Strata Schemes Management Act 2015 (NSW)

Strata Schemes Management Act 2015 No 50 An Act with respect to the management of strata schemes and disputes related to strata schemes and other matters; and to repeal the Strata Schemes Management Act 1996. Part 1 Preliminary 1 Name of Act This Act is the Strata Schemes Management Act 2015. 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 strata schemes, (b) to provide for the resolution of disputes arising from strata schemes. 4 Definitions (1) In this Act— accounting records means the accounting records required to be kept by an owners corporation under section 96. administrative fund of an owners corporation means the fund established by the owners corporation under section 73. aggregate unit entitlement of lots in a strata scheme means the sum of the unit entitlements of the lots. approved insurer means— (a) a general insurer within the meaning of the Insurance Act 1973 of the Commonwealth, or (b) any other person prescribed by the regulations for the purposes of this definition. assistance animal has the same meaning as in the Disability Discrimination Act 1992 of the Commonwealth, section 9(2). building, in relation to a strata scheme or a proposed strata scheme, means a building containing a lot or proposed lot, or part of a lot or proposed lot, in the scheme or proposed scheme. building management committee means a building management committee established for a building under a strata management statement for a strata scheme. building manager—see section 66. building manager agreement–see section 67. by-laws means the by-laws in force for a strata scheme. capital works fund of an owners corporation means the fund established by the owners corporation under section 74. change a by-law—see section 133. commission includes an insurance broker fee. common property, in relation to a strata scheme or a proposed strata scheme, has the same meaning as it has in the Strata Schemes Development Act 2015. common property rights by-law—see section 142. community scheme has the same meaning as it has in the Community Land Development Act 2021. company nominee of a corporation means an individual for the time being authorised under section 154 (1) by the corporation. connected, in relation to 2 or more persons—see section 7. covenant chargee of a lot or development lot in a leasehold strata scheme means a covenant chargee of a leasehold estate of the lot. damage policy—see section 160 (1). defective building work—see section 190. Department means the Department of Customer Service. developer of the strata scheme constituted on registration of a strata plan proposed under a development scheme means the person who, for the time being, is— (a) the original owner of the strata scheme, or (b) a person, other than the original owner, who is the owner of a development lot within the strata plan. development lot means a lot in a strata plan or strata plan of subdivision that is identified by a strata development contract as a lot that is to be the subject of a strata plan of subdivision under the development scheme for the contract. development scheme means the scheme of development provided for, and represented by, a strata development contract. financial statements means the financial statements prepared by an owners corporation in accordance with Division 3 of Part 5. floor includes a stairway or ramp. freehold strata scheme has the same meaning as it has in the Strata Schemes Development Act 2015. function includes a power, authority or duty, and exercise a function includes perform a duty. initial maintenance schedule means the schedule prepared by the original owner under section 115. initial period of an owners corporation of a strata scheme means the period— (a) commencing on the day the owners corporation is constituted, and (b) ending on the day there are owners of lots in the strata scheme (other than the original owner) the sum of whose unit entitlements is at least one-third of the aggregate unit entitlement. interested person—see section 226. large strata scheme—see section 6. leasehold strata scheme has the same meaning as it has in the Strata Schemes Development Act 2015. lessor of a leasehold strata scheme has the same meaning as it has in the Strata Schemes Development Act 2015. local council, in relation to land, means— (a) the council of the area under the Local Government Act 1993 in which the land is situated, or (b) a person declared by the regulations to be the local council for that land for the purposes of this Act or any specified provision of this Act. lot, in relation to a strata scheme, has the same meaning as it has in the Strata Schemes Development Act 2015. minor renovations—see section 110. mortgage, in relation to a lot in a strata scheme, has the same meaning as it has in the Strata Schemes Development Act 2015. mortgagee, in relation to a lot or development lot in a leasehold strata scheme, has the same meaning as it has in the Strata Schemes Development Act 2015. occupier of a lot means a person in lawful occupation of the lot. officer of an owners corporation means the chairperson, secretary or treasurer of the owners corporation. on-site residential property manager means a real estate agent exercising on-site residential property manager functions within the meaning of the Property and Stock Agents Act 2002. original owner— (a) of a freehold strata scheme means the person who held the fee simple in the parcel the subject of that scheme when the strata plan for the scheme was registered, or (b) of a leasehold strata scheme means the person who, immediately after registration of the strata plan for the scheme, is entitled to a leasehold estate in all the lots in the scheme or is entitled to a leasehold estate in 2 or more lots in the scheme with total unit entitlements exceeding more than two-thirds of the aggregate unit entitlement of the lots in the scheme. owner of a lot in a strata scheme means— (a) except as provided by paragraph (b) or (c), each person for the time being recorded in the Register as entitled to an estate in fee simple in the lot (in the case of a freehold strata scheme) or as entitled to a leasehold estate in the lot (in the case of a leasehold strata scheme), or (b) except as provided by paragraph (c), each person whose name is entered on the strata roll in accordance with section 178 as being entitled to an estate in fee simple in the lot (in the case of a freehold strata scheme) or as entitled to a leasehold estate in the lot (in the case of a leasehold strata scheme), or (c) each person who is taken by section 43 (1) of the Strata Schemes Development Act 2015 to be the owner of the lot. owners corporation means an owners corporation constituted under section 8 for a strata scheme. parcel means— (a) in relation to a strata scheme, the land from time to time comprising the lots and common property in the scheme, and (b) in relation to a plan lodged for registration as a strata plan, the land comprised in that plan. part strata parcel has the same meaning as it has in the Strata Schemes Development Act 2015. person present at a meeting includes a person who is not personally present but is able to vote at the meeting by another means specified under clause 28 of Schedule 1 or clause 10 of Schedule 2. planning approval means— (a) a development consent within the meaning of the Environmental Planning and Assessment Act 1979, or (b) an approval under Part 3A or Part 5.1 of that Act. positive covenant means a positive covenant imposed on land under section 88D or 88E of the Conveyancing Act 1919. precinct scheme has the same meaning as it has in the Community Land Development Act 2021. public authority means a public or local authority that is constituted by or under an Act. real estate agent has the same meaning as in the Property and Stock Agents Act 2002. registered means registered in the office of the Registrar-General. registrar means a registrar of the Tribunal. retirement village has the same meaning as it has in the Retirement Villages Act 1999. schedule of unit entitlement, in relation to a strata scheme, has the same meaning as it has in the Strata Schemes Development Act 2015. Secretary means— (a) the Commissioner for Fair Trading, Department of Customer Service, or (b) if there is no person employed as Commissioner for Fair Trading—the Secretary of the Department. special resolution—see section 5. strata committee of an owners corporation means the strata committee of that owners corporation established under this Act. strata development contract has the same meaning as it has in the Strata Schemes Development Act 2015. strata information certificate—see section 184 (1). strata interest notice—see section 22 (1). strata management statement has the same meaning as it has in the Strata Schemes Development Act 2015. strata managing agent means a person appointed as the strata managing agent for a strata scheme. strata plan has the same meaning as it has in the Strata Schemes Development Act 2015. strata roll for a strata scheme or a former strata scheme means the strata roll for that scheme established under Division 1 of Part 10. strata scheme means a freehold strata scheme or a leasehold strata scheme. sustainability infrastructure and sustainability infrastructure resolution—see section 132B. tenancy notice means a notice given to an owners corporation under section 258. tenant of a lot means a lessee, sublessee or assignee of a lot, but does not include an owner of the lot. the Register has the same meaning as it has in the Real Property Act 1900. Tribunal means the Civil and Administrative Tribunal. unanimous resolution—see section 5. unfinancial owner means an owner of a lot in a strata scheme who has not paid all contributions levied on the owner that are due and payable, and any other amounts recoverable from the owner, in relation to the lot. unit entitlement of a lot in a strata scheme means the unit entitlement of the lot shown on the schedule of unit entitlement for the strata scheme. utility lot means a lot designed to be used primarily for storage or accommodation of boats, motor vehicles or goods and not for human occupation as a residence, office, shop or the like. wall includes a door, window or other structure dividing a lot— (a) from common property or from another lot, or (b) if the lot is a lot in a part strata parcel—from any part of a building that is not within the parcel. Note. The Interpretation Act 1987 contains definitions and other provisions that affect the interpretation and application of this Act. (2) A reference in this Act to the registration of a strata plan or a strata plan of subdivision is a reference to the registration of a plan as any such plan under the Strata Schemes Development Act 2015. (3) This Act applies to a leasehold strata scheme in the same way as it applies to a freehold strata scheme unless otherwise specified. (4) Notes included in this Act do not form part of this Act. 5 Resolutions of owners corporations (1) In this Act, a resolution of an owners corporation is a special resolution if— (a) it is passed at a properly convened general meeting, and (b) of the value of 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 determining a special resolution, the value of a vote for a lot is equal to the unit entitlement of the lot, subject to subsection (2A). (2A) The value of a vote cast by an original owner of a strata scheme must be reduced by two-thirds if— (a) the total unit entitlement of lots for which the original owner is entitled to a vote is at least half of the aggregate unit entitlement of the lots in the scheme, and (b) the scheme comprises more than 2 lots. (3) In this Act, a resolution of an owners corporation is a unanimous resolution if it is passed at a properly convened general meeting and no vote is cast against the resolution. 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 (see clause 14 of Schedule 1). 6 Meaning of "large strata scheme" (1) In this Act, large strata scheme means a strata scheme comprising more than 100 lots or another number of lots prescribed by the regulations for the purposes of this section. (2) When calculating the number of lots in a strata scheme for the purposes of this section, utility lots and lots used for the purposes of parking are not to be included in the calculation. (3) The regulations may contain provisions of a savings or transitional nature consequent on a change in the kinds of schemes that are large strata schemes. 7 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 any other 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 owners corporation, or the strata committee of an owners corporation, merely because of any dealing, contact or arrangement the member has with the principal person in the capacity of a member of the owners corporation or strata 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 Managing body for strata schemes—owners corporation Division 1 Constitution of owners corporation 8 Constitution of owners corporation (1) The owners of the lots from time to time in a strata scheme constitute a body corporate under the name "The Owners—Strata Plan No X" (X being the registered number of the strata plan to which that strata scheme relates). (2) An owners corporation is declared to be an excluded matter for the purposes of section 5F of the Corporations Act 2001 of the Commonwealth in relation to the whole of the Corporations legislation. Note. This subsection ensures that neither the Corporations Act 2001 of the Commonwealth nor Part 3 of the Australian Securities and Investments Commission Act 2001 of the Commonwealth will apply in relation to an owners corporation. Section 5F of the Corporations Act 2001 of the Commonwealth provides that if a State law declares a matter to be an excluded matter in relation to those Acts, then the provisions of those Acts will not apply in relation to that matter in the State concerned. Division 2 Management of strata schemes 9 Owners corporation responsible for management of strata scheme (1) The owners corporation for a strata scheme has the principal responsibility for the management of the scheme. (2) The owners corporation has, for the benefit of the owners of lots in the strata scheme— (a) the management and control of the use of the common property of the strata scheme, and (b) the administration of the strata scheme. (3) The owners corporation has responsibility for the following— (a) managing the finances of the strata scheme (see Part 5), (b) keeping accounts and records for the strata scheme (see Parts 5 and 10), (c) maintaining and repairing the common property of the strata scheme (see Part 6), (d) taking out insurance for the strata scheme (see Part 9). 10 Functions of owners corporation generally (1) An owners corporation has such other functions as may be conferred or imposed on it by or under this or any other Act. (2) An owners corporation must not delegate any of its functions to a person unless the delegation is specifically authorised by this Act. 11 Other management bodies and persons who assist the owners corporation The owners corporation for a strata scheme may be assisted in the carrying out of its management functions under this Act by any one or more of the following— (a) the strata committee of the owners corporation established in accordance with this Act, (b) a strata managing agent for the scheme appointed in accordance with Part 4, (c) a building manager for the scheme appointed in accordance with Part 4. 12 Owners corporation may employ persons to assist in exercise of functions (1) The owners corporation for a strata scheme may employ such persons as it thinks fit to assist it in the exercise of any of its functions. (2) The owners corporation must ensure that any 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. 13 Functions that may only be delegated to member of strata committee or strata managing agent (1) The following functions of an owners corporation, strata committee or officer of an owners corporation may be delegated to or conferred only on a member of the strata committee or a strata managing agent— (a) the preparation of estimates for the purposes of section 79, (b) the levying of contributions, (c) the receiving of, acknowledging of, banking of or accounting for money paid to the owners corporation, (d) having custody of any money paid to the owners corporation or making payments from any such money, (e) the taking out of insurance required or permitted by this Act, (f) the conduct of meetings of the owners corporation and handling of correspondence, (g) the maintenance of records required to be kept under this Act, (h) such other functions as may be prescribed by the regulations. (2) This section is subject to sections 56 and 101. Note. Section 101 enables some of these functions to be exercised by certain other specified persons. Division 3 Meetings of owners corporation 14 First AGM must be held within 2 months after initial period (1) The original owner or, in the case of a leasehold strata scheme for which there is no original owner, the lessor of the leasehold strata scheme must convene and hold a meeting of the owners corporation, in accordance with this Act and the regulations, not later than 2 months after the end of the initial period. Maximum penalty—10 penalty units. (2) An original owner or lessor who fails to comply with this section remains liable to the penalty for that contravention even if the Tribunal makes an order under this Division or a meeting is convened and held in accordance with the order or otherwise. (3) An original owner or lessor required to convene the first annual general meeting of an owners corporation must give at least 14 days notice of the first annual general meeting to— (a) each other owner and each first mortgagee and covenant chargee shown on the strata roll, and (b) each tenant of a lot in the strata scheme whose name has been notified under a tenancy notice as a tenant of the lot to the owners corporation in accordance with this Act. 15 Agenda for first AGM The agenda for the first annual general meeting of an owners corporation 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 discuss the preparation of the 10-year capital works fund plan, (c) to determine the number of members of the strata committee and to elect the strata committee, (d) to decide whether insurance taken out by the owners corporation should be confirmed, varied or extended, (e) to decide whether insurance referred to in section 165 (2) should be taken out by the owners corporation, (f) to decide if any matter or class of matter is to be determined by the owners corporation in general meeting, (g) to decide whether the by-laws for the strata scheme should be altered or added to, (h) to decide whether a strata managing agent should be appointed by the owners corporation and, if appointed, what functions of the owners corporation should be delegated to the strata managing agent, (i) if there is a strata managing agent, a form of motion to consider the report by the agent as to whether, and what, commissions have been paid to the agent or are likely to be payable to the agent for the following 12 months, (j) to decide whether a building manager should be appointed and, if appointed, what functions the building manager should exercise, (k) to receive the documents required to be provided under section 16, (l) to consider the accounting records and last financial statements prepared, (m) to consider the initial maintenance schedule, (n) to consider building defects and rectification, (o) to appoint an auditor or to decide whether an auditor should be appointed, (p) any item prescribed by the regulations for the purposes of this section. 16 Documents and records to be provided to owners corporation at first AGM (1) An original owner or lessor of a strata scheme required to convene a meeting under this Division must deliver the following to the owners corporation at least 14 days before the first annual general meeting of the owners corporation— (a) all plans, specifications, occupation certificates or other certificates, diagrams, depreciation schedules and other documents (including policies of insurance) relating to the parcel or any building on the 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 parcel or any building, plant or equipment on the parcel, (c) the strata roll and any notices or other records relating to the strata scheme, (d) the initial maintenance schedule, (e) any interim report or final report of a building inspector prepared under Part 11 and relating to any building on the parcel, (f) any other document or item relating to the parcel or any building, plant or equipment on the parcel that is prescribed by the regulations for the purposes of this section. Maximum penalty—100 penalty units. (2) An original owner or lessor is only required under this section to deliver to the owners corporation a thing if that thing is in the possession or control of the original owner or lessor or may be obtained by the original owner or lessor by taking reasonable steps to do so. (3) This section does not require an original owner or lessor to deliver to the owners corporation any documents that exclusively evidence rights or obligations of the original owner or lessor and that are not capable of being used for the benefit of the owners corporation or any of the other owners. 17 Tribunal may order initial documents to be provided The Tribunal may, on application by an owners corporation, order an original owner or lessor required to convene a meeting under this Division to provide to the owners corporation a thing that was required to be but was not delivered to the owners corporation in accordance with this Division. 18 AGM must be held An owners corporation must hold an annual general meeting once in each financial year of the corporation. 19 Other general meetings (1) The secretary or a strata committee of an owners corporation may convene a general meeting (that is not an annual general meeting) of the owners corporation at any time. (2) The secretary of the owners corporation, or another officer if the secretary is absent, must convene a general meeting (that is not an annual general meeting) of the owners corporation as soon as practicable, and not later than 14 days 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 this section if it is made by one or more owners of a lot or lots in the strata scheme having a total unit entitlement of at least one-quarter of the aggregate unit entitlements. 20 Tribunal may appoint person to hold first AGM and other meetings (1) The Tribunal may, on application by an owners corporation or an owner or mortgagee of a lot in a strata scheme, order a person to convene and hold a meeting of the owners corporation 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. 21 Unanimous or special resolutions to be amended or revoked in same way (1) A unanimous resolution or special resolution of an owners corporation about a matter that is required by or under this Act or the by-laws of a strata 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 owners corporation dealing with common property may be amended by a special resolution. 22 Notice to be given to owners corporation of right to cast vote at meeting (1) Person with right to vote at meetings must notify owners corporation A person who has an interest in a lot that, subject to this Act, gives the person a right to cast a vote either personally or by nominee at meetings of an owners corporation must give the owners corporation written notice of that interest (a strata interest notice). (2) Contents of strata interest notice The strata 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 in it, (c) the date on which the person acquired the interest, (d) if the voting entitlement conferred by the interest is one that, according to this Act, is to be exercised by a nominee, the nominee's full name and address for service of notices. Note. An address for service of notices may be an Australian postal address or an electronic address, including an email address (see section 261). (3) Other matters to be specified in notice The strata 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 operation of law or the order of any court, (d) the interest has arisen in any manner otherwise than by transfer of the interest from some other person or the discharge of a mortgage. (4) Owners corporation may require notice to be given The secretary of the owners corporation, if of the opinion that a person obliged to give notice under this section has not done so, may 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 such a person, to give that notice. (5) Person prevented from casting vote if certain requirements not met A person is not entitled to cast a vote at a meeting of the owners corporation 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 any change of nominee or of the person's or any nominee's address for service. 23 Meeting procedures and voting Other procedures for general meetings of the owners corporation and voting at those meetings are set out in Schedule 1. 24 Order invalidating resolution of owners corporation (1) The Tribunal may, on application by an owner or first mortgagee of a lot in a strata scheme, make an order invalidating any resolution of, or election held by, the persons present at a meeting of the owners corporation 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, on application by an owner or first mortgagee of a lot in a strata scheme, make an order invalidating any resolution of, or election held by, the persons present at a meeting of the owners corporation if the Tribunal considers that the provisions of Part 10 (other than Division 6 or 7) of the Strata Schemes Development Act 2015 have not been complied with in relation to the meeting. (3) 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, or of the Strata Schemes Development Act 2015, 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. (4) The Tribunal may not make an order invalidating a resolution under subsection (2) if an application for an order has been made under Division 6 of Part 10 of the Strata Schemes Development Act 2015 in relation to the same or a related matter. (5) The Tribunal may not make an order under this section invalidating a decision by an owners corporation to approve, or not to approve, the appointment of a building inspector under Part 11. 25 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