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These are the raw versions of my Flat Chat columns for the Sydney Morning Herald’s ‘Domain’ section. Some of the issues are specific to New South Wales, some are universal. There will almost certainly be differences in strata law between NSW and other states and countries. If you have a serious problem, contact the agencies (in Australia) listed in our contacts sections. Or contact a properly qualified and experienced strata lawyer. These columns should not be regarded as a substitute for professional legal advice.
Time for more discrimination
Now this is a huge over-generalization (pace, all my lawyer friends) but we know there are some out there who, as I’ve said in the past, should wear tee-shirts with “LAWYER” on the front, to save them starting every discussion with a reminder of what they do for a living.Predicatably, perhaps inevitably, the US developer was sued for discriminations by a lawyer who didn’t even want to buy into the village. Apparently, the developer’s defence was: “See what I mean?”
Just to give an example. An Anglo-Lebanese woman I know moved into an apartment block in one of the newer areas of Sydney, simply because the unit was the best she could afford. She soon discovered that most of her neighbours were from the same South-East Asian ethnic group.
They would come home from work, dump their stuff in their home, make a cup of tea and then come back out into their lift lobbies and corridors to drink it and enjoy a chat with their neighbours. This was their culture at work and they loved the sense of community they had. The problem was they were having it in the corridors, rather than inside their homes. Our friend, however was not so keen, and ended up moving out because of the constant chatter and laughter outside her door.
Now, she wasn’t the kind of person to start making everyone else conform to her lifestyle (which she theoretically could have done, by getting orders at the CTTT). But wouldn’t it have been a lot easier on her if there had been some way of her knowing not to buy there in the first place.
I love the multicultural aspects of Australia and I enjoy the enthnic diversity of our cities. And I also think that everyone should have to opportunity to live how they please without upsetting other people or having to conform to the arbitrary standards of behavior set by their ‘squeaky wheel’ neighbours.
More discrimination, not less, I say! And maybe somebody will build a block for grumpy old people … oh, they already do – and it’s perfectly legal.
Short-term rulings expose cracks in strata
Peace breaks out but defects war continues
Looking at the ‘peace treaty’ recently announced between developers and apartment owners in NSW, you have to wonder why … and especially, why now?
Some developers have treated strata residents and investors with scarcely concealed contempt for years. A survey by the UNSW’s Department of the Built Environment released last year revealed that 85 percent of apartment owners reported defects in their buildings and 75 percent of them hadn’t been fixed.
For decades past, successive governments have been firmly in the deep pockets of some of the major players, with, seemingly, no rort or hustle too blatant for Macquarie St to stomach.
Self-certification by developers, a system requiring a unique combination of brass neck and blind eye, was a particularly dirty trick with predictably horrifying consequences, in the worst cases, unit blocks being approved by the developers but ruled unfit for habitation by the local councils.
When insurers then walked away from high-rise construction warranties, the government, rather than tightening up the building codes, removed the obligation on developers to insure building work for blocks over three storeys high. It would be an understatement to say this eroded consumer confidence.
So the new 19-point plan agreed between the Owners Corporation Network (representing strata owners) and the Urban Taskforce and Australian Property Council (developers) could not be better timed.
Fair Trading Minister Anthony Roberts, overseeing a major reform of strata laws, knows he has a unique opportunity to get it right. The state needs a lot of high-rises in relatively little time and he can blame all the problems on previous Labor governments.
That’s why the developers have been so accommodating. They know big changes are coming soon and they want to be on the side of the angels. However the elephant in the room is the need to return Home Warranty Insurance for buildings over three storeys high.
The developers don’t want that because insurance firms aren’t going to start trusting them until they see how they perform. Trust is a lot less reliable than experience and logic.
Add in concerns about phoenix firms – here today, bankrupt tomorrow, back again next week, leaving only their vapour trails of defects – and premiums would be astronomical. You will find links to the official releases about the accord HERE.
The news behind the headlines is that the Owners Corporation Network, having been dismissed for many years as a talking shop for disgruntled strata owners, is starting to get some real traction in this critical period of change in NSW strata.
But they aren’t limiting themselves to NSW. They have already reached out to strata activists in Victoria, especially in the Docklands developments, and have links with owners groups in Queensland.
Across Australia we are now seeing the people who actually pay for all these strata developments – apartment and townhouse owners – using their collective experience and flexing their considerable muscle on a national stage.
If the developers are taking them seriously, perhaps it’s time the rest of us did too. You can find out more about the OCN here.
Strata Disputes: The easy way and the hard way
I often advise owners and ECs, when there is a clear breach of the law or the by-laws, to tell the badly behaved owners that they can do this the easy was – just play by the rules – or the hard way – get a breach notice taken against them at Fair Trading and the CTTT – but either way, the result will be the same.
But when I think about it, in NSW there is an ‘easy’ way and a ‘hard’ way to deal with problems and the results are very different.
I finally had someone explain to me the difference between a Notice To Comply and a CTTT order. Yes, I know, I have been writing about
strata for about 10 years and I really should got this by now. However, this came up in a discussion with some strata managers, one of whom said they didn’t even bother with Notices To Comply because the procedure is so time consuming compared to the comparative rap on the knuckles that the miscreant gets.
As we’ve said elsewhere, if you park illegally in visitor parking or on common property, you can string out a Notice To Comply procedure long enough, you can get six or eight weeks parking at a cost of just over $200 – that’s a dead-set bargain in many areas of Sydney.
On the other hand, pursuing an Order at the CTTT is a much longer process but the ultimate result is much more significant.
Here’s how the two systems work with the same problem. Let’s say Joe Numpty insists on parking his third car in visitors parking because “visitor never park there anyway and I own part of that space.”
Let’s assume there is by-law in place that forbids owners from parking in visitor’s spots and there is no question that the car in question belongs to the Numpty family. So far, so good.
Option one is to issue a Notice To Comply which is this specific document you can download from the Fair Trading website.
First you have to raise this at an Executive Committee meeting and pass a motion to issue the Notice To Comply. Alternatively, if your strata manager has delegated powers, you ask them to issue the NTC.
The EC or strata manager might send a warning letter first but they don’t need to as the NTC is a warning in itself – it says, if you continue to break this by-law, we will ask the CTTT to fine you. Note, it is not a fine notice, it’s a compliance warning.
The Numptys ignore the NTC and continue to park in the visitor space, so our EC or Strata manager fills in this form applying to “Impose a Penalty for the Contravention of a By-law” (Tick the appropriate box). Note that in the description (Section 203) many of the other applications, there is no mention of mediation. It simply requires you to attach copies of any resolution of the Owners Corporation or Executive Committee and a copy of the official Notice to Comply.
Apart from that it asks you to detail all the steps, including the breach that led to the Notice , the authorisation (EC Minutes) to give the Notice and the details of the by-law that has been breached. They also want the dates and times on which the contraventions occurred and a description of the activities that are in contravention of the by-laws.
Now, I’m making corrections on the fly here because I thought it then went to an Adjudicator who would decide whether or not to issue the $550 fine . But it turns out that, no, you go straight to a Tribunal. Even so it pays to make sure all your paperwork is up to scratch and never assume that even the bleeding obvious will hold any sway.
Given the propensity for some Members of the CTTT to dispense ‘wisdom’ rather than simply follow common sense and the law, the paper trail should be flawless. Plenty of rock-solid, watertight cases have fallen at this hurdle because one piece of paper was still in the filing cabinet and not in the submission.
The other route – seeking a CTTT order to comply with the Act or a by-law – does require an attempt at mediation via Fair Trading before you can proceed to Adjudication. Adjudication is this time initially done on paper – find out more about the process HERE.
If there is an appeal, it will go to a tribunal where both sides can present their cases in person.
The difference with this slightly more cumbersome process is that if the Numptys have an order to obey the by-law issued against them and they continue to park in a visitors spot, they are no longer just in breach of a by-law, they are in contravention of a CTTT order – and the fines for that go as high as $5500.
That will get their attention where a couple of hundred dollars might not.
By the way, in researching this, I found it very hard to find either pathway clearly explained on either the Fair Trading or CTTT sites. It should be a lot easier than this. You can start by reading this INFORMATION But for the record, you will need THIS FORM to apply for mediation, then THIS FORM to apply for a CTTT order. – March 2013.
Why I want to clamp Fair Trading
It’s been a while since Fair Trading and I had fisticuffs but this week saw them issue a press release targetting a column I wrote a few weeks back saying that there are circumstances under which you can clamp illegally parked cars.
Based on a piece by leading strata lawyer Beverley Hoskinson-Green, a partner in our sponsors Makinson & d’Apice, the piece took the line in the law that says you can’t clamp a car without an owner’s consent and posits the idea that a by-law that specifically allows owners’ and residents’ illegally parked cars to be clamped IS giving permission. (There’s a lot more on that HERE)
Seems reasonable to me but not to Fair Trading who have jumped in to promote the ‘rights’ of the strata wrongdoer over the efforts of communities to run their homes properly.
“What many people are not aware of is regardless of any particular by-law that may be in force in a strata scheme – and regardless of any warning signage erected by the owners corporation – unless you have the consent of the owner, the practice of wheel clamping and towing of vehicles parked on private property has been illegal since 1998 when local government legislation was introduced,” says the Press Release. “These practices would only be legal if applied solely to the residents who had previously agreed to the parking rules.”
Basically they seem to be saying that a clamping by-law, however carefully it’s worded, does not imply legal consent except for those who voted for it when it was tabled.
This would be a new concept in the mad macrame of strata law – by-laws only apply to the people who actually agreed to them when they were voted on. Obviously, this is nonsense, otherwise the creaking and outdated mechanisms by which we try to make sense of our lives would crumble into chaos and anarchy.
When you buy or rent an apartment, you willingly accept the set of rules that are presented to you when you enter that contract. If you don’t like the rules, go and live somewhere else – that is your choice and it’s yours to freely exercise.
By all means try to change the rules when you become an owner but fundamentally you accept them until such times as they change. Ignorance of the law isn’t and never has been a defence. If you choose not to read the by-laws when you buy a unit, then you have no one but yourself to blame when they come back and bite you on the bum.
Fair Trading is saying that there is a difference between agreeing to a set of rules (and accepting the consequences if you break them) and implying consent for the owners corporation to take action under specific circumstances, even when your by-law says, specifically, that owners and tenants give consent for their cars to be clamped if they are illegally parked.
But you give permission for the owners to, say, prevent you from accessing the swimming pool at 10 pm, even though you are a shared owner of that pool. You give them permission to limit your access to and from the building without a key over which they have control. In some buildings, you can’t even access your own floor without the ‘implied consent’ of a restricted pass key.
Just see what happens when you force the door or gate that’s barring your way and say ”I didn’t agree to the by-law that says the door to the common area must be locked at a certain time, therefore I am exercising my right to have access to it.”
See what happens when your renovations go on all day and evening, including weekends (but within the restriction imposed by the Environmental Protection Act) and you say, “hey, I didn’t vote for the by-law that says I can’t do work outside these specific hours and the EPA sets out the times when I am allowed to use power tools.”
The Fair Trading press release goes on to list all the things you can do about illegally parked cars.
A more likely scenario is that an owners corporation would use its rights to serve a “notice to comply” on a resident who has breached a by-law by parking in a communal area or a space reserved for visitors. If the resident continued to breach the by-law, the owners corporation has the right to apply to the Consumer, Trader and Tenancy Tribunal for a penalty of up to $550 to be imposed.
Here’s the reality about Notices To Comply. People ignore them and then when they are taken to the CTTT – using up your or your strata manager’s valuable time at your expense – and the culprit is fined (if, indeed they are), it can work out cheaper than renting a car space for the same period. If NTCs worked, we wouldn’t be having this discussion.
However, by-laws only apply to owners and occupants of a strata scheme and do not apply to members of the public.
Yes, thanks for that – but we weren’t talking about non-residents. We thought we had come up with a viable solution for owners and tenants who park illegally.
“NSW Fair Trading’s Commissioner, Rod Stowe, said when people who are neither residents nor visitors of residents park their cars within the boundaries of a strata scheme, the owners corporation can contact the local council or police who may then order the removal of the car.
This misses the whole point. The issue was about owners and residents parking illegally – not outsiders who we know are a whole different problem. And in any case, has anyone from Fair Trading ever tried that? Most councils have a giant ‘too-hard’ basket just for strata issues. This is a potential revenue earner for them but I have yet to hear of a single council who does it (with the exception of one that consistently refused to do anything until a fire truck couldn’t get to a blaze because of illegally parked cars).
“But under no circumstances should a resident take the law into their own hands,” he said. “The unauthorised clamping, towing or otherwise interfering with a trespassing vehicle could land you a fine of up to $2,200.”
Residents shouldn’t take the law into their own hands, anyway. But that’s not what was being suggested – we are talking about Owners Corps taking action by whatever means appropriate. And we have a leading strata lawyer who says you CAN give consent via a by-law, so who’s to say it’s unauthorised?
To be fair, some strata managers, strata lawyers and Fair Trading itself say the notion of “implied consent” in this regard hasn’t been tested in court. There’s a simple answer to that – test it!
While some owners corporations are able to enter into agreements with local councils to enforce parking restrictions, either by way of parking tickets or impounding by the police, Mr Stowe said the best solution to the problem was to make it impossible for unauthorised people to park on the property in the first place.
Again, missing the point. We are talking about owenrs and residents. So, Mr Stowe, tell us how you can restrict owners and residents from parking in their own building?
“Measures that are known to be effective in preventing rogue parkers include pop-up lockable bollards in parking spaces and security gates at entry and exit points with electronic key access for residents,” he said.
Pop-up bollards on visitor spaces require someone to pop them up and down otherwise they are just barriers to an empty space. Not all buildings have on-site managers to do this.
“It can be more effective for an owners corporation to take action to prevent vehicle trespass from happening than relying on council or police assistance after a trespassing vehicle has been parked.”
OK, can we just inject some reality and logic into this discussion? If all of these things were that easy, we wouldn’t be having this debate. Councils are not going to come and tow cars that belong to people who live in a building because they are wrongly parked in visitors’ parking or on common property.
In fact, some Owners Corps break into cars, and roll them on to the street where councils HAVE TO deal with them. Is that the kind of behavior we want to encourage? Deflating tyres, anyone? Keying the duco? The more you restrict the legal avenues people have to correct bad and selfish behavior, the more likely they are to resort to vigilante tactics.
Let’s not kid ourselves, wheel clamps are not a solution to illegal parking – the bloody car is still in place, after all – but you can bet they are an effective deterrent. At least, they could have been until Fair Trading hopped in to reassure rogue parkers that they are safe from the Denver Boot.
This latest Press release will give great comfort and relief to the Visitors Parking Pains “why should visitors get parking when I have three cars and only one space?”
It will be a confidence boost to the common property parkers “my garage is full of junk so I have to park in the driveway – it’s just your tough luck that you can’t get past.”
And it will be a boon to the driveway blockers: “I was only going to be there for a couple hours … and it’s closer to the lift!”
My advice? Consider the Fair Trading diktat, by all means, but talk to your insurer. Ask them if your Executive Committee is covered for legal charges if you clamp someone and end up in court. And if you do have to appear before the Beak, please let us know.
If Fair Trading won’t test this in court, maybe we have to.
Freedom of information – or freedom from spam?
Here’s an interesting one. A group of owners have got together and set up a website in advance of their AGM. Without going into detail, they have ‘issues’ with the Executive Committee (is there a strata scheme anywhere in Australia where that isn’t the case?).
Actually, somewhat embarrassingly, it seems like they followed instructions I put on the Flat Chat Forum, explaining how to set up an anonymous website and they’ve done a not-bad job.
OK, it’s one thing to set up a website but how do you drive traffic to it? What they did was to get hold of a list of email addresses of owners and sent them all a fairly controversial message to get the ball rolling and publicise the web address of the site.
Now, let’s assume, for the sake of argument that a) they don’t have permission to email other owners; b) they are well-intentioned and just want to inform other owners about their concerns; c) there is an opt-out option in the email that allows owners to say they don’t want any more emails; and d) the material in the email and on the website is not defamatory or obscene.
Their EC has struck back with a mail-out to all owners accusing this anonymous group of breaking the law, saying that it illegal to use the email list without the owners’ prior permission.
I kind of know where the EC is coming from but I can’t find any law that spells that out. That said, I’m not a lawyer and I may just be looking in the wrong place. In any case, I reckon that if you are sending messages from owner to owner, within an Owner’s Corporation, then that should be OK.
But is it? And even if it is, have they gone too far by remaining anonymous?
In other words, if one of them had sent out the original email under their own name, would that have been OK?
No, according to their EC. They say owners have to give permission for the emails to be sent and the owners are represented by the EC and the EC hasn’t given permission, so it’s illegal.
And if that is the case, we have a couple of those lovely Catch-22s that litter the strata landscape. If you have a dysfunctional EC running a large building with lots of absentee landlords, how can you let other owners know there is a problem without breaking the law?
And if anonymity isn’t allowed, how can you publicise your ginger group without inviting all sorts of retribution from the powers that be?
I really don’t know the answer to this – I’ve heard lots of theories from different sources and I have my own opinion but I’d love to hear a definitive view (if, indeed, there is one).
With my Freedom of Speech hat on my head, my Freedom Of Information flag in one hand and my Residents’ Right To Know banner in the other, I’d say if there is a law that stops owners communicating with other owners in the same strata scheme, then it is a crap law.
Unless, of course, those owners disagree with me, in which case I think the right to privacy from unsolicited emails is paramount and they should all have their iPad privileges removed for a year.
What do you reckon? – Jan, 2013
Overcrowding: pie in the sky?
So, according to this story in the Sydney Morning Herald, the proposed changes to strata law are going to allow us to control the number of people living in apartments in our strata units and put an end to multi-occupancy, sub-divided flats and hot-bunking. We shall see.
Forgive me for being cynical but there are so many commercial and political interests at play that these plans are by no means a ‘lay-down misere’. This will require clear and strong direction from the Premier if changes are to be made and so far Mr O’Farrell has been remarkably silent on the issues.
Strata laws are subject to many other pieces of legislation
controlled by a multiplicity of Ministries who may not want to see their power eroded in any way – so even the most sensible suggestions in the strata reform process may be lost in the political jostling of the government.
It’s worth noting that at least one other senior government ministry was supposed to endorse the strata law reform discussion paper issued by Fair Trading last year but eventually, after some delays, it was released with only Fair Trading Minister Anthony Roberts’ imprimateur.
He could be ploughing a lonely furrow and that doesn’t bode well for the collective willpower required to see these changes through. If Mr Roberts doesn’t have the Attorney General’s office, Finance and Lands onside, absolutely nothing will happen when his proposals reach parliament.
But let’s not be so negative and embrace the potential for meaningful change which is greater than it has ever been in the last 50 years. The problem with the current laws in relation to overcrowding is a clause in the strata Act that restricts by-laws any by-laws from “operating to prohibit or restrict the devolution of a lot or a transfer, lease, mortgage, or other dealing relating to a lot.”
This restraint on by-law, a hangover from a time when strata developments were seen as investments rather than homes for owner-occupiers, has been used to justify everything from short-term lets to sub-division of apartments and ‘hot-bunking’.
But now it seems there is a strong possibility that it may be removed or seriously amended in the strata law reforms. If it isn’t, then we will get nowhere.
One fact of life that should not be ignored in all this is that it’s the critical shortage of affordable rental properties that makes overcrowding the only option for some tenants, most of whom, you would assume, would prefer to live somewhere safer as well as within their budget. If you drive tenants out of multi-occupancy dwellings, where do they live?
And does this transfer of responsibility to Owners Corporation mean that some buildings could become dominated by greedy landlords who will block any attempts to limit the number of people per apartment? Slums of the future, anyone? Those who don’t learn from the past are condemned to re-live it.
The Government needs to create a law that cuts through all the red tape and establishes a ‘liveability’ benchmark – a formula that matches floor space with a number of rooms and the number of adults allowed to sleep there. This needs to apply to free-standing homes as well as strata developments, and be applicable retroactively. Ethnic groups and large families should be able to apply for exemption on a case by case basis.
Local councils should then be obliged to act on legitimate complaints from strata residents renters and owners – with no ‘do nothing” option. The majority of local councils lack enough knowledge or experience of strata living to know what their role should be. And many just don’t have the political will to interfere with owners’ apparent sacrosanct “right’ to do what they want with their property.
That’s why strata issues have languished in the too-hard baskets of local government for so long. Why would councils deal with owners and residents when a developer will come along and offer them a few million bucks to put the rule books away and let them do what they want? Compulsion is critical.
It’s all very well to establish standards for buildings at the planning stage, as has been suggested, but any solution that doesn’t operate retroactively will only shift the problem to existing buildings where these rules won’t apply. There also has to be some encouragement for developers to stop selling “affordable luxury” which often means planting high profit ‘resort-style’ development in areas that really need basic, low-cost accommodation that is first and foremost safe and secure (but may offer lower profit margins).
It’s time to stop these trade-offs where the developer pays the council for a swing park a couple of km away so they can put a few extra floors on their latest monument to mammon. You want extra sub-penthouses? OK, how about also building some hostel-style accommodation with shared services where students and the low-paid can live cheaply and safely? That’s a real social contract – not a deal to make a council look better to its already pampered constituents.
There are things the Government could be doing right now, before more people die in fires or any more young women have to trade sex for a shot at a room in a half-decent rental.
Real Estate and letting agents who knowingly allow or encourage multi-occupancy and subdivision of homes should have their licenses revoked. Owners Corporations should be able to get orders from the CTTT to ban estate agents and building managers or caretakers with a bad record from operating in their buildings. Individual owners who sub-divide their properties (or allow them to be sub-divided) should be obliged to restore the property to its original layout and then sell it.
The new strata laws are apparently going to ban developers from also being the building manager and strata manager of a strata block. This is good. ‘Separation of powers’ is the only true protection for strata owners and tenants but this will also be the litmus test for our politicians’ willingness to pass these much-needed reforms.
The ‘one-stop shop’ that is so appealing to new owners who are already confused by the intricacies of strata living only really suits the developer. You can bet that Bloggy The Building Manager and Bloggs Strata Management Inc will not be pursuing BloggCorp International with any great vigour for the millions of dollars of defects their building may have, at least until the date for claims is well and truly past and they can charge the owners for fixing it themselves.
However, some of those developers most guilty of conning apartment owners with their ‘one-stop shop’ approach are also among the most generous donors to both sides of politics. It’s hard to see this proposal getting the across-the-board support it will need in parliament.
In about 15 years, half the population of Sydney will be living in strata. There are plenty of opportunities for developers to make a lot of money without ripping off their customers. But removing the temptation to do so will require our politicians to face up to their responsibilities and look to their long-term legacies rather than short-term gains.
You have the right to remain silent …
Isn’t that what they say in the cop shows on TV? I was thinking of that the other night when I had a bite and a couple of beers with my good friend Chris Mo’ane of IBC. “You know a lawyer’s five favourite words?” he asked. “It’s a matter of principle.”
How true. How many tales of woe that have passed through these pages – and many more that haven’t – have begun and possibly ended with someone sticking to their guns, come what may, because they they know are “in the right”?
Before my lawyer friends get on my case, avoiding a fight can be just as damaging as continuing the battle long after everyone should have lowered their weapons and gone off to lick their wounds. Having lived in a building where the EC was ruled by a pathological fear of litigation and the ‘surrender tackle’ was the only tactic in the playbook – at considerable financial cost – I know only too well that there are times when you have to ‘lawyer up’ as they also say in the TV police dramas.
But that phrase ‘it’s a matter of principle’ will take you into dark places from which you would normally be deterred by logic and commonsense, if not a spreadsheet that had columns for Emotional Cost, Personal Time and Mental Energy, as well as Legal Fees and Damages.
Forgive me if I have told this story before but I often remind myself of the email I received some time ago from a woman who was at her wits end. Her neighbour was clearly in breach of a bylaw (can’t remember which but it had got under her skin). All attempts to get him to abide by the by-laws had failed and he was clearly taking great pleasure in playing the system – incompetent advice from Fair Trading, erratic decisions from the CTTT, a frustrated Strata Manager with more pressing issues and an Executive Committee that didn’t want to get involved.
Swiftly moving past the question of why join an executive committee if you don’t want to get involved, this reader was at her wits end. What could she do? She had tried every legitimate means to get this recalcitrant to toe the line and had failed.
My advice was to forget it. Give up and don’t expend another brain cell or waste another tear of frustration on it. It’s not life threatening, it’s just bloody annoying. So let it go and, in a way, I said, you’ll have won.
I fully expected a torrent of digital abuse from this reader who was already frustrated by the lack of support from any other quarter. Instead I got a lovely email thanking me for giving her permission to do nothing. A weight had been lifted off her and she felt renewed and revitalized and able to get on with her life.
My point is, sometimes we have to forget principles and move on. If the neighbour who parks illegally prevents you from getting to your garage or takes up a space that others genuinely need, fight the good fight. If loud music late at night keeps you awake and makes you tired and irritable, go them like a pit bull in a poodle shop.
But if the main source of annoyance is the fact that you are aware that the rules aren’t being followed to the letter – they’re breaking the rules but it makes no real difference to you or anyone else – maybe it’s good to let it go. You don’t have to man the barricades on every issue, you don’t have to fight the good fight, you don’t have to take up arms against a sea of troubles, and by opposing end them.
You are allowed to set your own parameters of what is acceptable (mis)behavior by your neighbours. You are allowed to give and take – It’s a matter of principle. – 08/12/2012
Back the by-laws … not the breachers
With just over a week to go until the shutters come down on the great Strata Law feedback exercise (closing date, November 15), I’m feeling very guilty. Having talked about it, written about it, urged my readers and friends to get involved, and thought about it at great length, I haven’t yet written a single word of an official submission to the review (and you can find out more about it HERE).
The reason I haven’t started is that I don’t know where to. Literally. There are so many areas competing for our attention that it’s hard to know which one to put at the top of the list.
Some seem too specific – like let’s allow private companies in to police parking garages on behalf of owners corps. Others seem way too airy-fairy, like making the whole process of running a strata building more open honest and fair.
When I get down to it (about 11pm the night before the closing date) I know what ideas will be competing for pole position on the starting grid. For instance, proxy farming has to stop. This distortion of the democratic system, whereby one owner hoovers up a stack of proxies, uses that to hand pick his or her executive committee of choice, promotes their own pet projects, stymies anyone else’s and makes everything seem hunky-dory because they tightly control the flow of information, is undemocratic and frankly obscene.
This is a very real problem but, thankfully only for a small number of buildings – there are only so many megalomaniacs and autocrats to go round. Benign dictatorship is a very effective and attractive system … until it stops being benign. It’s time we put these little Hitlers and mini Mussolinis back in their boxes (even if they do make the trains run on time). But that’s probably not the biggest issue in terms of the number of people it affects.
The ‘extinguishment of strata titles’ has been given a fair airing. This is also known as ‘rapacious developers forcing little old ladies out of their family homes’ – or is it ‘hard-pressed owners trapped in crumbling buildings by selfish opportunists’? I can never remember which. Joking aside, it’s an important question of urban renewal that could probably simply resolved by a formula that says buildings that are over a certain age and have passed a financial threshold for the cost of ongoing repairs can be ‘extinguished’ with a vote of 75 percent of owners while newer buildings that just happen to be in the way of a money-spinning development would need 100 percent of owners on board. Again, this affects a minority of people.
So how about some changes that would make everyone’s lives better. Direct fines issued to badly behaved owners and tenants would sharpen up some people’s ideas of how important it is to read their by-laws. Of course, any such system would be open to abuse, so you have an appeal system through the CTTT whereby if you have been wrongly fined you can not only get your money back but the Owners Corp has to pay your costs too and a bit more for “sorry” money.
Ahhh, yes, the CTTT – or the Clown Factory as we call it here at Flat Chat Towers. There’s a recent posting in the Forum about an EC that took an owner to the CTTT for a flagrant breach of by-laws that didn’t allow them to mount their air-con on the common property wall on their balcony and in full view of the street. There are two principles in play here – the basic law that you can’t mess with common property without Owners Corp permission and the more ephemeral but entirely legal notion that a community has the right to set its own collective standards for the way they want to live (in this case the issue being the look of their building).
By-laws aren’t that hard a notion to grasp. You get to look at them before you buy and immediately after you rent. If you don’t like the standards the by-laws protect, don’t live there or change the rules by the various means available to you. What you don’t do is just ignore them because they don’t suit you.
So this case against the air-con rebel was a lay-down misere. The by-law breach was there for all to see, literally. But wait! The CTTT adjudicator in all his wisdom agreed that the by-law had been breached but dismissed the complaint on the grounds of ‘convenience’. Forget strata law, ignore the by-laws and please don’t give us your quasi-communistic ideas of collective decision making. It was more convenient for this one owner to place his air-con on the wall in full view and so he must be allowed to do it.
This is why clown music, complete with honking horns and boom-tish sound effects, plays in my head before you can get to the third T of this doomed body’s initials. And why do I say doomed? Because one way or the other this government has decided to fix the CTTT, primarily by absorbing it into the body of a great super-tribunal. I’m now seeing clowns being sucked into a pulsating cosmic glob, like a scene from Dr Who … we can but dream.
There also are moves afoot to dispense with the written adjudication step in the CTTT complaints process. The CTTT was set up to be a lawyer-free complaints system – but unless your written application for a ruling is absolutely legally watertight, with every bit of evidence noted, notarized, cross-referenced, triple copied and signed in blood, there’s a very good chance your case will fail on a technicality. What happens then is that you proceed to a hearing. Since most of the people who lose at the ‘paper’ adjudication feel hard done by, most cases will proceed to a hearing anyway. Justice delayed is justice denied – so the ‘paper’ adjudication could be dispensed with, speeding up the system and allowing the CTTT to operate as it was intended.
Of course, we then face the Member of the CTTT in a hearing and it’s pot luck whether you get someone who actually ‘gets’ strata living and will make a logical decision based on strata law and the evidence presented or some paper shuffler with the legal equivalent of a big red nose and oversized shoes who will make some bizarre proclamation based on how they think things should be, rather than how they are.
For CTTT Members who have never set foot in a strata development, let alone lived in one, the prime consideration is the individual home owner. The words Owners Corporation seem to evoke an image somewhere between the Stasi and the Big Bad Wolf. Maybe one of the changes should be to de-corporatise that name … call it the Home Owners Representative Organisation (or HERO for short). Anyway, right now, too many of these legislative Luddites are putting the individual before the community, their ‘rights’ before their responsibilities and their selfish desires above community needs.
And now I know where my submission will start. The new strata laws should make it absolutely obligatory for anyone hearing a strata dispute at Fair Trading or the CTTT to state very clearly that the needs of the community come before the desires of the individual, that community standards take precedence over concepts of individual ownership and that legally agreed and registered by-laws will be upheld by the CTTT, as they are supposed to be by the owners.
Jimmy Thomson writes about apartment living in Flat Chat every Saturday in Domain and you can join in the lively discussions HERE. – 3/11/2012
Time to stop kidding ourselves about defects
We have just published our 400th Flat Chat column in the Domain section of the Sydney Morning Herald. That’s more than eight years of this stuff and there are tens of thousands more people living in strata than there were when I first started writing about it. Those figures will keep rising until half the population of Sydney is living in some kind of common property community within, my guess, the next 15 years .
Here in NSW we are in the middle of a process that will lead to much-needed reform of strata law. More than 600 suggested law changes were distilled into the current discussion document which you can find and respond to HERE.
There has been a lot of discussion about the extinguishment of strata title – or forcing owners to sell their homes to developers, to put the most negative spin on it. But it is far from the most important issue. The one requiring the most serious attention is the one aspect that’s least likely to change – basic consumer protection that means you get what you paid for.
The options for purchasers of new apartments to take action, even when their buildings are riddled with defects, have been steadily eroded over the past few years. The developer lobby is so powerful in this state that this is unlikely to improve any time soon, regardless of who’s in power – at least not without a radical change in attitudes.
Of the 90-odd pages of the discussion document, only just over one page is devoted to defects, despite the fact that in the survey of strata living conducted by UNSW’s department of the planned environment 85 percent of respondents said there were defects in their buildings.
The document justifies this partial omission thus: “Issues around the design and construction standards of buildings and the certification process are outside the scope of this review. These matters fall under the separate review of the Planning system. Similarly, issues such as the application of home warranty insurance to multi-storey buildings and the time periods for defect claims are being examined as part of a separate review of the Home Building Act 1989.”
If that means strata buildings are going to be treated like every other building – except for that notorious exclusion clause that means there’s no Home Warranty Insurance for buildings over three storeys high – then we may as well pack it in now. Strata is different –pretending it isn’t creates more problems than it solves.
The discussion paper does suggest that maybe an item on defects might be a mandatory inclusion on the agenda for the first AGM of all new buildings and that developers might not be allowed to vote on anything to do with defects. I’d say yes to both. It’s a start but it’s only a start.
Just this week the Supreme Court decided that builders of apartment blocks don’t have a legal duty of care to either the developers or owners corporations because the issues are already covered ether by contracts or a dispute resolution processes. The judge even suggested that if the Owners Corporations’ recourse to restitution was neither easy nor cheap, it may be because that’s the way the government wants it to be.
Yes, there are laws under which you can pursue a developer for building a shonky block of flats. But it will cost you a fortune and at the end of the day, if the case goes against them, the developer can just declare bankruptcy. The lawyers and the Court still get their money and the developers have already stashed theirs away somewhere, usually to finance the start-up of their phoenix company. The Owners, who are the only ones who pay, would have been better off just fixing the defects themselves and not involving anyone else. Why? Because they have a legal responsibility to maintain and repair common property – having just stood up in court and said what those problems are, they can’t now pretend they don’t exist
So where does that leave a new apartment buyer – especially if you are buying off the plan. The answer is that it’s a bigger gamble than it should be. And there is a conundrum at the heart of this to which there is no simple answer: Developers want fewer regulations; the government want more low-cost housing; the owners want better guarantees that they aren’t buying a pig in a poke. In short, here can be no simple solution to this problem.
Something my experience of writing and reading about strata has taught me is that few if any owners complain that they paid for something but wanted more. In fact, most would just be happy to get what they paid for. What we need then is a bit more honesty, transparency and pragmatism.
We need to rethink the way defects are identified and dealt with so that everybody knows exactly where they stand. And maybe it’s time we dropped the pretence that there are no defects in buildings – in fact, we know 85 percent of new buildings have defects (and it’s probably even higher than that).
Some defects are simple human error but others are the result of deliberate decisions to save money on construction. The irony for the consumer is that the developer who’s made an honest mistake on a few items is more likely to fix them, without quibbling.
The developer who cuts corners and squeezes their subcontractors so much that they can’t afford to do a proper job, is also the one who will fight owners tooth and nail in court to avoid fixing so much as one loose screw.
So let’s take the pretence out of buying new apartments. We know the building is likely to have defects and we know we have to pay more to make sure there are fewer of them so let’s accept that up front and factor it into the purchase price. Let the developer take a thin slice of the purchase price and put it in the building’s sinking fund. It costs them nothing but it guarantees that there are funds there to pay for defects and future maintenance.
If the developer puts funds directly into the sinking fund whenever they sell a unit, it also means we can take the surrender tackle of bankruptcy off the table. It needn’t be a huge amount – one percent of the purchase price would do it and it would mean your $500k apartment would now cost $505k – but in a building where the apartments had a total value of $100 million, owners would have $1m to spend on defects and repairs without having to set foot in a lawyer’s office.
It would also remove the bitter battles between owners who want their new home to be perfect and those who don’t want to or can’t spend another cent on their apartment. The money would be there – they may as well use it. This would also remove the problem of people living in a building for years without spending a cent on repairs present or future, in pursuit of the holy grail of low levies.
And let’s not kid ourselves that this is adding to people’s expenses – one way or another, strata owners have to pay for the repairs and maintenance of their buildings – that’s the law. This just removes the internal squabbles and legal battles (which cost even more) and the con job when the first owners move out, leaving the next wave of residents to discover all the problems they have kept hidden until it was too late.
Developers already factor legal cost into their management charges so you are already paying a proportion of the cost of your new home into defect funds. The only difference is these defect funds will be used to fight you in court to prevent you getting what you paid for. Wouldn’t it be better using that extra money to just fix the problem?
Developers may argue that the one percent may be a brake on sales but those of us who’ve seen off-the-plan sales offices hike their prices by 10 or 15 percent in a morning because of unexpected demand know that the value a developer puts on a unit is based on one aspect above all others … what they think people will pay.
Better developers could use the Compulsory Sinking Fund Contribution – there, I’ve even given it a name – as a selling point: “With our quality of build, you won’t need to worry about repairs or sinking fund levies for years.”
Now, let’s match this pre-paid sinking fund with a two-level rating for defects, using an agreed formula (similar to the “Who’s Responsible for What …” memorandum).
Level One defects would be those that are potentially life threatening such as inadequate fire safety installations and dangerous balustrades plus serious structural defects that threaten the integrity of the building. Fair Trading and the department of Lands can just make upo a list and any builder or developer who doesn’t fix them immediately they are identified should face criminal charges and they should be jailed for the more serious faults. You can be jailed for culpable negligence under the Work Health & Safety legislation– why not in strata law?
These Level One Defects would not be paid for out of the proposed sinking fun pre-payment described above. Selling something you say is compliant when you know you have cut so many corners in its construction that that can’t possibly be the case is fraud, plain and simple. It’s time the frauds were exposed and chased out of the industry.
Level Two defects – significant but not critical flaws – would be covered by the sinking fund pre-payment. However, if there were so many defects that they exceeded the initial payment by, say, 10 percent, the developer would be given the chance to make good or face de-registration and other relevant charges.
Finally, with a level of transparency and certainty returned to the picture, we could reinstate Home Warranty Insurance for high-rise developments. And with the sinking fun either used to fix problems or topped up for a few years to come, there would be no nasty levies surprises for already squeezed home owners.
And yes, I know the poor old home owner would be paying for defects that shouldn’t be there in the first place. But hey, we know they are there and we know the frustrations and cost of getting the builders and developers to accept that, and we know that being right is no guarantee of success in the spider’s web of strata legislation and building law.
The benefits of a clear and simple process that puts community and the consumer confidence first far outweighs the pain of any small extra slug on the unit price. – 14/10/2012
Tragedy waiting to happen
At the risk of seeming opportunistic, I can’t contain my fury over the events in Bankstown on Thursday when a young student nurse jumped to her death and her friend was seriously injured as they both tried to escape a fire on the fifth floor of a unit block.
Setting aside the typical knee-jerk, blame the victim, racist response – it was a fire, they were Asian therefore it was possibly a methamphetamine lab explosion (an allegation utterly refuted by senior fire officers) – this was an abominable event that was as inevitable as it was tragic.
How anyone can be allowed to build a multiple dwelling that is by any definition a fire trap beggars belief … by anyone except those of us who have lived in strata for the past decade. Self-certification was a joke played on the strata residents of NSW by our politicians and their fat cat friends in the property development game. Now we have to ask if private certification is any better.
Where were the checks? The building became a fire trap because there was a roof added that the certifier say he would never have approved. Fair enough. But does nobody go around and check that the builders and developers have done what they said they would do?
Actually, I can answer that. Certifiers are often advised NOT to set foot in a building when they sign off on its construction. Instead, many sit in their offices and collate the various certificates provided by plumbers, electricians and builders saying they did the work to standard. The certifiers tick all the boxes and sign off on the paperwork as they are legally entitled to do. That way if there’s a problem, it’s down to the person who signed the certificate that they were given and not the certifier. Some will not even park outside the building in case someone assumes they have physically inspected the work and they then become liable for any mistakes or deliberate misinformation by the sub-contractors.
I’m sure some inspectors would rather do their job properly than entrust the safety of the citizenry to subbies, tradies and fly-by-night developers. Many, however, prefer to protect themselves from possible litigation.
But not all. Our good friend Chris Mo’ane was recently called by an incredulous colleague to an apartment block where the developer had all the requisite fire hydrants and sprinkler systems installed – the only thing missing was the water supply. The certificates had all been signed off as compliant. The developers and sub-contractors who tried to sneak that one past the inspectors should be on their way to jail by now – but they won’t be.
I don’t know if the owners of this building had lodged a defects claim against the developer but it’s a new building and they would seem to have every right to have done so. Fire alarms that went off so frequently that both residents and (you might reasonably assume) firies stopped taking them seriously would seem to be a pretty basic flaw in its construction. The apparently unapproved roof might actually not have seemed to be a problem to owners – they’re not, after all, qualified to know.
There were no sprinklers that would have doused the fire in seconds. The building code apparently says you don’t need them in a building less than 25 metres high. This particular death trap, coincidentally, just snuck under the height limit – but as we can see all too vividly, you don’t even have to be 25 metres off the ground for a drop to be fatal. Whoever set the standard for non-sprinklers at that height should be made to jump off the top of a 25 metre building and see how that pans out for them.
But I’d like reserve my final words of contempt for the developers’ lobby groups Urban Taskforce and Urban Development Institute who were quoted this morning mumbling platitudes about fire safety checks and badly designed buildings. Well, there had been fire checks and there had been orders issued and the council approved the design and the certifier signed off on the construction. And we can see how effective all that paper shuffling was.
But hang on, weren’t these lobby groups the same people who erupted in cheers and crowed with smug delight when Fair Trading Minister Anthony Roberts said the defects litigation gravy train for strata lawyers was about to hit the buffers? Aren’t they the same people constantly whingeing about not being able to make enough profit because there are too many rules, regulations and restrictions?
It’s time for the developers and all their cronies to shut the f**k up and put their own houses in order. You know your industry better than anyone – weed out the cowboys, make apartments safe and attractive places to live (rather than cutting any corner you encounter) and people will flock to buy your product.
For those poor girls in that Bankstown apartment, there were way too few rules, regulations and, most critically, enforcement. In the past year we have seen even greater curbs on the ability of apartment owners to chase developers who have dudded them with dodgy buildings.
If the death of a student nurse provokes a proportionate response to the fatal assault on a teenage boy in a Kings Cross street a few weeks ago, the State Government will be all over this issue and the Premier’s printing machine will be turning out draconian new laws like confetti.
But that won’t happen because anything that cuts into developers’ profits is a no-no in this state. Which is why shitty, shoddy building will continue to go up and the Government of the day will continue to punish the victims.
How so? When the worst developers have moved on to their next slum of the future, and the least diligent certifiers keep a suburb between them and the buildings they are approving, and the lawyers have been told to keep out of it, there is only one group that is legally obliged to clean up the mess, regardless of who made it and regardless of how much it costs – and that’s the apartment owners.
Yes, the buck stops with the poor saps who believed all the snake-oil promises and thought, naively, that there were rules and regulations that would protect them. That’s what passes for Fair Trading in this state. – 7/9/2012
<big>You and Me , not us and them</big>
There’s a simple idea in one of the email answers to a reader’s question that really struck home to me the other day. It’s all about community and communication and how the lack of the latter can seriously undermine the former.
We are as guilty here on Flat Chat as anyone is of reaching for the rule book – or more specifically, the strata Act – when a reader writes and tells us of a neighbour’s transgression (or complaint that’s been made against them).
Send them a Notice To Comply, is the most common advice for the simple reason that an NTC is often the first time a complaint has been formalised and there is a threat of very real financial retribution if the by-law breaching culprit doesn’t toe the line.
But then you have to factor in the ‘Them and Us’ attitude that we Aussies so often adopt. If we really do have a rebellious spirit (and I wonder if that really is as true as we’d like to think) it certainly comes out in strata conflicts.
So many postings sent to us here contain phrases like “the Strata” said this and “the Strata” did that. All of which leaves us thinking – who do you mean by ‘the strata’? Is it the Strata Manager, the building manager, the executive committee or the Owners Corporation? Does the poster even know themselves.
So it’s no wonder that the ‘them and us’ view prevails, despite the fact that it’s really “us and us”. The governing body of any strata – even more powerful than the Executive Committee – is the Owners Corporation. How do you join the Owners Corp? If you own a strata property you are already in it, whether you want to be or not.
So when you get a letter from your Executive Committee it’s from the representatives of YOUR organization. You had a vote on who would be in it and they are upholding your by-laws that you have agreed to abide by.
If you don’t like the EC or the way they administer the by-laws, or even the by-laws they administer, you can change them (provided enough people agree with you). If you can’t get enough people to agree with you, then maybe you are the one who’s out of step.
But getting back to the question of by-law breaches and the way they are handled, how do you prevent the “them and us” attitude from kicking in. Struggler, one of our StrataGurus, has an effective solution.
“I have found great results by personalizing problems in our complex. Rather than the notes that point out that a resident breaking a by law with their actions, notes which are either ignored or found scrunched up and thrown on the ground … I left a note for our serial offenders.
“This time I said ‘your neighbours would really appreciate it if…’ . No quoting by laws, no mention of notice to comply. No owners corporation or executive committee.
“I just pointed out that it was actually their neighbours, the people on the other side of the wall and across from you. The people you see everyday and who see you who are really annoyed by your actions. And guess what? The serial offenders pulled their head in and stopped.”
It seems as soon as it becomes ‘you and me’ rather than ‘us and them’ everybody starts to behave just a little bit better. – 25/8/2012
Our weird and wonderful world
It’s been a busy week on the Forum with everything from tenants being harassed by owners to executive committees blithely hiring unlicensed builders and claiming they have ‘immunity’ if it all goes pear-shaped.
Somebody wants to know if they have to put up with the noise from a commercial air-con unit on their roof (no, is the answer to that) while another asks if a member of the EC can give himself written permission to park in visitor parking (ditto).
A tenant who’s thinking of becoming an owner wants to know if her pet dog’s perfect behavioural record will make any difference if she buys into a building with an unclear policy on pets (probably not) while another asks if there’s any way they can avoid the mediation session on their complaint at Fair Trading and go straight to adjudication (no, again).
Actually, that’s an interesting one because, as was pointed out by an alert Flatchatter, while mediation is a compulsory step in a complaint procedure at Fair Trading, attendance at the mediation is not mandatory.
One reader wants to know if they can trade off postdated permission that was given to their neighbor to vault the ceiling of one half of their duplex, in exchange for exclusive use of the lawn in front of their window (yes, probably, if maximum diplomacy is employed).
I mention all this because we are approaching the 400th Flat Chat column in the Domain and I’m still getting questions from all sorts of people about all sorts of things that, unbelievably, I’ve never come across before.
But this is how it’s always been in strata in Sydney. I recently stumbled upon a story from the 70s about an apartment dwelling lady who went to court to defend her right to sunbathe topless. The judge said … no, actually I’ll keep that story for next week when I have room to tell it properly.
Questions and answers are pouring in like never before. The only problem is that the list of the most recent postings (on the right) moves down so quickly that questions sometimes drop off the end before casual readers get a chance to read them.
What can I say? At the risk of sounding like I’m trying to drum up hits and visits, you have to come back regularly, these days – otherwise you don’t know what weird and wonderful things you are missing. August 10, 2012
Flat Chat on TV – LIVE!
I just did my first ever live TV interview the other day. Having spent a lot of time behind the TV camera and plenty of segments of live radio, it should have been a breeze. In fact, I was as nervous as a kitten.
The item on the ABCs Midday report was on a new survey by a property sales website that said 64 percent of renters were planning to rent somewhere in the next year. And who was it that was being surveyed, anyway?
Was it totally random or was it people who had come on to their website to look for … um … a new property to rent or buy? You’d think it would slightly skew the figures, if that was how they did their survey.
OK, I thought, does that mean these renters are planning to move or just planning to keep renting? And what about the other 36 percent who didn’t appear to have any plans at all.
Of course, you can read what you want in statistics and the one that really interested me was that 29 percent of renters had informal tenancy relationships. Not good for either party, I’d have thought; too many grey areas and missing bond possibilities for my liking.
Anyway I got the call and being a shameless self-publicist, toddled along to the ABC studios, was parked on the roof (so we could get a nice backdrop of high-rises) and counted down through stories about who was going to carry the flag at the Olympics opening ceremony and gun control in the USA.
Needless to say, when I did get on air I did stumble, specifically when a static buzz drowned out a question. Apart from that, it was fine (I hope) and the next thing I knew I was in my car and headed for home – all done within the space of an hour. I wasn’t so much an overnight sensation as an over-lunch surprise.
If you want to see my live TV debut, it’s here. Next, Flat Chat … The Musical! – July 27, 2012
Distilling the spirit of strata reform
As Fair Trading operatives sift through the myriad options and opinions culled from their online forum of strata law reforms earlier this year – many of them entirely valid but completely contradictory – there are whispers that certain strands of thinking are starting to firm up.
At a very basic level, education of residents and executive committee members seems likely to be high on the agenda although how that is delivered and how they can encourage strata dwellers to access it is another matter.
As we see in this website’s forum on almost a daily basis, there are those who know what strata law and their own by-laws say, there are those who assume the laws and by-laws must say this or that (often based on something they once heard somewhere … another building … another state, even) and there are those who don’t care what anybody says, they are going to live as if they were in a free-standing home on a quarter-acre block.
When it comes to educating strata owners, analogies involving horses and water seem to abound, but one area where there may be an element of compulsion is in the training offered to office-bearers and, specifically, treasurers in large apartment blocks.
These 100-unit plus schemes have, almost by definition, budgets in excess of $1 million a year and it’s not a great idea to have that amount of money managed by individuals who think a spreadsheet is something you use to stop ceiling paint getting on the furniture. One possibility floating around is to insist that task be delegated to the strata manager or accountant – at additional expense, of course – until such times until such times as an EC member is trained up to take over.
However, there is a fear that if you insist on training for office-bearers – or, especially, all EC members – the talent pool of volunteers prepared to devote hundreds of hours of their time to running their buildings would evaporate. It’s a truism that the kind of people you want on your EC are too busy being successful at whatever it is they do to give up precious free time for a task that is, almost literally, thankless.
It’s no accident, then, that many executive committees are dominated by retirees. It’s a great way to employ years of experience but it does tend to skew the collective thinking in certain directions, especially when inevitably dwindling income is confronted by inexorably rising costs.
OK, how about if you pay them a modest amount for their time? Three questions immediately spring to mind. Could you pay them enough for being the focus of a lot of negativity when things go wrong (which things inevitably do)? Will you attract people who are only in it for the money? Would the fact that EC members were paid increase hostility towards them from owners and tenants who aren’t happy with their decisions (which brings us back to question 1)?
Other ideas that I’ve heard are being kicked around the corridors of Fair Trading, some or all of which may never see the light of day, include:
- Awarding costs in CTTT cases, to deter both vexatious litigants and delaying tactics by by-law breakers.
- Issuing ‘guidelines’ rather than laws, in the same way that the “who’s responsible for what” memorandum needs to be adopted as a by-law for it to take legal effect but, significantly, is the document to which CTTT adjudicators will refer in cases brought before them.
- Finding a simpler and fairer way to deal with building defect claims.
- Curbing proxy harvesting without disenfranchising non-resident owners.
- Looking at the whole ‘duty of care’ issue – should Owners Corporations be obliged to address complaints about breaches of by-laws?
- Putting more emphasis on mediation rather than confrontation.
As I said, these are just rumours and hints but one thing I know for sure is that the results of the on-line survey, as well as the recent UNSW paper on strata governance, are being distilled into a discussion document which, within the next couple of months, will present some concrete proposals for us all to get our teeth into.
But every time I think about these issues, either another “brilliant” idea or another insoluble conundrum occurs to me. The poor buggers who are actually having to come up with real answers to these complex and considerable questions must have permanently boggled minds. – 26/7/2012
Stand alone … on your own
Forgive me for sounding like a scratched record but I have to do something to counter the “living in strata must be awful” brigade. As I said just the other week on radio, living in a stand-alone house means you do exactly that when you have trouble with your neighbours – you stand alone.
And please don’t tell me you don’t get any trouble from neighbours in the burbs – it just won’t wash. When, after three days and nights of shouting, singing and loud music from the garden next door, a friend of mine in the inner west dared to complain about his neighbour’s non-stop Christmas party, the male guests at the party physically attacked the front of his house and it took six cops to restrain the father of the family.
The same violent drunk then had the temerity to apply for a restraining order against my friend who had to take a day off work to sit in court in case he had to answer the charges – and naturally party-boy next door didn’t turn up to plead a case that would never have flown anyway.
Why would that have been any better if they’d been in strata? Because there would be a set of rules in place and a whole bunch of people ready to tell Party Boy that the first 12 hours of celebration might be covered by the spirit of Christmas but after that you are just taking the P.
Sure, the close proximity of more people makes it more likely that someone might do something that irritates you (or vice versa) but there’s also safety in numbers and a clear set of rules that you and the irritant can consult to see who’s right and who’s wrong.
I raise this issue (again) because I heard another doozy of a problem from a friend who lives in a very nice area of the Eastern Suburbs.
One neighbor has built an extension on to his house which has created a convenient rooftop sundeck for his tenants. The deck also abuts directly onto a neighbouring bedroom and when said tenants were spotted staring in the window, the offended neighbor told them, in strong Anglo-Saxon language, that their prying eyes were not appreciated. Typically, he found himself on the wrong end of an AVO for verbal abuse.
The home owner, by the way, did have approval for an extension but nothing like the height and size he eventually built. Now neighbours have learned that he is planning to build upwards, casually removing the highly treasured harbor views of at least four people across the road. They know council won’t approve the plans but fear that, based on past experience, he’ll take whatever approval he can get then build what he wants anyway.
Of course, they can always ask their residents’ committee to step in … oh … hang on, this is a street of free-standing homes. There is no residents’ committee – for that they would need to be living in strata.
First posted 8/7/2012
The cost of providing free advice
Free advice is a wonderful thing – at least it is when you want it – but the reality is that nothing really ever comes without a cost. Even the ABC with all its fantastic TV shows and radio stations is paid for, albeit by our taxes, and so-called free-to-air television and radio costs a fortune, all of which is provided by advertising revenue. Even the paid-for channels like Foxtel have ads (talk about a double whammy!)
Somewhere in the middle of free and paid-for is sponsorship – where companies show their support for everything from a football team to a media outlet (or maybe just a desire to get the community’s attention) – by providing the money to help keep it going. That’s where this website sits.
About 18 months ago I was faced with a difficult choice. I could only answer two readers’ questions a week in my column in the Sydney Morning Herald but as the column became more popular, the questions started coming in thick and fast.
For a while I answered them individually – then I realized that was taking up way too much of my time and distracting me from the stuff I need to do to earn a living. As a freelance writer, time really is money and any not spent on paying gigs goes into the debit column of the ledger. As a journalist, scriptwriter and author I have plenty of other ways of expressing myself without needing a ‘blog’ on which to scratch my writing itch.
So I had to choose either to drop the website (rather than let it die a slow death by neglect) or take sponsorship and, at the same time, try to make it a more professional operation. Obviously, I chose the latter or you wouldn’t be reading this right now.
So here we are with the website improved as far as I can get it and with a raft of new sponsors – and a couple of old friends – so that all of you strata dwellers can still have access to free advice as well as eight years of archive material generated by the Flat Chat column and its readers.
That explains the recent increase in “ads” and I’d like to welcoming our new sponsors – Integrated Building Consultants, Makinson & D’Apice strata lawyers and CI Services building managers, and to thank our existing supporters, main sponsors Strata Choice strata management, Lannock strata finance and StrataRes online strata management, for sticking by us.
None of these companies would be sponsors unless I held them in the highest regard but don’t expect any gushing editorials about how fabulous they are. They all have a listing on our sponsors’ page, some have their own pages on the website and they all have links to their individual websites so they can speak for themselves.
However, they wouldn’t be here if I didn’t like and trust them – you might notice the absence, for instance, of dodgy developers and shonky short-term rental firms from the sponsors roster – and I look forward to reading their expert input into the Forum.
If you do require professional advice, all of these firms are accessible by email and they will all give you an honest appraisal of what they can do for you and how much it will cost to help you solve problems or, even better, avoid them.
Yes, sooner or later we all have to pay. Free advice is all very well but when push comes to shove, especially in strata, you want professionals at your side, giving you the best support that money can buy.
The first-time home owners honey-trap
This opinion piece first appeared in the SMH on Wednesday, June 13.
The NSW government has retooled its stimulus for first home buyers, offering them $15,000 towards new homes plus no stamp duty for buyers of new homes costing less than $650,000.
The new regime could be seen as a welcome bonus for the property-development industry, but some observers may also see it as a honey-trap for the unwary.
If you were a cynic, you might conclude that the home buyers’ package is designed to attract the least-savvy members of the community to the most problematic and unregulated sector of property development.
It is reasonable to assume that first-time home owners – who mostly choose apartments – are likely to have little or no idea what they are getting themselves into when they buy into strata. But they will soon learn that Australia is still struggling with the concept of shared responsibility in high-rises and townhouses, so much so that the NSW government is reviewing strata laws.
That ”guesstimated” $35,000 in grants and waived stamp duty for a $550,000 home may seem like a bargain – until you stack it up against the steady erosion of consumer rights for strata owners.
The big issue in new-apartment land is defects – and the home owners’ reasonable desire to get what they paid for.
Developers’ lobby groups would have you believe that defects would not be an issue were it not for crane-chasing lawyers geeing up apartment owners, who would otherwise be happy with their purchase.
The Fair Trading Minister, Anthony Roberts, said as much last month, when he announced that the “banquet is over” for strata lawyers in NSW. This sop to the developer lobby skates over one simple fact – defective buildings are a huge problem in this state.
In a recent University of NSW report on governance in the state’s strata developments, researchers found more than half of respondents reported problems in their developments – and of those, 80 per cent said they had problems with defects.
Even before the O’Farrell government came to power, this was a big issue, with the statutory requirement for home-warranty insurance having been removed for buildings more than three storeys high.
Since that big blow to consumer protection, there has been an increasing number of obstacles placed in the way of strata owners.
It was made harder for owners to agree to take legal action that cost more than a paltry sum, and then it was announced that claims had to be made within six months of a problem being discovered. And let’s not forget that these issues are confronting many people who, for the first time in their lives, are coping with home ownership and the shared rights and responsibilities of strata living.
The new Fair Trading Minister added another hoop for them to jump through this year when he decreed that non-structural defects had to be claimed within two years and structural defects within six.
Meanwhile, some (but by no means all) developers spend millions of dollars in court trying to avoid having to rectify defects in their buildings, while others (but by no means all of them) explore every possible legal means of avoiding their owners discovering and claiming the defects in the first place.
Sydney needs to build more apartments in a big hurry. In 20 years’ time, half the population of the city will need to be living in some sort of strata development, so the new payment scheme is a welcome boost for apartment builders.
But unless it also comes with new laws that provide easily understandable and viable protection for home owners, it’s a minefield for the uninformed and unwary. So first-time home owners should grab their $15,000 gift and aim to get their stamp-duty relief. But perhaps they should have an extra question for their solicitors when they look at the contracts for their new home; how much time and money does this developer spend fighting its customers in court?
Otherwise, their money – and the government’s, which is, of course, made up of your taxes and mine – is simply going to buy a very expensive pig in a poke. And if they’ve bought it from one of the less reputable and more litigious operators, no amount of grants and stamp-duty relief will compensate for the heartache and misery that could lie ahead of them.
Read Herald readers’ reaction to the piece HERE.
600 ways to improve strata
Don’t get excited, OK? The state government has released the findings of an online ‘community consultation’ about the state of strata living and they have discovered that “noise, parking and anti-social behaviour drive neighbours nuts”.
Now, we all knew that, but the point of this report is that it is a step towards legislation being written and enacted. By the way, this is different from the UNSW report into how effectively strata is managed that came out on May 21st (there’s a summaryof that HERE and the full report HERE).
Back to the report on submissions to Fair Trading’s online forum, what’s in it? “From smoking in common spaces to the operation of executive committees, the overwhelming response from the community tells us there’s significant need for reform,” Fair Trading Minister Anthony Roberts said, explaining that they were amongst the most prominent complaints addressed in a community consultation by public policy think tank Global Access Partners released last Saturday (May 12th).
“The forum received 19,138 visits from 13,558 individual visitors; 1,230 individual comments were received and close to 600 suggestions for procedural change or law reform were submitted,” says the minister. “Submissions expressed concern about the facilities for disabled people and the challenges of short term rentals right through to the use of pianos and leaf-blowers.”
And what that should tell you is that you shouldn’t expect anything to happen overnight. But something will happen – it’s just hard to divine what.
This is not a criticism – it’s great that we finally have a Fair Trading Minister who gives a damn about what strata owners and residents think. But some of those 600 suggestions are completely contradictory and even the most common sense ideas have a good chance of getting tangled up in the mutually exclusive areas of property owners’ rights and community needs (not to mention the steady whine from developers complaining that we spend too much on lawyers, trying to get what we paid for).
But there’s a lot of interesting stuff in it. Yours truly even had a little section pretty much to myself about how strata plans should have a mission statement, outlining the major issues for residents, so everyone knows what they are getting into (page 53, if you must know). You’ll find the document HERE.
A cynic might say there are so many contradictory views in this paper that nothing might ever come of it. Certainly there will be a view of, not so much “if it ain’t broke don’t fix it” (because it obviously is broken) but “if we leave it alone it will keep chugging along”. Supporting that view is the fact that the strata community has become incredibly adaptable, inventive and resourceful.
There may even be an argument for having separate, very restrictive laws for new buildings – until they get up and running properly – and more relaxed and flexible rules for older, more established blocks. For instance, not having anyone who has done even a basic Strata Law training course on the EC of a new block should maybe be a trigger for the appointment of a Strata Manager (albeit one who has to work with the Executive Committee, rather than instead of it).
But there I go again coming up with new ideas when there are already too many to deal with as it is. The good news is, however, that the times are a-changing and it’s up to us owners and residents to make damned sure the changes are for the better and not the worse.
The city where apartments go for a song (and a few million Dong)
What a strange few weeks I’ve had – and apologies for not keeping this up to date in my absence.
Three weeks ago I was in Vietnam where Saigon (aka Ho Ch Minh City) has apartment blocks springing up all over the place. Apparently they cost an ‘astronomical’ $1000 per square metre – multiply that by 10 for a Sydney central apartment.
I met a guy there who rented a two bedroom serviced apartment overlooking the harbour in Vung Tau for $15 a night.
Meanwhile the air hostess on the flight back said she preferred Saigon to Hanoi because the old area of the capital has as many as 20 people living in one house.
I don’t know how accurate that was but you can sense that Vietnam, while still recovering from its troubled recent history is a country on the brink of a massive economic explosion.
They have their own oil and minerals and a massively motivated workforce. The French and Japanese have been pouring money into the country (or were, until the GFC) and even the Americans want to be friends.
However, even though it is still a Communist country, all the issues of inflation, cost of living and property prices are waiting for them when the boom does take off. But they are wonderful people and it’s a great country.
I had no sooner landed in Sydney that I was on a plane for the Top End on a trip that gave me a couple of days in Darwin.
What they have done with their Waterfront area in Sydney’s most Asian city is remarkable. A hotel, serviced apartments, shops and residential flats all wrap around a park, outdoor wave pool and conference centre. It seems to work and the price per square metre is only seven times what you’d pay in Saigon (although you’d be paying 20 times as much for a serviced apartment as in Vung Tau).
The sad thing is that I go to an exotic Asian country and then our spectacular Top End, and all I can do is look at apartments. I should get myself a hobby. (11/05/2012)
No, Minister, the problem isn’t the lawyers … it’s the law
The recent statement by NSW Minister for Fair Trading Anthony Roberts that he plans to curb the activities of strata lawyers over-enthusiastically pursuing defect claims against developers was like a baseball bat to the knees of apartment owners and strata profesionals. This is an entirely appropriate allusion considering at least one Sydney developer has used this method to dissuade unhappy apartment owners from exerting their legal rights.
Strata lawyers would have to “find another ambulance to chase” Mr Roberts told the Australian Financial Review last week, announcing that his department is formulating plans to restrict legal action by apartment owners in pursuit of defect rectification.
“The banquet is over,” said Mr Roberts. “I make no apology for saying that I’d rather see money put into quality construction and rectifying faults than putting money into the pockets of lawyers.” (Read the full article here)
You can see his point but you can also forgive apartment owners for thinking they are about to be sold out to commercial interests … yet again.
“The State government is looking to [dilute] legislation that already offers insufficient consumer protection against shoddy workmanship,” says a press release from the Owners Corporation Network – the peak organisation of apartment owners and their executive committees. “Perhaps this is naive, but wouldn’t a simpler solution be to [address] the appalling building standards that are causing untold misery for families across the state?”
It seems to the OCN, the strata managers of Strata Community Australia and many other professionals, that the new-ish Minister for all things strata related has swallowed whole the developers’ self-serving argument that the cost of defending legal actions over defects is the cause of the downturn in apartment building in NSW.
This would be surprising since Mr Roberst seems reasonably sensible and the developers’ claim is a bit of a stretch considering what else is happening in the world.
Wouldn’t the GFC have had an effect? What about the slowdown in China – a big market for Australian apartments? And hasn’t the tattered reputation of some developers and their dubious associations with members of the previous NSW Labor Government been a factor in their potential customers’ thinking?
In fact, when you look closely at the figures, the whole argument that developers are being driven interstate because legal actions are less punitive there may be entirely spurious. According to Australian Bureau of Statistics figures compiled by Strata Community Australia, in the past year strata home building in NSW dropped by five percent, less than half the national average. The only places where apartment building has increased are the states where the economies are strong and population is growing, like Queensland and West Australia.
Yet David Ghannoum, regional managing director of construction for Brookfield Multiplex, told the AFR that his company did not have this problem with legal issues in other states. So how then does he explain a 23% downturn in strata building approvals in Victoria, 32% reduction in both South Australia and Tasmania and a 31% fall in the Northern Territory all places where, he says, there are no over-zealous defect claims? Based on those figures you could just as easily argue that the vigorous pursuit of defect claims has propped up the market in NSW, limiting the drop to five percent. Not a likely scenario, but at least it’s logical.
“The underlying problem is the defect in the building, not the litigation,” Mark Lever, CEO of Strata Community Australia, told the AFR. Chris Mo’ane, managing director of Integrated Consultancy, a structural engineer and frequent court-appointed expert agreed: “Fundamentally it’s about the builders building in compliance with the Building Codes of Australia and the development consent … the problem is, they don’t.” Moa’ne added that, contrary to the “ambulance-chasing” jibe, most lawyers try to resolve the defect issues through mediation.
So what’s really going on here? Is the Minister really going to remove the last vestige of consumer protection from high-rise apartment owners?
Consider this, there is no requirement for building warranty insurance for apartment blocks over three storeys high. If developers refuse to rectify defects, legal action is the owners’ only option; they don’t even have the choice of doing nothing.
Just last year, the minister reduced the period in which non-structural defects could be claimed from seven to two years. That means in the first two years of a new building’s life, when owners are just getting used to each other, their committee and, for many, their first taste of strata living, they also have to identify dangerous balcony balustrades, leaking roofs and ruptured roof and bathroom seals. Best of luck with that, folks.
What about quality control? Professional surveyors are often advised not to set foot in new buildings when they sign off on their certification because to do so might make them liable for the defects they know are likely to eventually appear. Instead many only check that the paperwork of the builders and sub-contractors is in order. So much for consumer protection.
This steady erosion of home buyers’ rights is not the way to cure the so-called “developer drought”. In the seven years I have been writing about strata the main complaint from home buyers isn’t that they didn’t get enough luxury for their money, it’s that they didn’t get what they paid for.
No bunch of concerned amateurs – which is what most executive committees comprise – are going to give up three or four years of their lives to pursue a legal claim on a whim, facing the pitbull counsels of multinational developers in court and, when things go wrong, the vicious attacks of their neighbours at home.
Let’s hope when the minister says he wants the money wasted on legal fees to be spent on better buildings, he means he’s going to set up a truly independent assessment system whereby qualified surveyors are hired by the government to decide what the defects are and how much it should cost to fix them. Let the owners or developers then wheel out their lawyers if they dare.
But there is something else that’s blithely ignored in all this posturing. There is only one group of people who have an absolute legal obligation to maintain and repair strata buildings and to make good defects whenever they appear, regardless of who’s at fault. It’s not the developers, the builders or the sub-contractors who are legally obliged to fix defects; it’s the people who buy the apartments and townhouses from them. It says so right there in the Strata Act and it has been confirmed by precedent in the Supreme Court.
The strata owners’ choice isn’t whether or not to fix defects; it’s whether to pay the bills themselves – and they can run to millions of dollars – or try to get it from the people who built the mess in the first place and have profited from their shoddy practices.
Thankfully, some of the developers operating in NSW who haven’t fled interstate in search of an easier buck, realise the people will pay a little extra for quality and assurance – and they don’t expect a Rolls Royce when they are paying for a Toyota Corolla.
But at least if they bought a badly constructed car, owners could expect to have it fixed or replaced for free. If the Minister really wants lawyers to stop behaving like bounty hunters, he needs to find a way to prevent the worst developers from being cowboys. – April 14, 2012
More smoke and mirrors from the Health department
Back in February, I wrote to the NSW Health minister about the government’s new anti-smoking strategy which banned us from smoking outside our strata buildings’ entrances (which almost nobody does) but barely touched on people smoking on their balconies and their smoke drifting into other people’s homes (which way too many people do).
This is what I wrote:
The proposed plan limits smoking outside apartment block entrances but does not address the more serious issues such as people smoking outside their units on balconies and smoke going in to other apartments, except to say the law will: “Support the implementation of smoke-free multi-unit residential dwellings by strata organisations through the promotion of guidelines.” This seems a very weak response to a very serious and growing problem. Are balcony smokers – ie smokers on common property who have exclusive rights to its use – to be completely ignored. I will be writing a column about this this weekend so I would appreciate a response ASAP.
The initial response was typically non-committal so I had another swing at it
As you will see from issues raised on my website, this is a very real and serious problem, and one that that developing guidelines over five years is unlikely to fix.
What we are talking about is people smoking on common property (to which they have exclusive use) because they don’t want to smoke in their own homes. So there are legislative grey areas here.
However, this smoke often goes into other people’s homes, regardless of by-laws that are already in place. Also, people may buy an apartment in a building that seems to have by-laws about not allowing smoke to transfer from common property to private lots, only to find that the by-law is unenforceable and they have bought into a home that damages their health.
In view of the statements in NSW Tobacco Strategy 2012-2017 that “exposure to second-hand smoke involves adverse health effects including an increased risk of asthma and sudden infant death syndrome for children” and the NSW wants to “strengthen efforts to reduce exposure to second-hand smoke in workplaces, public places and other settings,” why has there been no clear indication given at the very least that this is a growing problem (if only by dint of the fact that more people are moving into apartment blocks) and that a specific solution may be required?
If I may make an observation, this sounds like another case where our politicians and policy makers still have a quarter-acre block mindset while the electorate is moving into apartments in great numbers and having to deal with real issues ignored by policy makers who either don’t know the problems they face or, even worse, don’t care.
I would appreciate a response from the minister to this question as soon as possible.
Well the response, from Dr Kerry Chant, Deputy Director-General, Population and Public Health and Chief Health Officer, arrived today … only six weeks later – so much for my plan to write a column on the issue that week. Basically it just repeats stuff we already know, directs us to a web forum in which we’ve already participated and, reading and re-reading it, I have to say I am none the wiser. Have a read yourself HERE and, if you can work it out, please let me know.
Do these people actually understand how strata works? If they don’t, are they asking the right questions of the right people? For instance it seems to suggest that Strata Managers are the ones who propose and implement by-law changes. And just to put this in perspective, in the weeks since I wrote to the minister, about 700 new cases of lung cancer will have be diagnosed in Australia.
What else could the ministry have done? How about issue an amendment to the law that said regular and significant intrusion of smoke from one strata home to another (with accompanying definitions of what that meant) was to be considered a health risk? It would still be up to individuals whether they wanted to pursue it, but at least this idea from the Department of the Bleeding Obvious would have defined the problem and moved the debate on from personal attacks between neighbours and all this whining about the so-called Nanny State we hear every time we try to nudge civilisation forward a little.
My view? If smoking in football stadiums is a problem, why aren’t the ‘fireflies’ who pollute other people’s homes because they don’t want to stink up their own? Only 17 percent of Australians smoke. Can’t we build special blocks for them … little toxic ghettos where they can choke each other to death and leave the rest of us alone?
And if you really want to stop people smoking, you pass a law saying nobody born after, say, January 1st, 1998, can ever legally buy or smoke cigarettes. It’ll take a while but while 15-year-olds might be able to pass themselves off as 18-year-olds now, it will be different in 10 years when the next generation of adolescent puffers have to pass for 25. And the beauty is that nobody who ever (legally) smoked is prevented from doing so.
Buying off the plan (15/3/12)
I had a couple of chats the other day about buying off the plan and eventually it came down to whether or not I would buy a new or as yet unbuilt apartment as an investment.
There was a time when I would have said “no way” – after all, it was our trials and tribulations after buying a new apartment off the plan from a very large Singapore-based developer that led to the whole existence of Flat Chat as a book then a newspaper column and then a website. (It’s an ill wind etc etc …)
But the property market has calmed down a bit, some apartment buyers are a lot more savvy (although plenty of first-timers and empty nesters don’t have a clue) meaning that there are quality developments out there for those who know what to look for as well as crap developments that smart investors can avoid.
So, assuming you would make sure searches of an established unit would reveal any problems, what are the main traps to avoid in a brand new or off-the-plan purchase.
Firstly, you want to go with a reputable developer. How can you tell if they are good guys or bad guys. Well, for a start you can go HERE, type the name of the company into the search box and then see how many and what kind of court cases they’ve been involved in. Everybody’s entitled to defend their legal rights but if a developer has a track record of being sued by owners for defect rectification – and a long history of fighting these claims tooth and nail through the courts, you are entitled to feel wary.
First-time developers also require some caution, especially family businesses where the plan is to build a small block with many if not most of the apartments owned by relatives, funded by sales of the other units to unsuspecting individuals. Run away!
Be careful of buildings that are aggressively marketted overseas. You could end up with the building being controlled by a mixture of ‘blind’ proxy votes from overseas investors and new arrivals who may not appreciate that, however much better their new apartment is compared to where they lived, they are entitled to reasonable standard and there are means by which to get them.
Affordability shouldn’t mean dirt-cheap construction that at best only just meets Australian Building Standards (which are pretty low for apartments anyway). But you shouldn’t expect top-of-the-line facilities and virtual soundproofing between apartments.
Noise is one of the major issues in apartments but many first-timers are happy to put up with a little bit of noise leak between units. The problems arise when all apartments are uniformly marketted as if they were luxury penthouses, expectations are built too high and frustrations and disappointment are great.
And beware of the low levies ‘honey trap’. Facilities and services cost money but there is no obligation on the developers to initially set a realistic amount for for the resort lifestyle they have sold you. Lifts, swimming pools, security, gyms, cleaners – they all cost money and you, the owners, are who pays for them. Your levies may be attractively low in the first year, but they can go through the roof when reality bites and it’s you whose paying the bill.
All that said, good apartments built by reputable and responsible developers do exist but you will probably end up paying a bit more for them. If you want a cheap apartment, you’ll pay in other ways such as time, energy and, probably, financially too. If your budget is limited, better to buy a smaller apartment in a good building than a bigger apartment in a bad one. That just adds up to a bigger share of trouble if it all goes pear-shaped.
Proxy farming fails democracy (2/3/2012)
A few weeks ago I wrote here that the most important thing that the government should change in its upcoming review of strata law would be to make enforcement of by-laws compulsory. Running a very close second would be to do something about proxy farming or harvesting as it’s often known. This is where someone like the chairman or secretary or even strata manager or building manager, collect enough votes from apathetic owners to give themselves an inordinate amount of influence over the running of their building or strata complex.
Allowing proxy votes to be accrued by one or two individuals in this way, in the name of ensuring democracy, often turns out to provide the exact opposite. It creates dictatorships and the best you can hope for in these circumstances is that the dictator is benign, rather than the kind of paranoid bully who makes a Third World despot look like a passive-aggressive Sunday School teacher.
And the problem isn’t that there are so many would-be Gadaffis or Castros lurking in the shadows waiting to exploit the system, it’s that the system, as it stands now, encourages and almost creates them. Even worse, it discourages debate, discussion and engagement with your strata community.
Let me explain how this happens – and I have seen it many, many times at close quarters. Firstly, the chairman or secretary of an Owners Corporation sends out a call for proxies in the build-up to the complex’s AGM. There is nothing sinister in this – in fact it is just good management. In large buildings, AGMs are expensive operations both financially and in terms of the amount of time and preparation required. To have one fall over because of a lack of a quorum (25 percent of the owners or, more precisely, their voting power) is a waste of time, energy and money.
Provided the Executive Committee and their office-bearers haven’t screwed up too badly in the previous year, plenty of owners will pass on their proxies, happy not to have to do too much thinking about the way their building is run. However, probably without either side of the equation intending this, they may also have handed their EC office-bearers a virtual carte blanche when it come to the AGM.
What happens next is very much dependent on the characters of the people holding the proxies. Bear in mind that they are probably giving up a lot of their time and brain space for free, so they may feel entitled to make the decisions they feel are in the best interests of the building, regardless of what others think. As one chairman said to me recently, “Whatever I decide, somebody doesn’t like it – so I may as well just do what I think is right.”
It’s at this point that the erosion of democracy potentially kicks in. Forget the control-freak power junkies for a moment – they exist but they are very much in the minority. There are two other commonly found and mostly inoffensive majority proxy holders in strata: the Benign Dictator and the Irresistible Force. It is when they are ensconced in the chair and armed with enough proxies to determine the outcome of any vote – and possibly change by-laws – that they become dangerous.
The Benign Dictator may welcome an open and free debate even when they know the outcome (because they have enough votes to decide it). But even their patience will have its limits and they may not be listening to the right people when it comes to the legalities of their decisions.
The Irresistible Force, operating on a principle of “father-(or mother)-knows-best” may tolerate some discussion up to a point but is likely to tire of the debate for the same reason – they already know the result. They are also most prone to an attitude of “this law is stupid therefore it can’t be right.” Strata law can be illogical and either too restrictive or too lax – common sense often doesn’t come into it.
When the Irresistible Force has a business background, especially, things can start to get really ugly. People who are used to dominating business meetings often don’t get the point of a discussion which is only going to lead to the same outcome – whatever they decide. So questions and points of dispute are increasingly met with rolling of the eyes and exaggerated shrugs and sighs, at best, and, at worst, downright disparagement or denial of an opportunity to speak.
To be fair, think of this from the point of view of the chairman or chairwoman who has been up late for weeks on end, trying to make sure the accounts, agenda and reports are right. Why does he or she have to sit through all this uninformed prattle when the decision has already been made and only requires the rubber stamp of the votes that they already hold?
However, this diminution of the power of the meeting generates a collective response to gradually withdraw from the process. Why even turn up at a meeting when they are going to be outvoted by people who either don’t live in the building or can’t drag themselves away from their TV for a couple of hours a year? Why would they even raise their hand to speak when they are likely to meet a fairly public antipathy, ranging from exasperation to utter contempt?
Want to get involved and change things a little? Why would anyone stand for the executive committee when they know the chair has already chosen the people they want to serve with them and can use his or her proxy votes to ensure their election? In the worst cases, approved YesPersons, SayNothings and NoShows dominate the EC, the Chair is firmly ensconced for another year and the anti-democratic cycle takes another downward twist. And each time that happens, proxy votes have even greater power and things go from bad to worse.
Next year, even fewer people are likely to attend a meeting that is supposed to be where all opinions can be heard but may have degenerated into a “Shut-up and Vote” show and tell.
And remember, none of this is likely to have owners rioting in the lift lobby. If the powers that be aren’t doing a terrible job, the worst that happens is a gradual disengagement from the process, people stop taking responsibility for their own building, and apathy – an ever-present feature of strata democracy – spreads like warm glue.
The irony of all this is that the ‘double-investors’ – the people who own and live in these buildings – are increasingly disenfranchised and the absentee owners whose only concern is their return on their investment hold inordinate sway over buildings they may never have set foot in since the day they bought it (if at all).
So what are the answers?
In Queensland owners are limited to holding one proxy or five percent of the number of lots, whichever is greater. This may encourage clustering of votes – those in the best position to lobby for votes, like the chair, treasurer and secretary, could gather 15 percent of the votes between them – but at least it limits the influence given to any one individual. The Queensland system is, however, a mess, grossly favouring management rights holders over individual owners and strata professionals. For instance, building managers can’t hold proxies but management rights owners can; that makes it very hard for residents to deal with bad management rights owners who are in the perfect position to arrange proxy pyramids of favoured owners who each bring 5 percent of the vote to the table.
This bias in favour of management rights holders is a hangover from the days when most Queensland strata developments were mostly for holiday lets and the White Shoe brigade ran the state, so we certainly don’t want the Queensland model in its entirety. Limiting proxies so selectively may be as anti-democratic as allowing free rein.
One good thing in the Queensland system, however, is that proxy votes aren’t permitted for election of the executive committee so at least individual owners can turn up at a meeting and try to win over their neighbours without the election already being in the bag for the incumbents.
Postal voting – where your proxy form has a yes or no option for each item on the agenda – seems more democratic but it undermines a major function of the AGM; discussion of the issues. How can the vote of someone who hasn’t heard arguments for and against a motion be as valuable as someone who has sat through a debate?
The long-term answer is to encourage involvement – get more people to the meetings and the proxy question becomes irrelevant. But that only happens when people are angry and/or worried.
Perhaps a financial incentive would do it. Factor in a 5 percent discount on levies for those who actually attend AGMs. Non-attendees would have to pay more, of course, but they are freeloading off other people’s time and energy anyway, so why not?
The postal vote might be encouraged but only if arguments for and against the items on the agenda are sent out with it.
And limits on the number of proxies could be accompanied by a way of letting people know who is available to represent their views when the obvious choices’ quotas have been filled.
Maybe the chair, whoever he or she may be, shouldn’t be allowed to hold proxies at all – they do have considerable influence over their EC colleagues and that should be enough. And people signing blind proxies over to “the chairman” may be in for a shock when the Benign Dictator is replaced by the Paranoid Control Freak.
Or perhaps we should do away with proxies altogether – there is provision in the law to reconvene a meeting a week later, if the original meeting is not quorate. OK, it’s an added expense but that is shared with the majority of owners who didn’t turn up so they are paying for their apathy.
I have seen proxies used ruthlessly for the good of buildings as well as to their great detriment. However, as the saying goes, power corrupts and absolute power corrupts absolutely. Strata owners should not be put in a position where the laziness and apathy of their neighbours gives them more power than they need, want or know how to handle.
Now I’ve been hung out to dry – 18/2/2012
Wow – did my “hung out to dry by neighbours article” get a response on line! At the last count about 70 Herald readers took the opportunity to hit the web and support or abuse me (never forget this is a ‘shoot the messenger’ country). Some supported the EC that I bagged, others hopped in on my side, agreeing they could have done more.
Some blamed the parents for not raising their kids right, others blame the couple for complaining in the first place. Many supported ECs, saying they are volunteers and don’t have the power to make people behave (they do, actually). Others said ECs have too much power and these guys should be grateful the EC doesn’t interfere with their lives more than they do (and that happens when they use these ‘non-existent’ powers excessively and selectively).
Many people said noise is part of strata living and children have a right to be noisy so suck it up. Others said you don’t have to tolerate excessive noise and blamed parents who couldn’t control their children in the house so they sent them outside to destroy the neighbours’ peace and quiet. [See the Herald column and all the comments HERE ]
Just to get back to the facts, briefly. My contention was that if a by-law has been breached (and more than one clearly had) the Executive Committee should be legally obliged to issue a Notice To Comply.
A Notice To Comply is a warning backed by a threat. Basically any notice to comply has the effect of telling people they have breached a by-law (and it has to state which by-law) and warning them that if they don’t stop, they will be taken to the Consumer, Trader and Tenancy Tribunal (CTTT) where fines of up to $550 may be imposed.
In reality, nine times out of ten a Notice To Comply gets the required result without it being taken any further. In the case I wrote about, the kids and their parents had broken at least two by-laws, one relating to kids playing on common property unsupervised, the other relating to the creation of noise on common property that was disturbing the ‘peaceful enjoyment’ of other lots.
If the EC had issued a notice to comply, it would have a) made the noisy neighbours realise that they had breached community standards, not just upset the people next door and b) made them think twice about victimising this couple, knowing there was community support. And that’s before you even get to the threat of two $550 fines.
Instead, the Executive Committee decided they didn’t care that two of their by-laws had been breached. How breaches of by-laws are suddenly “not our problem” is beyond me, although I know it goes on a lot.
The beauty of compulsory by-law enforcement is that it takes the personal issues right out of it. A complaint is made to the EC, they decide whether or not its valid and the Strata Manager sends a Notice To Comply. When the ratbag neighbours gets this, there’s no point in them harrassing the EC members because they can say they had no choice. It’s the law.
A lot of the criticisms of my column were valid, in that there were other circumstances that I didn’t (couldn’t) describe in which, say, Executive Committee inaction was a valid response. And yes there may have been two sides to this story but then it’s not the only story of its kind and it does represent a much bigger issue – selective enforcement of by-laws.
By the way, a couple of people said my “article” was ‘badly researched’ and ‘one sided’. To that, I say … well, duh! It wasn’t a news story, it was a comment and opinion. It wasn’t researched at all (apart from having written about strata for nearly seven years now.) I get 350 words and not a syllable more for my column in the Herald. In that space I have to precis a question (the original of this was about 800 words) and then answer and/or comment on it. Within a context as complex as strata, it ain’t easy – I probably spend twice as much time cutting back as I do writing.
But look, I’m happy for people to read what I write and take a pop, if they feel so moved. That’s what it’s all about (although I was tempted to reply to the guy who said he couldn’t ‘bare” to live next to me that he didn’t have to – smart casual attire is fine). Anyway, this column works a lot better if I take an honest position and deal with the responses when they come in rather than try to canvass every point of view and not have the room to express them. Also, contributions to the column are anonymous so it makes it very hard to track down the “other side”. But have a look at the original email HERE , scroll down to the one from ‘Mailbox’ and see what you think.
It’s great that both the Herald online and this website allow people to put other sides of the story. I haven’t heard from the family involved yet … but then maybe they don’t read the Herald … or they do but they didn’t recognise themselves … or they can’t read.
See you next week … its a doozy!
Roll up the red tape (11/2/12)
One of the stated aims of the current revision of strata law is to remove a lot of the red tape so that people can just get on with running their buildings. But what does that mean? Will it make it easier or harder to run a case through the CTTT (if it still exists in its current form, which seems increasingly unlikely). Will it be easier to nail down developers when they have thrown up defective buildings and want to walk away from million-dollar rectification bills? Unlikely. You can guarantee the same people who were pouring money into Labor pockets to ensure they had open slather on high rise developments will have found a way to sweeten their relations with the Coalition. The worst of them have operated on rat cunning, greed and creative amorality for the last decade or so – they’re not going to change just because the government has.
But maybe the red tape could be unentangled at source. Overly elaborate by-laws devised by over-zealous lawyers in conjunction with paranoid, nitpicking, confused control-freak executive committees do not make for good management … or happy communities, for that matter.
My own building, for instance, recently had an issue with an owner who installed giant mirrors on the side walls of their balconies. Even 15 stories up, they were pretty obvious. A polite note from the building manager about changing common property without permission and they were gone in two days. Result. It was an honest error by the owner and it was quickly resolved by the building manager and executive committee. So far, so good – small war, not many dead.
However, as a direct result a whole new by-law has been proposed to cover every possible visual intrusion into the look of the building (except for barbecues, of course, they’re fine, regardless of how ugly they look or how much stink or smoke they pour into other owners’ lots). Things that are excessively bulky or the wrong colour are to be verboten … although the definition of bulky (rather than, say, large) or what precise shade of which colour is acceptable is yet to be determined. Legal eagles, pull up your briefs and prepare for actions!
But this is not about my building where, in any case, common sense tends to prevail … eventually. No, this is about us all tangling ourselves in red tape when all we need are simple clear rules and a willingness to pursue them. My point is, if the by-laws ain’t broke, don’t fix them. If the rules of your building are working effectively, why add to them?
There’s a very good reason for not complicating by-laws. Every little change you make creates another possible loophole and, boy, do litigants love a loophole! If owners don’t know what common property is before they mess with it, tell them. You don’t need to draft a whole new by-law that won’t be read anyway every time someone in your building has to be told that their balcony, walls, windows or visitor parking doesn’t belong to them.
So these changes that are about to be devised by the State government really need to address the real problem: we strata dwellers are over-controlled and under-informed when it comes to our by-laws. Often the by-laws seem stupid and petty and so we don’t trust them … if we bother to read them in the first place.
So here’s my proposal: every strata plan should be given the period covered by two AGMs to audit and revise their by-laws and strip them back to essentials. The “model” by-laws suggested in the strata act and regulations cover most of the possibilities and should be the starting point. Anything specific to your buildings – like exclusive use by-laws – can be tacked on to them. When that’s done, every new owner and tenant has to sign a document that says they have read the by-laws and agrees to abide by them. Finally, make enforcement of bylaws mandatory (as it is in other states) rather than optional, dependent on the whims of the executive committee. That not only allows owners a degree of certainty about how their building will be run, it takes the heat off EC members if they are legally bound to raise complaints.
By the way, mandatory enforcement of by-laws doesn’t mean StrataCops patrolling unit blocks looking for breaches – it means that if a resident makes a legitimate complaint, the building manager, executive committee or strata manager has to take it seriously and can’t just fob it off as a dispute between two neighbours.
More on this, next time …
The Future is …Flexible (Jan. 2012)
Don’t hold your breath but it may be that the most profound changes to strata law are in the offing … or it could be the most elaborate deployment of smoke and mirrors in an area of government previously, at least, unsurpassed in its lack of transparency and history of obfuscation rather than enlightenment.
I’m speaking of course of the NSW government’s current canvassing of all and sundry in strata for their – that’s YOUR – views on what needs to be done to fix strata laws in this state.
If you go to the website HERE you can chip in and answer any or all of these four questions:
Q1. What are the main areas of the existing strata and community scheme laws you would like to see changed?
Q2. Can you see any future issues that need to be addressed in the legislation?
Q3. How could the management of strata and community schemes be improved?
Q4. Are there any changes needed to the way disputes in strata and community schemes are resolved?
You can read what other people are saying and the survey is allegedly going to be used to help with a revision of the strata laws planned for mid this year (2012). Whether or not they pay much attention to what we, the people who actually live in strata say, is another matter.
Cynical, moi? Anyone who has watched an episode of Yes, Minister or The Thick Of It will know that one of the basic principles of politics is that you don’t ask a question if you don’t know the answer. So let’s have a look at what our pollies are thinking the answer might be.
If you look at the survey website, there’s a message from Fair Trading Minister Anthony Roberts who says: “An improved, modern and more flexible framework for strata and community schemes is essential. Many people waste thousands of dollars in legal fees because the law is not simple and clear.”
No argument from me on that although I wonder what ‘simple’, ‘clear’ and ‘flexible’ mean to politicians and civil servants.
Also via the website, Greg Pearce, MP, briefly outlines his vision for the new laws: “The legislation should be flexible and accessible, balancing the needs of developers, owners and residents, but is it?”
There’s that F-word again. And when you hear about a need to “balance the needs of developers” you have to assume, based on the recent reduction of the window for defect rectification, that they aren’t going to be any worse off in this brave new ‘flexible and accessible’ world.
Fair’s fair, it mostly sounds good – but what does it all mean? Where are they going with this? Here’s a clue: a senior civil servant telling us they’d prefer fewer rules, not more, in strata.
“The problems that cause most disputes in strata and community schemes are fairly easy to identify,” say Michael Coutts-Trotter. “You start with the three Ps – pets, parking and parties. Floating timber floors, noise problems, decaying old buildings, rising levies, overcrowding, misuse of proxies, owners who do not pay on time and a lack of clarity over what is common property are just some of the other issues.”
Notice there is no mention of building defects and the difficulty many new home buyers have in simply getting what they paid for or being sneakily locked into long-term contracts with the developers subsidiaries or mates. A clear case of “don’t mention the war,” don’t you think? It seems that as long as we remember that we are the problem, maybe then the government can find a solution.
So what does Mr Coutts-Trotter, Director-General of the Department of Finance and Services, think the government should do about the issues they do acknowledge? The answer seems to be “less is more”.
“One area that needs more attention is the amount of red tape, particularly for smaller buildings and those that run their scheme without the services of a professional managing agent,” says Mr Coutts-Trotter. “Many thousands of people across NSW give up their time to sit on executive committees or become office bearers for their scheme.
“This is often a thankless task and some schemes have increasing difficulty in finding enough people willing to volunteer for these roles. The last thing they need are prescriptive rules and procedures to follow without any real reason or purpose.”
Amen to that, but can you give us an example of rules that have ‘no reason or purpose’? Are you saying that Executive Committees, many of whom already either don’t know about or don’t bother with rules and regulations, should have even fewer controls on their actions?
“Cutting red tape would not only save costs for schemes, it would also remove the source of many nitpicking, technical disputes that arise when someone has simply forgotten to dot the i’s and cross the t’s,” says the DG, who asks, “Can you think of any unnecessary areas of red tape in either the strata or community scheme laws which should be cut?”
Hmmm. What does he mean by technical? Proper agendas and notifications of meetings? Correct minutes and meetings procedures?
Or are we talking about the current requirement for EC meetings before Notices To Comply can be issued. Or having to traipse off to the CTTT every time somebody parks on Common Property? Or ending up strangled by the dreaded red stuff if you want to ensure your residential building isn’t turned into a holiday hotel by a handful of greedy bastards or prevent hot-bunking students being crammed into one flat?
Fair Trading Commissioner Rod Stowe has a few thoughts too: “Opening up the types of matters that can be mediated may prevent disputes from festering within schemes. Adopting the Community Justice Centre model of a free service may encourage more people to give mediation a go.”
Sounds good – and Rod has views on enforcing compliance too.
“There are close to 70 offences in the current laws, many of which attract maximum penalties of only $110 or $220,” he notes. “A shorter list of key offences would make better use of our limited resources. Innovative and practical remedies, other than court action and fines, may be worth exploring.”
Like … what? Name and shame? An hour in the stocks (rotting vegetable missiles optional)? But seriously, what most strata schemes want is quick action against troublesome offenders. However, anything that doesn’t have proper procedure gets perilously close to vigilante tactics.
Des Mooney, the General Manager, Land and Property Information (LPI), again mentions flexibility; it’s a great word for politicians and civil servants because it sounds desirable but, when it comes down to it, means little.
The pollies want to cut the number of laws that govern strata from a ridiculous 10. Hear, hear to that. But there is a simple solution – you simply say that Strata Law supersedes any other law when there is a conflict over a strata issue. Also, as a general legal principal, you accept that in strata the needs of the community over-ride the much-vaunted ‘rights’ of the individual.
And, in an effort to root out the cancerous corruption that can eat at the heart of these new-born communities, once half the lots have been sold a developer should have ZERO influence over the rest of a strata plan. No votes. Nada.
Combined, these changes would sweep up all the others and be modern, flexible, clear, balanced and all the other buzzwords that have infected this debate.
One other idea. Every strata plan in NSW is given a year (or two AGMs) to review their by-laws. After that, they have to have a “mission statement” that goes on the front of every rental or sales contract.
It could say something like: “This strata plan does not allow uninsulated flooring or pets. We also take action against excessive noise and illegal parking. We encourage short-term lets. All our other by-laws are enforced.”
Or it could say, “This Strata plan has a give-and-take attitude to noise, provided it is not excessive or persistent, and we welcome well-behaved pets. However, parking is strictly monitored and we take action against smokers who are a nuisance to other residents.”
See what I’m getting at? Everybody would know from day one what kind of building they were getting into and no one would have any excuses when they were pulled up for by-law breaches. These mission statements could, of course, be altered as the nature of the buildings evolved.
But what we really need is a quick, clear and INflexible process of enforcement so we can all get on with enjoying our strata living. Flexibility may be the springboard to a bright new strata future … but it sounds too close to floppy for my comfort.
50 years on, a change is coming to Strataland (Dec. 2011)
You may have noticed the report in the Sydney Morning Herald this week that the Fair Trading Minister Anthony Roberts is looking at a major revamp of strata laws. It’s an appropriate time for him to do this, it being the 50th anniversary of NSW having the first strata laws in the world.
And he has the opportunity to sweep away all the crappy compromises that have been made over the years and blame it all on his ALP predecessors (sometimes justifiably, sometimes less so). But before we clean the slate, it’s worth looking at how we got into our current mess.
Many years ago, just when high-rise development in this state was starting to take off, the state government had the brilliant idea of allowing self certification for strata buildings. After all, the majority of property developers are decent, honest and credible people who value their reputations.
Or so you would hope. Unfortunately, too many of them were cheats, frauds and chisellers and giving them the freedom to sign documents saying their own buildings were up to standard was like giving P-Platers a full licence if they promised to drive carefully and not hoon around with their mates at night.
What happened next was that the worst of them built instant slums, some of which were so bad that councils refused to issue occupancy certificates, and the insurers had to pick up the slack.
The insurance business went into meltdown and the government, having created this parlous situation, made it worse by decreeing that, if insurers weren’t going to insure them, buildings over three storeys high don’t have to have home warranty insurance.
This put the burden back on apartment owners, through their Owners Corporations, to sue the developers … and the builders … and the sub-contractors … if they still existed as legal entities. To their shock, some owners had the temerity to actually do this so the government brought in laws that made it almost impossible to even get comprehensive legal advice about whether or not you had a case.
Harsh? Follow this … under the new laws, you could not spend any more than a tiny amount of money getting legal advice without the approval of the majority of the owners. Fair rnough, you might think, but lawyers could easily charge more than your limit to put together a comprehensive assessment about whether or not you had a winnable case. So Executive Committees were having to go to owners to ask them to allow them to spend money on something they couldn’t quantify or fully explain without breaching the law and asking for proper legal advice.
To recap, in a worst case scenario, your building had no warranty insurance and you couldn’t find out if it was even worth suing the developer for defects. Meanwhile, those who did jump through all the appropriate hoops, suddenly found themselves truly up against it. Basically a bunch of home owners who just wanted what they paid for were battling teams of highly-paid lawyers hired by multinational corporations. Some of these companies seemed more interested in showing they would fight to the bitter end to avoid paying a cent to the owners they had cheated – pour encouragez les autres – than getting a reputation for being honest, decent and fair.
Meanwhile the more ruthless operators used every trick in the book to continue controlling their buildings long after they had sold every last apartment in them. The benefits of a ‘one-stop shop’ for building needs – building management, strata management, on-site management – provided by the people who knew the buildings best (i.e. the developers) or their cronies (sorry, “trusted service providers”) were promoted over the obvious value of having independent advisors working for the owners, who paid their bills, rather than the developers.
Proxy harvesting, where incumbent chairs of Executive Committees can hoover up the votes of absent or uninterested owners, helped set these fundamentally corrupt practices in stronger concrete than held up most of the buildings. Once a developer and an immovable EC chair get together, democracy and consumer rights disappear.
Meanwhile, executive committees and owners corporations are left to their own discretion to decide which by-laws they would enforce and to which they would turn a blind eye when it suited them.
People are buying into residential blocks and finding they are being taken over by short-term rentals and multi-occupancies. This is the strata equivalent of discovering a bikie gang has decided to move into your street … only much, much more common. Councils, state governments and bodies like the CTTT and Fair Trading are too busy playing pass-the-buck to do anything effective to stamp out this blight that looks like it’s based on need but really is nothing but greed.
Fifty years after pioneering strata law, NSW is way behind the times. Too many buildings are too often at war with their developers and far too often at war with themselves. Meanwhile developers claim they can’t build apartment blocks because even the bog-standard benchmarks of the Australian Building Standards make it too difficult.
This is pure unadulterated poppycock.
There are developers in this state who are building quality homes at reasonable prices without the flim-flammery that goes with promising Heaven and only delivering Hell on Earth for anyone who tries to get what they paid for.
If the apartment building industry is in decline – and at a time when the demand for homes has never been greater – it’s at least in part because potential purchasers don’t trust the product. When you go to buy a small, runabout car, the salesman doesn’t tell you it’s a Rolls Royce. Yet, when you go to buy an apartment, you the word you will hear more than any other is “luxury”.
In the seven tyers that I have been writing the Flat Chat column, one thing has become apparent. The majority of strata owners don’t want special treatment or some pie (truly) in the sky. They want what they paid for. They’re not angry becasue they can’t afford something better, they’re angry becasue they’ve been cheated.
So, Mr Minister, how about a star rating system based on what strata purchasers will actually get? One star could be a basic home built to Australian Building Standards and no more. You will be able to hear your neighbours occasionally (and they you), the facilities will not be resort standard (but then your levies will be lower) and everybody concerned will know this is an entry level home.
A three-star building would have better facilities, better sound and heat insulation and would be generally above average in every regard, including the price and the levies.
And the Five-Star home would be so well built and finished that you would barely know your neighbours were there. Facilities would be top-of-the-range (and so would prices and levies).
This, of course, is a pipe dream and will remain so as long as the good developers allow themselves to be bundled in with the bad.
So where can the Minister make strata law better for strata owners? He could start by having a look around.
In other states, defect claims are handled via government agencies who have the financial and legal clout to take on the multinational bullies and make them provide the homes they have been paid for.
In other states the number of proxy votes held by one person is limited.
In other states, Owners Corporations are obliged to enforce their by-laws; if they don’t like them, they can, of course, change them.
Right here there are problems with overcrowding, ageing buildings and ageing communities who can’t pay the rising costs of maintaining services from falling incomes. Worst of all is the sense that strata living is a necessary evil rather than a glorious opportunity to build communities.
There are many other improvements that could be imported from other states, or in the spirit that helped create the world’s first strata law 50 years ago, started from scratch.
All you have to do is put strata owners and residents (especially) first. Everything else will flow from that.
HOW I GOT (UN)INVITED TO MEET THE MINISTER (27/11/2011)
I took a very exciting phone call from someone in Fair Trading about six weeks ago. Basically they said “if you were to be invited to meet the Fair Trading minister, would you be interested?”
I suppose it’s a bit like being offered an Australia Day honour: they want to know you will accept it before they offer it so that you can’t turn round and reject it to score a political point. Not that I’ll ever be offered one.
Anyway, I said yes and they asked me what I’d most like to talk to the minister, Mr Roberts, about. Where do I begin? I am impressed that he is actually doing stuff in his portfolio but not so keen on some of the changes he’s made – like reducing the time for claiming non-structural defects to two years, for instance. If ever there was a invitation to dodgy developers to keep building crap apartment blocks, there it is, right there.
So I said I’d have a think and then a week or so later someone from Fair Trading called up and said I was clearly most interested in parking because that’s what that weekend’s column had been about. You have to realise that usually very, very few people in Fair Trading read the Flat Chat column and none of them read this website so if they do look at the paper, they think whatever I wrote about that week is my one and only area of concern.
I mean, why would they read the only regular column about their area of concern in a daily newspaper? They’re much too busy issuing Press releases about “”Bitumen Bandits” who cheat … oooh … dozens of tight-fisted farmers and home owners with their low grade driveways to be overly concerned about the way half the people in NSW will be living within the next 10 years.
So I said yes, parking is an issue but there are other things and I’ll get back to you. I then sent them an email and once you read it (below) you’ll probably understand why I haven’t heard a dicky-bird since.
But to be honest, I wouldn’t set too much store by being invited to meet the powers that be. How Government works is that you identify people who are vocal about your portfolio, give them a cup of coffee and a free gift (I have so many USB drives and pens from previous visits to lowlier functionaries, I could set up a stall at Paddy”s Market), chat about the ‘issues’ and send them on their way.
What happens next is approximately … nothing. Your visit is logged and at some point in the future if anybody asks what the Minister/Head of Department/PR person is doing about that very clever chap who writes Flat Chat, they can say they had him in for a full and frank discussion and the meeting was cordial and constructive and his views are under consideration (you’ll find them in the circular in-tray under the desk).
And if you don’t believe me, you’ve clearly never watched either Yes Minister or The Thick Of It.
Anyway, this is the gist of what I said I wanted to discuss with the Minister – and the reason, I suspect, that meeting will never happen.
My main concern with consumer protection – which covers a multitude of sins – is the basically unfair system whereby strata purchasers have no confidence that new properties are either going to be defect-free or that defects will be easy to rectify.
So far the only change has been to shorten the time in which defects can be claimed. That, and the fact that legal changes were pushed through with little consultation (or indeed, notice) has alarmed the strata community.
This suits developers who can still sell enough apartments to under-informed purchasers (first-timers and overseas investors) to make a profit – especially if they are shoddily built.
But the sophisticated and knowledgeable (and cashed-up) buyer is steering clear of new blocks because there is too much at risk. That is where your lack of confidence in the building sector comes from. Increase consumer confidence and you will increase sales and boost building – it’s as simple as that. Unfortunately those developers driving the debate are more concerned with easy and inflated profits – with the consequent diminishment of the quality of the housing stock.
There are very simple solutions available to the government – such as defect bonds for first-time developers and independent defect assessment. But it seem that – just as it was with the previous government – the developer’s profit margin is the only criterion that carries any weight when it comes to strata housing policies.
I would also like to add my concerns about the operation of the CTTT. The tightly held positions of Members who are reappointed to their positions as a matter of course every few years, has led to the creation of a bureaucratic monolith that does exactly the opposite of what it was established to do – provide a simple, low-cost avenue for the resolution of strata disputes.
The fact that serial by-law breakers can tie their executive committees in knots with years of breaches, appeals and counter-claims is a farce. The simple notion that by-laws should be observed has no currency in the CTTT, where Members often decide to grant themselves the right to favour one side or another based on their own personal prejudices. Alternatively, plaintiffs with a cast-iron case can find themselves dismissed because there may be one piece of paper missing.
It is widely accepted in the strata community that you should avoid taking disputes to the CTTT if you can humanly avoid it because the process is so painful and outcomes are so unpredictable. The tribunal has become largely self-serving and irrelevant to the realities of strata living and is more of a hindrance to building communities that it is a help.
A simple solution would be to make breaches of Notices To Comply effective immediately they have been registered with the CTTT and then let the by-law breakers be the ones who have to front up and explain why they shouldn’t have to pay them. You either let Executive Committees run their building or you don’t – and if you do, it shouldn’t be with one hand tied behind their back.
Also, owners corporations should be obliged to enforce their own by-laws – it’s too easy to say an issue is between two neighbours when in fact it is part of the good governance of the strata community. Other states manage this
I think that’s enough to be going on with and I look forward to discussing these issues with the Minister.
By the way, if you think this has ruined any chance I ever have of meeting the Minister,it won’t make a bit of difference. They don’t read my stuff and, anyway, I hear the Bitumen Bandits are on the move again. (JT- 27/11/11)
Your say on the CTTT (21/11/2011)
Last week’s column in Domain invites you to tell the powers that be what you think of the CTTT (you’ll find links to the submission process here) and while we have been critics in the past, we here at Flat Chat do feel we have a responsibility to offer some positive suggestions for improvements. To do that, however, you have to examine where its main weaknesses are.
So at the the risk of banging the same old drum again, here in no particular order and based on six years of emails to the Flat Chat column and postings on the website, are what we reckon the main issues are.
- Lack of consistency and clarity in decisions
- Too much red tape
- Inability to award costs against serial offenders
- Inability to award costs against serial nuisance complainers
As I said, it’s very easy to criticise but what are the solutions? Well, some are already there, if the CTTT wanted to use them.
For instance, the lack of consistency in decisions stems from different interpretations of the strata law and the by-laws of each building. But you have to ask, why are the being interpreted to begin with. If I by-law has been properly constituted and registered, then it should be observed or changed by the correct procedure at an AGM, not open to interpretation by someone who may have no idea what it’s like to live in an apartment.
One of the most contentious issues (and where interpretation is like shifting sand) is the question of flooring. Adjudicators, lawyers, residents and strata managers tie themselves in knots trying to get some clear guidelines when it could all be decided by a simple test of whether or not someone walking across their floor can be clearly heard in another apartment, especially when the walkers have removed the most effective insulation of them all … carpet and underlay. It’s not rocket science (although with acoustical testing demanded in some buildings, it’s getting that way).
But to get back top the point, the CTTT adjudicators should just stick to the by-laws as they are written. That said, there should be an easier mechanism to change by-laws that are clearly inappropriate for a building but where the requisite 75 percent vote can’t easily be achieved because of apathy, vested interests and block proxy voting (but that’s another story).
On point 2, too much red tape, the CTTT really lets itself down with regard to its own aims. This is what it says on the CTTT’s “About Us” web page.
The CTTT’s objectives, as set out in section 3 of the Consumer, Trader and Tenancy Tribunal Act 2001, are to ensure that:
- the CTTT is accessible
- its proceedings are efficient and effective
- proceedings are determined in an informal, expeditious and inexpensive manner
- decisions are fair and consistent.
I think any organisation where, as in one recent case, owners in a building who feared for their physical safety from violent neighbours had their case dismissed because they failed to produce one piece of paper at the beginning of their hearing, is neither efficient, effective, fair nor consistent. And far from being informal and inexpensive, the clear message was that they would have been better off hiring a strata lawyer to dot all the Is and cross all the Ts otherwise some pompous paper shuffler would dismiss them given the slightest excuse.
It would not be difficult to have CTTT advisors helping both complainants and defendants make sure all their paperwork in order, but they currently hide behind the excuse that they “can’t offer legal advice”. Telling someone to make sure they have the minutes of the meeting where they decided to issue a notice to comply isn’t legal advice – it’s common courtesy. Most people who take their cases to the CTTT – on both sides of the cases – have never been in this kind of situation before. Giving them friendly free advice on the process would do nothing to undermine the CTTT’s charter and would actually speed the process up.
On point 3, for some serial offenders, the $550 (maximum) fine for breaching a by-law is just a minor expense, offset by the pleasure of making the neighbours who won’t let them do exactly as they please jump through the CTTT hoops to have it imposed. It’s the EC who has to build the case, collect the evidence and spend time and money doing so. The by-law breaker doesn’t even have to turn up for the mediation, submit more than a letter (if that) for adjudication or even appear at the hearing they demanded to appeal the result. There has to be a serious escalation of costs to the by-law breaker. Let it be a free run to begin with, just to establish the facts of the case. But each time after that that they are legitimately ‘breached’, all reasonable costs should be awarded against them. In some parts of Sydney, it’s cheaper to cop a CTTT fine for parking on common property than it is to pay for a car parking space for the duration of the CTTT process. There has to be a deterrent to serial by-law breaches or there’s no point in having by-laws at all.
I have been challenged (HERE) on point 4, and this was my response.
On the question of the serial complainer, there are many ways to resolve an issue of bad management of a strata scheme. Firstly, all you have to do is convince the majority of your neighbours that this is the case. They, after all, can see at first hand how well or badly the scheme is being run. I know it’s never as simple as making a compelling argument but democracy doesn’t get any more grass roots than at strata level. If you can convince enough of your fellow owners that there is a systemic problem in your strata plan, they can vote to fix it at the AGM. If they don’t care then the problem clearly isn’t that bad in their eyes.
Secondly, there is appeal to a higher Court. These days in Strata, the first resort for appeals is the District Court where any obvious misinterpretations of the law can be heard and remedied. It’s more expensive than running another case through the CTTT – one reason serial complainers don’t go there.
The worst serial complainers use up huge amounts of their strata plans’ and the CTTT’s resources by running variations on cases they have already lost, which have to be treated as new cases.
Their search for ‘justice’ ties up EC volunteers time and energy not to mention the costs if a strata manager or lawyer is involved (and one or the other probably will be). When one tilt at the windmill fails, they come up with another variation and the process starts again – mediation, adjudication, hearing, appeal.
If the serial complainer happens to be a pensioner, the cost to them is negligible and if they literally have nothing better to do with their time it takes on all the hallmarks of a hobby.
What they are doing is perfectly legal but it’s clogging up a CTTT system that’s already struggling while undermining their own communities. They also encourage CTTT members to feel very superior to ordinary strata residents (not that they need much encouragement).
We have to balance the right to a fair result with all strata owners’ rights to choose how imperfect their world is. Yes, there is proxy stacking, a high level of ignorance of the law and, even worse, apathy that all mitigate against correcting flaws at the individual strata plan level.
But there has to be a cut-off point where the CTTT can say that one individual taking case after case against their strata plan has to stop, for everyone’s sake.
Meanwhile, check out the original story HERE to find out how to make your submissions
Getting the strata life we deserve (29/10/11)
There’s a bit of a debate going on HERE about whether a strata is just as dysfunctional when the rules are too strictly enforced as when they are too loosely interpreted.
Have look because there are valid views on both sides. But here’s my take on it, for what it’s worth:
Basically if by-laws are too restrictive, then we should make an effort to have them changed. However, by-laws are in place with the tacit approval of the majority of residents so they should be respected. (Yes, I know there are StrataFascists for whom “no-no notes” are a hobby – just as there are selfish morons who think everyone else should adjust to what they want.)
Railing against by-laws is a popular sport in these here parts but, like governments and newspapers, we only get what we deserve.
Seriously, there are very few mandatory by-laws in NSW and they are just common sense (like, you can’t ban guide dogs or children). So if you think your executive committee is too domineering, vote them out. If you think your by-laws are too oppressive, change them.
What we shouldn’t do, however, is encourage a culture of ignoring by-laws because we think they they are stupid or unreasonable. Sadly there are too many people already who think their ownership of their home entitles them to behave as if the entire block is their domain.
Being a member of an owner’s corporation (which all owners are whether they want to be or not) is the most profound and direct form of democracy we’ll ever get. At least once a year we get the opportunity to collectively change the rules, who enforces them and (by implication) how diligently they are enforced.
And if we are consistently out of kilter with the majority, we have the choice of either sucking it up or moving on to somewhere more in keeping with the lifestyle we wish to have. By the way, for all the house dwellers who think strata is too restrictive, try parking in your neighbour’s driveway and see how much freedom you have then.
Yes, there are some people in strata who over-react to minor infractions (just as there are loonies in houses who throw their slugs and snails over the fence into your garden) but strata is a system that has plenty of mechanisms to rectify dysfunction – all that’s required is the time and energy to fix the problem.
And if we can’t find the time or summon the energy, maybe the problem isn’t as bad as we thought.
Floored by timber salespeople (16/10/2011)
Just spent an interesting (and wearying) weekend looking at timber floors. The experience should have been no more frustrating than any other trek round stores and salespeople but this one had me tearing out what little’s left of my hair.
I got more nods and winks than in a Saigon bar whenever I mentions the owners corporation, by-laws and insulation. Most of the advice was how to “get round the stupid rules set by the boring old farts on your executive committee.”
“Just chuck a rug down for a few days if anyone complains” was a favourite. “This millimetre thick strip of vinyl is as effective as carpet,” was a real eyebrow raiser.
“They can’t stop you doing what you want …” was fairly common. And the phrase “peaceful enjoyment of your lot’ was accompanied by much rolling of eyes.
So when I explained that a) some of ‘they’, aka the ‘boring old farts’, were my friends and b) I wanted to comply with the by-laws, not find a way round them, I felt like I had walked into a church and asked where the atheists sat.
And it struck me, not for the first time, that it would be much better to deal with the flooring problem at source. Shouldn’t flooring sales people be primed to advise us on how to avoid problems in the first place rather than how to get round them when they inevitably arise.
Now, I have been harassing Fair Trading for years to do something about this issue. It hurts both parties in a flooring dispute – the people downstairs who have their peace and quiet ruined by the clatter of shoes on timber, and the clatterers who end up having to rip up (or carpet over) their nice new floorboards.
Last time Fair Trading revised the model by-laws, they brought in one about hard flooring which may well be effective … but only for those new strata schemes that adopt it. The rest of us have to live with what we’ve got until we can muster the support to change our current by-laws, if need be.
But it strikes me that the next time they issue their alarm calls about “bitumen bandits” who affect … what ? … a couple of dozen people every few months, Fair Trading should think about the hundreds of thousands of strata dwellers for whom this could easily become a source of misery, if it isn’t already.
So come on Fair Trading-ites, publish a pamphlet that tells customers what the likely issues are with timber flooring and what they need to do to avoid them. And force all flooring shops to hand it out to any customers at the point of sale (rather than being hidden in a dark corner of the Interweb).
Meanwhile, if Lumberjack Lou’s Timberama offers to rip up your carpet and lay cheap flooring, ask for a written guarantee that “she’ll be right” means they will replace the floor free of charge when your neighbours take you to the CTTT.
My business – if I decide to go ahead with this – will be going to the guy who understood the issues before I mentioned them, was prepared to talk to the EC and building manager if need be about the way the floors would be laid, and didn’t say people who complained about noise didn’t ‘get’ apartment living.
Happy Flatting .
Several Shades of Green – October 4th, 2011
My good friend Christine Byrne of GreenStrata has been on at me for ages to create a ‘green issues’ strand in the Flat Chat Forum, promising that she will answer all the questions that I can’t (which will be pretty much all of them).
There are heaps of things you can do to make your building greener and the added incentive that will cut through most executive committee inertia is the fact that saving the planet often saves you money.
For instance you can cut half the lighting in your garage, save half the electricity costs and still be as safe as you want to be. You can track down water leaks in your building; there’s too much expense attached to getting water into your building and then pumping it up to where it can be used for you to just let it trickle away. You don’t have to do anything too radical to make a difference – just sensible will pretty much do it.
Anyway, these issues and more can now be discussed on the Flat Chat Forum HERE. The rest is up to you.
I’ve just been having a go at the Strata Community Australia’s interactive Executive Committee members’ training website and I have to say it’s pretty good. I’m going to have a concerted effort to work my way through it and if you do want to be more on the ball in your committee, you can do the same by clicking HERE.
I also need to remind you of the SCA Lot Owners Forum which is on again this year as part of the Strata Community Australia (NSW) – formerly the Institute of Strata Title Management – Annual Convention
The Forum will be held in the Southee Pavilion at Sydney Showground, Olympic Park, Homebush Bay on Saturday, 8 October 2011 from 9.30am, cost is $44 (including GST) for the whole day.
This year the SCA (NSW) has expanded the Forum from a half to a full day event including morning tea, lunch and afternoon tea and entry to the trade exhibition so that $44 is a bargain (IHMO).
They also have an informal dinner on the Saturday night, themed Country Comes To The City, for an additional $106.00 (including GST) including dinner and drinks. It’s from 6.00pm – 11.00pm at Southee Pavilion Lawn.
You can download the whole programme – and there are some pretty interesting speakers and topics – by clicking right here
Happy Flatting .
At the recent Griffith University Conference on strata, there was a module on what could be done to better educate Executive Committee members about strata law. The idea of making it compulsory prior to membership of the EC was floated again (as was, somewhat more outrageously, making it a contingency of ownership) but I pointed out that many strata managers say it’s hard enough to get good people on committees as it is without adding the hurdle of a compulsory education course.
If you want a great insight into what a thankless task it can be for the people who do volunteer for their executive committees, read Struggler’s recent posting HERE.
If In Doubt, Shoot The Messenger – 25/8/11
I just made the huge mistake of reading some of the postings on the Herald’s website, relating to the parking story in last week’s column. Now I know better than most how heated things get when you discuss parking issues but, jeez, this was a fiery one.
Rob, from Brisbane, was only the first to call me several kinds of moron (because I was talking about NSW law and not Queensland’s), several posters missed the point completely (that there is no easy answer to parking problems in NSW strata) but quite a few, thankfully, calmly and logically, backed me up.
This is the problem with unfettered access to the internet – and one of the reasons it requires a little effort before you can post material on this website – angry people with extreme views get to hurl abuse anonymously and with no fear of any comeback. The problem is that in so doing, they are often spreading misinformation and bad advice. The same person who told the world I was ten types of idiot also advised people to tow illegally parked cars. Now, you might get away with that in the Sunshine State, but you’d be in big trouble if you tried it here in NSW.
He wasn’t alone. My favourite was the slightly pompous: “Unless the law has changed in the 19 years since I lived in Sydney, it’s perfectly legal to tow cars parked on private property …” Yes, well, guess what; in the past 19 years lot of laws have changed … and one of them is that you can’t tow cars parked illegally. But, as I said, calmer voices prevailed.
“In the scheme where I am still an owner (Sydney) someone parked in front of my garage blocking my car in. The police did not want to know, but advised not to illegally touch it or have it towed,” said Pinchey, from Sydney.
“My experience in a large apartment complex has been that all clamping and towing of cars is illegal in NSW (but legal in Qld). Even if the car is parked in your private space, you are powerless to have it towed,” says Henry, also from Sydney. “Naturally, the police don’t particularly care so all you can do is find a tow truck driver who is willing to move a car which you don’t have legal permission to move. I’ve also been advised by strata solicitors that even pasting sticky notices on car windows or windscreens is a form of vandalism and is also illegal. Bottom line, you’re powerless to do anything legal.”
And finally a handy reference from another reader. CLICK HERE for the amendment to the law the says you can’t clamp, tow, block or otherwise ‘immobilise’ an illegally parked car.
Now, I’ve got to get my head down to write my speech for a debate at the Griffith University strata conference this week. The topic is “Purchasers are insufficiently protected in the strata title unit sale process.” So far I have two words: “Well, d’uh!”
Happy Flatting – JimmyT
Quantity Posts from Quality Readers 9/8/11
Look, I know better than most that size isn’t everything but this is getting ridiculous. The number of daily visits to this website is now creeping up towards 900 – that’s nearly three times what it was just over a year ago.
For those of you who count “hits” (and you shouldn’t really) that’s 4.8 million since September last year. Why shouldn’t you count hits? Because that’s more an indication of how many groovy graphics there are when you go on the site. It’s not like ‘hits’ on YouTube (which IS an indication of how many people have viewed something). So forget the nearly 5 million hits – impressive though that sounds – the 800-plus visits per day is awesome (and scary) enough.
It’s quality not quantity that counts and in this case it’s the quality of you guys and your contributions that make all the difference. In fact, I have had to adjust the website to display twice as many “Recent Posts” because they are coming in so thick and fast that live topics have been disappearing off the bottom of the list.
Meanwhile, I am constantly amazed at how much I don’t know about strata – after about seven years of writing about it – and eternally grateful for all the strata owners and professionals who put me right.
For instance, I only discovered in the past few weeks that there are four different sets of “suggested” by-laws for residential buildings. There are the by-laws in the Act, which are optional unless a new complex doesn’t adopt any by-laws, in which case they operate by default. Then there are three sets of “model” by-laws in something called the Regulations which are also optional but you have to actively adopt for them to have any effect. But you can change them … or not. Or just ignore them and come up with your own set of rules.
Confused? It’s almost like the Fair Trading mandarins looked at the by-laws situation and said “you know, this isn’t nearly complicated enough … let’s mix things up a bit”. The worst aspect of this is that many owners don’t realise that the by-laws in the Act probably don’t apply to them and get very frustrated when they trip over the ones that DO affect them.
Depending on when your strata plan was formed, which by-laws were adopted at that time and how they have been amended since then, it’s safer to assume that your by-laws aren’t the same as either those in the Act or, indeed, the model ones in the Regulations.
The only way to find out which by-laws apply to you is to track down your strata plan’s by-laws and read them.
Finally, I apologise again for the shameless self-promotion of my book at the top of the page. It’s got nothing to do with strata but I’m told it’s selling like hotcakes, so that’s good.
August 1, 2011…
Interesting times at the Green Strata forum last weekend. I always get to these things where I have been invited to be a speaker, and immediately start wondering why I agreed to do it. I’ve just got over my nerves when I look up into the audience and realise half of them are wondering the same thing.
There was a good turnout, especially considering the atrocious weather, and there was a lot of very interesting stuff which made me think we should have a ‘Greening your strata’ forum here but then I realised all I would do is refer people to the guys who really know what they’re talking about at GreenStrata. So, if you’re interested in saving money AND the planet, go there now. (But come back soon).
Anyway, big congrats to Willoughby Council, the Owners Corporation Network and Christine Byrne of Green Strata for organising the seminar. About 160 people rocked up so they were very happy.
Despite last week’s column, I haven’t yet been summoned to Macquarie St to explain to the Premier the details of my masterplan to fix strata in NSW. I can only assume he’s clearing the decks so he can give it his full attention. (Feel free to roll around laughing.) Seriously, though, I wonder if anyone in Fair Trading or the CTTT reads either my column or this website. The forum should be compulsory reading for the nabobs and mandarins of those two organisations – because it’s you guys telling it like it is out here in Strataland.
Come to think of it, the last time I was invited to Parliament (they do a very nice lunch) the politician I gave some advice to ended up (allegedly) assaulting a developer. I didn’t tell him to do that … but, hey, I’m taking it as a win for us.
From July 14 …
What do we want in strata blocks? Lively buildings where our neighbours don’t make a sound, barbecues on our balconies but no one else’s, visitors’ parking that’s free from owners’ cars … except ours.
My good friend James Valentine from ABC 702 has penned what amounts to a wish list – maybe even a prayer for strata dwellers – pointing up in his inimitable style that many of the things we crave in strata living are mutually exclusive. You can read it HERE.
STRATA STRESS IN VICTORIA
This article appeared in the DOMAIN section of the MELBOURNE AGE in October 2008.
By Jimmy Thomson
Apartment buildings in Melbourne and across Victoria may be heading for financial meltdown as unit owners face substantial increases in strata fees at the same time that it’s become harder to force defaulters to pay up.
Fees – quarterly or monthly payments for each owners’ share of the management and upkeep of their building – are on the increase due to new regulations that require managers to have professional liability insurance while larger buildings have to establish maintenance funds to pay for future repairs.
But the new system also means claims for overdue payments have to go through the Victorian Civil and Administrative Tribunal (VCAT) and it can take months before arrears are recouped. Even then, owners corporations can’t claim the costs involved and many are now writing off debts rather than pursue them.
“With mortgage stress, increased fees and it being harder to recover debts, the fees system is in danger of hitting a spiral of decline,” says strata lawyer Stephen Goddard, chair of the Owners Corporation Network, the national body for apartment owners. “When other owners realise they are picking up the tab for the slow or non-payers, they could stop paying their bills too.”
The much-needed and wide-ranging new laws, which came into force in January this year, were a response to the fact that strata developments – apartments, townhouses and mixed commercial and residential communities – are getting bigger, more complicated and much more popular with Victorians.
But for those living in them – about a quarter of the state‘s residents – there is widespread confusion about exactly who is supposed to do what.
“Owners didn’t have much idea of their rights and obligations before the new laws came in,” says Rob Beck, General Manager of Owners Corporations Victoria, the umbrella organisation for the 80 percent of the state’s professional strata managers. “Now that they’ve got more responsibilities, they have even less idea.”
The new laws give owners’ management committees the right to make binding decisions but also dump a stack of new responsibilities in their laps, including financial management, record keeping, dealing with complaints and meeting procedures.
Managers (formerly body corporate managers) now have to be registered and must have professional indemnity insurance. And the new dispute procedure means owners corporations have to take part in in-house mediation if they want to pursue a complaint against a resident.
“Prescribed” buildings – blocks of more than 100 units or with an annual turnover of more than $200,000 – are compelled for the first time to create maintenance plans for future repairs, and any building that has such a plan now has to put money into a fund to pay for it.
There’s a lot for unit owners to get their heads around but leading strata lawyer Julie van Dort says fees are the single biggest concern as the new laws bed in.
“Fees, personal debt and debts of the owners corporation, are among the biggest worry for strata owners,” says Ms Van Dort. “There are increased fees because of compliance and obligations in the legislation but there appears to be no increased benefits or protection.”
Ironically, at the same time as fees rise, owners’ corporations are writing off debts below the level where it’s worthwhile pursuing them.
“Previously, disputes went before the courts,” explains Rob Beck. “While VCAT’s jurisdiction reduces overall costs, it doesn’t grant orders for the costs parties incur. This penalises owners corporations when they are forced to act against individual lot owners for non-payment of fees and charges.”
Mr Beck, who says penalty interest charges aren’t enough, believes 60 percent of the strata claims currently before VCAT are for non-payment of fees, a process that takes, on average, nine weeks on top of the delays inherent in flagging bad debts.
“We believe it is patently unfair for owners who do the right thing to be penalised and bear the cost of debt recovery,” says Mr Beck, whose organisation is currently running strata seminars across the state. “By VCAT not awarding costs against the defaulting owner, other lot owners who pay on time and follow the rules are hit with a double whammy.”
Adding to the confusion, there are doubts about whether some of the fees are actually justified. With managers now devising compulsory maintenance plans for the life of larger buildings, some owners complain that they are having to save money for “disaster planning” rather than sensible contingency funds.
“We’ve got managers planning to replace all the building’s lifts in 25 years and others talking about digging out and completely replacing swimming pools,” says Michele Anderson, chair of the Victorian branch of the Owners Corporation Network, a national body of strata owners. “It’s all based on an absolutely worst-case scenario.”
Julie Van Dort, who helped advise Consumer Affairs Victoria on the new laws, says one of the biggest changes is the amount of legislation, its complexity and the paperwork required. And, despite extensive and, apparently well received publicity campaigns, she isn’t convinced that strata owners are any better informed than they were before the new laws came in.
“Purchasers and owners are still confused about what they thought were ‘property rights’ and what they have as strata lot owners – a lot of obligations and few rights,” she says.
That’s a view not shared by Consumer Affairs. “CAV believes awareness of legislative change regarding owners corporations has risen significantly and is quite high,” says Dr Claire Noone, Director of Consumer Affairs Victoria. “CAV is continuing its education and information campaign to ensure that owners, tenants, and managers are better aware of their respective rights and obligations.”
Even so, some owners corporations have decided the whole business is too complicated and are continuing to muddle through as they always have, raising the whole question of whether, even now, they understand the difference between owning a house and a unit.
“Victorians are still wedded to the concept of ‘it’s my home’ or ‘property rights’, says Ms Van Dort. “The concept of ownership as an unbundling of property rights in communal living may take another generation to accept.”
Consumer Affairs have produced a booklet, Owning, managing and living in a unit or
apartment: a guide to owners corporations, which can be accessed online at http://www.consumer.vic.gov.au, from the Consumer and Business Centre at 121 Exhibition Street or by contacting CAV on 1800 1300 55 81 81.
Confusion and conflict reigns
Michelle Anderson, chair of the management committee of a high rise in Docklands, realised the new strata laws hadn’t quite clicked when a real estate agent told her about a tenant in her building who’d been complaining about noise.
“This woman openly said he was just a nuisance, he was only a tenant, no one else had complained and, anyway, she’d told him there was nothing the body corporate could do,” says Michelle.
“I had to explain that, firstly, tenants now have as much right to complain to the owners corporation as anyone else and secondly, we are legally obliged to respond.
“It turned out this bloke had a legitimate complaint but we hadn’t been given a chance to address it because the real estate agent thought it was her job to fob him off.”
Although she agrees that the laws badly needed changed, Michelle, chair of the Victorian branch on the Owners Corporation Network – a national organisation of strata owners – thinks they have “opened a can of worms”.
She says extra costs to owners for added expenses on top of existing management contracts are a major issue, married to, ironically, a lack of full understanding by some managers.
“Most management committees are running show the “old” way and even the managers are struggling to understand the changes,” she says.
Michelle also claims a double whammy on maintenance funds – previously called sinking funds – is costing strata owners dearly.
“Some buildings now have two maintenance accounts set up and are contributing twice to maintenance. There is a lot of confusion even within management regarding this.”
And she sees the age-old conflict between tenants and owners as having been exacerbated by the new laws, even though the process is now more transparent.
“Tenants now have equal rights and can cause problems for committees if they are not aware of the owners corporation rules for the building they live in” she says. “They will argue issues that an owner fully accepts and understands.
“The tenant has different expectations and can take the Owners corporation directly to the Victorian Civil and Administrative Tribunal (VCAT), causing undue costs to the owners corporation.’
But Michelle has simple solution for that problem, at least: “All tenants should be given a copy of the rules and made sign them before agreeing to a lease.”
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