Law

Changes to the Strata law coming soon

By 14 November, 2019 November 29th, 2019 No Comments

Under proposed changes to the subsidiary legislation of the Strata Titles Act 1985 (WA) (Strata Act), the State Administrative Tribunal (SAT) will become a ‘one stop shop’ for all strata disputes. Whilst this will provide a more time and cost effective dispute resolution process in respect of management and governance disputes, debt recovery of strata levies and charges will remain the exclusive jurisdiction of the courts. This will require Strata owners to consider which is the appropriate forum to resolve any strata-related disputes.

Recovery of Levies in Court

Under section 34(4)(c) of the Strata Act, the Owners of a Strata Plan can recover unpaid strata levies and other charges in a court of competent jurisdiction. Generally speaking, in Western Australia unpaid levies will be dealt with by the Magistrates Court, given the amount is usually under $75,000. Most claims for strata levies either obtain default judgment or an admission of claim is received from the Defendant.

Issues will arise in Court proceedings where a claim is defended on the basis of a strata management or governance issue, irrespective of how baseless the defence may be, as the SAT has exclusive jurisdiction to resolve such disputes. In these circumstances, a claim will likely need to be stayed or adjourned pending an outcome of a SAT application resolving the dispute.

Changes to the Strata Act

The proposed changes to the Strata Act provide the SAT with the exclusive jurisdiction to resolve strata disputes. The changes strengthen the Tribunal’s powers, allowing the SAT to award damages, enforce, make, amend and repeal by-laws and resolve disputes between the strata manager and the strata company. The Tribunal will no longer be subject to a monetary limit for awarding damages which is currently set at $1,000.[1] However, the Tribunal will only be able to award damages for compensation and not the recovery of unpaid levies which will remain with the Court. In practice, this will not change the conflict between the jurisdictions of the Court and the SAT.

Advice

When owners do not pay strata levies, it is important to take steps to recover them as soon as possible before they become too large to manage. Protracted court proceedings are often a deterrent to strata bodies looking to recover levies and the conflict of jurisdiction between the SAT and the Courts often causes confusion, frustration and further delays. Whilst incoming reforms to the Strata Act have streamlined the process somewhat, it is important to note that the recovery of unpaid levies, will remain within the jurisdiction of the Courts.

If you are unsure how to recover unpaid Strata levies or have any other queries relating to proposed changes to the Strata Act, feel free to reach out to us at hello@pragma.law or contact Jason O’Meara at jason@pragma.law.

[1] Strata Title Act 1985 (WA), s84(1)(a).

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