SA Community and Strata Titles Reform Bill Introduced

The Statutes Amendment (Community and Strata Titles) Bill 2021 (SA) (the Bill) was introduced into the SA Parliament on 3 March 2021 by the Attorney-General, V A Chapman. The Bill proposes changes to the Community Titles Act 1996 (SA) and the Strata Titles Act 1988 (SA), which relate to the creation and management of community and strata-titled properties respectively. 

Background to the Bill

According to the Attorney-General, the proposed changes to the community and strata titles legislation are to implement recommendations made in the "81st report of the Environment, Resources and Development Committee; Strata Titles" (the ERD Report). The proposed changes also come from additional changes requested by interested parties in consultation on the Bill, and letters received from members of the public and others. The Committee inquiry commenced in March 2015 and reported in March 2018.

The ERD Committee's terms of reference required inquiry into strata titles regulation to review the legislation changes that were made to the community and strata titles legislation in 2013. Several of the changes proposed in the Bill are said to build on those changes, and in some cases to "tighten provisions to ensure they have the intended effect". Several other changes proposed in the Bill are, according to the Attorney-General "for the purpose of achieving greater consistency between the Community Titles Act and the Strata Titles Act. It should be noted that the Strata Titles Act generally governs strata title developments established before the commencement of the Community Titles Act in 1996. The Community Titles Act on the other hand governs new community and strata divisions and community corporations established after that time."

According to the Attorney-General, moving to consistency "wherever possible" between the two pieces of legislation:

Overview of Changes Proposed

The Bill propose to make the following changes to the Community Titles Act and the Strata Titles Act.

• Make amendments to the Community Titles Act section 78D and Strata Titles Act section 27D to address the practice of reinvoicing by body corporate managers by requiring that a body corporate manager must clearly disclose the amount of any fee or commission being charged to the corporation for arranging a contract with another service provider
• Amend both Acts to make it clear that the caps on fees that apply to corporations also apply to a manager providing information and copy documents on behalf of the corporation to an owner or prospective owner under Strata Titles Act section 41 and Community Titles Act section 139
• Make changes to the Community Titles Act and Strata Titles Act requiring the plan of division for a community or strata titles scheme to be supplied to owners or prospective purchasers under the Community Titles Act section 139 and Strata Titles Act section 41 as part of strata and community title property searches
• Amend the Strata Titles Act section 33(5) to provide for consistency with the Community Titles Act by adopting the formula for achieving a quorum at general meetings of corporations contained in the Community Titles Act section 83.
• Amend both Acts to require the statement of expenditure (or ''sinking fund plan'') required to be prepared and reviewed by corporations under the Community Titles Act section 113 and Strata Titles Act section 33A to be supplied to the owners or prospective purchasers under the Community Titles Act section 139 and Strata Titles Act section 41 as part of strata and community property searches.
• Change both Acts to increase the prescribed minimum amount of mandatory public liability insurance that must be held by a corporation under the Strata Titles Act section 31(2) and Community Titles Act section 104(2) from $10 million to $20 million;
• Make changes to both Acts to ensure that the pamphlet required under Community Titles Act section 78B and Strata Titles Act section 27B explaining owners' rights under a proposed contract with a body corporate manager (including to inspect corporation documents held by the manager, to apply to the Magistrates Court to resolve disputes and the rights to terminate the contract) be required to be supplied to owners rather than merely being made available for inspection prior to a meeting at which it is proposed to vote to appoint the manager
• Make amendments to Strata Titles Act section 34 to make it consistent with the Community Titles Act section 84 by providing that an owner in arrears may not vote at strata corporation meetings;
• Amend the Community Titles Act and Strata Titles Act to address the problem of inquorate (that is, not enough members are present to make up a quorum) corporation meetings by adopting an approach recently introduced in Western Australia, whereby a quorum may be declared from those present after 30 minutes of the appointed time for a duly convened meeting, avoiding the need to adjourn and reconvene the meeting at a later date;
• Make changes to both Acts, to adopt the Community Titles Act position on which officers can call a general meeting of the corporation;
• Change the Strata Titles Act to make it consistent with the Community Titles Act, by adopting the Community Titles Act position on who may vote at a corporation meeting if there is more than one owner of a lot and they disagree;
  [Currently under the Strata Titles Act, the first named person on the certificate of title may vote, whereas neither votes under Community Titles Act section 84(7) while the Strata Titles Act position is arbitrary and body corporate managers prefer the Community Titles Act position.]
• Amend the Community Titles Act to increase the threshold for mandatory audits for community titled corporations, aligning the Community Titles Act more closely to the Victorian approach to audits, such that self-managed community corporations will be required to have their accounts audited where contributions exceed $100,000 per year or there are over 100 lots in the group;
  [Other community titled groups can still resolve to have their accounts audited if they wish after balancing perceived risk against audit costs. The requirements for body corporate manager trust accounts to be audited are unchanged.]
• Amend both Acts to remove the requirement for corporations to have a common seal, consistent with changes previously made under the Corporations Law;
• Amend the Community Titles Act to extend the prescribed time for lodgments of amendments to by-laws with the Registrar-General from 14 to 21 days since 14 days has proved, according to the Attorney-General, ". . . difficult to achieve and to create discretionary powers for the Registrar-General to dispense with the requirement for the consent of certain parties to minor prescribed technical amendments of, or to correct clear errors in, a scheme description for a staged development" - improving efficiency and reducing significant costs that can arise from the need to obtain consents from a broad range of parties to minor changes; and
• Change the Community Titles Act to explicitly empower a community corporation to make by-laws to regulate smoking of tobacco and related products on the shared common property and to prevent smoke drift from private lots onto other lots or common property.
  [This change will allow community corporations to vote by special resolution to vary their by-laws to regulate smoking, something urged on the Government by the Heart Foundation SA and supported by Drug and Alcohol Services SA].

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Statutes Amendment (Community and Strata Titles) Bill 2021 (118 of 2021) [SA], second reading speech and explanatory material available from TimeBase's LawOne service

81st Report of the Environment, Resource and Development Committee: Strata Titles (SA Parliament)