STRATA TITLES (STAGED DEVELOPMENT) AMENDMENT BILL
STRATA TITLES (LEASEHOLD STAGED DEVELOPMENT) AMENDMENT BILL
The Hon. R. J. WEBSTER (Minister for Planning, and Minister for Housing) [3.27]: I move:
The main bill before the House is the Strata Titles (Staged Development) Amendment Bill. Its aim is to make it easier to develop a strata scheme in stages. By development of a strata scheme in stages, I mean just that: some development takes place now, some takes place later. The purchasers in each stage of such a project all become members of the one body corporate, and the common property created in each stage becomes part of the overall common property. This means a developer can use the proceeds of sale from the early stages to finance the development of later stages. Another advantage is that the developer can take account of the changing expectations of purchasers and adapt later stages to meet them.
Since 1986 a statutory system governing staged development has existed, but it has not proved to be popular. Developers have not been willing to bind themselves to large and precise amounts of detail required under existing law to be inserted in a development statement, and they consider that the method for amending a development statement is cumbersome and inflexible. Consequently, developers have been devising certain artificial means of enabling staged strata developments to proceed outside of the statutory system. Because the system was being underutilised, a consultative committee was set up to consider proposals for enacting a new statutory scheme.
The committee was made up of representatives of some 15 organisations comprising developers, home unit owners, managing agents, solicitors, surveyors, councils and government. It suggested a new statutory scheme which would allow developers more flexibility in carrying out a staged development while still providing the necessary protection for purchasers. The main features of the new scheme are
as follows: a strata development contract will be lodged at the same time the initial strata plan is lodged at the Land Titles Office. Upon registration of the initial strata plan, together with the strata development contract, a staged strata scheme comes into existence.
The strata development contract will set out all the details of the development. It will specify what the developer must do and what the developer may do. Owners of lots in the scheme will not be able to prevent these things from occurring but will be able to compel the developer to carry out the work he is obliged to do. A statutory form of explanatory note will be prominently displayed at the beginning of the strata development contract drawing attention to these fundamental aspects of the scheme. The contract will also bear a statement by the consent authority - normally the local council - that carrying out the development will not contravene development consent.
The legislation will also impose obligations on the developer. For example, it will be a requirement that the standards for all subsequent stages for materials, finishes, landscaping, roads, paths, and common property improvements will not be less than for the first stage of the development. I should like to also briefly mention some other features of this new legislation. The method of determining the developer's liability to body corporate expenses is to be disclosed in the strata development contract. The developer will have a majority vote in general meetings or council meetings of the body corporate where the meeting is considering what are known as "development concerns". Development concerns are generally those matters necessary to carry out the staged development in accordance with the strata development contract. For example, commencement of the next stage of a development would be a development concern. Variations to the development contract may be made by filing an amended contract in the Land Titles Office.
This amended contract must contain a certificate from the relevant consent authority that the contract is not inconsistent with any related development consent. Vertical staged strata schemes will be permitted. That is, a building divided into strata lots will be able to have additional floors built into it in the future. In such cases, however, special implied statutory obligations will apply. For instance, the developer will be deemed to have promised that in carrying out the building operations, support for existing land and buildings, in accordance with proper engineering and building practice, will be guaranteed. It has been necessary to ensure that developers do not manipulate unit entitlements to avoid their fair share of land tax and rates, and that unit entitlements are equitably distributed among all the lots in the scheme.
To this end, special provisions dealing with the allocation of unit entitlements have been made in a number of amendments to section 8 and section 8A of the Strata Titles Act. A staged strata development will end once the last stage has been completed or 10 years after the date of commencement of the development, whichever is the earlier. Lot owners and the body corporate can take action to compel a developer to complete the development. Transitional provisions are included which will ensure that schemes approved before commencement of the new legislation can continue under the existing legislation. It is also convenient to introduce three miscellaneous amendments at this time.
First, the Act needs to be modified to make it clear that nothing in it removes the need for ordinary development consent. This will overcome doubts about this issue raised in a decision of the Land and Environment Court. Second, strata subdivision of two lots that are not strictly adjoining as presently required, but are only separated by a natural feature, or a road, railway, public reserve, or drainage reserve, will be permitted. This amendment will remove an anomaly between subdivision permitted under the Community Land Development Act 1989 and subdivision under the Strata Titles Act.
The third of these amendments will remove the need for a developer who owns all the lots in a strata scheme, and who wishes to terminate the scheme in order to redevelop the parcel, to obtain an order of the Supreme Court. In these cases there are no competing interests to be resolved by a court and it is therefore appropriate for the termination to be carried out administratively by the Registrar General. Such a procedure would result in appreciable savings in time and costs and reduce the court's workload. The Strata Titles (Leasehold) Act 1986, dealing with leasehold strata schemes, mirrors the Strata Titles Act and, accordingly, parallel amendments governing staged development need to be made to the leasehold Act. This is achieved by the Strata Titles (Leasehold Staged Development) Amendment Bill which is the second bill to be considered. I commend the bills to the House.
The Hon. B. H. VAUGHAN (Deputy Leader of the Opposition) [3.33]: The Strata Titles (Staged Development) Amendment Bill and the cognate Strata Titles (Leasehold Staged Development) Amendment Bill are good legislation. As a latent practitioner in the field I believe it is not before time that such legislation was introduced. During debate on these bills in the other House the Government accepted several significant amendments moved by the alternative government. Those amendments are now part of the legislation. Indeed, for that reason the second reading speech of the Minister for Planning is somewhat different from the speech delivered by the Minister for Conservation and Land Management in the other House. Little more can be said about the legislation. I have, however, a pedantic plea which refers to the preamble in the Strata Titles (Leasehold Staged Development) Amendment Bill. Mr President, you would be among the first to agree with me I am sure that one does not talk about a bill containing rather restrictive provisions. I hope the parliamentary draftsman will refrain from using such a phrase in the future.
The Hon. D. F. MOPPETT [3.35]: I support these bills and welcome the support of the Opposition for them. Though I am not a practitioner in this area of expertise, when I was preparing my speech I was
fascinated by the development of legislation since strata title came into existence as short a time ago as 1973. I suspect that at the time there was a considerable degree of caution based on almost centuries of trying to grapple with preserving security of title. This concept of cubic spaces was really quite revolutionary.
The concept of one-title development was admirable at the time, but the evolution of the concept has been extremely interesting. The part-strata bills that were passed not so long ago allowed for a development to contain some strata titles and some ordinary titles on the one development. That obviously gave flexibility to major projects at a time when the development of major projects, particularly in the capital cities, was at a standstill. It was certainly a salutary way of meeting the needs of developers and clients and potential purchasers of the various titles that were created in those types of developments.
Today we are looking at staged development in strata title. It seems to me the process of consultation has been admirable. The Minister made reference to the 15 bodies that were consulted to bring this legislation together. Interestingly, those bodies were representative of the entire spectrum, from home unit owners and developers to those who may have an interest in the development of new legislation in this regard. I am pleased that this bill now seems to have the universal support in this House. The only comment I have is that I believe the Deputy Leader of the Opposition exaggerated perhaps a little when he said that the amendments agreed to by the Government were major amendments. My opinion is that the amendments could be described as belts and braces type amendments.
The core of the anxieties raised in debate in another place were in fact covered in the legislation. However, it was agreed that matters could be spelled out more clearly, or repeated in other clauses, to ensure universal acceptance of the bill. The Government should be commended for accommodating those anxieties which were expressed, I assume, genuinely by the Opposition in the other place simply to protect consumers. The Government was at pains to provide that protection when the legislation was drafted, and those three concerns were covered. The first concern related to any ambiguity about the time over which the development contract could run - although it had been stated that, in the absence of any other determination by way of a contract, 10 years would be assumed to be the relevant time. That ambiguity was clarified in the amendments.
There was also clarification of those development matters on which the developer would have virtually sole say in meetings of the body corporate. That had been spelled out, but again further protection for consumers was provided by way of amendment. The other aspect worthy of comment is the process for the hearing of appeals. As a result of experience, a review has been instituted to look at the system of appeals, whether to the Strata Titles Commissioner or to the Land and Environment Court. When that review has been completed I expect we may see some minor amendments, if they are recommended by that review. On that basis I believe all honourable members could vote with confidence for the passage of this excellent legislation.
The Hon. R. S. L. JONES [3.41]: The Australian Democrats support this legislation. We are happy that the Australian Labor Party moved a series of amendments in the lower House that resulted in strengthening the legislation and that addressed a number of concerns that I would have had about it. I am pleased those amendments were accepted by the Minister. This is complex legislation and I hope it will facilitate further staged developments, particularly those which would allow better use of small allotments of land, for example for medium-density developments with strata title townhouses, which are very popular where I live.
With regard to the previous legislation I do not understand why developers were unable to bind themselves to the large and precise amount of detail required. Under section 28A(3) of the Strata Titles Act 1973 the conditions imposed on developers were not onerous, so I do not understand why developers were unable to comply with those obligations of the Act. Nevertheless, there were problems, and these bills will make it easier for developers to undertake development projects. I should like to thank Tony Clark of the parliamentary research service who did a lot of work for me on these bills. His report published today on the amendments passed in the lower House confirms my views on the amendments. I thank him for the valuable service he provided to me and to other members. The Australian Democrats support the legislation and look forward to further developments that will make better use of land than we have made of it hitherto, especially in Sydney.
Reverend the Hon. F. J. NILE [3.43]: Call to Australia is pleased to support the bills. The principal bill, the Strata Titles (Staged Development) Amendment Bill aims to introduce a more flexible scheme for the staged development of land in a strata scheme, and the cognate bill, the Strata Titles (Leasehold Staged Development) Amendment Bill, seeks simply to expand the provisions to leasehold strata schemes. We are pleased that the bills spell out in detail what is now required to facilitate a development in stages of a parcel that is subject to a strata scheme. The legislation dealing with these various developments presents what I believe will be a helpful schedule to allow developers to carry out their tasks efficiently. In that regard I draw the attention of honourable members to schedule 1 of the principal bill, which relates to amendments to division 2A of the Strata Titles Act. The bill seeks to amend the Act by proposed section 28A(2), which provides:
That these bills be now read a second time.
(2) The development contemplated consists of:
("development lots"); and
the progressive improvement of the parcel by the construction of buildings or the carrying out of works (or both) on a lot or lots reserved for future development
It goes on to spell out those requirements. Proposed new section 28C relates to the requirement for the form and content of a strata development contract. I believe this will be of benefit to all concerned - for the council and for the community. Proposed section 28C(2) states:
the subsequent subdivision under this Act of each such lot and the consequential adjustment of unit entitlements within the scheme.
28C(2) A strata development contract must include a concept plan and a description:
(a) of the land comprising the parcel, identifying separately the development lot or lots to which it relates; and
(b) of any land proposed to be added to that parcel at a later time; and
(c) of so much (if any) of the proposed development as the developer is permitted by the contract to carry out and may be compelled to carry out (identified in the contract as "warranted development - proposed development subject to a warranty"); and
I believe these two bills which have been prepared in great detail will assist in the development of building projects involving strata titles and leasehold situations, and we are very pleased to support them.
The Hon. R. J. WEBSTER (Minister for Planning, and Minister for Housing) [3.46], in reply: I thank all honourable members for their contributions to this debate. Obviously this is good legislation. It has been well and truly scrutinised by both Houses and I have much pleasure in commending the bills to the House.
Motion agreed to.
Bills read a second time and passed through remaining stages.
(d) of so much (if any) of the proposed development as the developer is permitted by the contract to carry out but cannot, merely because it is described in the contract, be compelled to carry out (identified in the contract as "authorised proposals - proposed development not subject to a warranty").