Category Archives: Strata

Work Health & Safety Act & Owner Corporations

WHAT IS THE WORK HEALTH & SAFETY ACT?

In an effort to create consistency in the occupational health and safety laws around Australia, the Commonwealth and each State and Territory have worked together to create the Model Work Health & Safety Legislation which is (or will soon be) adopted by each State and Territory to replace the State based occupational health and safety laws.

On 1 January 2012, the Work Health & Safety Act 2001 (NSW) (“WHS Act”) came into effect and introduced:

new obligations for all persons involved in a workplace (not just employers and workers);
added obligations on persons already regulated by health and safety laws; and
personal penalties for non-compliance.

WHAT IS A “PERSON CONDUCTING A BUSINESS OR ENTERPRISE”?

The WHS Act focuses around the concept of a “Person Conducting a Business or Undertaking” (“PCBU”). What does this mean?

Section 5 of the WHS Act provides:

“(1) For the purposes of this Act, a person conducts a business or undertaking:

(a) whether the person conducts the business or undertaking alone or with others, and

(b) whether or not the business or undertaking is conducted for profit or gain.

(2) A business or undertaking conducted by a person includes a business or undertaking conducted by a partnership or an unincorporated association.

(4) A person does not conduct a business or undertaking to the extent that the person is engaged solely as a worker in, or as an officer of, that business or undertaking.”

Practically, PCBU includes, amongst others, owners’ corporations, sole traders, unincorporated associations, incorporated entities, partnerships and community associations.

WHO IN A PCBU IS RESPONSIBLE?

The WHS Act imposes obligations or “duties of care” on a number of different personnel at different levels of a PCBU.

OFFICERS (which takes on a formal meaning as per the Corporations Act 2001 – ie, a director or person who has involvement in the decision making of the business etc) have an active duty to ensure the PCBU is compliant with its various safety obligations. They must proactively stay up to date on work, health and safety matters affecting the business and generate processes to be implemented for compliance with the obligations imposed.

WORKERS AND VISITORS of a PCBU each have positive obligations to take reasonable care for their health and safety whilst at the workplace and to ensure that their actions do not endanger others at the workplace. This is a shift from the old occupational health and safety laws which placed the obligations on the employer.

IS AN OWNERS CORPORATION REALLY A PBCU?

An owners corporation is exempt from the WHS Act to the extent that it is only responsible for common areas which are used for residential purposes only. This exemption however, may only apply to a very small number of owners corporations particularly where, for example:

it employs people and independent contractors to carry out work on the common property including repairs and maintenance works;
any of the lots or common property are used for non-residential purposes such as a commercial use (even home
offices or businesses), retail use (including shops and restaurants), exercise classes or gardening and other activities by owners; or
any easements are granted over the property for cable lines or drainage pipelines, etc.

As such, most owners corporations, the strata committee members, employees and consultants will be effected by the WHS Act.

IS AN STRATA COMMITTEE MEMBER AFFECTED BY THE WHS ACT?

One of the effects of the WHS Act is the broadening of the list of people who are responsible for work health and safety issues. One extension of this list is to strata committee members of owners corporations and the imposition of an obligation on them to exercise “due diligence”.

This obligation of “due diligence” includes a requirement to proactively understand the requirements of the WHS Act and ensure that the owners corporation has appropriate measures, plans and policies to comply with those requirements. This means that the strata committee members are required to:

keep relevant information on work health and safety issues on the common property and site;
understand the nature of operations being conducted in the building;
ensure that there are measures in place to eliminate (or at least minimise if elimination is not possible) any potential risks; and ensure that the owners corporation has systems in place which address and comply with the WHS Act requirements.

Pleading ignorance is not a defence to non-compliance for strata committee members.

ARE THERE EXEMPTIONS FOR VOLUNTEERS?

The WHS Act does however draw a distinction between paid officers and volunteers.

For paid officers, obligations to exercise due diligence must be exercised and significant penalties apply for a failure to comply. On the other hand, while volunteers are also required to comply with due diligence obligations, they cannot be penalised for failing to do so. They can however, be penalised for failing to make sure that their actions or omissions do not adversely impact the health and safety of others.

WHAT ARE THE CONSULTATION DUTIES?

The importance of consultation has been recognised in the WHS Act and has been implemented as a specific obligation on duty holders, that is, any person that holds a specific duty under the WHS Act. Under the WHS Act duty holders (with similar or overlapping duties) must consult, coordinate and cooperate with each other and also with workers. The Act sets out flexible ways in which the consultation may occur. Significant penalties can be imposed for breaches of this requirement.

WHAT IS THE REGULATORY BODY AND WHAT INVESTIGATION RIGHTS EXIST?

Union members holding a WHS entry permit may enter a workplace (or in the case of an owners corporation, a building or common property), to advise and assist with WHS Act compliance and/or when a contravention of the WHS Act is suspected. While 24 hours’ notice is required to be provided in the former case, the permit holders can enter without notice when a contravention is suspected. The PCBU must not refuse, delay or hinder the union permit holder. Owners corporations should implement a process to deal with permit holder entries.

WHAT ARE THE OBLIGATIONS REGARDING NOTIFICATION OF INCIDENTS?

Where a serious or dangerous incident occurs, the PCBU must:

notify the regulatory body; and
preserve the incident scene until an inspector attends or the regulatory body directs otherwise. The WHS Act sets out details of what constitutes a notifiable incident.

WHAT KIND OF FINES CAN BE IMPOSED?

The penalties imposed under the WHS Act are applied in accordance with a sliding scale which generally is as follows:

Category of Penalty	Owners Corporation	Strata Committee Member	Worker or other
Recklessness/risk of death or serious injury/illness	$3 million	$600,000 or 5 years jailor both	$300,000 or 5 years jailor both
Breach of Duty/risk of death or serious injury/illness	$1.5 million	$300,000	$150,000
Breach of duty	$500,000	$100,000	$50,000

The weight of the penalties reflects the significance of the obligations which are being enforced by the WHS Act.

WHAT CAN OWNERS CORPORATIONS DO TO ENSURE COMPLIANCE WITH OBLIGATIONS?

Some examples of measures that owners corporations may take to address the implementation of the new work health and safety laws include (but are not limited to):

assume that the owners corporation is a PCBU and that the WHS Act applies to the owners corporation – most owners corporations engage workers either as employees or independent contractors to carry out maintenance and repair works and at some stage will therefore, be a PCBU;
identify reasonably foreseeable hazards on the common property and site;
eliminate any risks and hazards identified as far as reasonably practicable or minimise the risks and hazards where they cannot be eliminated;
implement compliance WHS Act plans and procedures;
review and amend (if necessary) policies for new and existing strata committee members to ensure compliance with WHS Act;
educate the owners about the new WHS Act regulations and obligations;
make sure the insurances cover any additional risks imposed by the WHS Act – usually, office bearer’s legal liability insurance does not cover fines, penalties, punitive, exemplary or aggravated damages (always remember that no insurance can cover jail sentences);
re-visit by-laws to ensure that they adequately deal with WHS Act obligations including the implementation of incident reporting systems and obligations to immediately notify the strata committee members of potential risks and safety issues identified;
the holding of regular additional meetings of owners to discuss health and safety issues or concerns;
consider whether you should provide height limits for workers (both employees and independent contractors) to minimise the risk of falls; and
ensure that ongoing rules are implemented about vegetation management, storage of substances, maintenance of plant and equipment, induction of tradespeople, etc.

Thanks to Gavel and Page Lawyers for this article.

Park illegally – lose your home

You would think, of all the issues that plague strata dwellers, parking would be the easiest to resolve.

After all, a spot is allocated to you (or not) and you are allowed to park in it (or not). If only…

“We have new tenants in our complex who have two or three cars parked in visitors parking and a fourth outside their garage blocking another tenant from getting in and out of their parking area.

“I placed the following notice on two cars parked illegally for over a week: This Car is Parked in a VISITORS PARKING SPACE. Visitor Parking spaces are for the use of VISITORS of all residents We understand that on occasion, residents use these spaces for short periods of time. Please be respectful to all units by abiding by this. Please note – Parking cars on the grass is Not Permitted.

“The notice was removed from one of the cars, which driven out and returned to the same spot an hour later.” – Sarah C, via Flat Chat Forum.

Oh dear, Sarah. I think you blew it when you said it was OK to park in visitors parking ‘on occasion’ and Forum StrataGuru Struggler agrees.

“The problem here is that the note you left actually gives them and anyone else permission to park there – at least in their eyes,” he writes. “‘On occasion’ and ‘short periods of time’ are all tolerated in [my] complex but just not in writing.”

Struggler is right. You need to let them know that by parking in visitors parking or on grass verges they are:

a) in breach of by-laws and that could lead to fines of up to $550 and

b) by breaching by-laws they have also broken their lease which could lead to eviction.

Yes, they may think they are above the law but they could lose their home.

A copy of the same notice from your EC secretary should be delivered to the rental agent or owner of the property. And let’s hope your original note is already in the trash.

Thanks to SMH for the article

Sydney’s strata surprises

Rents rise by 13% in sought-after suburbs

Rents in Australia’s most sought-after suburbs have increased by up to 13 per cent in the last year.

Tenants are paying up to $60 a week more for accommodation than they were 12 months ago, according to figures released by RUN Property on Saturday.

Fairfield in Melbourne had the highest leap in rental prices (13.4 per cent), followed by Edgecliff in Sydney’s eastern suburbs (12.6 per cent).

These were closely followed by hikes of 11.7 per cent in the Sydney north shore suburb of Cremorne and 11.5 per cent in Surry Hills in inner Sydney.

RUN Property CEO Rob Farmer said 24 suburbs in Sydney and 18 in Melbourne saw rent increases of more than six per cent for new tenants in January, compared with the same time last year.

“The popular suburbs close to beaches, major shopping centres or train stations continue to go from strength to strength for investment property,” Mr Farmer said in a statement.

The average rent rise across Melbourne when new tenants moved in was 5.4 per cent, bring the average rent up to $383 a week.

In Sydney, the average rent increase was 7.4 per cent, up to $545 a week, while in Brisbane, rents rose by 3.3 per cent bringing the average rent to $346 a week.

Thank you Sydney Morning Herald for this article

New rules to protect kids in high-rises

Apartments and multi-storey homes are about to get a little safer for children thanks to a rule change around windows in new buildings.

The Australian Building Codes Board has ruled that all windows in new homes and apartments that are more than two metres off the ground must be either fitted with window locks that stop the window being opened more than 125mm (12.5 cm), or must have reinforced screens to prevent children from falling from a height.

The changes will be included in the National Construction Code from May 2013.

The Australian Building Codes Board estimates that owners and builders will choose to fit 80 per cent of windows with locks, and the remaining 20 with reinforced screens. Its research priced window locks from $20 – $70 each, and strong screens from $130 a square metre, putting the average cost of a suitable screen at $130.

Ron De Vere, a project manager with the Australian Building Codes Board, says the decision was made after wide consultation with industry, and with fire authorities across the nation.

De Vere said an economic analysis that took into account the cost of installing locks and screens versus society’s cost of treating children who had fallen from windows showed that the broader cost-benefit of the changes was around zero.

However, “the board was swayed by the risk to children and the danger of children falling out of buildings”, he says. “It’s a bit like the pool safety issue, the child drowning … the value of a child’s life is so crucial.”

Danny Cass, a professor of paediatric surgery at the Children’s Hospital Westmead, has welcomed the changes saying the recognition that children could access windows and easily climb or fall out of them was a win for commonsense.

“Before, they thought a kid couldn’t climb that high but … they often pull things up to it, or beds are placed next to it,” Cass says.

Just a like a pool safety fence though, children will only be protected when adults remember to lock the windows and check that the reinforced screens are in good order.

The board backed away from an initial proposal to mandate window guards for windows two stories or above in all domestic dwellings.

It also a decided against that a proposal to increase to one metre the minimum floor-to-sill height of openable windows in rooms that are four metres from the ground outside.

The minimum floor-to-sill height will effectively remain at 865mm as the current provisions require a barrier of 865mm be in place to any openable window that is more than four metres from the ground, and it is common practice to place the bottom of the window at that height, using the wall itself to create the barrier.

The floor-to-sill height requirement will remain even where a lockable or removable device or screen is in use – in case the device or screen is inadvertently unlocked or removed. However, the minimum height from ground level at which the window-to-sill or barrier rule comes into play will drop from four metres to two metres after evidence showed serious injury can happen when a child falls from just two metres.

The changes will come into effect from May 2013, a timeframe the board says will allow industry to prepare for the changes.

An average of one child a week is taken to hospital in Australia after falling from a window. According to figures from the Children’s Hospital Westmead, 80 per cent of children who have fallen from a window have significant injuries, and four out of five children who fall from windows are aged under five. For information on keeping your kids safe near windows. Cass says the next challenge is making windows in existing housing and apartment stock safer for children. Cass is part of a working party on child falls at the Children’s Hospital Westmead. The group will meet again this month to explore further recommendations for existing properties.

Thank you Sydney Morning Herald for this article

The Finances of Litigation

Financing any form of litigation is extremely expensive and building defect litigation is no exception. In fact, because construction defect cases often involve multiple rounds of testing and investigation, additional expert fees can make this one of the most expensive forms of litigation.

Using Reserves

By their nature, building defect cases tend to arise early in the life of a scheme when capital reserves will be low or non-existent. However, if there is money in the sinking fund, this can be used to finance litigation to the extent that the claim relates to repair, replacement, restoration or maintenance of major components for which the sinking fund was established.

Bank Loans

Some banks will lend money to strata schemes to maintain and repair common property but so far this has not extended to financing defect investigations and litigation. Owners corporations and community associations are not permitted to give security for such loans and this makes financing litigation difficult.

Solicitor’s Finance

Unlike the current trend in America, construction defect lawyers in Australia are unlikely to finance testing and repairs or other outlays like barristers fees because of the constraints in Australia on contingency or success fees. The practice of advancing money for outlays or extending credit for work in progress is fraught with conflicts of interest on the part of the lawyer in terms of being objective about the advice to the client when the lawyer has a financial interest in the outcome.

Thanks to Teys Lawyers

Netstrata welcomes 5 Wallaroo Close

Netstrata are pleased to announce that they have been appointed as strata manager’s for 5 Wallaroo Close, Killara. The prestige strata scheme will be managed by Brad Wood . Brad said “I look forward to working with the committee in helping them run the scheme more effectively, reducing the amount of their own time that they have been putting into the strata management”.

5 Wallaro

Netstrata support Illawarra Black & White Race Day

Netstrata was proud to support Vision Australia’s Illawarra Black & White Race Day held at Kembla Grange on Saturday 8th October 2011. It was a fantastic day although a little wet, Netstrata Wollongong’s Tanya Gough said “It was great to see so much of the Wollongong Business and Local Community digging deep for a fantastic cause”.

Vision Australia is a partnership between people who are blind, sighted or have low vision. We are united by their passion that people who are blind or have low vision will have access to and fully participate in every part of life they choose.

Netstrata-Winner-300x200 Netstrata-Horse-300x200 Netstrata-Off-Racing-300x200

Netstrata’s Tanya Gough and Sarah Tickner presented the first place ribbon to Mr Ellaval winner of the 2011 Netstrata Plate.

Building and development – solving neighbourhood problems

As buildings age, particularly those that have had their repairs and maintenance neglected, strata communities might choose to redevelop all or part of the building to comply with fire and life safety orders and / or to remain functional and relevant in the current market. Knowledge of building and development process is required.

Similarly, when a neighbor is proposing a new building or a lot owner wants to do structural work, the building and development process becomes relevant to strata community life.

While each state and territory has their own building and development legislative regimes, the process is generally the same:

Environmental plans set out the guidelines for development in a local area – watch for new plans in your area as everyone has a say before they are finalised;
The general rule is that development approval is required from your local authority to erect, structurally alter, or demolish any building, including outhouses and sheds. Excavations and painting of heritage-listed properties also needs approval
– remember if something does not require development approval, for example because it does not affect the structural integrity of the building, it may still require owners corporation approval under the by-laws;
The subdivision of excess land also requires a development approval;
High impact development applications will require advertising and objections might be lodged on the grounds of effecting views, overshadowing, privacy, encroachments, noise, possible parking problems and changing the streetscape or character of the neighborhood – if you are going up another level or two, the set back of the new floor will be relevant to the way the building looks from below.
Development approvals will cost up to $200,000 for major works because they will require full-scale drawings and an array of experts reports and can take 9 to 18 months depending on the level of objections and the complexity of the issues. If building and development work is being undertaken to comply with fire and life safety orders, temporary measures may have to be taken to protect the safety of occupants and visitors pending the resolution of this often long and drawn out
process; and
The owners corporation is required to consent to any development approval application but the consent to lodging the application does not stop the owners from objecting to the application – try explaining that to the ‘naysayers’ at your owners corporation meeting!

Good consultants attuned to the special needs of strata communities can help you navigate this difficult area whether as the applicant or the objector.

Thank you for TEYS Lawyers for this Article

Netstrata welcomes the Mile Post at Randwick

Netstrata are pleased to announce that they have taken over the strata management of the iconic M

ile Post strata scheme on Alison Road, Randwick directly opposite the Randwick Race Course.

The scheme is managed by strata manager Liesl Biles and she is looking at working with the Strata Committee with the major capital works which are in the pipeline. Keep your eye out for the changes as your driving up Alison Road.

Mile Post exterior