New legislation being introduced by the NSW state government may give owners corporations more power to prevent overcrowding and hot-bedding in strata title accommodation.
The new laws are designed to ensure safe levels of occupancy are maintained and to prevent large numbers of adults crammed into a unit or rotating bed use. A limit of two adults per bedroom, except in special cases, is likely.
The City of Sydney introduced a limit of two adult occupants per bedroom for new apartments from 2006 but there has been no court action by the council to enforce the rule. Under the new legislation, owners corporations can enforce the limits they set. Fines could be imposed for non-compliance.
New strata laws are due to be introduced to parliament in the second half of the year following a review launched by the NSW fair trading minister, Anthony Roberts, in December 2011. Some 1800 submissions to the review called for greater powers for NSW’s more than 70,000 bodies corporate.
The new legislation is also likely to clamp down on property developers appointing themselves as the caretaker company for a strata scheme following the Meriton World Tower fiasco. Meriton awarded itself the $2.13 million-a-year caretaker contract for 10 years and is being challenged by the complex’s three owners corporations for ongoing maintenance issues estimated at $1 million. World Tower unit owners maintained Meriton issued 9500 swipe cards to enter the building even though there are just 236 residential units.
Meanwhile massive rationalisation of the $500 billion body corporate services industry with small operators disappearing and larger companies gaining market share is being predicted by Patrik Bruhlmann, chief executive of listed body corporate services company Vesture.
He says the industry is moving towards accreditation and greater regulation.
“In Queensland, NSW and Victoria alone, more than 500 companies are competing for a share of the market. There are hundreds of small, private operators, each of which is managing fewer than 1000 lots. Some do not have the expertise, experience or resources to provide the level of service a body corporate needs.”
Mr Bruhlmann said industry regulation would place additional operational requirements on body corporate services companies.
“Body corporate managers need to continually update their skills and knowledge to stay abreast of the changing legal and financial environment,” he said. “As a consequence, we may see a massive industry rationalisation, with small players disappearing and larger companies gaining market share.
“I strongly believe that level of fragmentation will diminish over the next 10 years due to the need for greater industry regulation to safeguard lot owners.”