Local Court Amendment (Company Title Home Unit Disputes) Bill 2013

Local Court Amendment (Company Title Home Unit Disputes) Bill 2013

(Debate, Legislative Assembly, NSW Parliament)

I support the Local Court Amendment (Company Title Home Unit Disputes) Bill 2013 and congratulate the Attorney General on introducing this long-overdue and much-needed reform. Company title allows owners to purchase shares in an apartment in exchange for rights to occupy a unit in the building.

 It was a common form of unit ownership before strata laws were introduced in 1961 and continues to exist in many apartment buildings in my electorate, particularly architecturally significant 1930s art deco buildings in Potts Point and Elizabeth Bay. Unlike strata apartments, which are run by all owners through the owners corporation with an elected executive committee to manage small issues, company title is run by a board of directors with much greater power. The board of directors can choose who can and cannot purchase shares, who can and cannot rent a unit from a shareholder, and, through the articles of a company, impose a wide range of rules.

While this may have some benefits, it can lead to disputes. Some of my constituents have reported unreasonable restrictions on shareholders. One constituent informed me that the board of his building will only grant permission to keep a cat after the owner provides the cat's photograph, name, sex and weight. The owner must enter and exit the building through the garage when with the cat. He says he has had a cat for years with no problems, but these rules were introduced only recently. Many owners report disputes about maintenance and repairs, as is the case with strata title units. Regardless of their nature, all company title disputes have to go to the Supreme Court, which is time consuming and expensive. In 2007 the New South Wales Law Reform Commission report "Disputes in Company Title Home Units" stated that this process was discouraging owners from pursuing their rights to resolve disputes. My constituents in company title apartments concur and welcome the more simple resolution process under this bill.

The bill will allow the Local Court to hear company title disputes and make orders about people's behaviour; payment of damages; rights and obligations under the constitution; and whether constitutions or agreement terms are void. When notice of this bill was given, I was concerned that the bill did not implement the Law Reform Commission recommendation to confer disputes on to the Consumer, Trader and Tenancy Tribunal. However, the Attorney General says the tribunal may not have power to determine disputes that arise under Commonwealth law. Given this, the approach in the bill makes sense. Legislation covering company title is complex and comes under a number of different laws from different jurisdictions.

A number of owners report concern with the overall governance of company title, which they believe encourages disputes. They say the board of directors has sweeping and broad powers and shareholders have limited control. Some suggest that all company title apartments should be transferred to strata title, where legislation provides better and clearer protection for owners. It is difficult to determine the extent of such concerns. Some of my constituents are disappointed that the current review of strata legislation does not include legislative reform for company title buildings. They say company title owners have similar problems to strata title owners, but without the same protections. I share their concern that a comprehensive review is needed of company title law, which should determine whether it remains a fair and useful means of home ownership. The bill is a great start to helping company title shareholders achieve fairness and I commend it to the House.


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