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March 7, 2016

Investing in a strata unit – new rules for tenants proposed

An owner of an investment property will generally be reliant on rental income. As a result, owners of investment properties and the letting agents will be used to dealing with tenants and the rights they have under residential tenancies legislation.


Things are about to get a bit more complicated, with proposed changes to the strata legislation following the recent strata law reform process.

The main areas of change will be:

  • Tenant representation – tenants will be entitled to be given notice of general meetings and to attend those meetings. In schemes that are predominantly occupied by tenants, they’ll also have the right to appoint a tenant representative to the executive committee, which will now be known as the strata committee. They can be excluded from discussion on certain financial matters. Also, they will not be entitled to address the meeting or vote, unless they hold a proxy. We expect it to become more common for tenants to request a proxy from the lot owner, especially with commercial tenancies. We also expect this to become a headache for strata managing agents and lot owners.
  • By-laws – there will be increased scope for by-laws regulating occupation of lots, e.g. limiting occupant numbers. There are to be some changes in model by-laws dealing with occupant activity issues such as pets and smoking. By-laws will take on a greater importance, with greatly enhanced enforcement powers to be available.
  • Abandoned goods – provision is to be made for disposal of abandoned goods, often left behind by tenants on vacating rented apartments. In addition to making life easier for lot owners and strata managing agents, this may pre-empt some disputes between owners’ corporations and investor lot owners.

Given that these changes will affect owners of investment properties occupied by tenants, the usual scenario, owners of investment property should take legal advice on the implications of these changes.

Owners’ corporations and their strata managing agents should take advice on how these changes can be used to enhance the amenity of their building.

About David Bannerman

David Bannerman is director of Bannermans Solicitors, specialist in strata and construction law. David is widely published on strata and related property law matters.