Changes to WA’s Strata Titles Act

In 2016, the Minister for Lands announced that the West Australian government would go ahead with reforms to WA’s Strata Titles Act 1985.

Whilst the reforms are still being drafted, the proposed changes aim to address the state’s growing population and an increased demand for strata properties on the part of Perth tenants.

Set to be delivered by WA’s State Land Information Authority, Landgate, it is hoped the reforms will provide more flexibility for Perth’s property investors, developers, strata owners and tenants.

Here’s a closer look into what these reforms will achieve for Perth property investors and developers.

New strata schemes

The suggested reforms to WA’s Strata Titles Act 1985 propose the introduction of two new types of strata: community title schemes and leasehold strata schemes.

    • Community title schemes: These will allow for the management of multiple strata schemes and mixed use land developments in one land parcel. The strata companies responsible for each scheme will operate under an overarching community corporation.
    • Leasehold strata schemes – These will allow WA property investors to buy and own a long-term lease of a lot (from 20 to 99 years), for which they will receive a Certificate of Title.

These amendments aim to encourage more mixed-use development in WA to accommodate the growing number of tenants choosing to live in strata properties. The reforms will provide Perth investors with more options for owning titles to land and buildings.

Easier staged strata development

The drafted bill aims to streamline the process for strata developers looking to construct in phases.

These staged strata development schemes often appeal to developers looking to fund later construction with sales from their earlier strata lots.

It is hoped the increased flexibility provided by the reforms will attract more developers and property investors to WA.

Improved information for buyers

Reforms to the Strata Titles Act 1985 aim to simplify contracts for buyers looking to invest in a strata lot.

Under the current Act, Perth property investors have claimed they haven’t read or understood the information provided to them in their contracts.

The proposed reforms to the Act aim to provide property investors with the necessary and relevant information required before signing the dotted line. This will ensure investors fully understand how the common agreements and entitlements of their strata scheme may influence their obligations and responsibilities as a lot owner.

Better management of strata schemes

Changes to WA’s Strata Titles Act 1985 will support the improved management of strata schemes on the part of strata management companies.

Under the proposed reforms, strata managers will become more accountable. They will be required to show a reasonable knowledge of their responsibilities and act in accordance with their obligations as strata manager. The duties imposed by the new reforms will require strata managers to hold a separate trust account for strata funds.

The reforms will better regulate the management of strata schemes and will require managers to report information regarding their schemes to Landgate.

Simpler resolution process for strata disputes

Previously, this process was relatively complex under the Strata Titles Act 1985.

However, the proposed reforms will increase the power of the State Administrative Tribunal and improve the clarity of owners’ rights when it comes to strata disputes. Under the proposed changes, the State Administrative Tribunal will become the central forum for the resolution of strata disputes, leading to a more streamlined resolution process.

Termination of Strata Schemes

Under the Strata Titles Act 1985, a scheme could only be terminated with a unanimous vote from all strata lot owners. If a unanimous vote was not obtained, this would lead to extensive legal processes and costs in order to secure termination.

The changes set out in the drafted bill propose a majority vote process for the termination of strata schemes. The majority required will depend on the size of the scheme.

For schemes of four lots or more, a majority of 75% must be obtained for termination to be considered.

These reforms will improve the situation for property investors who believe the continuation of a strata scheme is no longer in their best interests.

Need help managing your strata property?

Whether you’re new to the investment market or a long-term property investor, the property management team at Rentwest can help you manage the day-to-day running of your investments.

From rental collection to investment strategy, our specialised team of Perth-based property managers will ensure your properties remain at their best and most competitive after purchase.

Contact the team at Rentwest on 9314 9888 or email us at rentals@rentwest.com.au to find out more about our property management solutions.

Note: The information provided in this article has been sourced from the government report provided by Landgate. For more information on the latest strata reforms, please visit https://www0.landgate.wa.gov.au/titles-and-surveys/strata-reform.