This article about ACT Strata Reform package has been provided by Dimitri Livas, Savil Group.
It’s no secret that the Australian building industry is in strife and the situation in the ACT is no different. Canberra faces the same problems as other Aussie states when it comes to dodgy builders, developers, and certifiers – and the trail of shoddy developments left in their wake. But experts have pointed the finger at the ACT government’s failure to enforce industry standards, saying this as one of the biggest reasons why the city of Canberra has suffered an outstanding number of defective buildings during its construction boom.
In fact, the problem is so bad that the government launched a legislative inquiry into the quality of ACT buildings in April this year. And not surprisingly, it quickly became obvious that a lack of builders’ experience, dodgy certifiers, and even dodgier “phoenix” companies were key concerns. And of course, a lack of consumer protection was mentioned again and again by affected owners.
So, what is the government going to do about it?
Well the federal government has introduced reforms to the building industry, which are ever-so-slowly being rolled out across the states, partly in response to highly publicised mass-evacuations in hugely defective buildings like Opal Tower and Mascot Towers in Sydney. But in a welcomed change, the ACT Government seems to be leading the pack in strata-specific reforms, with a new package announced recently.
‘Managing Buildings Better’ is the name of the strata reforms package – which has taken nearly three years to put together. It attempts to offer more protection to buyers and owners corporations in strata plans, as well as business owners in mixed-use developments. Pet-owners are also offered a leg-up in the new package, which attempts to correct outdated legislation.
And these changes can’t have come at a better time, with more and more dodgy buildings springing up all over Canberra. Senior ACT government ministers have commented on the shift that Canberra is seeing in terms of where its residents are choosing to live.
With more and more owners buying into mixed-use properties and apartment buildings closer to the city centre, they acknowledge that some legislation has become outdated. So, with both industry and community involvement in its development, the new package is an attempt to keep up with buyers’ behaviour and changing dynamics in the building industry. But will it work? Time will tell.
So, what’s in the new ACT Strata reform package?
Well, one of the biggest problems owners in defective buildings have faced is a loophole in legislation that has previously allowed developers and builders to make substantial changes to a building’s design after the development had already been approved and apartments had already been sold. Some dodgy developers have even gone so far as to use this loophole to reintroduce aspects of the original design which were rejected and therefore removed from plans before final approval was granted. Other common reasons for these later-stage changes are cost-cutting or rushing to meet a deadline, and the end result is poor workmanship, sub-standard quality and broken buildings.
Under the new laws, developers and real estate agents will be legally required to tell buyers when “significant” changes have been made to proposed developments. The reforms will also give buyers more power to cancel their contract should such changes be made. This is something that should’ve been done a long time ago, but at least we are seeing some positive changes happening now.
Developers are also being held to account for projecting running costs of the building. The new reforms mean developers will need to prepare and provide upfront plans to buyers, outlining running costs of the building and maintenance requirements. They will also need to tell owners about potential commercial uses of the building in mixed-use developments. This will all happen at a much earlier stage than what it currently does and will hopefully lessen the chances of owners being hit with unforeseeably high levies for general maintenance costs. It’ll also be possible for owners to know what type of commercial activity may be going on downstairs well before they sign on the dotted line.
And levies have come into the spotlight for other reasons too. In this new package, reforms will make it possible for developers and owners corporations to decide how levies and contributions are distributed between owners. Right now, in strata properties, owners often pay the same fees for utilities – like water – and building facilities – such as maintenance of lifts – regardless of how often they use these. Giving owners corporations and strata management more power to accurately divvy up these costs should result in fairer levies for owners. This is especially the case in mixed-use developments where residential owners share costs with businesses.
But one of the biggest wins for future owners is one particular change that will help to safeguard them against dodgy developers and builders in the event of dealing with building defects. You see, it isn’t uncommon for developers and builders or other contractors to own apartments within the very projects they have built or contributed to. However, in the past there have been situations where owners’ corporations come together to vote on dealing with defects – only to have those same developers, builders or contractors come together and use their power in numbers to vote against any such action. How it has been possible for such a huge conflict of interest to go unchecked for so long, but at least now the government seems to be doing something about it.
Other changes proposed by the package seek to simply make the experience of strata living easier for owners and residents. One such simple but long-overdue change is streamlining the approvals process for owners who wish to have a pet live in their apartment. Currently, strata by-laws have owners jumping through hoops to get approval for pets, with many buildings outright refusing them or only making exceptions for residents who rely on their pets for physical or mental assistance. This has led to a situation in nearly every building where “illegal” pets are kept in the building when owners simply refuse to go through the out-dated process for approval. This reform is a small change, but one that pet-lovers nonetheless will appreciate.
In the days to come we will no doubt hear more about just how the new package will improve strata living in the ACT. And hopefully, other states will start to catch on. Stay tuned!
- ACT: Q&A Is there a Code of Behaviour for Difficult Lot Owners?
- How the Government and the Construction Industry Can Work Together to Create Healthy Buildings [Opinion]
This post appears in Strata News #281
Disclaimer: The information contained in this article is provided for your personal information only. It is not meant to be legal or professional advice nor should it be used as a substitute for such advice. You should seek legal advice for your specific circumstances before relying on any information herein.
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