Western Australia has introduced the most significant changes to strata laws in over 20 years.
While a raft of changes have been made – the legislation is 438 pages – the most contentious new law makes it easier for developers to force owners to sell their strata properties.
Previously, developers had to get unanimous approval from owners to redevelop a strata property.
But the new laws require only 80 percent of owners to approve redevelopment.
Those who oppose a redevelopment can be forced to sell their property, leading to opponents dubbing the law the ‘boot out a granny bill’.
In the past, developers were often forced to pay a premium to buy up all lots if they wanted to redevelop a property. The new laws mean they will have the authority to force owners to sell in a ‘majority terminations process’.
In a ‘majority terminations process’, owners will receive ‘like-for-like’ compensation, rather than ‘fair market’ value.
Owners who don’t wish to sell, for example for health reasons, can take their claim to the State Appeals Tribunal.
Small strata schemes of fewer than five lots still require 100 percent approval from owners to redevelop.
Changes widely supported in the industry
Western Australia’s Land Information Authority, Landgate, was given responsibility for delivering strata reforms in the state.
The Strata Titles Amendment Bill 2018 (STA Bill) was passed into law on 1 November 2018, while the Community Titles Bill 2018 (CT Bill) become law on 6 November 2018.
Now the legislation has been passed, Landgate will complete regulations to support the new legislation.
For more information about what was included in the Strata Titles Amendment Bill and the Community Titles Bill, click here.
The changes have been in the pipeline for more than a decade, and are widely supported by the industry, including by the Property Council of Australia, the Real Estate Institute of WA, Strata Community Australia, Urban Development Institute Australia, Planning Institute Australia, Facilities Management Australia and the Australian Property Institute.
Why changes were needed
Western Australia’s population is predicted to rise to more than five million by 2056, and there is a need for more housing in the state, particularly in urban areas.
With more than 300,000 strata lots in Western Australia, estimated to be worth $170 billion and including residential properties and retail, commercial and industrial business premises, a more robust, transparent and up-to-date legislative framework was needed.
There had been no major reform to Western Australia’s strata legislation for more than 20 years.
In a statement on Landgate’s website, Allison Hailes, Chief Executive Officer of the Urban Development Institute of Australia (WA), said, “With affordability, sustainability and greater densities high on the agenda for both government and the community, these strata reforms are essential to delivering these outcomes.”
John Wynne, National Planning Director, Urbis, said, “These changes will facilitate the next generation of development, where public transport, retail, commercial, residential and short stay accommodation may be integrated.”
REIWA President, Damian Collins, said the reform will bring strata communities into the 21st century.
“Once implemented, the new legislation will provide a more streamlined and transparent system for everybody involved in strata living. This includes, better dispute resolution, clearer obligations for strata managers and a fairer and more robust system for the termination of schemes.”