The NSW Strata Magazine | August 2021

The NSW Strata Magazine

TOP TIPS ON SUBMITTING A PET APPLICATION Page 12-13 | JS Mueller & Co Lawyers

INSURANCE OFFER INSIDE

SAVE UP TO $500 Page 6-7 | Strata Insurance Solutions

CAN YOU RE-USE A RENOVATIONS BYLAW REGISTERED TO YOUR LOT? Page 22-23 | Strata Choice

August 2021 // ISSUE 13 1

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What happens if a tenant breaks the window?

Who is responsible for a broken window in a strata unit?

Generally, if a tenant breaks the glass either the tenant is liable to replace it (if the tenant caused the breakage) or the Landlord’s

insurance should cover it.

Who is responsible for a broken window in a strata unit? Who should be invoiced – the tenant (occupying at the time the glass broke), the owners, or the Owners Corporation?

Generally, if a tenant breaks the glass either the tenant is liable to replace it (if the tenant caused the breakage) or the Landlord’s insurance should cover it. The residential tenancy lease would govern the exact position.

I have read the Fair Trading Common Property Memorandum but under 9 Windows for Owners Corporation Responsibilities it does not specify the glass.

Although, in saying the above, glass is deemed to be common property if situated on a communal boundary and there are no bylaws to state otherwise. Therefore if there is no evidence to confirm the tenant caused the breakage, the owners corporation is responsible to repair the glass and may be able to claim it on the building insurance under accidental damage if the cause was of such nature.

Could you please advise what happens if a tenant breaks the window glass.

Is it the responsibility of the landlord, tenant or the Owners Corporation?

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Leanne Habib | Premium Strata info@premiumstrata.com.au

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Strata Insurance Renewals

How does your company put forward a proposal for a strata insurance policy based on last year’s premium from a competitor without full knowledge of the commission structure or even if there was any commission in the policy?

Tyrone Shandiman | Strata Insurance Solutions tshandiman@iaa.net.au

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Any quotes we submit clearly spells out how we arrange our quotes.

We don’t put forward proposals for last year’s premiums. So, how we will put proposals forward is very simple. If they are available, insurers first seek to get quotes from the market. The second option that is available, and that I do talk to my clients about, is that there are certain insurers that will reserve to the holding broker.

Firstly, obviously, the holding insurer will do that, and there are some insurers that will only quote one broker at a time. We can still provide clients an indication of what our pricing would be for those policies if they provide us with a copy of the quotes that they’ve received from those companies. Any quotes we submit, obviously, clearly spells out how we arrange our quotes.

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Townhouse Fire Safety Requirements Are the requirements the same as for apartment buildings?

Q

Do townhouses need to meet the same fire safety standards as apartment buildings?

I’m looking at purchasing a townhouse which is under a strata scheme. The building was built in 1994.

Do townhouses need to meet the same fire safety standards as apartment buildings with regards to fire safety doors, fire hydrants etc.?

Would a building built in 1994 generally meet the fire safety standards? I know older buildings tend to have issues.

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A

Townhouses are a different classification to an apartment buildings.

Every multi-occupancy building post-1988 should require an annual fire safety statement.

Every residential occupancy should have a working smoke alarm.

Townhouses are a different classification to an apartment; require fire safety systems, but generally require less than an apartment building.

It is impossible to state whether a townhouse generally meets the fire safety standards without having inspected it, but further to the above, the fire safety systems are generally fewer than the equivalent apartment building & therefore there is less to go wrong. That said, due to the lesser requirements, there is lesser chance the systems in a townhouse have been maintained.

To summarise – how long is a piece of string?

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Rob Broadhead | 2020 Fire Protection rob.broadhead@2020fire.com.au

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The owners corporation must maintain the common property

Can the owners corporation park a common property maintenance issue forever, quoting lack of funds?

If common property repairs cost $10k to fix and strata have $20k in the capital works account, can the owners corporation park the common property maintenance issue in the pending list, citing a lack of funds?

Leanne Habib | Premium Strata info@premiumstrata.com.au

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Definitely not.

Definitely not. Section 106 of the Strata Schemes Management ACT states that the Owners Corporation must repair and maintain the common property to ensure that it’s in working order. So if it’s failed, it’s not working, it doesn’t operate and Owners Corporation has an obligation to repair it. Having no funds is not an excuse to make that obligation. It just means that the Owners Corporation needs to take steps to raise those funds. That’s why legislation permits you to raise what they call a special levy that’s above and in addition to your ordinary coordinately quarterly levies, so they will just have to raise a special levy to meet the obligations to repair and maintain the failed common property.

So if they don’t have enough funds, the short answer is they must raise those funds.

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Top Tips on Submitting a

Pet Application

If a resident is applying Q for a pet, should the application include a pet overview or a pet resume about what the pet is like? Do they need pet references? What are your best tips for success?

A

Provide as much information about the pet as you can.

Absolutely, you’ve got to put your best foot forward as they say. So if you’re applying to your strata building for permission to keep a pet, put your best foot forward. Provide as much information about the pet as you can. Go further than just saying ‘I want to keep a 13 year old miniature schnauzer in my apartment. His name is Angus and he’s really well behaved’.

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Top Tips for Submitting a Pet Application 1. Provide evidence that the dog is: • registered with the local council • microchipped and had its immunisations • well behaved 2. Provide references: • from the dogs vet.

• from other people who have lived with the dog in the past.

• if you’re moving from one apartment building to another, get some references from former neighbours to say the dog is well behaved, that it never created a problem in the 10 years that it lived in our building.

Adrian Mueller | Partner & Senior Lawyer JS Mueller & Co Lawyers

adrianmueller@muellers.com.au

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3. It may well be that you want to bring the dog along to an interview with the strata committee. That does happen from time to time, sit the pup on the desk and hope it behaves. That’s the litmus test.

So definitely provide full details to your strata committee because we have to remember that if someone applies to keep a pet and they don’t provide sufficient details about the pet, that may well provide a reasonable basis for the committee to reject the pet application.

The committee might say “Well, you just didn’t give us enough information about this pet. We really can’t make a properly informed decision as to whether the pet is going to be a good or bad thing for the building. Therefore we’re saying no.” And that decision may well be upheld if it’s challenged in NCAT.

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The Strata Management Statement

Who determines allocation of shared facilities?

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What is the process Q involved to determine the percentages allocated to shared facilities in a Strata Management Statement (NSW).

Is there an Act or document that outlines how the percentages are obtained and inserted into the SMS? It is very important that A a specialist a Strata Consultant/advisor who has had extensive experience is involved with the initial setup and ongoing running.

A Strata Management Statement (SMS) is an individually drafted document used to regulate the relationship between the different components making up a Building Management Committee (BMC). These components can be lots in a deposited plan, separate strata plans, commercial and retail developments etc.

and the Strata Schemes Development Act 2015 (NSW) recognises this need and under Schedule 4 – Strata Management Statements, clause 2(1)(f), copied below, it specifies that a review of the allocation of costs remain fair and if any there are changes to facilities or services this needs to be reviewed and that at a minimum a review must take place every 5 years. ( f) a review process to ensure that the allocation of those costs remains fair with any such review taking place as soon as practicable after any change in the shared facilities or services (including any change in the use of those shared facilities or services), with at least one such review occurring every 5 years even if no such change has occurred, and’

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Robert Fothergill | Strata Life Robert@thestratalife.com.au

The SMS must set out the structure and function of the BMC and the activities needed to manage and maintain the complex. The management and up-keep of shared facilities is a major part of any SMS. Shared facilities are areas, services and equipment within the building and its site that are shared by two or more of the component use areas These facilities are usually set out in a detailed strata management schedule or as part of the SMS. The only shared service/facility defined in the legislation is for insurance premiums, under the Strata Schemes Management Act 2015, Section 162 (2), otherwise no guidance is given. So it is very important that a specialist a Strata Consultant/advisor who has had extensive experience is involved with the initial setup and ongoing running.

It is in my experience it is likely that the initial setup will need to be adjusted as the complexities of the property is understood 15

Rules Around License Plate Reader LPR Systems Q

Our building has recently installed a license plate reader system and we have a few questions.

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1. Can a building install a Licence Plate Scanning System and disable swipe card access to the car park? If we hire a car or use shared cars we can’t enter our own car spots.

2. If we are moving in and new to the building, how do we access the garage?

3. Can we be blacklisted from entering if we have bylaw breaches?

We are finding that this A system is becoming more common, as when it is used correctly, it assists greatly in tracking by-law breaches for visitor parking.

1. Owners Corporations can resolve to install Licence Plate Recognition (LPR) Systems to assist with the management of security for the building. Should your scheme have installed this system, your former swipe cards will have likely become obsolete.

We are finding that this system is becoming more common, as when it is used correctly, it assists greatly in tracking by-law breaches for visitor parking.

To install a system, the Owners Corporation will have approved the installation of the system at a general meeting and adopt a bylaw to detail the management of; the system, the data it collects, access provisions etc.

The by-law should also detail who can access the system and under what circumstances, the process of registering the licence plate with the Owners Corporation, and the consequences should the vehicle and its owner be found breaching by-laws.

Fortunately, updating the LPR system should be very simple for the Strata Manager or Building Manager. Most updates to the system can be done remotely, and instantly. Should you hire a car, or use a shared car, you will need to update management immediately to ensure you are able to access the car park.

2. Strata schemes often have by-laws which outline the moving-in and moving-out procedures for the scheme. Generally speaking, you will need to liaise access with the Strata Manager/Building Manager so that the relevant provisions can be made for you to access the common property, especially where a LPR System is in place.

3. Without having viewed the by-laws for your scheme, the short answer is – no. You cannot be “blacklisted” from accessing your lot within a strata scheme. The Owners Corporation is responsible for the management and administration of the strata scheme, which may involve issuing bylaw breach notices should you not comply.

This does not allow an Owners Corporation to abuse the technology to further restrict access to your lot. Any reference to removing the ability to access the car park in a by-law is generally a deterrent, and not enforceable.

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Should GST Be Included in Special Levy Invoices?

We have a Special Levy going to pay for a contract to address a waterproofing problem. Our strata manager is adding GST to the levy invoices.

Is this correct?

It is therefore important that the owners corporation appoint office bearers Regardless of a scheme being registered, it pays GST on expenses so has to collect that amount in levies.

The ATO site is very helpful on this issue: Strata schemes and real estate agent services A strata scheme is required to register for GST if: - it is considered to be a non-profit body and its turnover is more than $150,000 (turnover must include levies on unit owners) - it is not considered to be a non-profit body and its turnover is more than $75,000 (turnover must include levies on unit owners).

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Most schemes will be a non-profit body (as otherwise it may have to distribute interest income or profits from rental or other activities).

Thus the scheme in question could be registered if it elects to be registered (as many commercial schemes do under the above thresholds as the owners are in many cases, GST registered) or would be required to be registered if it meets the above thresholds.

A scheme which is registered will need to conduct BAS statements.

Regardless of a scheme being registered, it pays GST on expenses so has to collect that amount in levies – it just can’t claim GST input if not registered.

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Andrew Terrell | Bright & Duggan Andrew.Terrell@bright-duggan.com.au

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Withholding Levy Payments To compensate Q for money I’ve spent on repairing common property, I’m withholding levies payments. Ids this the right course of action?

After repeated requests from the Strata Manager, some of the long standing activities of strata are not completed so we’ve withheld the quarterly levies.

Over the last few years, special levies were collected for rectification works and these have not been completed. In addition, there have been issues with the internal exhaust fans that were not completed by the strata manager and I replaced them on my own account.

Since some of the amounts are the Owners corporation’s responsibility and there has been no satisfactory outcome, I have held back Levies due for the past year and I intend to continue holding back any quarterly levies until the amount owed equals the costs that I have incurred in fixing some of the defects/remedial activities that I deem to be necessary in my unit complex.

Can the Owners Corporation adjust my levy against the costs that I have incurred whether there is an approval or not?

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If you do not A pay your levies, then you will be an unfinancial owner with the consequences that you cannot vote at general meetings and you cannot be a member of the strata committee.

Under the Strata Schemes Management Act 2015 (SSMA) there is no legal basis for a lot owner to refuse to pay a levy or for an owners corporation to reduce the levy one lot owner pays. This is the case even if the owners corporation is refusing to comply with its legal duties or is being mismanaged. In those cases, the appropriate thing for the lot owner to do is apply for mediation at Fair Trading and then for orders at NCAT to rectify the situation.

common property because the owners corporation has failed to do so, the lot owner is not entitled to be re-imbursed the cost by the owners corporation unless there is a prior agreement between the two to permit the re-imbursement. The reasons the Supreme Court gave that one person is, generally speaking, not permitted to do work on another person’s property without the latter’s permission, and an owners corporation must be able to engage and control the contractors that work on common property so that the owners corporation can enforce warranties against contractors for defective works. An owners corporation cannot enforce warranties in a contract between a lot owner and a contractor.

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If the owners corporation has budgeted for quarterly levies and raises those quarterly levies and any special levy, but it is not spending the money raised at all or the money is not required (which may be the case if a lot owner has paid to repair common property because the owners corporation has not) then there may be some scope for a lot owner to apply to NCAT for an order reducing the size of the levies under section 87 of the SSMA. Under section 87, NCAT may change the amount of a levy or its manner of payment if NCAT considers that the amount of a levy is inadequate or excessive or that the manner of its payment is unreasonable. An applicant for such an order must first apply for mediation at Fair Trading.

Carlo Fini | Lewis & Charles Lawyers Carlofini@lewischarles.com.au

If you do not pay your levies, then you will be an unfinancial owner with the consequences that you cannot vote at general meetings and you cannot be a member of the strata committee.

You are not entitled to be re-imbursed (for example by a reduction in your levies) for the money you have spent repairing common property.

The NSW Supreme Court in the case of The Owners – Strata Plan 32735 v Heather Lesley-Swan [2012] NSWSC 383 has made it clear that where a lot owner spends their own money to fix 21

Can you re-use a renovations bylaw registered to your lot?

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If there is an existing Q renovations bylaw in place, does the lot owner need to get a new bylaw if additional renovations fit the original scope of works.

What is the ongoing benefit of a renovation by-law that has been registered against a lot? I have a building I manage where a lot owner obtained a by-law to do renovations in the lot, most specifically to the bathroom and waterproofing membrane. After the renovations, the lot owner sold the unit.

A new owner buys the unit and does not like the renovations and wants to renovate to their taste. Their renovation plans fall completely within the vague scope of works of the renovation by-law (e.g., “remove existing floor and install new flooring”). If you buy into the history of a unit, its by-laws, and the obligations and responsibilities of the by-law(s), then surely you can buy into the benefits as well. If the scope of works does not change, does the new owner need to get a new by-law for their renovations?

This is owing to subsection (2), which allows the work to proceed only if the owners corporation has passed a special resolution “that specifically authorises the taking of the particular action proposed.

In the article NSW: Renovation By-Laws – How Much Detail Do I Need To Include published by David Bannerman, Bannermans Lawyers, clarification is given to the need to: adequately describe the works and the common property area; and clearly identify who will be responsible for property maintenance of, and keeping in a state of good and serviceable repair, the specified common property are.

In summary, the motion and by-law should be very specific in terms of what works are being undertaken and who is responsible thereafter.

The vague description of the works in this particular by-law may serve to benefit the lot owner by avoiding the need for a new bylaw, however it may also place the owners corporation (or the owner) at risk for the reasons mentioned in the article.

The obligations and responsibilities were already transferred to the new owner when they purchased the unit. They would need to get a renovation application approved by the Owners Corporation, but do they need a new by-law?

The motion and by-law A should be very specific in terms of what works are being undertaken and who is responsible thereafter.

The owners corporation must still approve the renovation works in accordance with section 108 of the Strata Schemes Management Act, regardless of whether or not there is an existing by-law in place.

Tim Sara | Strata Choice tsara@stratachoice.com.au

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Dealing with Building Defects The Decision Making Process

Q

The roof on our older building needs the waterproofing checked but the committee is unable to reach a decision. We are awaiting mediation, but what else can we do?

The roof of our building is a cement slab that is 40 years old. The waterproof membrane has never received any maintenance.

We live on the ocean and receive a significant amount of salt water damage and have had to fix concrete cancer on balconies and repair rust spots.

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There are 5 people on the committee of 9 who don’t believe there is anything wrong with the current state of the rooftop and we are currently in the process of awaiting mediation.

In the meantime the chairperson has put forward a motion to go to the next committee meeting regarding access to the roof as follows: MOTION: That the persons authorised to have unqualified access to the roof are the Chairperson, The Secretary, and any person so authorised by five members of the Executive Committee, for the sole purpose of discharging their duties as Chairperson or Secretary.

Unqualified access means access to that person alone, unless any other persons have previously been authorised by five members of the Strata Committee.

A

Any issue concerning the strata committee and validity of decision making should be brought to the strata manager’s attention at first instance.

This is potentially the responsibility of the Owners Corporation in accordance with section 106 of the Strata Schemes Management Act 2015. On the information provided it is unclear whether there is a strata manager appointed. I suggest that any issue concerning the strata committee and validity of decision making should be brought to their attention at first instance.

The motion appears challengeable.

A chairperson at a meeting may rule a motion out of order if the chairperson considers that the motion, if carried, would conflict with the Strata Schemes Management Act 2015 or the by-laws of the strata or would otherwise be unlawful or unenforceable.

There are duties a strata committee is required to comply with. Section 37 provides that each member of the strata committee of an owners corporation is to carry out his or her functions for the benefit so far as practicable of the owners corporation and with due care and diligence.

If the owners corporation are not discharging their duties in accordance with the above and Act an application can be submitted under the Act for a compulsory manager to be appointed.

On application to the NSW Civil and Administrative Tribunal the Tribunal may make an order appointing a strata managing agent to exercise all the functions of an owners corporation or specified functions.

In your set of circumstances if you feel the strata committee is not exercising their functions of the owners corporation as set out above and are concerned, you can consider bringing an application for a compulsory strata manager.

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Pierrette Khoury | Khoury Lawyers pierrette@khourylawyers.com.au

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EYEON Property Inspections Buy and Sell with More Confidence P: 1300 798 274 W: https://www.eyeon.com.au/ E: info@eyeon.com.au

Bright & Duggan Strata Professionals P: 02 9902 7100 W: https://bright-duggan.com.au/ E: customercare@bright-duggan.com.au

BIV Reports Specialist in Strata Compliance Reports P: 1300 107 280 W: https://www.biv.com.au/ E: biv@biv.com.au

Sky Living Strata Providing a superior customer experience P: 02 9299 1100 W: https://www.skylivingstrata.com.au/ E: enquiries@skylivingstrata.com.au

Covid19 Plans Covid19 Safety Plans for Strata P: 1300 828 344 W: https://covid19plans.com.au/ E: plans@covidplans.com.au

Stone Real Estate We provide a unique level of service P: 02 4345 0490 W: https://helenhughesproperty.com.au/ E: helen@helenhughesproperty.com.au Civium Communities When you build trust, you build a community P: 1300 724 256 W: https://civium.com.au/ E: clientservices@civium.com.au Norwest Strata Management Efficient & Effective Strata Management Solutions P: 02 9086 9123 W: https://www.norweststrata.com.au/ E: mail@norweststrata.com.au

Cleaning Strata Shop Online Cleaning supplies, software and signs P: 0468 455 390 W: https://www.stratashoponline.com.au/ E: tony.s@acebodycorp.com.au Pacific Facility Services Strata Property Cleaning & Ground Maintenance Services

P: 1300 378 388 W: http://www.pacificfs.com.au/ E: a.smith@pacificfs.com.au

Ai Odour Control Systems Actualise your facilities’ potential P: 1300 728 760 W: https://www.aiodourcontrolsystems.com.au/ E: info@aiodourcontrolsystems.com.au

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LIST MY BUSINESS OZ Bin Cleaning The Bin Cleaning & Hygiene Professionals P: 1300 651 165 W: https://www.ozbincleaning.com.au/ E: penny@ozbincleaning.com.au

Clotheslines Lifestyle Clotheslines Clothesline and washing line supplier & installer P: 1300 798 779 W: https://www.lifestyleclotheslines.com.au/ E: admin@lifestyleclotheslines.com.au

Defect Restoration Big Boys Construction Group Strata & Insurance Builders, Remedial Construction P: 02 4777 4740 W: https://www.bigboysgroup.com.au/ E: info@bigboysgroup.com.au TD Equipment and Trade Hire Maintenance Roofing and Cleaning Services P: 0403 032 229 E: tamika@tdequipmenthire.com

Electrical Altogether Group Power.Water.Data P: 1300 803 803 W: https://altogethergroup.com.au/ E: eaustin@altogethergroup.com.au Energy On Pty Ltd Providing utility network solutions P: 1300 323 263 W: https://www.energyon.com.au/ E: EnergyServices@EnergyOn.com.au ENM Solutions Providing Solutions for Embedded Networks P: 03 9836 6366 W: https://www.enmsolutions.com.au/ E: info@ENMSolutions.com.au

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McIntosh Electrical Pty Ltd Powered by Trust P: 1300 627 727 W: https://www.mcintoshelectrical.com.au/ E: jenny@mcintoshelectrical.com.au

Fire Services 2020 Fire Protection Experts in Fire Protection for Strata P: 1300 340 210 W: https://www.2020fireprotection.com.au/ E: service@2020fire.com.au Fire Safety Constructions Compliant Specialist since 1999 P: 02 9945 3499 W: https://www.firesafetyconstructions.com.au/ E: info@firesafetyconstructions.com.au Linkfire Pty Ltd Your Essential Safety Partner P: 1300 669 439 W: http://www.linkfire.com.au/ E: sales@linkfire.com.au Betta Fire Protection Compliance you can trust P: 02 8669 9108 W: https://bettafireprotection.com.au/ E: info@bettafireprotection.com.au

Painting 3 Colours Painting Services P: 1300 883 635 W: https://3colours.com.au/ E: 3colours@3colours.com.au Calibre Coatings Delivering Excellence in Painting Services P: 08 9331 5553 W: https://www.calibrecoatings.com.au/ E: wa@calibrecoatings.com.au Higgins Coatings Pty Ltd Specialist painters in the strata industry P: 1300 HIGGINS W: https://www.higgins.com.au/ E: info@higgins.com.au

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LIST MY BUSINESS Plumbing Sydney Central Pumps Fixing Pump Problems within for 20+ years P: 1300 558 059 W: https://www.scpumps.com.au/ E: service@scpumps.com.au Stormwater Sydney Inspection, Repair and Maintenance of drainage assets

P: 1300 741 003 W: https://stormwatersydney.com/ E: admin@stormwatersydney.com

Safety and Security QUATRIX PTY LTD Intercoms, Access Control, CCTV, Data Installation P: 1300 659 939 W: https://www.quatrix.com.au/ E: info@quatrix.com.au Lock, Stock & Barrel Locksmiths Pty Ltd No matter what time of the day, we’re here P: 0411 700 072 W: https://www.lsblocksmiths.com.au/ E: info@lsblocksmiths.com.au

Waterproofing Superseal Protective Coatings (SPC) Waterproofing & Epoxy Specialists P: 02 9774 1004 W: https://www.spcau.com/ E: info@spcau.com

Windows and Doors Windowline Pty Ltd Australia’s strata replacement window & door specialists

P: 02 8304 6400 W: https://windowline.com.au/ E: info@windowline.com.au The Window Guy Window Hardware Maintenance P: 1300 663 664 W: https://www.thewindowguy.com.au/ E: info@thewindowguy.com.au Select Window Installations Windows & door replacement specialists P: 02 9938 1500 W: https://www.selectwindows.com.au/ E: sales@selectwindows.com.au

Sustainability and Energy The Green Guys Group Australia’s Leading Energy Saving Partner P: 1300 511 875 W: https://greenguys.com.au/ E: sean@greenguys.com.au Humenergy People, innovation and value sharing P: 1300 322 622 W: https://www.humenergy.com.au/ E: Info@humenergy.com.au

Lifts and Elevators

Danrae Group Remedial Waterproofing & Building Specialists P: 1800 326 723 W: https://www.danraegroup.com.au/ E: enquiries@danrae.com.au

Equity Elevator Consultants Saving our clients time and money P: 1300 080 816 W: https://www.liftsconsultant.com/ E: enquiry@equityelevator.com.au

The Superseal Group Trusted Experts in all aspects of Waterproofing P: 07 5519 4916 W: https://supersealgroup.com/ E: admin@supersealgroup.com

Innovative Lift Consulting Pty Ltd Australia's Vertical Transportation Consultants P: 0417 784 245 W: https://www.ilcpl.com.au/ E: bfulcher@ilcpl.com.au

Franchisers Network Pacific Strata Franchise Join our successful team P: 03 9999 5488

PRINT YOUR DIRECTORY HERE

W: https://www.networkpacificstratafranchise.com.au/ E: networkpacific@franchisedevelopments.com.au

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Attention NSW Strata Service Professionals

Join our printable Strata Services Directory today

Contact lizaj@LookUpStrata.com.au to find out more today!

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