We might not have a crystal ball, but we can look to current events, trending issues, and other states’ actions and policies to map out the future of the Northern Territory’s body corporate laws.
Pet ownership, access to solar, affordable insurance, and short-term rental accommodation are just the tip of the iceberg. In this article, we will examine several pressing issues facing the strata sector, what governments are doing in response, and how potential changes will affect committees, owners, and those living in strata-titled buildings.
First, here's a brief introduction to the current state of body corporate laws.
Northern Territory strata evolves to cater to changing owner and renter expectations, advancements in technology, and new challenges. The Unit Title Act 1975 was most recently amended in September 2019.
Despite this, the Northern Territory’s strata legislation lags behind its southern counterparts. Other states – namely the Australian Capital Territory (ACT) and New South Wales (NSW) – have broken new ground, introducing reforms that radically alter body corporates’ and owners’ rights and how by-laws are developed and enforced.
If you’re a member of a body corporate, you can benefit from investigating other states’ legislation reforms. These act as a blueprint, a glimpse into the future of body corporate management in the Northern Territory and across the country.
Pro tip: Stay one step ahead by checking for new bills in the Northern Territory here.
From 1 January 2021, sections 65A and 65B of the Residential Tenancies Legislation Amendment Act 2020 permit tenants to keep a pet at their rental property if they have notified their landlord in writing, and the landlord has not objected or applied to the Northern Territory Civil and Administrative Tribunal (NTCAT) within 14 days.
This amendment was a welcome change for renters, but what about owner-occupiers in body corporate schemes with by-laws that expressly prohibit the keeping of animals?
Well, these schemes are unaffected by the update. Both tenants and owner-occupiers must abide by their complex’s by-laws, and if those by-laws say no pets, they cannot house an animal in their property.
Council by-laws may also restrict the number of pets you can own. For example, if you live in the City of Darwin, you can have no more than four animals and no more than two dogs or two cats.
Case study: ACT introduces pet-friendly strata legislation
Like the Northern Territory, the ACT introduced regulations that make pet ownership more accessible for renters. The ACT Unit Titles Legislation Amendment Act 2020, which commenced on 1 November 2020 with a year-long transition period, aligned strata legislation with these updates.
Here are two of the key pet-related changes outlined in the amended Act:
Could we see similar updates in the Northern Territory? It’s likely. The Territory has already dipped a toe into more relaxed pet ownership rules. Logic suggests that updates to strata legislation, similar to those seen in the ACT, will follow.
Aussie travelers are keen to explore their own backyards in a COVID-complicated world, which means the desire for local short-term rental accommodation (STRA) is set to explode.
The phenomenon is worldwide, with Airbnb CEO Brian Chesky calling for one million new hosts to join his platform to meet skyrocketing demand.
“We think there’s going to be a travel rebound coming that’s unlike anything we’ve ever seen,” he said in an April 2021 interview.
The question begs: what power does a body corporate have in relation to owners and renters leasing their homes on Airbnb, Home Away, and other home-sharing platforms?
There’s no hard and fast answer. In the Northern Territory, we don’t have specific legislation that restricts STRA within body corporate schemes. However, visitor behavior and the number of guests per bedroom can be controlled within a scheme’s by-laws, which may help curb the undesirable effects of STRA.
Case study: NSW allows owners’ corporations to restrict STRA
Since 10 April 2020, owners’ corporations in NSW have been permitted to enact by-laws that forbid STRA when the property is not the host’s primary place of residence. If the property is their primary place of residence, they are allowed to rent all or part of their home without notifying the body corporate.
Pro tip: Not sure whether your by-laws permit Airbnb and other short-term rental accommodation? Our guide has you covered.
While the Northern Territory has been largely isolated from the pandemic, COVID-19 has transformed how Australian's connect, live, and work. Social distancing, mask-wearing, and isolation became a part of day-to-day life. And those living in higher-density dwellings such as apartment complexes found themselves face-to-face with new challenges.
One of the critical problems that arose within body corporate schemes was the handling of individuals quarantining within a building or complex.
If an individual tests positive for COVID and isolates in a residential building, should the body corporate committee be notified? Should other residents be advised? To what extent should the COVID-positive resident’s identity and privacy be protected?
Again, existing legislation doesn’t give us a clear-cut answer. A body corporate may introduce a by-law that requires residents to disclose if they are infected with COVID-19; however, enforcing this rule may prove difficult, if not impossible.
The chances are that the government will step in and provide body corporate managers and committees with a standardised process that protects the infected individuals while ensuring residents are informed and able to take necessary precautions.
Case study: QLD amends body corporate laws in response to COVID-19
COVID-19’s impacts were far-reaching. Restrictions saw many of us embrace work-from-home arrangements, with 41 percent of Australian employees working from home in February 2021. Workers leveraged technology to collaborate and communicate with their peers – and several states, including Queensland, updated body corporate laws to follow suit.
From 2 October 2020, Queensland’s body corporate committees can use technology to access records, attend meetings, vote, and view submissions related to dispute applications. The amendments aim to overcome challenges associated with COVID-19, including social distancing and snap lockdowns.
As of 28 May 2021, the amendments are in effect and will remain until 30 September 2021 or a date decided by the state government.
The 2021-2022 Federal Budget delivered a big win for the strata sector with a policy announcement aimed at addressing insurance affordability in flood and cyclone-prone regions of northern Australia.
The announcement comes after the Australian Competition and Consumer Commission (ACCC) released its final report in November 2020 following its inquiry into insurance in Northern Australia. The consumer watchdog found premiums had increased in the subject areas by 178 percent over the last decade, compared to 52 percent in other regions of the country.
The report recommended an increase in government investment to minimise the financial risk of natural disasters by improving the accessibility of comprehensive insurance and the resilience of properties.
The Federal Budget promises a $40 million Strata Title Resilience Pilot Program. Commencing July 2022, the policy will decrease insurance premiums and support strata properties in protecting against and recovering from natural hazards.
“We're serious about supporting Northern Australia as a place to live, a place to work, and for people to raise their families and live their lives,” said Prime Minister Scott Morison. “And this is one of the practical things we've got to do to ensure that that lifestyle can be maintained.”
For unit owners, this program could reduce owner contributions and provide financial protection by ensuring adequate coverage.
Pro tip: Struggling to settle insurance claim disputes? Find out how body corporate committees can successfully navigate the process here.
Non-compliant buildings have become a hot topic in Australia and abroad after the devastating fire at the Grenfell Tower in London in 2017, resulting in the death of 72 people.
As recently as May 2021, safety fears related to combustible cladding similar to that responsible for the Grenfell fire saw residents of a bayside apartment building in St Kilda, Victoria, given two weeks to evacuate.
Although legislation banning the use of combustible claddings was introduced across Australia in 2018, existing at-risk buildings have been left in hot water – and neither the state nor the federal government is willing to pick up the bill. It’s the owners that are responsible for funding the removal and replacement of the hazardous cladding, and body corporates may need to navigate the expenses and potential insurance claims demanded by the process.
Cladding is not the only building defect impacting residential buildings and their owners. In April 2019, an investigation into a Darwin-based engineer found that a crucial structural component in nine separate multi-storey buildings was non-compliant.
The finding came after the engineer was referred to the Building Practitioners Board in 2017 for supposed misconduct.
Those who live, work, and own units in the nine buildings were made aware of the structural issues and advised to act fast and remedy the problem – potentially at their own expense.
Looking forward, states may introduce building and strata legislation that prevents non-compliant building construction and provides a safe and economical pathway to rectification for those that already own and live in units in affected buildings.
More than 13 percent of Australian households live in apartments. Giving these residents access to renewable energy and other sustainability initiatives will be crucial if the country is to meet its emissions reduction targets over the next decade.
In December 2020, a body corporate management company operating in NSW, Victoria, and Queensland took sustainability into its own hands, striking an electricity deal heralded by climate-concerned academics.
The electricity arrangement will give 64 strata buildings under management access to solar power, saving an estimated $681,000 per year and significantly reducing emissions. According to the organisation, the deal is an industry-first.
In the coming years, we expect to see the government provide financial support to body corporate committees seeking greener energy alternatives. This will empower owners to minimise their carbon footprint and save on electricity without the prohibitive upfront expense.
Case study: NSW helps owners’ corporations install sustainability infrastructure
The Strata Schemes Management Amendment (Sustainability Infrastructure) Bill 2020 aims to help owners’ corporations install ‘sustainability infrastructure’ on common property by altering the resolution required to gain approval.
Sustainability infrastructure is anything that minimises pollution, reduces energy and water consumption, decreases waste, streamlines recycling efforts, and encourages the use of sustainable transportation (bikes and electric cars, for example).
Before the bill was passed, sustainability upgrades required 75 percent of owners to be in favor of the motion. This threshold has been lowered to a simple 50 percent majority.
Although the Northern Territory’s strata legislation has been slow to react to local and global changes and challenges, the next few years will likely see bills passed that empower body corporate committees and owners to better care for their properties, communities, and environment.
If you’re ready to future-proof your scheme, contact North Management today.