WA Reforms Strata Titles and Introduces New Community Titles

Thursday 30 August 2018 @ 2.22 p.m. | Legal Research | Trade & Commerce

On 28 August 2018, the Strata Titles Amendment Bill 2018 (80 of 2018) [WA] ("the Strata Bill") reached second reading stage in the WA Legislative Council. Earlier, on 23 August 2018, its associated piece of legislation, the Community Titles Bill 2018 (the CT Bill), passed the WA Legislative Assembly and is due for introduction into the WA Legislative Council. Together the two Bills are said by the WA Government to usher in ". . . a new era of certainty for strata owners and buyers while providing an opportunity for developers to invest in new types of strata".

In a media release dated 28 June 2018, the Minister for Transport Planning and Lands, the Hon Rita Saffioti BBus MLA (the Minister) said:

"The two new forms of strata - Community Titles and Leasehold Strata - will help greatly in building new communities with excellent transport links and good amenity. They'll be the sorts of places where people will want to live and work. . . . This legislation will help to deliver the METRONET station precinct vision with new ways to create low to medium density housing in creative and sustainable ways. . . . People who live in strata, or who are considering living in strata, will be better informed and empowered to manage their schemes under the new Acts."

Details - Strata Titles Amendment Bill 2018

There are four key areas of reform dealt with in the Strata Bill.

1. Making strata better

Under this area there is a comprehensive list of changes, some of which are as follows:

  •  Extensive statutory duties imposed on strata managers: A range of statutory duties will be imposed on strata managers to make them more accountable and to encourage higher standards of professional service to be delivered to strata companies. 
  • Enforcement of statutory duties; contract termination and damages claim: The extensive statutory duties will be enforced by the strata company as the strata company is in the best position to see whether the strata manager is complying with the duties required of them.
  • Giving owners more of a say in the running of their scheme: Owners will have more of a say in how their scheme is managed by allowing voting to occur outside of a meeting, permitting electronic voting, and expressly allowing strata companies to keep records and send notices electronically. Restrictions will be imposed on the use of proxies. Owners will have a forum to review by-laws and resolutions that are unreasonable, oppressive or discriminatory.
  • Make it easier for people in strata to enforce the by-laws: Owners, occupiers and the strata company will be able to apply to the State Administrative Tribunal to enforce by-laws.
  • Providing for more flexibility in staged subdivision: Staged subdivision of strata / survey-strata schemes will be made more flexible.
  • Safeguards for the termination of schemes: The first strata schemes in Western Australia were constructed over 50 years ago so to protect the assets held by all strata owners, the process of terminating a strata scheme will be revised. 

2. A new form of land ownership – Leasehold strata titles schemes

The Strata Bill also introduces a new form of tenure or land ownership to Western Australia, known as a leasehold scheme. A leasehold scheme is essentially a strata/survey-strata scheme created for a fixed period. A leasehold scheme operates under the same governance framework as a freehold strata/survey-strata scheme with some variations. A leasehold scheme expires on the expiry day for the scheme. Each lot in a leasehold scheme is subject to a registered strata lease. Each strata lease expires on the expiry day of the leasehold scheme. The owner of the land on which a leasehold scheme is created (by registration of the scheme) is referred to as the owner of the leasehold scheme

3.  Making the Act easier to understand by modernising the language
Many of the changes in the Strata Bill do not change the underlying concepts but will result in the Act being much easier to understand. Changes are as follows:

  • Modernised language that makes the Act easier to understand and use, without changing the concepts in the legislation. 
  • Some definitions have been changed to better express the concepts without changing their intended meaning.
  • Sections have been amended for greater clarity. 

4. Relocating provisions of the Act so that it easier to navigate
The Strata Bill will substantially reorder sections of the current Act and according to the Minister, will provide greater clarity so that large general principles are dealt with early, and similar concepts are addressed together.

Details - Community Titles Bill 2018

The purpose of the CT Bill is to introduce a new form of land tenure to Western Australia which provides for the subdivision of land by a community scheme, the creation of community titles, and the governance and operation of community schemes.

The key difference to the Strata Titles Act 1985 is that the Act does not permit more than one scheme to be created on a single parcel of land. The CT Bill will permit a single parcel of freehold land to be subdivided in a way that creates up to three tiers of schemes in the one community scheme. Each scheme in the community scheme will have its own community corporation established on registration of the scheme by the Registrar of Titles.

The CT Bill sets out the legislative framework and key components of a community scheme by providing for a new form of land subdivision where each lot in a community scheme will have a share in the common property of not only the community titles scheme to which that lot belongs, but also a share in the common property of those community titles schemes to which that lot’s scheme belongs. 

The CT Bill relies on the existing planning and development framework under the Planning and Development Act 2005 for the approval of community schemes and provides for the creation of a unique planning instrument, to be known as a “community development statement”, as a prerequisite for the creation of a community scheme. A community development statement will set out in detail the planning requirements for the scheme: including:

  • the subdivision and development approvals required, 
  • the purposes for which the land may be used, 
  • the staging and development sequencing of each subdivision or development, 
  • the utilities requirements for the scheme, and 
  • the works to be completed, and other relevant matters for a community scheme. 

A community development statement must be approved by the Western Australian Planning Commission.

What's Next for the Legislation

As already indicated the two Bills are close to passing through both houses of the WA Parliament.  Another Bill that forms part of the package is the Community Titles Amendment (Consistency of Charging) Bill 2018 which would amend the the CT Bill to impose certain fees prescribed under that CT Bill to the extent that those fees are a tax and as such cannot be done directly in the main CT Bill. The Community Titles Amendment (Consistency of Charging) Bill 2018 has also reached second reading stage in the Legislative Council.

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Strata Titles Amendment Bill 2018 WA and supporting speeches and explanatory materials as reported in the TimeBase LawOne Service

Community Titles Bill 2018 WA and Community Titles Amendment (Consistency of Charging) Bill 2018 and supporting speeches and explanatory materials as reported in the TimeBase LawOne Service

New strata title Bill to shape sustainable communities [Ministerial Press Release 28/06/2018]

All about the reform [Landgate Website]

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