This article about strata renovations NSW – post strata reforms has been supplied by James Moir, JS Mueller & Co.
The new reforms provide clearer, common sense approvals for owner strata renovations NSW. The new laws recognise three kinds of renovations:
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- Cosmetic – strata owners will be able to carry out cosmetic work with no approval
- Minor – a simple majority resolution will be required to approve minor renovations
- Major – a special resolution and approval is required for major work
This article is split into 5 sections:
- Summary of new legislation affecting works by-laws
- Summary of changes to works – old to new
- Blanket or generic by -laws
- Individual works/renovation by-laws
- Summary of NCAT changes
1. Summary of Relevant Legislation for Strata Renovations NSW
|New section||Old section||Description||Comment|
|134(3) and Reg 35||New||By-laws for pre-1996 schemes are those in Schedule 2||This will repeal any existing ones, except special by-laws|
|Sched 3||New||New model residential by-laws, applying to newly registered schemes|
|106(1)||62(1)||Maintain Common Property and keep it in good and serviceable repair||No change, same wording used|
|106(3)||62(3)||Can decide by special resolution not to maintain certain Common Property||Same|
|106(4)||New||If an Owners Corporation takes action against an owner for damage, it can defer compliance (obligation to maintain) until that action is determined, assuming no safety issues||New – previously there was no exemption|
|106(5)||New||Owner can sue for breach of statutory obligation (losses resulting from failure to maintain) for up to 2 years of becoming aware of the loss||Clarifies the case law which has gone back and forth on this issue. As the case law currently stands, this is a significant change.|
|106(7)||54(3) partly||Obligation to maintain is subject to any Common Property memorandum, any s108 by-law and any exclusive use by-law||Probably the same position as current, but sets it out more clearly. S54(3) only applies to exclusive use by-laws|
|108(1)||65A(1)||Can by special resolution add to, alter or erect a new structure on Common Property||No change, though we think s110(6) means this work can be deemed a minor renovation (and can be approved by the Executive Committee) unless it is a 110(7) exclusion|
|108(5)||65A(4)||If owner is to be responsible for maintenance, need by-law and owner’s written consent||No change|
|109(1)||New||Cosmetic work can be done without needing approval, but subject to owner rectifying damage to Common Property and carrying out work properly. By-law may specify additional work that is cosmetic, but can’t be one of the exclusions in s109(5).||Some of these items involve alterations to Common Property and would previously have required a written approval under by-law 5 or a special resolution and by-law. For example inserting hooks, nails and screws, installing built-ins and installing internal blinds/curtains.|
|109(5)||New||Exclusions – this cannot be deemed cosmetic work:||A by-law can deem other work to be cosmetic so no approval is needed, as long as that work is not excluded from the section. For that work (eg structural work or a bathroom reno), you still need the usual blanket by-law specifically authorising that work.||110(1)||New||Minor renovations can be done with the approval of Owners Corporation by ordinary resolution, no by-law needed. Minor renovations include:||Re the walls – this means altering non-structural walls can be done as a minor renovation. The Owners Corporation can pass a by-law saying the strata committee (Executive Committee) can determine these applications.|
|110(6)||New||Can provide that additional work is a minor renovation, subject to 110(7)||The Owners Corporation can pass a by-law saying all work that is not excluded can be approved by the strata committee. This is likely to become a popular new blanket by-law.|
|110(7)||New||Exclusions – this cannot be deemed a minor renovation:||The following works can be minor renos, as they are not excluded under 110(7) like they were under 109(5):|
|111||New||An owner must not do work on Common Property unless authorised or under a by-law or by a special resolution||This sort of summarises the other sections.|
|143(1)||52(1)(a)||Common property rights by-laws (like exclusive use ones) can be made with the consent of each owner on whom rights are conferred||Currently says with the consent of the owner of the lot(s) concerned. This clarifies the legal position and means the James case position will continue to apply, and Young’s case is history|
2. Summary of Changes to How Works are Dealt With
|Type of work||Position under current Act||Position under new Act|
|Installing hooks, nails and screws||Under standard by-law 5, written approval required, maintenance and repair not clear||Can be done without approval|
|Installation of built-ins||Special resolution and by-law needed if being bolted into a common property wall||No approval needed unless work involves structural changes|
|Installing blinds or curtains||Special resolution and by-law needed if work constitutes an alteration to common property (which is likely)||No approval needed. Some argument that approval is needed if there is a change to the external appearance of a lot, but probably won’t be interpreted that way|
|Kitchen renovation with appliances staying in same position||Special resolution and by-law needed if any change to common property||Only an ordinary resolution required and no by-law (and can be decided by Strata Committee meeting if power delegated)|
|Kitchen renovation with exhaust or plumbing changing||Special resolution and by-law needed if plumbing or exhaust penetrates common property, which is most likely||Only an ordinary resolution required and no by-law|
|Bathroom renovation with no change to waterproofing, (eg just changing vanity and shower screen)||Special resolution and by-law needed if changes to common property. Otherwise no approval needed.||Ordinary resolution only. Special res and by-law needed if change to waterproofing.|
|Installing or changing recessed light fittings i.e. within ceilings||Special resolution and by-law needed, as these are going above the paint on the ceiling (ie into common property)||Ordinary resolution only|
|Changes to wiring, cabling or power or access points||Most likely involves an alteration to common property, so special resolution and by-law required||Ordinary resolution only|
|Installation of bathroom exhaust fan||Special resolution and by-law needed, as this will penetrate a common property external wall||Ordinary resolution only|
|Solar panels||Special resolution and by-law needed as these are alterations to common property and exclusive use of it||Does it change the external appearance of the building, if the change can only be seen from the sky? If not, then not excluded under s110(7), so can deem that only ordinary res required|
|Air conditioners||Special resolution and by-law needed – through a wall, bolted to balcony, on an external wall etc||If it doesn’t change the external appearance of the building, then Owners Corporation can deem that only ordinary resolution required (and strata committee can deal with it)|
|Double glazing windows||Windows are usually common property, so by-law and special resolution needed||Not excluded under s110(7), so if new blanket by-law is passed, can be done with approval by Strata Committee|
|Ceiling insulation||Above the paint on the ceiling, so by-law and special resolution needed||Not excluded under s110(7), so if new blanket by-law is passed, can be done with approval by Strata Committee|
|Pergolas||Connected to Common Property, so by-law and special resolution needed||Probably approval needed as external appearance changed|
|Whirlybirds||Through Common Property, so by-law and special resolution needed||If hard or impossible to see from the street, can argue no change to external appearance, so can be one of the works which can be approved under a new blanket by-law|
3. Generic or Blanket By-laws
Once the new Act comes into effect, there will be two types of generic or blanket by-laws which will become very useful:
The same one currently used, whereby specified works involving alterations or additions to Common Property are approved, subject to the conditions in the by-law. These will remain an option for the types of works they previously dealt with. They will become very useful for those which are exclusions under s110(7) and cannot be deemed minor renovations, being:
- Structural work (internal walls)
- Work changing the external appearance (pergolas, awnings, and possibly solar panels and skylights)
- Work involving waterproofing (most bathroom renovations)
Again, in section 108(2), the work has to be specifically authorised by a special resolution. This is the same wording as is in s65A, so the Stolfa comments will continue to apply. A general approval of renovations will not be enough: it will have to be specific.
A new type of generic/blanket by-law, whereby:
- All work not excluded under s110(7) is deemed to be a minor renovations for the purposes of s110 and specifically 110(6)(a). Despite ss108(1) & (2), this can include work changing or adding to Common Property as long as it is not excluded under s110(7) (ie structural, changing external appearance and waterproofing);
- The Owners Corporation delegates its functions under s110 to the strata committee (Executive Committee). This is what we are commonly asked, for the Executive Committee to be able to approve works. Currently it cannot approve any work which involves an alteration or additional to Common Property, but after the new Act comes in, if this by-law is passed, it will be able to.
- The conditions set out in this by-law will apply if such work is carried out. We would set out the usual pre-work, during work and post-work conditions. Section 110 only includes that any damage to Common Property is repaired and the work must be done in a competent and proper manner.
4. Individual Works By-laws
All works for individual lots will continue to require their own individual special resolution and by-law, if they are an alteration or addition to common property, unless:
- they are cosmetic work (eg nails, screws, built-ins); or
- they are one of the listed minor renovations (in s110(3)), such as kitchen renos, recessed light fittings or electrical work. In this case they will have to be approved by ordinary resolution, unless the Type 2 by-law has been passed; or
- the work has been deemed to be cosmetic work (s109(4)) or a minor renovation (Type 2). If cosmetic work then no approval needed, and if a minor renovation, then once the Type 2 by-law is passed, the Strata Committee can approve it.
Any works by an owner which constitute structural work, a change to the external appearance or a change to the waterproofing, must be passed by special resolution and by-law. If a Type 1 blanket by-law has been passed in respect of that specific work, this is enough.
5. Summary of NCAT Changes
|Item||1996 Act||2015 Act||Comments|
|No more adjudication||N/A||N/A||All powers given to interested persons to go to the Tribunal now only relate to orders made by the Tribunal. There are no powers for Adjudicators to make orders. Any Adjudications lodged before 30 November 2016 will continue as if the 1996 Act was still in force (Clause 7 of Schedule 3 of the 2015 Act)|
|Changing unit entitlements||s.182||s.236||Same|
|Orders about by-laws, varying them, repealing them or ordering that owners unreasonably refuse to consent||ss.157-159||ss.148-150||Old s.159 gave an Adjudicator the power to invalidate a by-law if the owners corporation did not have the power to make the by-law. New s.159 is the same except that the|
Tribunal also has that power if the by-law is harsh, unconscionable or oppressive as well
|Pets||ss.150-151||ss.156-158||Slightly different wording, but the effect is the same.|
|Pets||ss.150-151||ss.156-158||Slightly different wording, but the effect is the same.|
|General power||s.138||s.232||Currently general power relates to the exercise/failure to exercise a function conferred or imposed by the Act or by-laws, or the operation, administration or management of a scheme. New Act adds the power to settle a complaint/dispute about:|
(b) Any agreement authorised/required under the Act;
(d) An agreement appointing a strata managing agent/building manager;
(d) An agreement between the Owners Corporation and an owner;
(f) An exercise/failure to exercise a function conferred or imposed under another Act
It was previously not clear whether the Tribunal could make orders about agreements with strata managing agents, for example.
|Costs||s.176||s.60 NCAT Act||Currently costs cannot be awarded for adjudications. As all matters will be hearings, costs will be able to be awarded in special circumstances, normally where an applicant seeks an order outside the Tribunal’s jurisdiction, but there can be other circumstances justifying costs orders.|
This post appears in Strata News #124.
This article first appeared as a PDF on the JS Mueller & Co website.
Disclaimer: The information contained in this newsletter about strata renovations NSW is not 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. Contact JS Mueller & Co for any required legal assistance.
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