NSW lot owners are wondering about the strata duplex requirements. We cover their questions here.
Table of Contents:
- QUESTION: Can individual lots on a 2-lot strata have individual building insurance if the buildings are not physically detached?
- QUESTION: I own in a 2-lot strata scheme. When the strata scheme commenced ten years ago, a capital works fund was established. Can we now cease the capital works fund, or must it continue once it has been established?
- QUESTION: A new owner purchased the other lot in our strata duplex. They refuse to contribute to maintenance or attend meetings. What can we do?
- QUESTION: Can you proceed with an AGM in a 2 lot strata plan if both lots are represented but one lot owner is in arrears?
- QUESTION: For an attached duplex in NSW, what are the requirements? Do we need an administration and sinking fund? How about strata insurance for the common property?
- QUESTION: We bought into a duplex a few years ago. We know nothing about the strata duplex requirements. It was not until we moved into our property that our neighbour in the adjoining unit informed us that there is a strata plan and a body corporate.
Question: Can individual lots on a 2-lot strata have individual building insurance if the buildings are not physically detached?
Answer: The owners corporation must insure the building as a whole.
Based on the Strata Schemes Management Act 2015, owners in a two-lot strata scheme generally require the owners corporation to insure the building. However, there is an exemption under certain conditions:
- This section does not apply to an owners corporation for a strata scheme comprising 2 lots if—
- the owners corporation so determines by unanimous resolution, and
- the buildings comprised in one of those lots are physically detached from the buildings comprised in the other lot, and
- no building or part of a building in the strata scheme is situated outside those lots.
Given the information provided that the two-lot scheme’s buildings are not physically detached, the exemption does not apply. Therefore, individual lots in this scenario cannot have separate building insurance policies; the owners corporation must insure the building as a whole.
Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.
This post appears in the September 2024 edition of The NSW Strata Magazine.
Question: I own in a 2-lot strata scheme. When the strata scheme commenced ten years ago, a capital works fund was established. Can we now cease the capital works fund, or must it continue once it has been established?
Answer: As you are a 2-lot scheme, an exemption may apply.
As you are a 2-lot scheme, the following exemption may apply. However, it does require a unanimous resolution, and the scheme needs to satisfy paragraphs (b) & (c):
74 Capital works fund
….- Exemption An owners corporation for a strata scheme comprising 2 lots need not establish a capital works fund if—
- the owners corporation so determines by unanimous resolution, and
- the buildings comprised in one of those lots are physically detached from the buildings comprised in the other lot, and
- no building or part of a building in the strata scheme is situated outside those lots.
Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440
This post appears in Strata News #690.
Question: A new owner purchased the other lot in our strata duplex. They refuse to contribute to maintenance or attend meetings. What can we do?
We are a two-lot strata duplex, with one unit above another. Our voting rights are 50:50. A new owner purchased the downstairs lot 18 months ago. They refuse to contribute to any building maintenance, common property maintenance, or strata record keeping. We can’t them to attend an AGM to carry out the basic requirements of the strata.
We own 50% of the property and have 50% of the voting rights, yet we can’t even get the common property garden tended to unless we do it all ourselves or pay out of our own pockets to do it. What can we do?
Answer: Apply to NCAT to have a compulsory strata managing agent appointed.
You may make application to the NSW Civil & Administrative Tribunal to have a compulsory strata managing agent appointed pursuant to Section 237 of the Strata Schemes Management Act 2015 NSW as it appears that your scheme is not “functioning satisfactorily”, has failed to comply with legislative requirements in terms of failure to maintain and have proper meetings and is failing to perform its duties.
As the applicant, you will bear the burden of proof and need to provide evidence in support of all the dysfunction of your scheme.
As your application would be for the appointment of a compulsory appointment, you do not need to make application for mediation through NSW Fair Trading.
Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440
This post appears in Strata News #626.
Question: Can you proceed with an AGM in a 2 lot strata plan if both lots are represented but one lot owner is in arrears?
Answer: No, because both owners are required for a quorum in your scenario and persons constituting a quorum must be financial.
Leanne Habib Premium Strata E: info@premiumstrata.com.au P: 02 9281 6440
Question: For an attached duplex in NSW, what are the requirements? Do we need an administration and sinking fund? How about strata insurance for the common property?
I live in a duplex. The building is not detached as the lots share a common wall.
I’m wondering what our requirements are. Do we need an admin and sinking fund for repairs maintenance, pest sprays etc is for two owners to share?
How about strata insurance for the common property?
Answer: As your building is attached and shares a common wall then you would be required to obtain building insurance for the common areas and also establish an administration and capital works fund.
The Strata Schemes Management Act 2015 includes special provisions for owners in a two-lot scheme and they include the below:
- Accounts & finance statements are not required to be audited
- A quorum in a two-lot scheme with two owners is always two people entitled to vote
- The strata committee is made up of an owner from each lot
- Owners can obtain their own building insurance for their lot, and be exempt from having a capital works fund if:
- The building in each lot are physically detached;
- No building or part of a building is situated outside the lots; and The owners pass a unanimous resolution for the owners corporation not to have building
- insurance for both buildings and/or not to have a sinking fund.
The above list applies to your property, but we draw your attention to the last point around the insurance and capital works fund.
As your building is attached and shares a common wall then you would be required to obtain building insurance for the common areas and also establish an administration and capital works fund.
However should yourself and the other lot owner decide that you would prefer to not have shared insurance and not establish a capital works fund, then you could hold a General Meeting and pass a unanimous resolution to remove those requirements.
Further requirements for your owners corporation would to hold an Annual General Meeting each year and also have an administration fund established to cover the day to day expenses for the common property which would include the insurance if no special resolution is passed and things like the annual pest treatments, lawn mowing etc.
You are able to find what should be included in an Annual General Meeting and also further information around Strata Schemes with two lots on the Office of Fair Trading’s website.
Jane Giacobbe Strata Reports Victoria & NSW E: info@srvic.com.au P: 0402 341 848
This post appears in the August 2020 edition of the NSW Strata Magazine.
Question: We bought into a duplex a few years ago. We know nothing about the strata duplex requirements. It was not until we moved into our property that our neighbour in the adjoining unit informed us that there is a strata plan and a body corporate.
My husband and I bought into a duplex in Campbelltown in October 2016. We were not made aware by our conveyancer that our property was under strata plan.
It was not until we moved into our property that our neighbour in the adjoining unit informed us that there is a strata plan and an owners corporation.
Before we had a chance to look into this matter further, our adjoining neighbour sold her property. We are now in a situation where there are two new owners in the strata duplex and we do not know anything about the requirements. How do we remove the previous owners from the owners corporation and how do we have the new owners registered? Please help us with this enquiry.
Answer: When a property is purchased in a strata scheme, a Section 22 notice is provided to the Strata Manager once the sale and transfer of title has taken place.
It sounds like there is a problem with the conveyancer / lawyer who acted for the purchaser.
When a property is purchased in a strata scheme, a Section 22 notice is provided to the Strata Manager once the sale and transfer of title have taken place. Every strata plan in NSW has a registered address with the NSW Land Registry Services (previously LPI, previously Department of Land). The conveyancer would normally search this information for you to send the Section 22 notice to the right place.
In this situation, I would suggest you do the following:
- Call your lawyer / conveyancer and ask who the strata manager is (if there is one).
- If there is one, ask have they (the lawyer) sent the strata manager the ‘Section 22 notice’ to advise of the transfer of ownership
- If there isn’t a strata manager, speak to your neighbour and find out if they are the owner. If they are, find out what you need to do regarding the strata matters. Normally for a duplex with no strata manager, the main item to do each year is the insurance if the properties are physically connected and run the AGM.
- If your neighbour is a tenant, find out who their agent is and explain why you need to know the details of the agent (so they don’t think you are ‘dobbing’ them in for something!)
- Speak to the real estate agent and try and get in contact with the other owner so you can organise correct insurances and possibly start setting up some processes around the annual strata meeting (the AGM). There is plenty of information on this website and the internet about what to do. The Office of Fair Trading will also be able to help and this is a free service.
Good luck, I hope this is helpful!
Rod Smith The Strata Collective E: rsmith@thestratacollective.com.au P: 02 9879 3547
This post appears in Strata News #183.
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Embed Read next:This article is for reference purposes only and is not intended to be a comprehensive review of the developments in the law and practice or to cover all aspect of the subject matter. It does not constitute legal or other advice and should not be relied upon this way. Readers should take legal or other advice before applying the information containing in this publication.
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