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STRATA TITLES (LEASEHOLD PART STRATA)
AMENDMENT BILL 1992
NEW SOUTH WALES
EXPLANATORY NOTE
(This Explanatory Note relates to this Bill as introduced into Parliament)
This Bill is cognate with the Strata Titles (Part Strata) Amendment Bill 1992.
The object of this Bill is to amend the Strata Titles (Leasehold) Act 1986 so as to
make further provision relating to the subdivision under that Act of part only of a
building. The amendments are aimed at providing uniformity, as far as is practicable,
between that Act and the Strata Titles Act 1973 (after that Act has been amended by the
proposed Strata Titles (Part Strata) Amendment Act 1992) in dealing with such
subdivisions and their consequences.
The opportunity is taken to standardise certain other provisions in the 1986 Act with
those intended to be inserted into the Strata Titles Act 1973 by the proposed Strata
Titles (Part Strata) Amendment Act.
A subdivision of part of a building under the 1986 Act creates a leasehold strata
scheme for a stratum parcel (consisting of lots, or lots and common property), and there
is no limit on the number of such schemes that may be created for different parts of the
same building and its site. It is not necessary for the whole of a building to be subject to
leasehold strata schemes, but (as a consequence of the proposed amendments) a further
such scheme will not be allowed in a building if the building has been substantially
added to since the initial leasehold strata scheme for the building was created.
The lessor, lessees and other occupiers of a building in which a new stratum parcel is
created will have certain aspects of their use of the building and its site regulated by a
strata management statement entered into by the lessor and the lessees of the building,
unless excepted from having such a statement by direction of the Minister. Strata
management statements will also be able to be entered into by the lessors and lessees of
buildings already containing stratum parcels.
Provisions of the 1986 Act relating to the resolution of disputes arising in the
administration of leasehold strata schemes currently extend to schemes for stratum
parcels that include parts of buildings. However, in appropriate cases, those provisions
are varied to take into account more effectively the interests of, and to allow obligations
to be imposed on, the lessor and lessees and occupiers of parts of those buildings that
are not included in stratum parcels.
Clause 1 specifies the short title of the proposed Act.
Clause 2 provides for the commencement of the proposed Act on a day or days to
be proclaimed
Clause 3 gives effect to the Schedule of amendments to the Principal Act.
SCHEDULE 1--AMENDMENTS
CONVEYANCING ISSUES
Requirements for strata subdivisions
Schedule 1 (3) amends section 7 (Registration of strata plans) to restate, in a
simpler form, certain of the requirements that must be met by plans that are lodged for
registration as strata plans.
Proposed Schedule 1A (Requirements for strata plans), to be inserted into the Act
by Schedule 1 (24), sets out the matters that must be certified by a registered surveyor
before a strata plan is registered, such as the existence of the proposed lots and the fact
that a proposed stratum parcel is not in a part of a building added after an earlier stratum
parcel was created for a part of the building.
Schedule 1 (2) amends section 6 (Subdivision) to declare that a development lot
under the Act or under the Community Land Development Act 1989 cannot be
subdivided under the section.
Schedule 1 (1) amends section 5 (Construction of Act) to declare that provisions of
the Act, other than those relating to the ownership and certification of title, apply to
encroachments (except on public places) shown on strata plans. This amendment is a
restatement in a more appropriate place of part of section 7.
Easements
Schedule 1 (4) makes a minor amendment to section 9 (Easements in certain
leasehold strata schemes) to correct a typographical error.
MANAGEMENT ISSUES
Strata management statements
Schedule 1 (5) inserts proposed sections 57A--57F as Division 5A of Part 2.
Of the
proposed sections:
Section 57A (Requirement for strata management statement) will prevent the
creation of a stratum parcel unless such a statement is registered for the building and
site concerned. This requirement will not apply if the Minister so directs.
A strata management statement may also be registered after the creation of the
stratum parcel to which it relates.
Section 57B (Formal requirements) will require the statement to be in a form
approved by the Registrar-General and to provide for the following, in accordance
with proposed Schedule 2A (Strata management statements) to be inserted by
Schedule 1 (25):
· a building management committee
· management of the building and its site
· amendment of the statement
· resolution of disputes about management issues
· service of documents on the committee
Schedule 2A will also lay down minimum requirements for the composition of the
committee and list some other matters for which the statement may provide, but is
not exhaustive of the issues for which such a statement may provide.
Section 57C (Registration of strata management statement) will require
particulars of such a statement to be recorded in relevant folios of the Register kept
under the Real Property Act.
Section 57D (Amendment of strata management statement) will require any
amendment of such a statement to be supported by all bodies corporate for stratum
parcels and all other persons holding registered freehold or leasehold estates in other
parts of the building concerned. An amendment may also be ordered by a court or be
required because of a revocation or modification of development consent.
Section 57E (Signing of strata management statement) will require a strata
management statement, or any amendment of such a statement, to be signed by the
holders of specified estates or interests in the building concerned or its site. The
Registrar-General may also require certain written consents before registering such a
statement.
Section 57F (Effect of strata management statement) will make such a statement
binding on all persons who are, for the time being, owners, mortgagees in possession
and lessees of the building.
Schedule 1 (7) amends section 88 (Copy of by-laws and strata management
statement to be provided) to require the sublessors of any parts of a building that are
subject to a leasehold strata scheme to supply a copy of the strata management statement
that affects the building to each of their sublessees.
Termination of leasehold strata schemes
Schedule 1 (6) amends section 80 (Termination of leasehold strata scheme) to
provide that orders made by the Supreme Court on the winding up of a leasehold strata
scheme may require the amendment of any strata management statement that affects a
building part of which was subject to the leasehold strata scheme.
Insurance
Schedule 1 (8) substitutes section 115 (Insurance of buildings) to restate, with
appropriate changes, the obligations for the insurance of buildings subject to leasehold
strata schemes.
Provision is made for the joint insurance of a building containing a stratum parcel by
the body corporate for the parcel and all other persons holding registered freehold or
leasehold estates in other parts of the building and for apportionment of the premium.
Schedule 1 (9) amends section 120 (Insurable interests) to expand the class of
persons declared to have an insurable interest in the whole of a building that includes a
stratum parcel so as to include registered owners and lessees of a part of the building
that is not included in such a parcel.
Schedule 1 (13) substitutes section 143 (Order to make or pursue insurance claim)
to restate the power of the Commissioner to make such orders and to allow any person
who is a registered owner or lessee of a part of a building that contains a stratum parcel
or its site to apply for such an order.
The class of possible applicants for such an order is expanded.
Schedule 1 (16) substitutes section 162 (Orders relating to insurance) to restate the
power to make orders requiring the insurance, or variation of the insurance, of a
building containing a leasehold strata scheme. If the building concerned contains a
stratum parcel, such an order may require the insurance premium to be paid in specified
proportions.
The class of possible applicants for such an order is expanded.
Dispute resolution--conciliation
Schedule 1 (15) inserts proposed section 151A (Resolution of certain building
management disputes) as Division 2A of Part 5. The proposed section allows the
Commissioner to conciliate such disputes in buildings in which stratum parcels are
situated, but only with the consent of all parties to the dispute.
Dispute resolution--orders
Schedule 1 (11) amends section 134 (Orders by Commissioner) to allow the
Commissioner to make orders under Division 2 of Part 5 (including interim orders) with
respect to a leasehold strata scheme for a part of a building that will bind not only
persons whose interests arise directly from that scheme but also specified other
"interested persons".
(Other "interested persons" include bodies corporate or managing agents of
leasehold strata schemes for, or owners, lessees, sublessees or occupiers of, other parts
of the building.)
Schedule 1 (12) amends section 136 (General powers of Commissioner to make
orders) to allow orders under that section to be made with respect to a leasehold strata
scheme for a part of a building on the application of other interested persons. The
Commissioner is required to have regard to any strata management statement for the
building concerned before making any order relating to the management of a stratum
parcel.
Schedule 1 (14) amends section 146 (Order relating to keeping of animals) to
ensure that such orders will bind the occupiers of, and all other persons who are or
would be bound by a strata management statement for, a building that contains a stratum
parcel.
Schedule 1 (17) amends section 171 (General provisions relating to orders under
Division 4 and on appeal) to extend the class of persons on whom a Strata Titles Board
may impose ancillary requirements in an order made by the Board. If such an order
relates to a stratum parcel, requirements may be imposed on any "interested person".
Schedule 1 (18) amends section 178 (Effect of certain orders) to restate that certain
orders have effect, to such extent as is necessary, as resolutions of the body corporate
concerned.
Schedule 1 (19) amends section 180 (Penalty for contravention of certain orders)
to allow the body corporate for each stratum parcel situated in a part of the same
building to take proceedings for an offence when an order made under Part 5 is
contravened, as well as other registered owners and lessees of parts of the building or its
site that are not included in a stratum parcel.
Rectification of building defects
Schedule 1 (20) substitutes section 186 (Structural defects--proceedings as agent)
to restate the current powers of a body corporate to act as agent in:
· ensuring that parts of a building continue to provide support and shelter to other
parts of the building; and
· arranging for related building defects to be rectified,
and extend those powers to other "interested persons" where the building concerned
contains a stratum parcel.
Dividing fences
Schedule 1 (20) also substitutes section 187 (Dividing fences) to restate the current
requirement that the body corporate is taken to be the owner of a parcel for the purposes
of the Dividing Fences Act and to provide that each body corporate for a stratum parcel
that includes part of the building and each other holder of a fee simple interest in a part
of the building or its site that is not included in such a parcel are taken to be joint
owners, if the building concerned contains a stratum parcel.
Service of documents
Schedule 1 (21) amends section 191 (Service of documents on body corporate etc.)
to allow service of documents on persons who own parts of buildings that contain
stratum parcels (but are not within such a parcel) in any manner authorised by section
170 of the Conveyancing Act. (The manner of service of documents on a building
management committee is required to be set out in the relevant strata management
statement.)
Power of entry
Schedule 1 (10) amends section 131 (Procedure after Commissioner receives
application) to allow the Strata Titles Commissioner, on giving notice, to enter any part
of a building a part of which is subject to a leasehold strata scheme to look into the
issues raised by an application for an order to be made by the Commissioner or a Strata
Titles Board under the Act.
Schedule 1 (22) amends section 192 (Powers of entry by public authority or local
council) to ensure that power to enter part of a building contained in a stratum parcel
implies a power to enter another part of the building or its site if it is necessary to effect
the authorised entry.
Schedule 1 (23) amends section 193 (Powers of entry of Commissioner in certain
cases) to confer a similar power of entry on the commissioner while investigating a
possible offence against the Act or by-laws if the alleged offence is related to a stratum
parcel.
SAVINGS
Savings
Schedule 1 (26) inserts proposed Schedule 5 (Transitional and savings provisions)
to preserve the effect of exemption orders made under section 115 (Insurance of
buildings) immediately before the substitution of that section and of orders, or
applications for orders, made under Part 5 (Disputes) immediately before the
amendment of that Part.
Amendments made by the proposed Act are applied to existing leasehold strata
schemes for stratum parcels, but it will not be necessary for them to have strata
management statements.