Page 2644 - Week 07 - Tuesday, 5 June 2012
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The concern that the Owners Corporation Network had was that the legislation would not clearly support an owners corporation that took a progressive and longsighted approach to building up the sinking fund for large scale investments in the common property. The concern of the OCN was that any owners corporation who took a responsible approach and put aside a small amount of money each year for large scale investment required in the future could be taken to ACAT by a disgruntled owner.
The Greens agreed with these concerns and have been looking into this issue. We also made it clear to the OCN that we would be happy to support the government if it brought forward amendments to address their concerns. We do agree that owners corporations should be able to plan for the future of large scale infrastructure. If we take a five-storey lift as an example, this will have a service life in excess of 20 years. The best approach is to set aside a small amount of money each year for that service, rather than to massively raise sinking fund levies in the 20th year when a particularly large service was scheduled.
I think this is not only prudent in terms of smoothing out the cost impact for owners but also fair, in the sense that, with something like a lift that has perhaps a 20 or 25-year lifespan, if the owners corporation is not preparing and putting aside a small amount of money each year in the early years you could essentially get free riders and those who buy into the complex at a later point in time are left with the burden of picking up the maintenance costs. Clearly, planning and paying for the costs over a longer period of time is both easier for owners and fairer in terms of the long-term ownership of properties.
The amendments today clarify that an owners corporation that acts in such a way is acting within the scope of the act and that the levies it charges would be proper. The way in which the government has achieved this in the legislation is to insert an example of the way in which a sinking fund could operate under the act. The example explicitly shows that a sinking fund can plan to end with a surplus at the end of the 10-year plan. So long as that surplus can be shown to be set aside for future expenditure related to the common property, the fund is valid.
The Greens support this issue being cleared up. Having a well-planned sinking fund to ensure good and proper maintenance is carried out on common property is obviously a good thing and a prudent thing. In the long run this ultimately prolongs the useful life of the infrastructure, which makes good sense on a number of different grounds.
Of course there could have been a number of different ways to approach this, and I think the government has taken a different approach from what OCN suggested, but the essence here is ensuring the ability of owners corporations to plan for the long term, something which has had a question mark around it. I am very pleased to see that matter being resolved in the bill today, in addition to the other matters that the bill addresses. On that basis, the Greens will be supporting the bill today.
MR CORBELL (Molonglo—Attorney-General, Minister for Police and Emergency Services and Minister for the Environment and Sustainable Development) (4.09), in reply: I thank members for their support of the bill.
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