Mrs SALLY QUINNELL (Camden) (18:36): I speak on the Strata Legislation Amendment Bill 2023. The bill amends the Strata Schemes Development Act 2015, the Strata Schemes Management Act 2015, the Community Land Development Act 2021 and the Community Land Management Act 2021, and the related regulations. The bill implements 31 recommendations of the Report on the statutory review of the Strata Schemes Development Act 2015 and Strata Schemes Management Act 2015, tabled to Parliament on 29 November 2021. The bill is the first step in delivering the review recommendations, providing immediate benefits to strata and community land schemes. The residents of strata and community land schemes have been waiting too long for action because the previous Government sat on its hands for two years, once again neglecting the pressing issues facing the people of New South Wales. The Minns Labor Government recognises the importance of strata and community land schemes for many people across the State. That is why the Government is getting on with the job and introducing this bill.

The Strata Schemes Development Act 2015 and the Strata Schemes Management Act 2015, work together to provide the regulatory framework for the creation, variation, termination and management of strata schemes in New South Wales. The Community Land Development Act 2021 and Community Land Management Act 2021 do the same but for community land schemes. The bill amends all four Acts and ensures community land scheme laws remain in step with strata laws. The reforms in the bill will improve the lives of residents in strata and community land schemes by strengthening the governance, accountability and effectiveness of these schemes.

Strata schemes are a form of community living, typically in an apartment building or a block of townhouses. Each person who buys a lot within the scheme owns the inside of the lot and shares ownership of the common property with all other owners. Common property includes roofs, driveways, external walls, gardens and some amenities. The bill amends the Strata Schemes Development Act 2015 to introduce much-needed improvements to the strata renewal regime. The process allows the owners' corporation of a strata scheme to pursue a collective sale or redevelopment of their building without unanimous support but where at least 75 per cent of lot owners agree. The renewal provisions empower strata owners to make a collective decision about the future of their scheme. Strata renewal draws on the collective decision-making process inherent in strata living.

As well as owning their own lots, strata owners also own a share of the common property. The strata renewal process acknowledges that decisions about commonly owned property need to be made collectively. The statutory review found that the collective sale and redevelopment provisions have been effective in meeting the objective to facilitate the renewal of strata schemes, despite limited uptake. Any proposed collective sale or redevelopment must follow a multi-step process set out in part 10 of the development Act, designed to provide transparency and allow time for consultation. These fundamental safeguards prevent intimidation, encourage collaboration and ensure that owners receive appropriate compensation.

The current law requires a scheme to develop a strata renewal plan strictly according to the process set out in the development Act. If the Land and Environment Court is not satisfied that the appropriate steps have been followed, then the plan will not be approved and will lapse. The bill gives the court some latitude to approve a strata renewal plan even if there are inconsistencies with the set steps or time frames. This more flexible process will boost confidence in the regime and address concerns identified in the review that a plan might not be approved just because of a minor procedural mistake during development. The amendments in the bill create a more workable process, but this is not at the expense of the safeguards that are fundamental to the renewal regime. The court can only approve a plan that has not strictly complied with the steps in the legislation if the court is satisfied that the procedural error would not cause substantial injustice.

The bill also boosts existing safeguards relating to conflicts of interest, making the process more transparent for all owners. Under current law, only those owners who are appointed to the strata renewal committee tasked with developing a strata renewal plan need to disclose conflicts of interest. The bill extends conflict of interest provisions to all owners, not only those who are on the strata renewal committee. At key decision points in the renewal process, owners will have to disclose whether they have a financial or other interest in the strata renewal proposal. This might occur where the owner is related to the proposed purchaser of the scheme or has made a competing offer to purchase the strata scheme. The changes in the bill will improve transparency and will mean that the Land and Environment Court must consider owners' disclosures when deciding whether to approve a strata renewal plan.

The bill also makes important clarifications about the court's cost orders. Currently, the law prevents the owners' corporation from recovering costs of renewal proceedings from a dissenting owner. This has created some confusion and injustice in situations where dissenting owners have raised frivolous objections to draw out legal proceedings and ramp up legal costs. The changes in the bill now clarify that the court can award costs against a dissenting owner where the court considers it appropriate. This might occur where the owner has not acted in good faith or has a conflict of interest that makes it inappropriate for the owners' corporation to bear all costs. The bill improves meeting governance across community and strata schemes by extending from seven to 14 days the periods for notice of an annual general meeting and delivery of all documents before a first AGM, and addressing proxy harvesting by limiting the number of lots a power of attorney or company nominee may represent.

The bill also boosts overall governance of strata and community schemes by clarifying rules around repayment of money paid from the administrative fund to the capital works funds or vice versa, while strengthening record-keeping requirements by requiring owners' corporations and corporations and associations to store records in electronic form, requiring landlords' agents to give notice of a tenancy to the owners' corporation or association and enabling tenants to give notice of their tenancy to the owners' corporation or association. The bill is the beginning of strata and community land scheme reforms. Those who live and work in strata and community land schemes have waited too long for change. The bill will deliver necessary reforms to modernise, clarify and enhance current laws for the benefit of residents. I commend the bill to the House.