NSW Sustainable Strata: Introduction of the Strata Schemes Management Amendment (Sustainability Infrastructure) Act 2021 and What it Means for Strata Schemes

Introduction

The Strata Schemes Management Amendment (Sustainability Infrastructure) Bill 2021 was recently passed in both houses of parliament and was formally assented to on 24 February 2021 and enacted as the Strata Schemes Management Amendment (Sustainability Infrastructure) Act 2021 (“the Sustainability Act”).

As the name of the legislation would suggest, it is predominately aimed at facilitating the instalation of sustainability infastructure in strata schemes with greater ease. However, it also introduces a number of additional amendments to the Strata Schemes Management Act 2015 (NSW) (“the SSMA”) including further provisions on pet by-laws in line with recent case law decisions and civil penalty orders by the NSW Civil and Administrative Tribunal (“the Tribnal”).

Sustainability Amendments

A definition of “sustainability infrastructure” has been introduced under the Sustainability Act to mean:

“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.”

Sustainability infrastructure would therefore include items such as solar panels, compost bins and water tanks.

“Sustainability infrastructure resolution” is also defined in the Sustainability Act meaning a resolution of an owners corporation to:

  1. fund sustainability infrastructure.
  2. add to, alter or erect a structure on common property for the purpose of installing sustainability infrastructure; and
  3. change by-laws for the purpose of the installation and/or use of sustainability structures.

Prior to approving a sustainability infrastructure resolution, an owners corporation is required to consider the costs of the works, the maintenance costs, who will own, install and maintain the infrastructure and the extent to which the infrastructure will be available to all or some of the lot owners.

Prior to the Sustainability Act being introduced all special resolutions required not more than 25% of the value of votes (calculated on unit entitlement) being cast against the resolution. This has been amended so that if a special resolution is required for a sustainability infrastructure resolution, there cannot be 50% or more of the value of votes cast against the resolution, making it easier for owners corporations to approve the installation of sustainability infrastructure.

Keeping pets in strata schemes

The Sustainability Act introduces section 137B to the SSMA which expressly outlaws unreasonable prohibitions on the keeping of pets in strata schemes.

These amendments go a step further than the decision in Cooper v The Owners – Strata Plan No 58068 [2020] NSWCA 250 which determined that a by-law which imposed a blanket ban on pets was invalid and unenforceable. Section 137B provides that an owners corporation cannot unreasonably refuse an application by a lot owner to keep a pet.

Subsection (2) provides that the keeping of a pet on a lot is reasonable unless keeping the pet unreasonably interferes with another occupant’s use and enjoyment of the occupant’s lot or the common property. There is a now an express legislative presumption that the keeping of a pet is reasonable and the onus is on the person requiring the removal of a pet to prove unreasonable interference.

All owners corporations should consider its by-laws to ensure that any of the conditions or restriction imposed by any pet by-laws are not overly harsh or unreasonable. Any by-laws which attempt to impose a blanket ban on pets are no longer of any force or effect as they are overridden by the new legislation.

The new provisions on keeping pets are set to be reviewed to address a number of matters including the circumstances in which it is reasonable to prohibit pets, the impact of keeping pets on the health and wellbeing of strata scheme residents and how to limit any adverse impacts of animals on common property. A report on the outcome of the review is to be tabled in Parliament by 24 August 2021.

Civil Penalty for Breach of Order

Another significant amendment is the introduction of section 247A of the SSMA which expressly provides the NSW Civil Administrative Tribunal (the Tribunal) with the jurisdiction to order a penalty of up to $5,500.00 for contravening an order made under the SSMA.

This a rectification of an error with the penalty provisions in the 2016 legislation changes where poor drafting meant the Tribunal no longer had the power to impose these penalties without the consent of the ‘minister’.

This provision will extend to orders made before the commencement of section 247A but only where the breach of a Tribunal order occurred after the commencement of this section.

An order to pay a monetary penalty will not be imposed more than once if the breach of a Tribunal order also constitutes a breach for the purposes of a civil penalty provision of the Civil and Administrative Tribunal Act 2013, or a contempt of the Tribunal.

Other Amendments

Section 182(5) has been introduced to the SSMA providing that the owners corporation must not make available for inspection any record disclosing how an owner voted in a secret ballot unless expressly required to do so by the Tribunal or a court.

On receipt of application from the Tribunal, owners corporations will now be required to immediately serve a copy of the application on all of the lot owners in the strata scheme except for an owner who is a named party to the application. This will only apply to applications made after the commencement of this amendment.

Changes to Schedule 1 of the SSMA now provide that a person who owns more than one lot in a strata scheme, may only appoint a single proxy in respect of all the lots owned. It is also expressly provided that the appointment of a proxy will not be made invalid simply because a meeting is adjourned to a later date.

Commencement Date

Section 137B of the SSMA on keeping pets will, if a proclamation of commencement is not made sooner, commence on 24 August 2021.

There is no set commencement date for the provision on civil penalty orders for breach of a Tribunal order or for the provision on serving Tribunal applications. These sections will be commenced by proclamation.

All other provisions of the Sustainability Act commenced on the date of assent, 24 February 2021.

 

Download PDF here – NSW Sustainable Strata – Introduction of the Strata Schemes Management Amendment (Sustainability Infrastructure) Act 2021 and What it Means for Strata Schemes

Speirs Ryan is a Sydney based boutique property law firm with national coverage. The firm is uniquely placed with specialist teams in both property transactions and strata law.

Disclaimer: This article is a general summary with focus on issues of interest to the authors. It is not intended to be used as legal advice.