New law to hit switch on unit rip-off
Developers can’t exploit power bills
THOUSANDS living in strata units could have their power and internet bills reduced with the state government to ban developers from locking entire apartment blocks into longterm contracts.
Across the state, there are almost 80,000 strata lots occupied by owners or tenants, many of them on electricity, gas and internet contracts signed up to by the developer.
As The Sunday Telegraph revealed earlier this year, many contracts are no longer competitive, making owners and renters pay too much.
Better Regulation Minister Matt Kean said the proposed Better Business Reforms would allow owners to choose their own providers. Automatic contract roll-ons would end, while owners’ corporation annual general meetings would be required to raise the issue of contracts as a compulsory standing item.
“People living in strata schemes should be able to choose their own utility providers, it’s common sense,” Mr Kean said. “These long-term utility contracts might sound like a good deal at the time but, 20 years down the track, they’re often uncompetitive and overpriced.
“It’s time to flick the switch on these restrictive deals.”
Previously, apartment blocks were built with individual meters for each unit, with developers carrying the cost of building the network.
Newer apartments feature a meter for the entire block, with utility providers often enticing developers by offering to take care of the cost of the infrastructure in exchange for a long-term contract. The reforms will apply to all utilities except water.
Owners Corporation Network executive officer Karen Stiles said the changes could result in unit dwellers saving hundreds of dollars off their bills, especially electricity.
“Developers have often been able to get all their infrastructure installed for free by the provider ... but what it has also meant is that owners have been denied the ability to get competitive quotes,” she said.
“Even with the best intentions of the developer, rapid changes in the market could mean that someone that has been locked in to a good deal at the beginning might not be in two to three years’ time.
“It has been one of the many ways developers have been able to take advantage, and so it is very pleasing this loophole is closing.”
The reforms will go before parliament this month.