Strata Reforms Could Change the Face of Urban WA

Monday, April 27th, 2015
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Long-awaited reforms to strata laws in Western Australia promise to have a dramatic impact upon the state’s urban landscapes by fostering the creation of dense infill developments and raising the sustainability of the built environment.

Amendments to Western Australia’s strata laws have long been waiting in the wings, with the Barnett government flagging reforms toward the end of 2013 in the wake of the NSW’s government’s unveiling of proposed overhauls to its own system.

The proposed changes that are being currently prepared by Landgate – Western Australia’s statutory authority for property and land information – seek to address rapid changes in the state’s real estate market, including anticipated population gains and a rapid expansion in strata-style property arrangements.

“By 2031, WA will be home to more than 3.5 million people and we need to prepare for the increased demand for affordable and sustainable housing – including more cost-effective urban infill developments and community living options,” said Landgate chief executive Mike Bradford.

“Proposed reforms…aim to make shared living and working communities more attractive. They consider ways to provide more options for owning title to land and buildings; encourage an improved standard of service from strata companies; and propose better management and dispute resolution processes.”

Chief among the reforms is fostering the development of large-scale mixed-use urban developments via the introduction of community title schemes to Western Australia.

Community title schemes are essentially expansions upon standard strata arrangements that are aimed at more complex residential developments that encompass a broader range of facilities and infrastructure.

In addition to creating common property, community title schemes can bundle together a multitude of urban services and function under the one unitary arrangement, including roads, parks, litter disposal, maintenance of gardens and nature strips, as well as certain utilities.

They have emerged in recent years as one of the most rapidly expanding segments of Australia’s housing sector, conferring developers with the ability to create their own cohesive, large-scale communities.

The schemes have already been widely deployed in NSW, where there are approximately 1,500 community schemes in a variety of different themes and environments.

According Joe Lenzo, executive director of the Property Council of Australia, the introduction of community titles to Western Australia will abet the creation of larger, mixed-use developments.

“Community titles will encourage larger scale precinct-style housing developments to occur in WA, similar to other states,” said Lenzo. “This include more mixed use development around suburban centres and strategic infrastructure investments like train stations.”

The reforms could further spur urban renewal initiatives by facilitating the termination of existing strata schemes via alterations to inflexible voting arrangements.

Landgate has proposed that voting requirements for the termination of strata schemes be revised in order to pave the way for future urban development.

“Town planners and developers have asked for more flexible arrangements to end schemes to facilitate planning strategy of urban renewal and urban infill, especially where zoning arrangements are changed, to permit increased density and development around transport hubs,” said Landgate’s discussion paper.

Under current regulations, the termination of a strata scheme requires the approval of all lot owners, meaning that each party possesses a veto right over such a decision.

Landgate contends that such an arrangement is undemocratic as well as unwieldy, given the power it confers upon any demurring groups in the minority.

“At the moment a single owner can prevent sale or redevelopment of the land in the strata scheme against the wishes of the majority,” said Landgate’s discussion paper. “There is an argument that democracy and a majority vote to terminate should prevail over the wishes of a dissenting minority.”

Proposed reforms to the voting rules for strata schemes also promise to boost the sustainability of WA’s built environments by making it easier to obtain the go-ahead for retrofits.

Under the slated reforms, only a majority vote would be required to green-light alterations to building structures that affect shared or adjacent properties.

This would make it far easier to approve sustainability retrofits such as the installation of solar PV panels, particularly compared to the current system under which each stakeholder possesses veto power over proposed changes.

Chris Tallentire, opposition spokesperson for lands, noted that such reforms would help remove roadblocks to sustainability initiatives that the existing voting system can create.

“If one person wants to put photovoltaic panels on the roof now, for example, they need permission from everyone in the building to do it,” he said.

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