WA strata laws - What every council of owners should know

WA’s major strata law, the Strata Titles Act (1985) has been in place for many years, however since 2020, the government has taken steps to update the state’s strata laws, and the regulations that add more detail and clarity to the legislation.

The original Act is designed to address the needs of strata title schemes, strata companies, councils of owners, and the owners themselves. It covers topics such as:

· Setting up a strata title scheme, the strata company itself and council of owners (the management committee)

· The constitution of the strata company

· Council of owners meetings and AGMs

· Functions, obligations and responsibilities of the strata company

· Role and powers of the council of owners

· Appointing external strata managers

· Financial management and responsibility

· Property and asset management

· Functions and responsibilities of building managers

· Making and enforcing by-laws

· Responsibility for building repairs and defects

· Compulsory building and liability insurance

· Disputes and how to resolve them

There have been some amendments to the Strata Titles Act 1985 which took effect on 1 May 2020. These amendments include:

· Strata disputes will have a more cost-effective and efficient dispute resolution forum through the State Administrative Tribunal (SAT)

· A fairer process for scheme termination with comprehensive new safeguards for all strata owners.

· Introduction of a required 10-year maintenance plan and reserve fund

· Strata managers have clear statutory duties defining their role and responsibilities

The most recent change to WA strata law is the commencement of the Community Titles Act (2018). The Community Titles Act 2018 came into effect on the 30th June 2021 and will allow for the creation and management of mixed-used developments encompassing elements such as retail outlets, commercial offices, recreational facilities and residential properties.

Importantly for a council of owners, the Act, its regulations and the new amendments detail the responsibilities, duties and safeguards of those entrusted with making decisions for the strata company.

Important Terminology

Knowing who is who and what is what is an important first step.

The strata scheme is the type of property title (as opposed to a freehold title for example).

The strata company is the legal entity that owns the common property, including the building, within a strata scheme. All apartment or lot owners are members of the company.

The council of owners is the committee elected by owners to make decisions on the ongoing management of the property (though some major decisions still need to be put to a vote of all owners).

A strata manager is an external specialist who may be engaged by the strata company to undertake the administrative elements of managing the property, such as calling meetings and overseeing finances.

A building manager is an internal employee of a strata company who undertakes daily management of the building including co-ordinating maintenance, cleaning, rubbish removal, notice boards etc.

Responsibilities of the council of owners

Much like a board of management in any large corporation, the council of owners is responsible for the good governance and management of the strata company and its property.

Under the law in WA, a strata company – through its council of owners ­– is responsible for managing and maintaining the common assets of a strata property. These responsibilities include:

· Taking out suitable strata insurance, through an approved insurer such as a strata specialist like Flex Insurance. In WA, it’s compulsory for strata companies to have, at minimum, adequate cover for building damage and public liability. But strata companies can look into additional cover such as volunteer or committee liability, machinery breakdown and financial fraud or theft.

· Sound and responsible financial management, including receiving income through levies and strata fees, paying expenses such as council rates and insurance premiums, and holding or investing funds for future needs.

· Making sure all decisions of the council of owners, and any strata management firms and/or building managers are made in good faith, and with due diligence.

· Arranging for repairs and maintenance of common property to be carried out swiftly and professionally.

· Scheduling works, including maintenance, vermin and pest management, and safety inspections, and notifying owners that they are going to take place.

· Keeping detailed records including: a register of lots, owners, tenants and insurance; financial statements; and the minutes of all meetings, and being able to make those records available to owners and others as appropriate.

· Issuing, publishing and enforcing by-laws, and ensuring no by-laws are unfair, discriminatory or oppressive.

· Getting legal advice and taking or defending a legal action.

· Employing staff such as building managers, and engaging contractors.

· Ensuring external professional strata managers (if appointed) meet minimum standards and are accountable to the strata company.

· Knowing, understanding and adhering to all applicable laws, such as planning, building, safety, insurance, employment, fire safety, inspections and occupational health and safety.

Amendments to the original Act, and the new regulations all came into effect in 2020 and, in addition to updating language, they also brought the laws into line with community expectations. The new amendments aim to:

· Improve the decision-making and record keeping of the council of owners

· Give owners greater say in how the property is maintained and improved, including making it easier to retro-fit green energy and sustainability infrastructure

· Increase the power to enforce by-laws through the State Administrative Tribunal.

If you’re joining a council of owners, or simply own a unit in a strata property, knowing the laws, your rights, obligations and protections – especially when it comes to insurance – is not only important, but smart.

There is more information on the WA strata laws here and more for councils of owners here.

WAAA runs events for members which are another great way to learn.

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