STATUTES AMENDMENT (COMMUNITY AND STRATA TITLES) BILL

I am pleased to introduce the Statutes Amendment (Community and Strata Titles) Bill 2021. The bill will make changes to the Community Titles Act 1996 and the Strata Titles Act 1988, which govern the creation and management of community and strata-titled properties respectively. These changes to the community and strata titles legislation will implement recommendations made in the 81st report of the Environment, Resources and Development Committee of this parliament, titled Strata Titles, as well as additional changes requested by interested parties in consultation on the bill and also subsequently in letters received from members of the public and others.

May I say that was a report commenced back in March 2015. I think two members of that committee have now retired and one is about to. I just want to place on the record my appreciation for that report. It did ultimately report in March 2018 and the report was signed and received by the then Speaker Atkinson later that year. All good things come to those who wait.

Part of the terms of reference of the ERD Committee's inquiry into strata titles regulation was to review the legislation changes that were made to the community and strata titles legislation in 2013. Several of the changes in this bill will build on those changes, in some cases to tighten provisions to ensure they have the intended effect.

Several other changes in the bill are designed to achieve greater consistency between the Community Titles Act and the Strata Titles Act, noting that the Strata Titles Act generally governs strata title developments established before the commencement of the Community Titles Act in 1996. The Community Titles Act in turn governs new community and strata divisions and community corporations established after that time. This move to consistency wherever possible between the two acts will make it easier for body corporate managers who assist with the management of community and strata corporations.

The bill will support a key priority of the government's justice agenda in keeping the law and our policies current and relevant. In summary, this bill will make the following changes to the Community Titles Act and the Strata Titles Act:

1. Amend the Community Titles Act section 78D and Strata Titles Act section 27D to address the practice of reinvoicing by body corporate managers by requiring that a body corporate manager must clearly disclose the amount of any fee or commission being charged to the corporation for arranging a contract with another service provider.

2. Amend the Community Titles Act and Strata Titles Act to make it clear that the caps on fees that apply to corporations also apply to a manager providing information and copy documents on behalf of the corporation to an owner or prospective owner under Strata Titles Act section 41 and Community Titles Act section 139.

3. Amend the Community Titles Act and Strata Titles Act to require the plan of division for a community or strata titles scheme to be supplied to owners or prospective purchasers under the Community Titles Act section 139 and Strata Titles Act section 41 as part of strata and community title property searches.

4. Amend the Strata Titles Act section 33(5) for consistency with the Community Titles Act by adopting the formula for achieving a quorum at general meetings of corporations contained in the Community Titles Act section 83.

5. Amend the Community Titles Act and Strata Titles Act to require the statement of expenditure (or 'sinking fund plan') required to be prepared and reviewed by corporations under the Community Titles Act section 113 and Strata Titles Act section 33A to be supplied to the owners or prospective purchasers under the Community Titles Act section 139 and Strata Titles Act section 41 as part of strata and community property searches.

6. Amend the Community Titles Act and Strata Titles Act to increase the prescribed minimum amount of mandatory public liability insurance that must be held by a corporation under Strata Titles Act section 31(2) and Community Titles Act section 104(2) from $10 million to $20 million.

7. Amend the Community Titles Act and Strata Titles Act to ensure that the pamphlet required under Community Titles Act section 78B and Strata Titles Act section 27B explaining owners' rights under a proposed contract with a body corporate manager (including to inspect corporation documents held by the manager, to apply to the Magistrates Court to resolve disputes and the rights to terminate the contract) be required to be supplied to owners rather than merely being made available for inspection prior to a meeting at which it is proposed to vote to appoint the manager.

8. Amend Strata Titles Act section 34 for consistency with Community Titles Act section 84 to provide that an owner in arrears may not vote at strata corporation meetings.

9. Amend the Community Titles Act and Strata Titles Act to address the problem of inquorate corporation meetings by adopting an approach recently introduced in Western Australia, whereby a quorum may be declared from those present after 30 minutes of the appointed time for a duly convened meeting, avoiding the need to adjourn and reconvene the meeting at a later date.

10. Amend the Strata Titles Act, for consistency with the Community Titles Act, to adopt the Community Titles Act position on which officers can call a general meeting of the corporation.

11. Amend the Strata Titles Act, for consistency with the Community Titles Act, to adopt the Community Titles Act position on who may vote at a corporation meeting if there is more than one owner of a lot and they disagree. Under the Strata Titles Act, currently the first named person on the certificate of title may vote, whereas neither votes under Community Titles Act section 84(7). The Strata Titles Act position is arbitrary and body corporate managers prefer the Community Titles Act position.

12. Amend the Community Titles Act to increase the threshold for mandatory audits for community titled corporations to align the Community Titles Act more closely to the Victorian approach to audits, such that self-managed community corporations will be required to have their accounts audited where contributions exceed $100,000 per year or there are over 100 lots in the group. Other community titled groups can still resolve to have their accounts audited if they wish after balancing perceived risk against audit costs. The requirements for body corporate manager trust accounts to be audited are unchanged.

13. Amend the Community Titles Act and Strata Titles Act to remove the requirement for corporations to have a common seal, consistent with changes previously made under the Corporations Law.

14. Amend the Community Titles Act to extend the prescribed time for lodgements of amendments to by-laws with the Registrar-General from 14 to 21 days since 14 days has proved difficult to achieve and to create discretionary powers for the Registrar-General to dispense with the requirement for the consent of certain parties to minor prescribed technical amendments of, or to correct clear errors in, a scheme description for a staged development. This will improve efficiency and reduce the significant costs that can arise from the need to obtain consents from a broad range of parties to minor changes to the scheme description.

15. Amend the Community Titles Act to explicitly empower a community corporation to make by-laws to regulate smoking of tobacco and related products on the shared common property and to prevent smoke drift from private lots onto other lots or common property. A community corporation will be able to vote by special resolution to vary its by-laws to regulate smoking in this way. This particular amendment is included at the urging of the Heart Foundation in South Australia, supported by Drug and Alcohol Services SA in SA Health. It follows equivalent reforms in New South Wales in 2016 and also recently passed in Victoria.

I commend the bill to members and I seek leave to have the explanation of clauses inserted into Hansard without my reading the same.

Leave granted.

EXPLANATION OF CLAUSES

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Community Titles Act 1996

4—Amendment of section 12—First by-laws

This clause makes a minor technical amendment.

5—Amendment of section 32—Persons whose consents are required

This clause amends section 32 to give the Registrar-General power to dispense with certain consents required under the section in specified circumstances.

6—Amendment of section 34—By-laws

This clause allows by-laws to regulate or prohibit smoking in the common property or the drifting of tobacco smoke from one lot to another or to the common property.

7—Amendment of section 39—Variation of by-laws

This clause extends the time within which a copy of varied by-laws must be lodged with the Registrar-General from 14 days to 21 days.

8—Amendment of section 73—Execution of documents

This clause removes the requirement for a community corporation to have a common seal and provides for the execution of documents by the corporation without a common seal and the signing of contracts on behalf of the corporation.

9—Amendment of section 78B—Body corporate managers

This clause amends section 78B to require that a pamphlet setting out the role of the body corporate manager and the rights of the community corporation and its members, (including any matters prescribed by regulation) be served on each member of the corporation at least 5 clear days before the date of the meeting at which the corporation is to consider whether or not to enter into a contract with the body corporate manager. The clause also includes an interpretative provision specifying that all fees and commissions payable by the corporation are considered part of the body corporate manager's remuneration.

10—Amendment of section 78D—Offences

This clause creates a new offence for a delegate who charges an undisclosed fee or commission to the corporation in respect of the performance of delegated functions or powers. The penalty is a maximum fine of $500.

11—Amendment of section 80—Business at first statutory general meeting

This is consequential to clause 8.

12—Amendment of section 83—Procedure at meetings

This clause amends the general meeting quorum requirement to provide that a quorum is determined by dividing the number of persons who are entitled to attend the meeting and exercise the voting power in respect of a lot by 2, disregarding any fraction and adding 1. In addition it is provided that if a quorum is not present after 30 minutes from the meeting's scheduled starting time, the persons entitled to vote who are present are taken to constitute a quorum.

13—Amendment of section 104—Other insurance by community corporation

This clause increases the minimum amount of mandatory public liability insurance from $10,000,000 to $20,000,000.

14—Amendment of section 113—Statement of expenditure etc

The statement of expenditure presented at the annual general meeting must set out proposed expenditure (other than recurrent expenditure) for the period prescribed by the regulations, which currently cannot exceed 5 years. This clause deletes that 5 year limitation.

15—Amendment of section 138—Audit

This clause reduces the number of community corporations that will be required to have their annual statement of accounts audited.

16—Amendment of section 139—Information to be provided by corporation

This clause adds to the list of material that is available on application by or on behalf of an owner or prospective owner or a registered mortgagee or prospective mortgagee. The section will now also allow for provision of a copy of the plan of community division and a copy of the most recent statement under section 113 (the statement of expenditure). The clause also amends the offence provision in subsection (3) to ensure it can also be committed by a person who is acting on behalf of a community corporation.

17—Amendment of section 155—Service

This clause makes a minor amendment to the service provision which will ensure it also applies to the pamphlet that will be required to be served under the proposed changes to section 78B.

Part 3—Amendment of Strata Titles Act 1988

18—Amendment of section 16—Amalgamation of adjacent sites

This is consequential to clause 21.

19—Amendment of section 17—Cancellation

This is consequential to clause 21.

20—Amendment of section 18—Name of strata corporation

This is consequential to clause 21.

21—Substitution of section 24

This clause provides that a strata corporation may (but is not required to) have a common seal and provides for the execution of documents by the corporation without a common seal and the signing of contracts on behalf of the corporation.

22—Amendment of section 27B—Body corporate managers

This clause amends section 27B to require that a pamphlet setting out the role of the body corporate manager and the rights of the strata corporation and its members, (including any matters prescribed by regulation) be served on each member at least 5 clear days before the date of the meeting at which the corporation is to consider whether or not to enter into a contract with the body corporate manager. The clause also includes an interpretative provision specifying that all fees and commissions payable by the corporation are considered part of the body corporate manager's remuneration.

23—Amendment of section 27D—Offences

This clause creates a new offence for a delegate who charges an undisclosed fee or commission to the corporation in respect of the performance of delegated functions or powers. The penalty is a maximum fine of $500.

24—Amendment of section 31—Other insurance by strata corporation

This clause increases the minimum amount of mandatory public liability insurance from $5,000,000 to $20,000,000.

25—Amendment of section 33—Holding of general meetings

This clause allows the presiding officer or treasurer to convene a general meeting (in addition to the existing categories of people who can do so).

The clause also amends the general meeting quorum requirement to match the new provision in section 83 of the Community Titles Act 1996.

26—Amendment of section 33A—Statement of expenditure etc

The statement of expenditure presented at the annual general meeting must set out proposed expenditure (other than recurrent expenditure) for the period prescribed by the regulations, which currently cannot exceed 5 years. This clause deletes that 5 year limitation.

27—Amendment of section 34—Voting at general meetings

This clause amends section 34(3)(b) to provide that, where there are 2 or more unit holders in respect of the same unit and they do not agree on how to exercise a vote, then none of them is entitled to vote.

The clause also amends section 34(7) to make it consistent with section 84(14) of the Community Titles Act 1996 by ensuring that an owner who is in arrears cannot exercise voting rights.

28—Amendment of section 41—Information to be furnished

This clause adds to the list of material that is available on application by or on behalf of an owner or prospective owner or a registered mortgagee or prospective mortgagee. The section will now also allow for provision of a copy of the strata plan and a copy of the most recent statement under section 33A (the statement of expenditure). The clause also amends the offence provision in subsection (2a) to ensure it can also be committed by a person who is acting on behalf of a strata corporation.

29—Amendment of section 49—Service

This clause amends the service provision to make it consistent with the provision under section 155 of the Community Titles Act 1996 (consequentially to the amendment in clause 22).

Debate adjourned on motion of Mr Odenwalder.