This article is Part 3 of a Sustainability series exploring how sustainability initiatives can be authorised and implemented in NSW strata schemes.
Read the earlier articles in this series:
- Part 1: NSW: Authorising works to the common property and the resolution is required
- Part 2: NSW: What is the test to determine if work is a repair or an upgrade?
Let’s get our kangaroos in a row and make sure our when introducing sustainability into our strata schemes we use all the tools we have available to make it easier. In part one of this Sustainability series I considered how works are authorised by an owners corporation and in part two I reviewed cases on whether common property work was a repair or an upgrade.
In this part three of my Sustainability series, the changes to the Strata Schemes Management Act 2015 (“Management Act”) regarding sustainability infrastructure resolutions and special resolutions are considered together with how these changes have very real implications for owners corporations by impacting on the ability of owners corporation’s to authorise sustainability infrastructure works.
First, what are sustainability infrastructure resolutions?
They are defined in section 132B of the Management Act. Very simply, they are resolutions to:
- Finance sustainability infrastructure;
- Add to or alter the common property or to erect a structure on the common property for the purpose of installing sustainability infrastructure; and
- Amend by-laws for the purpose of the installation or use (or both) of sustainability infrastructure;
And, what is sustainability infrastructure?
Section 132B of the Management Act provides a definition however, and this is key to understanding the definition and the flexibility and impact of these types of resolutions, section 132B does not define sustainability infrastructure in terms of technology. Instead, the definition is as follows:
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“sustainability infrastructure means changes to part of the common property (which includes the installation, removal, modification or replacement of anything on or forming part of that property) for any one or more of the following purposes—
(a) to reduce the consumption of energy or water or to increase the efficiency of its consumption,
(b) to reduce or prevent pollution,
(c) to reduce the amount of waste sent to landfill,
(d) to increase the recovery or recycling of materials,
(e) to reduce greenhouse gas emissions,
(f) to facilitate the use of sustainable forms of transport,
Note.
For example, installing electric vehicle charging stations.
(g) a purpose prescribed by the regulations.”
The example given of installing EV charging stations is a typical one however it is important that the width of the definition be considered. I will consider more examples in my fourth blog in this Sustainability series to showcase how far ranging this definition is.
Now, what are the practical implications of sustainability infrastructure resolutions?
Many sustainability initiatives require an addition to or alteration of the common property and cannot be classified as a repair as they are intentionally changing the functionality of the common property. In my first blog in this Sustainability series pointed out, alterations or additions to the common property must be authorised. In most cases this would require a special resolution.
In a significant change to the Management Act on 24 February 2021 the definition of a special resolution was as altered to make it easier for sustainability infrastructure resolutions to be passed. Now, instead of requiring a majority of votes in favour and not more than 25% of the votes cast being against the motion (in simple terms a vote of 75% to pass the special resolution) a sustainability infrastructure resolution requires a majority of votes in favour and not less than 50% of the votes cast being against the motion.
In other words, a simple majority is all that is required not the normal 75% of votes. This makes it much, much easier to pass sustainability infrastructure resolutions.
In my fourth blog in this Sustainability series I will explore the far ranging effects of this change using real world examples.
Please seek legal advice that is tailored to your situation because as always, the devil is in the details and this is general information only.
Allison Benson Kerin Benson Lawyers E: allison@kerinbensonlawyers.com.au P: 02 4032 7990
This post appears in Strata News #778.
Have a question or something to add to the article? Leave a comment below.
Read next:
- NSW: Q&A What counts as sustainability infrastructure under the new rules?
- NSW: City of Sydney calls for your feedback on apartment sustainability programs
- NSW: Sustainability infrastructure: What is it & how has installing it been made easier?
This article has been republished with permission from the author and first appeared on the Kerin Benson Lawyers website.
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