act unit titles presentation
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© Copyright 2011 Teys Lawyers www.teyslawyers.com.au
Surviving the Transi=on to the ACT Unit Titles (Management) Bill 2011
© Copyright 2011 Teys Lawyers www.teyslawyers.com.au
Presenta=on July 2011
© Copyright 2011 Teys Lawyers www.teyslawyers.com.au
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)
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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
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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
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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
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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/
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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
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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
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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
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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
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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
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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
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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
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‘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
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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
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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
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© Copyright 2011 Teys Lawyers www.teyslawyers.com.au
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
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© Copyright 2011 Teys Lawyers www.teyslawyers.com.au
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
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© Copyright 2011 Teys Lawyers www.teyslawyers.com.au
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”
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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)
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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
© Copyright 2011 Teys Lawyers www.teyslawyers.com.au
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
© Copyright 2011 Teys Lawyers www.teyslawyers.com.au