STATUTES AMENDMENT (STRATA SCHEMES) BILL

I rise to speak on the Statutes Amendment (Strata Schemes) Bill 2021 and indicate to the house, and in particular to the member for Waite, that whilst I thought, when he was presenting this bill, it might have some merit and be able to remedy some ill, he did not ultimately identify any ill that needed to be remedied. I have taken advice on the matter as to how we currently manage the strata schemes and indicate that, on the basis that it is not a matter which at this stage needs to be considered in the affirmative, the government will be opposing the bill.

I thank the member for Waite for bringing to our attention all the matters that need to be reviewed from time to time in relation to how we structure the rules around people who cohabit in the same place—not always in the same dwelling. They need to be able to resolve these matters. We have community titles, we have strata titles and we have legislation to cover these matters incorporated in the Community Titles Act 1996 and the Strata Titles Act 1988.

Essentially, this bill is to remove the requirement for an owner of a strata area or a community strata area, where there are only two in the lot, to comply with the need to ordinarily agree to structural building on common property. The closest thing we otherwise have in the community is the rules that are probably the bane of most MPs' lives, and that is under the Fences Act and disputes between neighbours and how they might determine, through a notice procedure, what kind of fencing should be between their boundaries and when it needs an upgrade and the like.

At the moment, under the Strata Titles Act, unless a particular strata plan indicates otherwise, the boundary of a unit is the internal surface of the walls, floors and ceilings, and in most strata corporations the roof, guttering, external walls and foundations are common property. Internal walls are the owner's responsibility. The unit holders, where there are only two units, own the structure and therefore can legally contract with a builder, etc., to undertake structural building work/improvements and then own the improved property comprising the two units.

Under section 29 of the Stata Titles Act, a unit building may not be altered without special resolution of the unit holders. A special resolution requires that not more than 25 per cent of the owners vote at a properly convened meeting of the corporation. For a two-unit group, both owners must agree to achieve a special resolution. As described in the second reading, the intent of the bill is to remove effectively the veto power of the neighbour or the second owner for the external work/ improvements proposed.

Because of these long-established positions, a person who has bought into a strata group of units, even where there are only two, has the expectation that the exterior appearance and structure of what is essentially a jointly owned building of two units will not be altered without their agreement. Notwithstanding the usual planning controls on such work, it would be a significant change to owners' rights to suddenly take away their joint decision-making power over the jointly owned property. Further, the default position is that the opposing owner, as part of the strata corporation, would become jointly liable financially for the second improved unit, including for maintenance, increased insurance premiums, etc.

Service infrastructure is often shared in strata groups, such as shared water, sewerage and electricity lines and meters. These jointly owned infrastructure and supporting easements for the right of access, etc., will likely need to be interfered with if building work is undertaken on one side of the building comprising the two units.

Questions then arise about the potential liabilities arising from that and the impact on the enjoyment of the other unit. South Australia, like other jurisdictions, does sensibly exempt two-lot schemes from several of the requirements in the legislation relating to operating sinking funds and other financial management requirements. They are not the subject of the bill, but I think it is important to note that our principal legislation does acknowledge that a two-unit facility may have different obligations from multi-lots.

Informal and preliminary search indicates that no other Australian jurisdiction provides for an owner in a two-lot scheme to undertake structural improvements on a lot without the agreement of the owner of the other unit. Discussions with the peak industry body, Strata Community Australia (SA), indicate that they were not consulted prior the introduction of the bill and hold similar reservations about the liability for works to common property as well as potential impacts to property valuations.

As acknowledged by the member for Waite, there is provision in the STA for the owner to apply to the Magistrates Court for relief if an owner claims that a decision of the corporation—effectively the other owner in this scenario—is unreasonable or where a dispute arises between the two owners. Of course, court action can be costly; that is acknowledged. It is preferable, obviously, to be able to deal with the matter, but we also need to take into account the rights of the dissenting owner to enable them to be properly taken into account.

From time to time, this question is raised about whether these sorts of disputes should be dealt with in SACAT's jurisdiction. Property matters have remained with the Magistrates Court. There is a determination which even prohibits SACAT dealing with it, from a residential tenancy point of view, where the landlord might be an interstate party. We do have to really fit in within the rules that we have. I am happy to work with the member for Waite on any further ideas that he might have in this regard, but I am unable to support this bill, but otherwise invite him to continue the discussion further.

Ms MICHAELS (Enfield) (10:57): I rise to make a contribution on the Statutes Amendment (Strata Schemes) Bill and indicate I am the lead speaker for the opposition on this. I commend the member for Waite and I understand there are certain constituents in his community who have had to face the issue of having two-strata or community lots and this concept of the power of veto preventing any building or construction work on one title.

I understand that frustration. I also understand there may be concerns in relation to, for example, if someone wanted to paint their house bright pink, what that would do to their neighbouring property. I propose to move an amendment, which I will talk through at a later point in the committee stage. What I think is a reasonable compromise is to support the member for Waite's bill on the basis that an amendment is put through so that if planning or building approval is required under the Planning, Development and Infrastructure Act, there is that oversight and the Planning and Design Code will come in.

In that case, I think the power of veto should be removed. If it is something like painting, which would not otherwise require planning approval, then I think the power of veto should stay to prevent any devaluing of property from someone doing something that does not require planning and development approval. On that basis, as we move through the stages of this bill, that is the position that we will take on this side of the chamber. Again, I commend the member for taking this up on behalf of his constituents and look forward to the progress of the bill.

Mr DULUK (Waite) (10:58): I thank the Attorney for outlining the government's position and the member for Enfield for the opposition's position as well, and for outlining some proposed amendments, which I hope we can discuss in the committee stage. I want to respond to some of the remarks from the Attorney. These proposed amendments will only, of course, relate to the situation where the power of veto will not apply, once a proposal has received appropriate planning approval and council approval.

This does not allow in a two-unit strata corporation for one unit holder in that strata corporation to make any substantial changes to the outside of the strata that they see fit. It will only be any changes that have, of course, appropriate council permissions, and that can simply be an amendment to a carport or a second-storey balcony, which may need strata approval per se, but one strata owner is in disagreement with that. It really looks at a way of removing any vexatious neighbourly dispute.

I appreciate that there will be some changes to strata property that do not need council approval, and I think that those mitigating factors are foreshadowed in some of the amendments proposed by the member for Enfield. I thank both the government and the opposition for their contributions, and I move that this bill be read a second time.

Bill read a second time.