Changes to Utility Supply Agreements in NSW

Changes to Utility Supply Agreements in NSW

As of 1 October 2019, an amendment to the Strata Schemes Management Act 2015 limited the term of agreements for the supply of electricity, gas or other utilities with an owners corporation to 3 years generally.
 
If the agreement was executed before the owners corporations first AGM, then the agreement expires at the first AGM. This only applies to agreements entered into after the commencement of this new section 132A of the Strata Schemes Management Act 2015 (so after 1 October 2019).
 
Existing agreements that were entered into before commencement of this new section 132A expire 10 years after the date on which the agreement commenced.
 
Further, the reform adds this as an item for consideration at AGMs under Schedule 1 – meeting procedures of owners corporations.
 
Importantly, the provisions do not apply to any agreements for the supply of electricity through an embedded network.

Changes for Strata Managers

Owners Corporations in NSW are now required to put a motion on their AGM agendas outlining the details of any utility agreements. Strata managers should update their meeting documentation accordingly.

Bugden Allen Lawyers can assist any schemes ot managers with a suggested motion to consider utility agreements. Alternatively, SCA NSW have provided their members with a suggested motion which was included in their recent newsletter.