copy Tel (02) 9926 0333 Fax (02) 9231 5809 · 17 March 2009 Ms Lyn Baker Commissioner for Fair Trading Office of Fair Trading PO BOX 972 PARRAMATTA NSW 2124 copy Australia; DX 362

VUA The Law Societyof New South Wales

Our Ref: JC:lb:1290152Direct Line: 9926 0216

17 March 2009

Ms Lyn BakerCommissioner for Fair TradingOffice of Fair TradingPO BOX 972PARRAMATTA NSW 2124

copy170 Phillip Street, Sydney NSW 2000Australia; DX 362 SydneyTel (02) 9926 0333 Fax (02) 9231 5809ACN 000 000 699 ABN 98 696 304 966www. l a w s o c i ety. co m. a u

Dear Commissioner,

Certificates under section 109 Strata Schemes Management Act 1996 (NSW)

I am writing to you at the request of the Law Society's Property Law Committee(Committee).

A copy of a letter to you from my predecessor dated 1 July 2008 outlining theCommittee's concerns about the form of the section 109 certificate is enclosed.

The Committee has taken the liberty of redrafting the certificate to address the mattersdiscussed in that letter and to make the certificate more user friendly. A tablecommenting on the changes is also enclosed.

The redrafted certificate will, the Committee suggests , provide adequate information toenable a proper adjustment of the levies on completion of contracts so that there is nonecessity for further adjustments, either between the vendor and the purchaser or by thestrata managing agent.

The Committee is happy to discuss these issues further and to arrange a meetingbetween Committee representatives and your office if required. If you wish to discussthese issues or arrange a meeting please contact Ms Liza Booth on telephone 99260202 or email lib(a.lawsocnsw. asn.au.

Yours sincerely

'" Quality

Joseph CatanzaritiPresident

12901 52ANG REGGNVGREGGILJl l 6...1

EndorsedCompany

ISO 9001Lic 10215SAI Globa

The Law Society ofNew South Wales is aconstituent body of theLaw Councilof Australia 4

Law CouncilOF AUSTRALIA

l

The Law Societyof New South Wales

Our Ref: HM:Ijb:1280976Direct Line: 9926 0216

1 July 2008

Ms Lyn BakerCommissioner for Fair TradingOffice of Fair TradingPO Box 972PARRAMATTA NSW 2124

170 Phillip Street , Sydney NSW 2000Australia; DX 362 SydneyTel (02) 9926 0333 Fax (02 ) 9231 5809ACN 000 000 699 ABN 98 696 304 966

www.lawsociety .com.au

Dear Commissioner

Certificates under section 109 Strata Schemes Management Act 1996 (NSW)

I am writing to you at the request of the Law Society's Property Law Committee(Committee).

The Committee has become aware of a growing number of instances where practitionersare experiencing difficulties with settlement adjustments due to the form of the section109 certificate. An example of a typical complaint from a legal practitioner is enclosed.

The Committee would like to make some suggestions on the content of section 109certificates which the Committee thinks will assist practitioners and strata managers inthe conduct of their respective businesses.

As a general comment, the Law Society points out:

1. the current section 109 certificate prescribed by Schedule 7 of the StrataSchemes Management Regulation 2005 does not comply with section 109(3)(a)of the Strata Schemes Management Act 1996 (NSIM;

2. the certificate in its current form is not user friendly; and

3. the information which is provided, in some instances, is inadequate to enable aproper adjustment of levies on completion of contracts, resulting in the necessityfor further adjustments (either between the vendor and the purchaser or by thestrata management agent).

ii^ TM QualityEndorsedCompany

150 9001tic 10215SAI Globa l

The Law Society of

New South Wales is a

constituent body of the

Law council

of Australia 4

Law CouncilOF AUSTRALIA

1 280976/MHT/M HT/LJ 116...1

Section 109(3)(a) of the Strata Schemes Management Act 1996 (NSW) states that inrespect of the relevant lot, the certificate must specify "the amount of any regularperiodic contributions determined by the owners corporation under Part 3, the periodsfor which those contributions are payable and any discounts applicable for earlypayment" (emphasis added).

As adjustments under contracts are determined by reference to the number of days in alevy period (rather than by reference to the date the relevant instalments are due orpaid), difficulties arise in circumstances where the levy periods do not coincide with thepayment dates.

Form 2 of the Schedule 7 of the Strata Schemes Management Regulation 2005 sets outthe prescribed form for section 109 certificates. You will note that there is no itemspecifying the periods for which contributions are payable as required bysection 109(3)(a).

The Law Society suggests a review of Schedule 7 of the Strata Schemes ManagementRegulation 2005 is carried out as soon as reasonably practicable. The object of thereview is to:

â ensure that form 2, being the prescribed form of certificate, complies withsection 109; and

â ensure that Form 2 contains the following information in connection withcontributions to the administrative fund and the sinking fund (under section 76(1))and special contributions to the administrative fund (under section 76(4)):

• the annual amount of the contribution;• the periods for which the contributions are payable;• any discounts applicable for early payment;• amount (if any) outstanding;• particulars of any amount outstanding;• amount (if any) in credit; and• particulars of any amount in credit.

The Law Society is happy to discuss these issues further and to arrange a meetingbetween Committee representatives and your office if required. If you wish to discussthese issues or to arrange a meeting with Committee representatives, please contact MsLiza Booth on telephone 9926 0202 or email lib(a)lawsocnsw.asn.au.

Yours sincerely

Hugh MackenPresident

1280976/MHT/M HT/LJ 116...2

ACCIDENT CLAIMSBUSINESS GENERAL

M I LB E R ... R

B E R G E_ v

R S O L I C I T O R S

M E 0 1 A T. 0 R S

. OUR. REF:

3 April 2008

ABN 34 050875 014

. VICTOR BERGER:Leisa Furlong

The Law Society of NSWConveyancing Committee170 Phillip StreetSYDNEY NSW 2000

Dear Sir/Madam,

RE: FORM OF SECTION 109 CERTIFICATES

I CONVEYANCING

1 COMMERCIAL LITIGATION

CORPORATE LAW

DEBT RECOVERY

ESTATE PLANNING

FAMILY L WTI AINDUSTRIAL LAWINSOLVENCY

INTELLECTUAL LAW

JOINT VENTURES

MORTGAGES

PARTNERSHIP AGREEMENTS

PROBATE

PRODUCT LIABILITY

PROPERTY TRANSACTIONS

RETIREMENT HOUSING

RETIREMENT PLANNING

WILLS & BEQUESTS

I wish to draw to your attention the form of Section 109 certificate which appears to be ingeneral use at this time. In my view the form is misleading in respect of adequately highlightingarrears. We enclose a.copy of what we understand is such a form.

In our view in the form under paragraph 1 and 2 entering below where the 4 current quartersappear a sum in answer to "Amount owing" at least at first glance would not necessarily alert therecipient of the form that the sum inserted if it is more than what may be the addition of theinstalments for the current period commencing from the first quarter of the current calendar year(for example if one is expecting to complete during the first quarter and the amount owing is saidto be more than that amount) is other than the total of the 4 quarters unless it is obvious that theamount owing is more than a little greater than the 4 quarters., In our view we believe that thereought to be a separate section which clearly:

uses the expression "Arrears" and

indicates how the arrears have been determined.

We trust that we have adequately described the-issue/concem. If you require any clarificationplease do not hesitate in contacting me.

PARTNERS: Victor Berger LL.B. (Accredited Business Law Specialists ) (Mediator - ACOC Certified)Harry Norman Freedman B.A.. LI_R (Accredited Family Law Specialists)

Mittu M.Gopalan B .A.L..LL.B. INHOUSE ADVOCATE: Stephen ].McGlynn

ALL CORRESPONDENCE TO: 154 Elizabeth Street , Sydney NSW 2000 Telephone 9264 3877Rear 223 Victoria Road Gladesville NSW 2111 Telephone 9817 4698 DX 11606 SYDNEY DOWNTOWN Fax (O2) 9267 8639 lot. (61 2) 9267 8639

Email [email protected] www.milneberryberger.com-au

"Liability limited by a scheme approved under the Professional Standards Legislation."

-2-

We look forward to your comments.

Yours faithfully,MILNE BERRY. BERGER & FREEDMANVictor Berger

Per: n1,i-. fxy 13t [r Y^ t,^+. z 7

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Certificate under section 109 of theStrata Schemes Management Act 1996

Date of CertificateStrata scheme in respect of which certificate issuedLot in respect of which certificate issuedPerson requesting certificate(owner/mortgagee/covenant chargee/authorised person)

If an authorised person, authorised by

................Strata Plan No .................Lot no

NameAddress

NameAddress

The owners corporation certifies the following with respect to the lot the subject ofthis certificate:

1. Administrative fund - contributions payable by regular periodic instalments or lumpsum (section 76(1) of the Act)

Total amount last determined Amount Period

Number of instalments payable(if contribution payable by instalments) ........

.......... to .........

Amount of each instalment,period to which instalmentrelates and date due Amount Period Date Due

........... ......... to ............... to ..........

........... ......... to ..........

........... ......... to ..........

Amount (if any) outstanding

Particulars of any amount outstanding

Amount (if any) in credit

Particulars of any amount in credit

Discount (if any) applicable for early payment

Page I of I I

2. Sinking fund - contributions payable by regular periodic instalments or lump sum(section 76(1) of the Act)


.......... to .........



........... ......... to .......... ...........

........... ......... to .......... ...........

........... ......... to .......... ...........

........... ......... to .......... ...........






Page 2 of 11

3. Special contributions to the administrative fund (section 76(4) of the Act)

Amount of any levy payable undersection 76 (4) of the Act ............................

Date on which determination made ..............................



........... ......... to ..........

........... ......... to ..........

........... ......... to ..........

........... ......... to ..........





Brief statement as to the purpose for which the contribution was required

4. Money unpaid under by-law conferring a right or privilege (section 53 of the Act)

Amount payable under a by-law referred to insection 53 of the Act

Date when amount due

Page 3 of I I

5. Contributions towards costs of proceedings (section 229 of the Act)

Amount of any levy payable undersection 229 of the Act .............................

Date on which determination made ..............................



........... ......... to ..........

........... ......... to ..........

........... ......... to ..........

........... ......... to ..........





Brief statement as to the purpose for which the contribution was required

6. Amounts recoverable in relation to work carried out by owners corporation

Amount (if any) recoverable under section 63 of the Act .......

7. Rate of interest payable on contributions

Rate of interest payable under section 79 of the Act on contributions ......%

Amount of interest payable in relation to outstanding contributions

8. Amount of unpaid pecuniary penalties

Amount of any unpaid pecuniary penalty that is a charge on the lotby reason of section 206 of the Act

Page 4 of 11

9. Particulars on strata roll for lot to which certificate relates

Name of owner Name .....................Address for service of notices on owner Address .....................

Name and address for service of notices on Name .....................each mortgagee, covenant chargee or other Address .....................person who has given notice to the owners Capacity ....................corporation under section 118 of the Act

10. Managing agent and caretaker

Name of managing agent (if any) appointed Nameunder section 26 of the Act Address

Name of caretaker within the meaning of Namesection 40A of the Act Address

10. Members of executive committee

Name

Chairman

Treasurer

Member 1

Member 2

Member 3

Member 4

Member 5

Member 6

Member 7

........................

.........................

.........................

.........................

.........................

.........................

.........................

.........................

.........................

11. By-laws

Address

......................................

......................................

.....................................

.....................................

.....................................

.....................................

.....................................

.....................................

.....................................

Particulars of any by-laws made by the owners corporation within the 2 year periodbefore the date of this certificate that have not been lodged at the office of theRegistrar-General as at that date

Page 5 of I I

12. Insurance policies

Particulars of all insurance policies held down by owners corporation

Type of policy Name ofinsurer

Policy number Sum insured Date due Date when lastpremium paid

Amount of lastpremium

Name of each insurance broker for each policy (if relevant): Name

Address ...............................

Page 6 of I I

Items 14 to 17 must be completed if the strata scheme is also part of a communityscheme

Name of community association:

Address for service of notices:

Name of precinct association (if any):

Address for service of notices:

................................

................................

................................

................................

................................

................................

13. Contributions payable to administrative fund of community association


.......... to .........


Amount of each instalment,period to which instalmentrelates and date due






Amount Period Date Due

........... ......... to ..........

........... ......... to ..........

........... ......... to ..........

........... ......... to ..........

Page 7 of I I

14. Contributions payable to sinking fund of community association



.......... to .........

Amount of each instalment, Amount Period Date Due

........... ......... to ............... to ..........

........... ......... to ..........

........... ......... to ..........

period to which instalmentrelates and date due





...........................

...........................

............................

............................

Page 8 of I I


15. Contributions payable to administrative fund of precinct association


.......... to .........



........... ......... to ..........

........... ......... to ..........

........... ......... to ..........

........... ......... to ..........







Pagc 9 of 1 1

16. Contributions payable to sinking fund of precinct association


.......... to .........









......... to ..........

......... to ..........

......... to ..........

......... to ..........

...........................

...........................

............................

............................

Page 10 of I I

Law Society's om q uts din theu^redrafted , 009 certificate suggested by the Law Society,

Number Chan Commentsfex lanatii^n1 General 1. Formatting has been slightly changed to

ensure all relevant information is containedin more definite columns on the right handside of the certificate.

2. Where particulars of a party is required,provision has been made for the insertion oftheir name and address (for example, seeclauses 9, 10 and 11 of the certificate).

2. Insertion of new item "Strata Scheme This amendment, coupled with the amendmentin respect of which certificate is to the certification by the owners corporation,issued". means the strata managing agent only needs to

insert the strata plan number once rather thantwice.

3. Annual amounts of contribution, The current form prescribed by the regulationsinformation on contributions to the requires information on:administrative fund and sinking fund (a) the amount of the last determination;(both for the relevant strata scheme (b) the amount of each instalment; andand any relevant community, precinct (c) the date on which each instalment is due.or neighbourhood scheme) has beenslightly changed to reflect the What is more relevant to purchasers (andfollowing information: practitioners) is the amounts of each(a) the amount of the last determination (both annual and periodic) and the

determination; periods to which those determinations relate(b) the period to which the (rather than the dates on which they are due)

determination related; and (although the latter is also useful and has been(c) the amount of each instalment, included in the certificate).

the period to which the instalmentrelated and the due date for the Clauses 1, 2, 3 and 5 have been amended toinstalment. incorporate this information into one paragraph.

4. Addition of information containing Clauses 1, 2, 3 and 5 have been amended toparticulars of any amount which is include this information.outstanding and any amount in credit.

5. Addition of information regardingname and address for services ofcommunity association and precinctassociation.

Documents

copy Tel (02) 9926 0333 Fax (02) 9231 5809 · 17 March 2009 Ms Lyn Baker Commissioner for Fair Trading Office of Fair Trading PO BOX 972 PARRAMATTA NSW 2124 copy Australia; DX 362