Strata Schemes: Size does Matter (Sometimes) – Part 2 Strata Schemes Management Act 2015

Small and Large strata buildings - gold coast 

In my last post I said size does matter in strata schemes and related this back to the Strata Schemes Management Act 1996. Now, as most people with an ear to the ground in strata in NSW are aware, the Strata Schemes Management Act 2015 has been assented to. The date of its commencement has not yet been announced but is expected to be 1 July 2016.

Although the Regulations have not yet been released you can see from the tables below there are differences between different sized schemes under the 2015 Act.

Note that schemes with more than 100 lots (not including utility lots or parking lots) are known as large schemes.

Quorum Requirements – 2015 Act – 1996 Act has similar requirements

2 lot schemes 3 lots – 100 lots 101 + lot schemes
· Both must be present · At least ¼ of persons entitled to vote present either in person or by proxy OR

· At least ¼ of the unit entitlements present in person or by proxy

· At least ¼ of persons entitled to vote present either in person or by proxy OR

· At least ¼ of the unit entitlements present in person or by proxy

Strata Committee Membership – 2015 Act

2 lot schemes 3 lots – 100 lots 101 + lot schemes
·  Both lot owners are EC members.

·  If a lot is co-owned then the co-owners either need to consent to who is to be the EC member or if there is no consent the lot owner first mentioned on the strata roll is the EC member.

·  If a lot is owned by a company then the company nominee is the EC member.

· Similar to Current Act but increased restrictions on eligibility to exclude strata managers, building managers or person with a financial interest if they are not a lot owner. ·   Similar to Current Act but increased restrictions on eligibility to exclude strata managers, building managers or person with a financial interest if they are not a lot owner.

 

*Note: Aside from tenant members, other potential members can nominate themselves for the committee prior to the AGM

 Strata Committee Meeting Notice & Minutes -2015 Act

2 lot schemes 3 lots – 100 lots 101 + lot schemes
·  Must give 3 days’ notice of the meeting to each SC member and put notice on notice board.

·  Must give copy of meeting minutes to each SC member & lot owner within 7 days.

· Must give 3 days’ notice of the meeting to each SC member and put notice on notice board.

· Must give copy of meeting minutes to each SC member & lot owner within 7 days.

· Must give 3 days’ notice to SC members & tenant member & owners.

· Display on notice board if there is one

· Must give copy of minutes to SC members within 7 days of meeting & also lot owners if they request it within 7 days

 Convening SC Meetings – 2015 Act

2 lot schemes 3 lots – 100 lots 101 + lot schemes
· Must convene if requested to do so by members with 1/3 of the unit entitlements for the scheme within 14 days’ of request ·   Must convene if requested to do so by members with 1/3 of the unit entitlements for the scheme within 14 days’ of request · Must convene if requested to do so by members with 1/3 of the unit entitlements for the scheme within 28 days’ of request

General Meeting Minutes – 2015 Act

2 lot schemes 3 lots – 100 lots 101 + lot schemes
· Must give each SC member & lot owner a copy within 14 days of meeting ·   Must give each SC member & lot owner a copy within 14 days of meeting · Must give each SC member & lot owner a copy if they request it within 14 days of meeting

Capital Works Funds – 2015 Act

2 lot schemes 3 lots – 100 lots 101 + lot schemes
· Similar to 1996 Act

· Need not establish a sinking fund if determined by unanimous resolution and buildings are physically detached and no part of a building is outside a lot

·   Must establish a sinking fund

·   Must include estimate at each AGM for specific items

·   Must establish a sinking fund

· Must include estimate at each AGM for specific items

· Must also note the difference between amount of estimate and amount spent & reason for difference

Insurance – 2015 Act

2 lot schemes 3 lots – 100 lots 101 + lot schemes
· Not required if unanimous resolution passed & buildings are physically detached & no part of building is outside a lot ·   Must insure building ·   Must insure building

 Audits – 2015 Act

2 lot schemes 3 lots – 100 lots 101 + lot schemes
· Not required unless OC resolves to one one · Audit only required if annual budget over $250,000 or if OC resolves to obtain one ·   Audit required before AGM

Spending Limits – 2015 Act

2 lot schemes 3 lots – 100 lots 101 + lot schemes
· EC can be limited by the owners corporations’ resolution · EC can be limited by the owners corporations’ resolution · Two quotes are required if the amount exceeds $30,000

· EC must not spend 10% more than the amount specified for the item in the AGM

· OC can remove the above limitation

· Does not apply in emergencies

NOTES:

Upon commencement of the Strata Schemes Management Act 2015 the Executive Committee becomes the Strata Committee and the Sinking Fund becomes the Capital Works Fund

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