Act unit titles presentation

© Copyright 2011 Teys Lawyers www.teyslawyers.com.au

Surviving the Transi=on to the ACT Unit Titles (Management) Bill 2011


Presenta=on July 2011


A New Suite of Legisla=on

Unit Titles Act 2001

Schedule 1 – Codes of Conduct

1.1 Execu=ve CommiLees

1.2 Strata Managers

Schedule 2 – Execu=ve CommiLee Process & Procedure

Schedule 3 – General Mee=ngs

Schedule 4 – Default Rules (previously

ar=cles)

Unit Titles (Management) (Act)


The Environment is the Big Winner

•  New defini=on of sustainability infrastructure

•  Ordinary resolu=on to install, finance and grant easements

•  Requires considera=on of long term benefits

•  May be acquired as trustee for tax reasons

•  Service Contracts may need to show environmental sustainability measures

•  OC rules must not prohibit or restrict sustainability or u=lity infrastructure


More Responsibility on Execu=ve CommiLees

Privacy

• Responsible for compliance with Privacy Act • Requires privacy policies and procedures

Disclosure

• Annual disclosure of insurance and commission • Requires knowledge of managers’ insurance commission

Outsourcing

• Tighter constraints on all service-‐type contracts • Requires greater focus on short-‐term for contractors and employees (other than strata manager and services contractors)

Conduct

• New code of conduct for execu=ve commiLee members • Requires knowledge of Act and higher standards

Liability

• Personally liable for dishonesty and recklessness • Requires due diligence processes


What is Recklessness?

reckless / adjec&ve 1. uLerly careless of the consequences of ac=on; without cau=on – recklessness, noun Macquarie Dic=onary, 4th Edi=on

•  Failing to repair and maintain common property known to

be a risk to health and safety

•  Failing to take advice on workplace safety

•  Entering into a major contract

or transac=on without legal advice


A $10 latch and 10 minutes work would have saved this boy’s life

Iman Akter Mostafa, aged three (top led), died when he fell from a window of a strata scheme in Kogarah in 2009.

hLp://www.chw.edu.au/parents/kidshealth/building_falls/


A New EC Code of Conduct

1.  Understanding of Act 2.  Honesty and fairness 3.  Care and diligence 4.  Best interest 5.  Compliance 6.  Nuisance 7.  Unconscionable

conduct 8.  Conflict of interest


What Is Reasonable Care & Diligence?

diligence / noun constant and earnest effort to accomplish what is undertaken; persistent exer=on of body or mind

Macquarie Dic=onary 4th Edi=on

For example:

•  Checking references and insurance policy of a new strata manager

•  Considering external advice and only ac=ng otherwise in special circumstances

•  Finding out about responsibili=es and =me limita=ons in building defect maLers


What Is Unconscionable Conduct?

•  Serious misconduct or something unfair or unreasonable

•  Conduct which shows no regard for conscience

•  Conduct which is irreconcilable with what is right or reasonable


For Managers the Devil is in the Detail

•  2 year max developer appointments •  Subsequent 3 year terms include op=ons •  EC must disclose insurance commission annually •  Transfers subject to ordinary resolu=on approval not to be unreasonably withheld

•  Dismissal for 14 consecu=ve days absence •  Cer=ficate and inspec=on income to be paid to the OC


Lower Bar for Budget Approval

•  Ordinary resolu=on rather than special for approving the budget

•  Prudent budge=ng clarified to include maintaining common property in good condi=on on a day-‐to-‐day basis

•  Clearer rules about what funds can be used for


Sinking Fund Plans Refined

PermiLed payments • New property, and • Renew or replace old property

Timing for new plans • At least 12 months before end of 10 year plan

• Enforces prudent budge=ng

Amending plans • First plan 4 year review

• Other plans 5 year review

• Express power to amend at any =me by ordinary resolu=on


Improvements en=rely of common property

Building exclusions defined

Addi=onal risks by

regula=on

Greatest prac=cable extent cover

Compulsory debris and fee

cover

Future regula=ons eg

excess

BeLer Insurance Regime


‘Rules’ Replace ‘Ar=cles’

•  Pre UTA 2001 ar=cles stand but called rules

•  Post UTA 2001 ar=cles stand as rules if not inconsistent with new Act or other territory laws

•  Rules prohibi=ng or restric=ng sustainability are invalid


Privacy Laws Apply to Records

EC members have responsibility for privacy compliance

Corporate register contains personal informa=on and

must be separately displayed, printed or

emailed

Limita=ons on human rights to privacy are

propor=onate


Personal Informa=on Held by OC’s and Managers

Names

Addresses

Email addresses Telephone numbers

Property descrip=ons and

valua=ons

Tenancy details Owners credit card details

Bank account details for suppliers

Some=mes proof of personal iden=fica=on



What Do Strata Managers Do With This Informa=on?

What? Allowed or not?

Give it to strata inspectors Required by strata management laws

Give it to the execu=ve commiLee Probably not allowed under Na=onal Privacy Principles

Give it to web hos=ng companies Probably not allowed under Na=onal Privacy Principles

Give it to strata management sodware providers

Probably not allowed under Na=onal Privacy Principles

Give it to associated suppliers for cross marke=ng (e.g. banks )

Probably not allowed under Na=onal Privacy Principles

Throw it in the rubbish (paper and redundant IT)

Not allowed under Na=onal Privacy Principles



What Should Owners Do to Manage Privacy?

• Limit informa=on collected to that which is absolutely necessary

Limit

• Secure info electronically and give traceable access only

• Use privacy policies

Protect • Audit privacy policies

• Audit strata managers document security processes

Check



Dispute Resolu=on Changes

“Only the OC can apply to ACAT for an order about

animal disputes – it will be for aggrieved occupants to

persuade the OC to take ac=on”


General Mee=ng Innova=ons

•  28 days rather than 21 for reduced quorum decision to take effect

•  Absentee votes now allowed for any mo=on (previously only unopposed or unanimous resolu=ons)


How We Can Help Your Transi=on

Updates and further thoughts will be available weekly via StrataSpace

Standard privacy policies and procedures will be available

Review of rules

Compliance reviews

Execu=ve commiLee manuals and training material


About The Presenter Michael Teys is the Founder and Principal Lawyer of TEYS Lawyers. He has a Bachelor of Laws and prac=ces exclusively in the area of strata =tle law. He is a Fellow of the Australian College of Community Associa=on Lawyers. He was formerly an Adjunct Lecturer with Charles Sturt University. He appears weekly on SKY News Business Channel's Property Success with Margaret Lomas and is a regular panellist for the property edi=on of Your Money, Your Call for the same channel. You can find out more about Michael at www.michaelteys.com

TEYS Lawyers prac=ce na=onally in strata =tle law represen=ng owners corpora=ons, bodies corporate and apartment owners. The firm’s prac=ce groups include building defects, management rights, strata community disputes, by-‐laws and rules and levy and fee collec=on.

Subscribe for their free e-‐newsleLer StrataSpace and find out more about them at www.teyslawyers.com.au


Education

Act unit titles presentation