Archive for the ‘Property’ Category

Strata Law Reforms NSW

In 2015 the New South Wales Parliament passed the Strata Scheme Management Bill 2015 and the Strata Scheme Development Bill 2015, with more than 90 law changes. The new pieces of legislation set out comprehensive reforms of NSW strata laws modernising the law to reflect the reality of living in a strata townhouse or apartment today.

The changes are aimed at improving strata living and providing greater opportunity for strata redevelopment. The new strata laws commenced operation on 30 November 2016.

Before the new laws commenced research and community consultation was undertaken:

  • new regulations were developed setting out how the laws will operate;
  • key information was developed and released for strata schemes; and
  • a public awareness campaign took place.

We examine some of the more significant reforms set out in the new legislation below.

Collective sale of a strata scheme

Previously, a strata scheme could only be ended or “collapsed” with the unanimous support from all owners in a strata scheme. The new provisions allow for the collective sale or redevelopment of a strata scheme by a 75% majority of lot holders. The rights of the owners are protected by the inclusion of certain checks and balances. For example, if a strata sale is agreed to, the owners are to receive the market value of their lot plus an extra amount to cover costs associated with moving.

The purpose of the amendment is to prevent individual owners from blocking redevelopment of aging and high-maintenance unit blocks.

Proxy Voting

The number of proxies a member of a strata scheme can hold is now limited to:

  • one proxy vote only for schemes with less than 20 lots; and
  • 5% for schemes with more than 20 lots.

The intention is to restrict “proxy farming”, whereby members gather up the votes of uninterested or absent members in the strata scheme to enable them to pursue their own agenda.

Inspection reports

In relation to all future strata developments, a developer must appoint an independent building inspector to provide both an interim building report (identifying any defective building work) and a final report on completion of the building work.

Building defects

A developer of a high rise strata building is required to place a bond of 2% of the contract price of the building work, to cover potential defects identified after completion and those which are set out in the final inspection report. The building bond must be claimed or realised 2 years after completion of the building work or within 60 days after the final report is given.

The reforms are aimed at protecting buyers of new units, encouraging early identification and rectification of defects and helping improve the standard of building construction.

Other notable changes

The new legislation also includes provisions which:

  • make it easier for owners to complete cosmetic and minor renovations to their units;
  • address issues of parking, pets and smoke drift;
  • allow an owner’s corporations some flexibility in deciding when their general meetings will be held and allowing more modern forms of communication to be used to attend meetings, such as video and teleconferencing.

What about the other states and territories?

NSW is not the only state turning its attention to strata law reform. In Queensland, discussion papers for similar reforms were prepared in 2014 at the request of the previous State Government. Similarly, in Western Australia a Strata Reform Project Team has been tasked with undertaking research into strata reform to ensure Western Australia has a modern Strata Titles Act. Victoria’s last round of reforms of owner’s corporation legislation took place in October 2014.

Conclusion

The reforms are intended to promote redevelopment of strata apartment buildings, assist in urban renewal and increase housing supply. Apartment owners are encouraged to make themselves aware of the strata reforms and consider the impact the changes may have on their strata living.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

 

Retirement Living – Life beyond bingo and bowls!

retirement-livingRetirement Living

Life beyond bingo and bowls!

 

Not surprisingly people talk about buying their first home as being a life changing event and it is. However, in the past it has been rare for people to talk so excitedly about moving into some form of retirement living.

Given that sooner or later most of us are likely to have to deal with this issue either because we are assisting our parents, another family member or friend in making the transition from their home to a retirement community or because we are considering such a move for ourselves, it is important to know what your options are and to understand the legal and financial implications that come with this type of move.

 

A world of options

In days gone by the very notion of a retirement home was enough to send a shiver down many people’s spines. Thoughts of early dinners and endless games of bingo did little to encourage our more mature citizens to view this as a desirable life stage.

The good news is that things on the aged care front have changed considerably in the last decade and there is now a wider choice of accommodation options available than ever before.

Choices range from luxurious apartment complexes for the “Over 55” community through to multi-functional retirement communities where a variety of accommodation and services are provided on the one site ranging from independent living right through to around the clock nursing care of the more traditional nursing home variety.

 

Things to think about

The key to any successful life change usually starts with learning about the options available and understanding the legal and financial obligations that come with each option, so get out and start looking at what is available in the area where you or the person you are assisting would like to live. Then once you have an idea what is available in the area and price range you are looking for start considering the legal and financial issues that go hand in hand with the more emotional part of the process.

 

Remember not all retirement communities are created equal

First up ask “Is this the right retirement community for me?” If you are helping someone else it might not be right for you personally but is it what they are looking for?

Now this may sound like an obvious question, but it is important not to be dazzled by a new fancy fit out if on closer inspection the retirement community does not offer the range of services needed or if it is so far from family and friends that visitors will be few and far between and social isolation is likely to occur.

Just as every suburb and neighbourhood has its own quirks every retirement community is different and this is definitely not a case of one size fits all.

 

The Wish List

Make a wish list of what you are looking for.

At the top of the list put the “must haves” and at the bottom of the list add the “would be nice but not essential” things.

Things to consider including might be:

  • being close to public transport,
  • a range of on-site activities,
  • nursing assistance being available if needed,
  • a one-stop shop with different care levels all catered for in the one complex, or
  • proximity to current neighbourhood and family and friends.

Each person will have a different set of priorities.

The more you are able to focus on what is most important the easier it should be to eliminate options that are not the best for you and also the easier it will be to avoid getting side tracked by things that really don’t matter quite as much.

 

Some important things to think about

Making a move into a retirement community is a significant life change and there are emotional, financial and legal issues that will come up along the way.

Some things to consider before signing any paperwork and making a commitment of this kind include:

  • Do I need to sell my home first before I can afford to move?
  • If I buy into a retirement community what exactly am I buying?
  • Is the property strata or community titled or does some other form of ownership apply?
  • Does the property I am buying form part of my estate after I die or does ownership revert to some other entity (such as the company that operates the retirement community)?
  • Exactly what does the contract say – what are my rights and responsibilities under the contract?
  • Are there any ongoing fees and charges in addition to the purchase price?
  • What other costs do I need to factor in when I move? Don’t forget to include moving costs and possibly storage costs if you won’t be able to take all your possessions with you and are not yet ready to part with things you cannot fit into your new home.
  • Do I have to pay the whole price upfront or can you pay a portion of the cost and then pay the balance in ongoing instalments? Are they any other payment options such as pension sacrifice available?
  • Will the move into a retirement community affect any pension or rent assistance currently received?
  • Is the facility able to provide a higher level of care later on if your needs change or would you need to move to a different facility if your care needs increased?
  • What costs are associated with any care provided?

Ask for help

This type of move can prove to be a challenging one for both the person involved and anyone assisting them and it is important to understand exactly what is involved legally and financially before entering into any contracts.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Buying a Strata Unit

One way of owning property is to buy a unit.

Each unit is called a lot in a strata plan. The lot has its own separate title.

An executive committee representing the owners corporation (made up of all unit owners) is set up to manage the common affairs of the lot owners e.g. caring for the building and the common areas such as stairways and pathways.

Owners contribute to (A) a sinking fund to meet the costs of painting and major repairs and (B) an administrative fund to meet ongoing costs such as insurance and cleaning.

Units have by-laws which place restrictions on the behaviour of residents, for instance not allowing them to keep pets.

Before buying a unit, check the executive committees minutes to avoid any surprises.

3 must knows about a house deposit

1. The Standard Form Contract for the Sale of Land refers to payment of a 10% deposit. For example, if the Sale price is $400,000.00 the deposit payable is $40,000.00.

2. This deposit can be negotiated with the seller to something less, say 5%. Using the above example, the deposit payable would be $20,000.00.

3. If the seller agrees, a Deposit Bond can be used. This means that no cash is required to secure the Purchase. The Deposit Bond works like a Bank Guarantee. The cost is usually around $500.00 to $600.00 and varies depending on the Purchase price. What this means is that you’re not having to pay $40,000.00 upfront to secure the Purchase. A Deposit Bond is ONLY issued to Purchasers who have sufficient funds (e.g. a Loan) to complete the Purchase, for example the $400,000.00.