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New strata laws passed through WA parliament

Friday, 9th Nov 2018

In the biggest reforms to WA’s strata legislation in over twenty years, new strata laws have been introduced that will impact the rules governing the termination of strata schemes in WA.

The Strata Titles Amendment Bill 2018 and the Community Titles Bill 2018 were passed through WA parliament in early November, and include a number of reforms aimed at improving the management and development of strata schemes. But what do the changes mean, and why are they being implemented?

What are the new strata reforms?

The new laws introduced under the Strata Titles Amendment Bill and the Community Titles Bill include a number of key reforms, including changes to legislation surrounding scheme management, rules to allow for faster and more flexible staged subdivisions, and the introduction of two new types of strata. However, the biggest reform to emerge from these reforms relates to the rules surrounding the termination of strata schemes.

Previously, a strata scheme could only be terminated and redeveloped with unanimous agreement from all owners within the scheme. However, under new legislation, a majority termination process has been implemented, whereby a scheme of five units or more can be terminated with the agreement of 80% of owners.

In order to safeguard owners and ensure all owners’ rights are taken into consideration, all termination proposals need to undergo a full review process by the State Administrative Tribunal (SAT), which will assess the benefits and drawbacks for related parties and ensure the termination process is correctly followed.

Why are the new strata rules being implemented?

There are a number of reasons driving the reforms to WA’s strata laws, but the overarching aim of the changes is to ensure strata laws remain aligned with the modern needs of WA communities and the State’s growing population.

In addition to providing better outcomes for property owners by implementing improved dispute resolution processes within strata schemes and setting out clearer obligations for strata managers, the reforms are intended to deliver new land development options to drive economic growth and facilitate WA’s expected population growth.

Given that the first strata schemes in WA were created over 50 years ago, the termination and redevelopment of these schemes is expected to become more commonplace. The new laws are designed to set out clearer and more transparent processes for the termination of these schemes, allowing for more straightforward redevelopment of aging strata properties. These changes could prove fundamental in supporting the gentrification of local areas and helping to facilitate better outcomes for future developments.

Momentum Wealth is a Perth-based property investment consultancy dedicated to helping investors accelerate their wealth through property. We have served investors for over 12 years, assisting clients in the research, financing, acquisition, development and management of their investment properties.