An owner’s corporation is responsible for managing the common property in a residential, commercial, retail, industrial, or mixed property development. There has been rules and regulation that has been guiding the management of owner’s corporation. With time, the legislation regarding owners of corporations has been subject to change. The recent changes have been reflected in the new owner’s corporation’s regulations 2018 that were approved by the governor in council, thereby preceding the 2007 regulations. The new rules aim to promote good governance and protect many owners’ interests concerning the common property. This article gives a detailed explanation of the principal changes that have been introduced in the new owner’s regulation 2018.
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The maintenance plan
The new reforms prescribe that the owner’s corporation’s maintenance plan must include the major capital items. The major capital items are common property structures such as roof, window frames, stairway and balustrades; common property services such as water, gas, sewerage pipes, electrical and telephony infrastructure. And the common property assets such as fences, pools and water tanks. The maintenance plan is only applicable for the stated significant capital items and not individual property, as it is the responsibility of the relevant owner to maintain and repair this. As a member of the owner’s corporations, you must review your current maintenance plans and ensure they comply with the new regulations.
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Rules for the committee members
This new legislation aims to reduce absenteeism among the committee members of the owner’s corporations. The committee is allowed to resolve and remove a member after being absent for more than 25% of the meetings without explanation for six months. Upon removing the member, there is a casual vacancy that needs to be filled.
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Professional indemnity insurance issued to owner’s corporations
During property management, it is necessary to maintain their reputation for possible mistakes to be made in the future. Hence the provision of professional indemnity insurance is issued to the owner’s corporations manager. Professional indemnity insurance covers any legal costs, compensation, and work costs to rectify a mistake, should a claim be made against the management. In the owner’s corporation regulations 2018, this insurance has been increased from 1.5 to 2 million dollars.
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Model rules that should be followed
The new 2018 regulations have introduced new model rule 2 dealing with committees, increasing the model rules to 7. The new rule 2.1 allows the committee to appoint members to a new sub-committee without referencing the owner’s corporation. This is contrary to the present act, which limits the committee from making any further provision upon the appointment of the members of the sub-committee
Additionally, there is a new model 5.2 rule that focuses on the external appearance of lots. The rule prescribes the owner or occupier of a lot to obtain written approval of the owner’s corporations before making any changes to the external appearance of the lot. Moreover, the owner’s corporations are not allowed to make an unreasonable approval withholding decision but instead make a reasonable approval while protecting the quiet enjoyment of other lot owners, structural integrity, the value of other lot owners, and common property.
Furthermore, new model rule 5.3 requires notice to Owners Corporation of renovations to lots. It is mandatory for you as the owner of the lot to notify the owners corporation of renovations that might affect other lot owner’s enjoyment of the common property. The renovations might cause noise pollution and debris on the common property, which affects its use.
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The fees remain unchanged
The owner’s corporation 2018 prescribes that fees associated with registration of the owner’s corporation should remain unchanged.
