It was always the case that the seal of an Owners Corporation needed to be affixed physically and in the presence of appropriate witnesses to comply with s273 of the Strata Schemes Management Act 2015 (NSW) (Act).
In response to the COVID-19 pandemic and Government Public Health Orders, from 5 June 2020, temporary measures were introduced to allow owners corporations and community associations to sign documents or instruments rather than affixing the common seal. Those measures had a limited life.
The Strata Schemes Management Amendment (COVID-19) Regulation (No 2) 2022 (NSW) commenced from 30 September 2022 bringing this temporary measure to an end. Instead, a significant change was made with the insertion of Regulations 17A and 17B into the Strata Schemes Management Regulation 2016 (NSW) (Regulations). These Regulations require Owners Corporations to now affix to any instrument or document, a physical or electronic seal.
The Act was also amended by the inclusion of ss273(3A), (3B) and (3C) to accommodate the new Regulations. These new Regulations are summarised as follows:
Regulation 17A of the Regulation – Electronic affixing of seal of owners corporation
If the Seal is to be affixed electronically, then Regulation 17(A) requires that it must not be affixed except in the presence of:
- Where the owners corporation has only one owner – the owner or the strata managing agent;
- Where the owners corporation has only two owners –
(a) both owners, or
(b) the strata managing agent;
- Where the owners corporation has more than two owners –
- Two persons who are owners of lots or members of the strata committee as determined by the owners corporation; or
- if no determination made:
(i) the secretary of the owners corporation and a member of the strata committee, or
(ii) the strata managing agent.
Regulation 17B of the Regulation – Requirements for strata managing agent for seal affixed electronically
If the seal of the owners corporation is affixed electronically in the presence of a strata managing agent under Regulation 17A, the managing agent must attest to the fact and date of the affixing of the seal by:
- the strata managing agent’s signature, or
- If the strata managing agent is a corporation, the signature of:
- the president, chairperson or other principal officer of the corporation, or
- a staff member of the corporation who is authorised by the president, chairperson or other principal officer to attest to the fact and date of the affixing of the seal.
If the signature was executed by electronic communication, it must be carried out using a method that identifies the person signing and indicates the person’s intention in respect of the information in the document (Regulation 17B(2)).
The method used is to be:
- as reliable as appropriate for the purpose for which the electronic communication was generated or communicated in the circumstances; or
- factually proven to have identified the person signing and indicating their intention in respect of the information in the document; and
- the person consents to the method used to identify the person and their intention to sign.
The consent requirement may be inferred from conduct (provided it is unconditional) and we suggest that intent may similarly be inferred from the conduct of the person affixing of and witnessing the affixing of seal.
The Identification method is not prescribed and is merely to be appropriate in light of all the circumstances, as explained above.
It is suggested that if an electronic/digital signing software such as DocuSign is used, the requirements under Regulation 17B(2) would likely be satisfied.
The seal
The type of electronic seal that should be used is not prescribed by the Regulation. The provisions of Regulation 17B to a large extent mirrors the requirement to validate electronic transactions as set out in s10 of the Electronic Transactions Act 1999 (Cth) and at s9 of the Electronic Transactions Act 2000 (NSW).
Under Commonwealth law, electronic communication is defined as:
(a) a communication of information in the form of data, text or images by means of guided and/or unguided electromagnetic energy; or
(b) a communication of information in the form of speech by means of guided and/or unguided electromagnetic energy, where the speech is processed at its destination by an automated voice recognition system.
Due to the continuously evolving and unforeseen changes in electronic communication and technology, it appears that Regulation 17B has been structured to be broad and flexible to allow continued application for an Owners Corporation in affixing of a common seal electronically.
If you would like to discuss this article , please contact our Property and Real Estate Projects Partner, Mike Ellis or Associate, Adwar Alkhamesi.
This publication is for general information purposes only and does not constitute legal advice. You should seek legal advice regarding your particular circumstances.