This article and Q&A is about how the WA Strata Reforms have made solar in strata easier and the process for applying for solar in your strata building.
Table of Contents:
- QUESTION: How can we best take advantage of solar produced electricity to contribute to the reserve fund without suffering from additional tax payable by the strata company?
- QUESTION: Is the cost for installation of solar panels to be paid from the Reserve Fund? I would consider solar a new asset and, therefore, funds would need to be raised for this item.
- QUESTION: One lot owner wishes to install 18 solar panels on the common property roof. Would it be reasonable to request certification from a structural engineer?
- QUESTION: Is there an example of how to present the contract for approval of solar panels to the Strata Manager for an out of meeting vote?
- QUESTION: Can the corporate body of the strata refuse installation of solar panels on my home? I intend on proceeding with the solar installation regardless.
- QUESTION: What are the legal requirements in a 50 unit strata complex, where 7 units have rooftop solar panels installed? Are they required to install digital or smart meters?
- ARTICLE: New Strata Reforms Make Solar For Strata Easy and Safe
Question: How can we best take advantage of solar produced electricity to contribute to the reserve fund without suffering from additional tax payable by the strata company?
Answer: Solar generation reduces (or supplements) the cost of electricity.
With the disclaimer that this is not accounting advice, solar generation reduces (or supplements) the cost of electricity, as a site does not need to purchase the volume of electricity generated onsite (by solar) from the grid.
Two scenarios apply:
- When solar electricity (i.e., all or a proportion thereof) is allocated to common areas usage, the common electricity charges are reduced for the scheme’s benefit as a saving if no charge is applied to the value of each kWh of solar electricity.
- Where a strata scheme is on selling electricity to occupants in accordance with regulatory tariffs (i.e., solar or grid electricity), it should derive an on-sell margin or profit that would flow into the revenue stream of the strata scheme as the lot owner is charged for the electricity at a tariff rate.
- From an accounting perspective, how the income is treated would be subject to site specifics and a question for the appointed accountant in accordance with tax law.
- Generally, where a profit is derived, it would be assumed the strata company will need to pay the relative tax.
We have plenty of information regarding this on our website:
Damien Moran Energy-Tec E: damien.moran@energy-tec.com.au P: 08 9382 7700
This post appears in Strata News #683.
Question: Is the cost for installation of solar panels to be paid from the Reserve Fund? I would consider solar a new asset and, therefore, funds would need to be raised for this item.
Answer: It is ultimately the decision of the Strata Company, from where the funds are being drawn from.
Not knowing the financial situation of the Strata Company, the size of the strata scheme and the lot boundaries, we can only give a generic response.
Under Section 64 – Common Property (utility and sustainability infrastructure) easement – the strata company can enter into a contract – an infrastructure contract – with a person under which the person owns and operates the utility infrastructure or sustainability infrastructure on common property in the strata titles scheme, and such an infrastructure would require an Ordinary Resolution of the Strata Company.
Section 91 (2) stipulates that a strata company may improve or alter the common property in a manner that goes beyond in such repair, renew and replace common property.
If expenditure is being proposed for the installation of solar panels, that expenditure can be authorized by an ordinary resolution under Section 102; and if existing funds – whether kept in the Administrative or the Reserve Fund – does not allow such expenditure, the Strata Company can resolve by ordinary resolution to raise a Special Purpose Fund levy. It is ultimately the decision of the Strata Company, from where the funds are being drawn from.
Again, without knowing the financial situation, the size of the scheme and the lot boundaries, we are unable to advise anything further.
This advice does not constitute legal advice and we recommend that the owner obtains their own legal advice to suit the circumstances.
Marietta Metzger magixstrata E: marietta@magixstrata.com.au P: 08 6559 7498
This post appears in Strata News #623.
Question: One lot owner wishes to install 18 solar panels on the common property roof. Would it be reasonable to request certification from a structural engineer?
In a group of eight single storey strata dwellings, one owner wishes to instal around 18 solar panels. His roof is common property and the proposed size of the installation would cover most of the roof.
How do we get an infrastructure contract drawn up? How do we indemnify ourselves against future claims arising from loss or damage caused by the installation or its future removal? Would it be reasonable to request certification from a structural engineer that the roof can hold the weight with no potential for the installation to cause damage?
Answer: I would have to emphasise getting a structural engineer in any instance when you are putting that sort of load on a roof.
Bruce McKenzie, Sedgwick:
I would have to emphasise getting a structural engineer in any instance when you are putting that sort of load on a roof. People do have to understand that a lot of buildings, particularly modern day buildings, are built and designed pretty closely to what the design tolerances are. In other words, they’re not over designed by 20, 30, 40% of what the standards asked for. Sometimes it’s only a small amount over so what that means is if you impose a load on a roof, or a balcony or anything like that is significant, it can impact things structurally, so definitely would recommend getting structural advice on that one.
Sam Reece, Australian Apartment Advocacy
I thought that was a very impressive question that was well thought out that was well considered, and I agree with Bruce. Because at the end of the day, when you’re living within a community, you have to be considerate of your neighbours. You can’t go and whack in 18 solar panels and think it’s not going to impact everybody else. So Bruce is completely right. Get a structural engineer out, and just make sure that you’re capable of actually having that protected and also then you may actually want to look at a different insurance policy for those solar panels on top of what you actually have as your common property too.
Bruce McKenzie Sedgwick E: bruce.mckenzie@au.sedgwick.com P: 1300 735 720
Sam Reece Australian Apartment Advocacy E:sam@aaadvocacy.net.au P: 0452 067 117
This post appears in the November 2021 edition of The WA Strata Magazine.
Question: Is there an example of how to present the contract for approval of solar panels to the Strata Manager for an out of meeting vote?
A few owners intend to install solar panels and the Strata Manager/committee has informed the Owners to prepare the sustainability infrastructure contract and submit it to them.
Can anyone advise an example as to how to present the contract for approval of the solar panels to the strata Manager for an out of meeting vote?
Answer: There is no standard form for the contract. Therefore, the strata company or the Owner/s need to speak to a solar energy lawyer to have the contracts prepared. Part of this advice can include advice on the voting process, although this process is largely uncontroversial. The strata company and the Owner/s need to agree to the contract first.
Tristan Cockman Justice Legal Pty Ltd E: tcockman@justicelegal.com.au P: 0408 954 570
This post appears in Strata News #470.
Question: Can the corporate body of the strata refuse installation of solar panels on my home? I intend on proceeding with the solar installation regardless.
Can the corporate body of the strata refuse installation of solar panels on my home? My house is free standing but part of strata and the only issue I can see is that it will alter the outside appearance of the house. Also, no other villas have solar panels.
I will, of course, seek the approval from the other lot owners, but I intend on proceeding with the solar installation regardless of the response because it the solar will not be on common property.
Answer: If the strata company rejects your proposal, then you can worry about the next steps.
Assuming you are in WA and that the roof space is not common property, approval to installing solar panels on your lot should require a resolution without dissent. However, if one or more of your fellow lot owners do dissent, you may be able to apply to the Tribunal for an exemption or review depending on the circumstances which would include the reasons for the refusal and how the solar panels may (or may not) impact upon the other owners. I would not recommend just doing it because there may be consequences of doing this.
However, we may be getting ahead of ourselves. In the past, you would often get one or two grumpy people opposed to solar panels for reasons that cannot be explained. But I have not received any queries relating to a refusal to approve solar panels in quite some time. People seem to accept them without issue. I would suggest you seek approval in the usual way and see what happens. If the strata company rejects your proposal, then you can worry about the next steps.
Note: The above comments only apply when the roof is part of your lot. If the roof is part of common property, there is a separate process to obtain approval. In short, you need an ‘infrastructure contract’. More information about this process is here: ‘Infrastructure contract’ – Is it a lease? Is it a licence? No, it is an easement!
Tristan Cockman Justice Legal Pty Ltd E: tcockman@justicelegal.com.au P: 0408 954 570
Question: What are the legal requirements in a 50 unit strata complex, where 7 units have rooftop solar panels installed? Are they required to install digital or smart meters?
What are the legal requirements in a 50 unit strata complex, where 7 units have rooftop solar panels installed? Are they required to install digital or smart meters?
The current meters are the old type disc meter which runs backwards when the panels are producing power.
Answer: I suspect it comes down to whatever Western Power requires at the time.
I don’t know the answer for sure. I know only from my own experience (11 years ago in 2009) that Western Power would require that any old meter be replaced by the modern bi-directional meters whenever it approves a new installation. It seems a bit odd this is not the case here.
What I do know is that this is not a ‘strata’ question. There is nothing in the strata legislation that treats meters different to any other type of premises. I suspect it comes down to whatever Western Power requires at the time.
Tristan Cockman Justice Legal Pty Ltd E: tcockman@justicelegal.com.au P: 0408 954 570
This post appears in Strata News #360.
New Strata Reforms Make Solar For Strata Easy and Safe
If 50% of Lot owners decide to adopt solar generation capabilities in their strata building or allow an individual Lot to do so, new strata law will now make it easier, and safe.
Section 64 of the Strata Titles Act 1985 (WA)1 has been introduced to make it easier and more efficient to obtain the approval of the strata company to install sustainability and utility infrastructure on common property where that infrastructure is to be owned by either one or some of the owners or, a third party (not an owner and not the strata company).
Regulations soon to be released making solar in strata easier
The STA provides some details about the rights and obligations of the strata company and infrastructure owner in the same way that the rights and obligations arise under short form easements. Regulations soon to be released are expected to add to these rights and obligations.
Making the arrangement a short form easement will avoid any need for an exclusive use bylaw or plan to be registered at Landgate, substantially reducing the potential cost of installation and paving the way for existing unlawful installations to be made legal.
We are pleased that amendments have taken into account our recommendations over the past 7 years to Landgate addressing issues related to challenges owners face when implementing sustainability infrastructure improvements. Considerations to governance structures for such improvements were highlighted in our paper ‘Strata Title and Sustainability Infrastructure in Western Australia’ (February 2015) and included in recent submissions during industry and public consultation periods.
Here are the basics:
- the strata company enters into an “infrastructure contract” which sets out who owns the infrastructure and the areas of the property to which the easement applies.
- the strata company signs the contract and passes an ordinary resolution by more than 50% of the number of Lot owners or by more than 50% of unit entitlements “applying” section 64 of the STA to the contract.
- the owner of the infrastructure is deemed to have various rights over the common property including to access the land and install, remove, operate, repair, inspect, etc the infrastructure and various obligations such as to make good the damage to the land.
- if the strata company is purchasing the infrastructure, the resolution approving the expenditure (for amounts exceeding an amount set out in the regulations) need only be by ordinary resolution as opposed to a special resolution.
Further information about WA Strata Reform including sustainability and utility infrastructure can be found within Improved Management under Common Property via Landgate2 or see Section 64 in the amended Strata Title Act (1985)3.
History: Since authoring the first Parliamentary Internship paper on the need for Greening Strata Title Law in 2012 and subsequent submissions to Landgate over the past 7 years, we have bought to light strata title laws prohibiting sustainability infrastructure improvements and provided solutions to overcome these challenges. Section 64 of the Strata Title Act 1985 offers an innovative, fair and considered approach.
Fast Facts about solar and strata:
- Australia has the highest uptake of household solar installations and capacity per capita in the world – around 23% penetration4
- There are now over 2 million houses in Australia with solar panels.
- 26% of WA homes now have roof-top solar5 with arguably a third of these strata homes. The capacity for solar PV uptake is immense.
- Buildings currently account for 18 per cent of Australia’s greenhouse gas emissions6 and account for around 20 per cent of Australia’s energy use.7
Please note: this information was provided prior to the proclamation of the new strata title amendments.
Footnotes
- STA 1985, pg 80. https://www0.landgate.wa.gov.au/__data/assets/pdf_file/0010/67258/Blue-mark-up-version-of-Strata-Titles-Act-1985-Showing-how-Act-will-be-amended-on-proclamation-of-STAA.pdf
- https://www0.landgate.wa.gov.au/titles-and-surveys/strata-reform/all-about-the-reform/improved-management
- Strata Title Act 1985. Pg 80 https://www0.landgate.wa.gov.au/__data/assets/pdf_file/0010/67258/Blue-mark-up-version-of-Strata-Titles-Act-1985-Showing-how-Act-will-be-amended-on-proclamation-of-STAA.pdf
- Steady year in the small-scale market
- http://pv-map.apvi.org.au/historical#4/-26.67/134.12
- Department of the Environment and Energy, National Greenhouse Gas Inventory. Figures based on share of greenhouse gas emissions for residential, commercial and construction sectors.
- Department of the Environment and Energy, Australian Energy Update 2017, August 2017. Figures based on share of energy for residential, commercial and construction sectors.
Tristan Cockman Justice Legal Pty Ltd E: tcockman@justicelegal.com.au P: 0408 954 570
Tristan Cockman’s Bio: Tristan Cockman is a commercial lawyer who specialises in clean energy, real estate and property contracts and providing legal advice for clients in the sustainability industry in Western Australia. Prior to commencing his own business, he was a commercial lawyer at a top tier firm for 10 years. Tristan is one of few commercial lawyers with property and energy experience. Given the growing market trend towards the self-supply of energy in property and land development and the ongoing deregulation of energy supply, Tristan is uniquely qualified to provide advice in the property and energy industries.
Chiara Pacifici CP Collaborative E: chiara@cpcollaborative.com.au P: 0419 953 079
Chiara Pacifici’s Bio: Chiara’s career has focused on the property sector with more than 20 years as a real estate professional in marketing and sales and over 10 years leading change in sustainable development outcomes for the built form. She has experience in developing marketing and sales strategies, influencing design and construction, embedding corporate policy and management plans aligned to continuous improvement and has led consumer research and industry training to help improve decision making.
This post appears in Strata News #233.
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