New law to hit switch on unit rip-off

De­vel­op­ers can’t ex­ploit power bills

The Sunday Telegraph (Sydney) - - NEWS - LINDA SILMALIS BEN PIKE

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.

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