The Strata Schemes Management Amendment (Sustainability Infrastructure) Act 2020 which is anticipated to commence in late July 2020, will amend the Strata Schemes Management Act 2015 (the “Act”) and is good news for owners corporations wishing to put in place greener facilities for residents. This amendment will smooth the path for approval of works such as solar panels and electric car chargers in strata, and guides owners corporations through the key factors to consider prior to approving such works.
Here we outline what kinds of works will be considered sustainability infrastructure under the Act, how sustainability infrastructure initiatives may be approved by an owners corporation, and the considerations that owners corporations will have to take into account before voting on sustainability infrastructure at a general meeting.
What is sustainability infrastructure?
The new amendment to the Act defines “sustainability infrastructure” as a change to common property that involves any one or more of several classes of sustainability measures. A “change” could include the installation, removal, modification or replacement of any part of common property.
Whether or not a change to common property will be considered “sustainability infrastructure” will depend on the intended purpose of the proposed change. The purpose of sustainability infrastructure may include any one or more of the following:
- increasing the efficiency of the consumption of energy, or reducing the consumption of energy;
- increasing the efficiency of the consumption of water, or reducing the consumption of water;
- reducing or preventing pollution;
- reducing the amount of waste sent to landfill;
- increasing the recovery or recycling of materials;
- reducing greenhouse gas emissions; or
- facilitating the use of sustainable forms of transport, including the installation of electric vehicle charging stations.
Sustainability infrastructure approvals
Previously, approval of a change to common property required a special resolution and registration of a section 108 and 143 by-law. The new amendment to the Act provides that approval of a change to common property may also be in the form of a “sustainability infrastructure resolution”. This is a new resolution that requires a simple majority (50% or more) of persons who are present and eligible to vote at the general meeting at which the motion is considered.
However, a sustainability infrastructure resolution may be broader than a common property rights by-law. A sustainability infrastructure resolution may also be in relation to financing sustainability infrastructure, or to change the by-laws of the strata scheme for the purpose of the installation or use of sustainability infrastructure.
Considerations prior to approval
Before a sustainability infrastructure resolution is approved, the Act requires that the owners corporation must consider four factors.
- Importantly, the owners corporation must clearly identify who will own, install and maintain the infrastructure. Will the solar panels affixed to the common property rooftop be a lot owner’s fixtures, or will the solar panels remain common property? Ownership will need to be established early so that the motion and by-law may clearly identify who is responsible for installation and maintenance costs.
- Who will be able to access the sustainability infrastructure? The owners corporation will need to consider the extent to which the new facility may be used by some or all lots in the scheme. This may include the setting up and maintenance of a register of lots that the owners corporation have approved for access.
- The cost of the sustainability infrastructure works, including any running or maintenance costs, must also be considered. For example, owners may wish to consider how the cost of additional energy use by electric car charging stations is apportioned between lot owners according to their use of the facility.
- Under the Act, the owners corporation will also have to consider any matter prescribed by the Strata Schemes Management Regulations 2016 (the “Regulations”). Currently no amendments have been made to the Regulations regarding sustainability infrastructure that require consideration.
In addition to the amendments to the Act in relation to sustainability infrastructure, the Strata Schemes Management Amendment (Sustainability Infrastructure) Bill 2020 also includes clarifications regarding inspections of records, information to be provided to tenants, meeting procedures, proxies and adjourned meetings.
- Section 182 of the Act will be amended to include a provision that the owners corporation is not to make available for inspection any record that would disclose how an owner voted in a secret ballot, unless ordered to do so by the Tribunal or a Court.
- The Act will clarify at section 186 that a lessor or sub-lessor is not required to give the by-laws to a tenant if that tenant has already been given the scheme’s by-laws in accordance with the Residential Tenancies Act 2010.
- Section 226 will be amended to confirm that the owner corporation is a party to Tribunal proceedings in any application made under the Act.
- Schedule 1 of the Act will be amended at clause 26 to include provisions confirming that a person who owns more than 1 lot in a strata scheme may appoint a single proxy in respect of all the lots, and that a proxy for a meeting is not rendered invalid merely because the meeting is adjourned to a later date.
The amendment also includes various miscellaneous changes in Schedule 1 - of the Amendment that will commence at a later date by proclamation. The changes yet to commence include the new section 247A, which will provide that the Tribunal may order a person to pay a penalty of up to 50 penalty units for contravention of an order (the “original order”) under the Act.
An application for a section 247A order may be made by the applicant for the original order, the owners corporation, lot owner, or any other person with an interest in a lot in the strata scheme to which the original order relates. Where the order arises out of a mediation, any party to the mediation may apply for a section 247A order.