authorised to do so by an order of the Tribunal under this Division— (a) incur a debt of an amount in excess of the amount then available for repayment of the debt from the administrative fund or capital works fund, (b) borrow money or give security for the repayment of money, (c) make, amend or repeal an association property rights by-law, (d) add land to the scheme, whether as association property or as a development lot or neighbourhood lot, except in accordance with the development contract (if any) for the scheme, (e) appoint for a period extending beyond the date of the first annual general meeting of the association— (i) a managing agent, or (ii) a facilities manager, or (iii) another person to assist with the management, maintenance or repair of association property. 26 Restriction on powers of neighbourhood associations A neighbourhood association must not, during the initial period for the neighbourhood scheme, do any of the following things unless the neighbourhood association is authorised to do so by an order of the Tribunal under this Division— (a) grant a lease of neighbourhood property, (b) create an easement burdening land within the neighbourhood scheme or a restriction on the use of land within the scheme, (c) release an easement, or a restriction on the use of land, that benefits neighbourhood property, (d) dedicate association property, (e) transfer neighbourhood property except by way of sale to a resuming authority under Part 10, Division 6 of the Community Land Development Act 2021, (f) erect a structure on neighbourhood property, (g) subdivide or create neighbourhood property. 27 Restriction on powers of developers A developer must not, during the initial period for a scheme, do any of the following things unless the developer is authorised to do so by an order of the Tribunal under this Division— (a) convert to association property a neighbourhood lot within the scheme, (b) subdivide a neighbourhood lot within the scheme. 28 Order to authorise certain acts during initial period (1) The Tribunal may, on application, make an order— (a) waiving, varying or extinguishing a restriction relating to the initial period for a scheme (whether or not imposed under this Act or the Community Land Development Act 2021), and (b) authorising matters to be done in relation to the waiving, varying or extinguishing of the restriction. (2) The application may be made by the association or developer to which the restriction applies. (3) Written notice of an application must be given to— (a) the association and each owner of a community development lot, precinct development lot or neighbourhood lot or proposed community development lot, precinct development lot or neighbourhood lot in the case of a community scheme, precinct scheme or neighbourhood scheme or proposed scheme to which the application relates, unless the association or the owner is the applicant, and (b) each registered mortgagee of a lot in the scheme and any mortgagee specified on the association roll for the lot and any covenant chargee having the benefit of a covenant charge affecting a lot, and (c) any other persons that the Tribunal directs. (4) The Tribunal may order that notice of an application be dispensed with if the Tribunal considers it appropriate in the circumstances of the case. (5) A person to whom notice is given is entitled to appear and be heard on the hearing of the application. (6) Notice of an application is not required to be given to a mortgagee specified on the association roll for a lot if the rights of the person as a mortgagee— (a) are suspended for the time being because of a sub-mortgage, particulars of which are specified on the association roll, or (b) have been terminated because of an instrument, particulars of which are specified on the association roll. 29 Remedies for breach of restrictions (1) An association for a scheme may recover from the original owner under the scheme— (a) as a debt—any liability incurred by the association because of a breach of this Division, or (b) as damages for breach of statutory duty—any loss suffered by the association as a result of a breach of this Division. (2) A member of an association for a scheme other than the original owner under the scheme may recover from the original owner as damages for breach of statutory duty any loss suffered by the member because of a breach of this Division. (3) It is a defence to an action under this section for debt or damages if it is proved that the original owner— (a) did not know of the breach on which the action is based, or (b) was not in a position to influence the conduct of the association in relation to the breach, or (c) used due diligence to try to prevent the breach. (4) A remedy available under this section does not affect any other remedy. Part 3 Association committees Division 1 Constitution of committees 30 Association to appoint committee (1) An association must ensure that a committee of the association is constituted in accordance with this Act. (2) The association committee may take office before the first annual general meeting of the association. (3) If there is no committee of an association, the scheme must be administered by the association, but nothing in this subsection prevents a managing agent appointed under this Act from exercising any functions conferred on the agent. 31 Committee for association with 3 members or fewer (1) The association committee for an association with 3 members or fewer consists of the following— (a) the nominee of each member that is a subsidiary body or other corporation, (b) each other member or the nominee of the member. (2) A member cannot have more than 1 nominee and a nominee must not be a corporation. (3) The nominee of a subsidiary body must be a person who would be eligible under this Division to be an elected member of the association committee if the association had more than 3 members. (4) (Repealed) (5) The association committee ceases to hold office if a new committee is elected under this Division following an increase in membership of the association to more than 3 members. 32 Committee for association with more than 3 members (1) The association committee of an association with more than 3 members is to consist of the number of persons determined by the association, but the number of members must— (a) not be more than the number of members of the association, and (b) not be more than 15. (2) The members of the association committee— (a) must be elected at— (i) the first annual general meeting of the association, and (ii) each subsequent annual general meeting, and (b) may be elected at another general meeting called to elect members of the committee. (3) If the number of members of an association increases to more than 3 after the first annual general meeting of the association, the members of the association committee of the association must be elected at a general meeting called to elect members. (4), (5) (Repealed) 33 Persons who are eligible to be members of community committee or precinct committee (1) The following persons are eligible for nomination, appointment or election to a community committee or a precinct committee— (a) a member of the association (other than a subsidiary body or other corporation) who is the sole owner of a development lot in the scheme, (b) a company nominee of a member of the community association or precinct association that is a corporation but is not a subsidiary body, (c) the only nominee of a member of the community association or precinct association who is eligible to be, but is not, a candidate, (d) a member of a subsidiary body, or a member of the committee of a subsidiary body, who is nominated by a resolution of the subsidiary body and is the only person nominated by it, (e) an individual who is the co-owner of a development lot in the scheme or a company nominee of a corporation that is a co-owner of a development lot in the scheme, if the person is nominated for election by an owner who is not a co-owner of the lot or by a co-owner of the lot who is not a candidate for election as a member, (f) an individual who is not an owner of a development lot in the scheme, if the person is nominated for election by an owner of a development lot who is not a member, or is not seeking election as a member, of the committee. (2) To avoid doubt, an individual who is a member of the community association or precinct association who is not a co-owner of a development lot in the scheme may nominate himself or herself for election as a member of the community committee or precinct committee. (3) Only 1 co-owner of the same development lot may be a member of a community committee or precinct committee at the same time. 34 Persons who are eligible to be members of neighbourhood committee (1) The following persons are eligible for nomination, appointment or election to a neighbourhood committee— (a) a member of the association (other than a corporation) who is the sole owner of a development lot in the scheme, (b) a company nominee of a member of the neighbourhood association that is a corporation, (c) the only nominee of a member of the neighbourhood association who is