Strata Series: When Does Development Legislation Reform Take Effect?

The Unit Titles Legislation Amendment Act 2020 (the UTLAA) aims to address the issue of mixed-use development in the ACT not receiving adequately support by existing legislation, regulations and codes.

With 113 pages of amendments to 13 different legislative instruments, the UTLAA covers a lot of ground. The UTLAA was notified in February 2020 indicating most of the its broad reaching provisions to commence 1 November 2020. Sections 3 and 111 (OC meeting requirements during a state of emergency) commenced 30 April 2020.

The product of an extensive period of industry and stakeholder consultation, the UTLAA marks the first stage in a series of reforms aimed at creating “fairer and more equitable arrangements for mixed-use developments, as well as improvements to the overall governance and management for all units plans in the ACT.”

This summary is the tip of the iceberg. We will be publishing several supplementary articles to provide more information around some of the juicier changes. Links to these articles will appear in this article as they are published so be sure to bookmark this page as your reference point for these changes.

A Snapshot of Commencement
February 2020
UTLAA Notified
On and from 30 April 2020:
s 3 The legislation amended by the UTLAA As referenced below
s 111
s 145
Permitting remote voting for OCs during a state of emergency Unit Titles (Mgmt) Act 2011
Unit Titles (Mgmt) Regulation
On and from 1 November 2020:
Part 2 Introducing: Notification of Registration of Units
Plan for Off-the-Plan Contracts
Civil Law (Property) Act 2006
Part 2 Introducing: New Implied Warranty regarding
Disclosure Statements and Notices
Civil Law (Property) Act 2006
Part 3 Amending: Additional Required Documents incl a copy of body corp meeting minutes from the previous 2 years; a disclosure statement (if there is no registered units plan); and a building management statement if applicable. Civil Law (Sale of Residential Property) Act 2003
Part 3 Introducing: Adaptable Housing Sales Advertising Requirements Civil Law (Sale of Residential Property) Act 2003
Part 4 Additional Power: Community Title Scheme Proposals Community Title Act 2001
Part 7 Clarifying: Procedure for Registering a Units Plan Land Titles (Unit Titles) Act 1970
Part 8 Amending: Definition of Territory Lease Legislation Act 2001
Part 11 Introducing: Unit Title Applications: Statement of “Proposed Use” Unit Titles Act 2001
Part 11 Amending: Cancellation of Units Plan Unit Titles Act 2001
Part 12 Amending: Various Provisions Relating to Owners Corporations Unit Titles (Mgmt) Act 2011
The transitional provisions that apply between 1 November 2020 and 1 July 2021:
Part 2
s 20
Optional: Use of new Disclosure Statements and Disclosure Update Notices for Off-the-Plan Contracts prior to 1 July 2021 Civil Law (Property) Act 2006
New Civil Law (Property) Regulation 2020
Part 11
s 59
Optional: use of new Building Management Statements prior to 1 July 2021 Unit Titles Act 2001
Part 12
s 112
Postponement: OC Maintenance Obligations not required until after the second AGM Unit Titles (Mgmt) Act 2011
Part 12
s 112
Continued Rules: Any Owners Corporation Special Privilege Rules granted before 1 Nov 2020 will continue, but will terminate 1 July 2021 Unit Titles (Mgmt) Act 2011
Part 12
s 112
Continued Rules: Non-standard OC Rules remain in force, except where inconsistent Unit Titles (Mgmt) Act 2011
On and from 1 July 2021:
Part 2
Sch 1
Introducing: Disclosure Statements and Disclosure Update Notices for Off-the-Plan Contracts Civil Law (Property) Act 2006
New Civil Law (Property) Regulation 2020
Part 5
Part 6
Part 9
Part 11
Introducing: Building Management Statements Required for Units Plans Land Titles Act 1925
Land Titles Regulation 2015
Planning and Development Act
Unit Titles Act 2001
Part 12 Introducing: new obligations on Developers to provide Developer Maintenance Schedules for new buildings. Unit Titles (Mgmt) Act 2011
Part 12
Part 13
Introducing: new Owners Corporation default and alternative rules to replace existing rules Unit Titles (Mgmt) Act 2011
Unit Titles (Mgmt) Regulation
Part 12 Introducing: new requirements for special privilege rules to some unit owners Unit Titles (Mgmt) Act 2011
Part 10
Part 12
Amending: Owners Corporation Pet Friendly Rules Residential Tenancies Act 1997
Unit Titles (Mgmt) Act 2011
And Now With More Detail

On and from 1 November 2020, the following are in effect:

Amending: Definition of Territory Lease

  • A small legislative clarifier to avoid confusion when referencing ‘territory leases’

Amending: Additional Required Documents

  • All Contracts for Sale must include a series of additional required documents. Depending on the type of unit, this amendment introduces some extra requirements that relate directly to documents created as a result of this amendment. Depending on the situation, these include:
  • a Building Management Statement;
  • a Disclosure Statement;
  • Adaptable Housing Dwelling plans and drawings; and
  • OC Executive Committee minutes from the previous 2 years.
  • Building Management Statements and the new Disclosure Statements are not compulsory until 1 July 2021. The pre-amendment requirements for Disclosure Statements will apply unless you choose to use the new DS and Disclosure Update Notice.
  • See our linked articles for more information.

Introducing: Notification of Registration of Units Plan for Off-the-Plan Contracts

  • The seller must give the buyer a copy of the registered units plan and any alternative OC rules before an off-the-plan contract is completed.
  • The buyer must have 21 days to complete the contract from the day after they receive notification.
  • Any attempt to contract out of this will be void.

Introducing: New Implied Warranty regarding Disclosure Statements and Notices

  • This is a new warranty that specifically covers the new requirements for Disclosure Statements and Disclosure Update Notices.
  • Any attempt to contract out of this will be void.

Introducing: Adaptable Housing Sales Advertising Requirements

  • Advertisements of Adaptable Housing units must include a statement indicating the unit’s compliance with AS 4299-1995.

Learn more about the new Adapable Housing Units requirements here.

Clarifying: Procedure for Registering a Units Plan

  • A reminder that Units Plans will need to be endorsed by the Planning and Land Authority before registration and lodge the endorsed plans with the registrar general within 3 months of the endorsement.
  • Building Management Statements must be approved before the Units Plan is endorsed.
  • The registration documentation must include the new default rules and any alternative rules the OC wishes to include.
  • The alternative rules must be registered by the registrar general.

Introducing: Unit Title Applications: Statement of “Proposed Use”

  • Unit Title Applications will now require a statement about the proposed use of the units in the application, or any proposed restrictions to use with conditions.
  • When approved the Authority will provide a schedule of permitted uses.

Amending: Cancellation of Units Plan

  • Another short legislative clarifier: when a Units Plan is cancelled and the OC dissolved, the land forms 1 parcel of land to be treated as a territory lease.

Additional Power: Community Title Scheme Proposals

  • The Authority may now refuse a Community Title Scheme Proposal for the reason that it has no or limited external open space.

Amending: Various Provisions Relating to Owners Corporations

  • The execution of documents can now occur by signature of two members of the OC executive committee.
  • The OC may apply to ACAT for authority to: enter into a contract they are otherwise prohibited to enter and/or change the rules of the OC.
  • Disputes no longer need to include the OC.

There are transitional provisions that apply between 1 November 2020 and 1 July 2021:

  • if a Developer chooses to use a Development Statement with their Contracts for Sale prior to them becoming mandatory on 1 July 2021, the Developer is bound by the new Disclosure Statement requirements, the new Disclosure Update Notice procedure and the new implied warranty.
  • This includes buyer’s right to rescind within 21 days if DS issued after contract signed.
  • Building Management Statements can now be created and registered on title but are not mandatory until 1 July 2021.
  • For Units Plans registered before 1 July 2021, developers can provide maintenance schedule for their buildings to new Owners Corporations, but this is not mandatory until 1 July 2021.
  • Any special privilege rules regarding common property granted before 1 November will continue and terminate on 1 July 2021.
  • For OCs established before 1 November 2020 that have non-standard rules, these rules will amend the new default rules except where they are inconsistent with the amendments.

From 1 July 2021, we expect the following to come into full effect:

Introducing: Disclosure Statements and Disclosure Update Notices for Off-the-Plan Contracts

  • Disclosure Statements have a new requirements (see our article for the full list). The DS must be provided to the buyer before entering into the contract.
  • The buyer has the right to rescind the contract with notice any time before the contract is signed. If the Statement is given to the buyer after the contract is signed, the buyer has 21 days to provide written notice of their intention to rescind the contract.
  • If the buyer rescinds the contract, the seller must repay any amount paid by the buyer.
  • If there is a material change to the Disclosure Statement, the seller must give the buyer a Disclosure Update Notice no later than 10 working days after the end of the calendar quarter in which the seller first becomes aware but at least 21 days before settlement.

Introducing: Building Management Statements Now Required for Units Plans

  • The BMS is a statement that explains how a building with more than 1 crown lease will be managed as a whole in relation to the common facilities of the building.
  • BMS are required for Units Plans with more than 1 crown lease and one of those wants to be unit titled.
  • The BMS must be prepared and approved by the Authority before the Units Plan can be registered.

Introducing: Owners Corporation Maintenance Obligations

  • The developer must prepare a Developer’s Maintenance Schedule for a units plan which must include warranties for systems and equipment, manuals and any contact details of the manufacturer and installer of any system.
  • The OC must also prepare a Maintenance Plan which takes the DMS into account.

Introducing : Owners Corporation Default and Alternative Rules

  • There are new default rules for OCs including how to deal with payment of rates, repairs and maintenance, use of common property and pets.
  • There are new measures for alternative rules which may only amend specific default rules.
  • Retirement villages have specific alternative rules regarding who can live in the village, visitors, noise, security etc.

Introducing: Owners Corporation Special Privilege Rules

  • Special Privilege Rules are those that apply to specific people and will no longer require unopposed resolution. SP Rules for less than 3 months are treated differently to those applying for 3 months or more.

Amending: Owners Corporation Pet Friendly Rules

  • Assistance animals may be kept regardless of any pet friendly rules.
  • Consent to keep a pet cannot be unreasonably refused. If the request is refused, the OC must give reasons for the refusal.

If you have any questions about any of these changes, please do not hesitate to reach out to the Morris Legal Group team. click here to contact us