compliance with strata and other applicable laws

© Copyright 2013 Teys Lawyerswww.teyslawyers.com.au

Module 7 Compliance with Strata & Other Applicable Laws

September 2013

Essential Strata Management


Compliance Involves More Than Strata Laws

Owners Corporations

Privacy

Tax

Discrimi-nation

WHS

EPA


How Long has the Privacy Act Applied to Strata?

• Since 1988!• Because an OC discloses

personal information for a benefit , service or advantage

• What strata managers do as a contractor under Privacy laws binds the OC


Dispelling Some Privacy Act Myths

• Privacy relates to individuals – wrong, it’s about organisations and what they do with personal information

• Privacy stops information flow – wrong, it just regulates how information is collected, used, disclosed and stored


Personal Information Collected by Managers for OC’s & BC’s

Names

Addresses

Email addresses Telephone numbers

Property descriptions and

valuations

Tenancy details Owners credit card details

Bank account details for suppliers

Sometimes proof of personal

identification


What is Discrimination?

(Discrimination and the Anti Discrimination Board of NSW , Anti-Discrimination Board of NSW Factsheet reprinted 4/01).

‘Discrimination means treating somebody unfairly because they happen to belong to a particular group of people.’


The Many Faces of Discrimination in Strata Corporations

By-laws with age restrictions

House rules about breastfeeding at the

pool

Chairman flirting with the strata manager

Discussing at a meeting the desirability of a

person based on their appearance

Asking a new resident manager about his or her marital status or

sexuality

Enforcing a by-law about restricting

modifications for a wheel chair user

Banning children from playing on common

property

Restricting certain food types being cooked in a

communal kitchen

Refusing to install a new and easier to use

pool area access device


Recognising Indirect Discrimination is a Key Issue for Strata Living

• Treating a person less favourably because of their disability

• Telling someone they can’t use the pool because their appearance will upset others

Direct discrimination

• A person is prevented from doing something a person without a disability can do

• A person with a disability can’t open the pool gate without the aid of a proximity device which the OC won’t install

Indirect discrimination


New WHS Laws at a Glance

Effective 1 January 2012 in QLD, NSW, ACT

No ‘grace period’ for compliance (OHS plans good for 12 months)

OC / BC = Person carrying on a business or undertaking

Residential strata exemption confusing & virtually useless

Reverse onus removed - prosecution must prove breach


Persons Who Are Not A PCBU

A strata body that is responsible for any common

areas used only for residential purposes is not a PCBU so long as no worker is engaged as an employee (s.7 WHS Act 2011)


Only For Residential Purposes Means No• OC / BC employees• Common property with

commercial lots• On-site letting agent• Lots used as home businesses• Nannies employed in lots• Lots for short term

accommodation• Communication towers /

satellite dish / advertising signs• Paid workers temporarily on site


The Tax Commissioner’s Starting Point

• Income tax ruling 2505

• Strata entities are treated as ‘public companies’

• Taxed at corporate rate of 30%

• Taxed as a ‘for profit’ company

• Principal of mutuality applies


Tax is Not Assessable on Mutual Income

• ‘One cannot make a profit out of oneself’

• Where there are identical contributors and participants in surplus, there is not assessable income

• Can apply to strata entities


Examples of Non-Mutual Income ie Assessable

• Interest from a bank• Access fees from non owners eg

occupants• Rental income from external

parties• Profit on the sale of assets to

external parties• Fees paid on the transfer of

management rights where the rights are held separately to the manager’s lot


Fire Safety Inspections and Orders

• Environmental Planning Assessment Act 1979

• Local council inspectors have powers to inspect and issue orders

• Non-compliance has serious personal liability and insurance consequences


The Fire Order Compliance Process

Notice of Intention to Issue Order

14 days Take advice Negotiate

Final Order

ComplyReportNegotiate

Appeal

28 daysDifficultNegotiate


Redevelopment as a Compliance Option

• Redevelopment may be a better financial option

• Difficult to negotiate owner buy-in, development approval and finance

• Negotiate this before final order is made


About the presenter - Michael Teys is the Founder and Principal Lawyer of

TEYS Lawyers. He has a Bachelor of Laws and practices exclusively in the area

of strata title law. He is a Fellow of the Australian College of Community

Association Lawyers. He is an Adjunct Lecturer with Charles Sturt University. He

appears weekly on SKY News Business Channel's Property Success with

Margaret Lomas and is a regular panellist for the property edition of Your Money,

Your Call for the same channel. You can read Michael’s blog on our website

www.teyslawyers.com.au and follow him on Twitter at @MichaelTeys.com

Teys Lawyers practice nationally in strata title law representing owners corporations, bodies corporate

and apartment owners. The firm’s practice groups include building defects, strata community disputes,

strata titles property law, by-laws and levy collection.

Subscribe for their free e-newsletter StrataSpace and find out more about them at

www.teyslawyers.com.au

About the Presenter

http://www.teyslawyers.com.au/

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compliance with strata and other applicable laws

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