Compliance with strata and other applicable laws

Essential Strata Management
Module 7 Compliance with Strata & Other
Applicable Laws
September 2013

© Copyright 2013 Teys Lawyers

www.teyslawyers.com.au

Compliance Involves More Than Strata Laws
EPA

Tax

Privacy

Owners
Corporations

Discrimi
-nation

WHS



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

Tenancy details

Owners credit
card details

Addresses

Property
descriptions and
valuations

Bank account
details for
suppliers

Email addresses

Telephone
numbers

Sometimes proof
of personal
identification



What is Discrimination?
‘Discrimination means
treating somebody
unfairly because they
happen to belong to a
particular group of
people.’
(Discrimination and the Anti Discrimination
Board of NSW , Anti-Discrimination Board of
NSW Factsheet reprinted 4/01).



The Many Faces of Discrimination in
Strata Corporations
By-laws with age
restrictions

Enforcing a by-law
about restricting
modifications for a
wheel chair user

Banning children from
playing on common
property

House rules about
breastfeeding at the
pool

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

Restricting certain food
types being cooked in a
communal kitchen

Chairman flirting with
the strata manager

Discussing at a meeting
the desirability of a
person based on their
appearance

Refusing to install a
new and easier to use
pool area access
device



Recognising Indirect Discrimination is a
Key Issue for Strata Living
Direct
discrimination

Indirect
discrimination

• Treating a person less favourably because of
their disability
• Telling someone they can’t use the pool
because their appearance will upset others

• 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


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
Final Order
14 days
Comply
Take advice

Appeal

Report

28 days

Negotiate

Negotiate

Difficult
Negotiate



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
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.
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Compliance with strata and other applicable laws

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