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Heartbreak Hotel

When we published our book Apartment Living, Sue Williams and I were accused of being conspiracy theorists because we highlighted the ways that residents of new apartment blocks can get seriously done over by unscrupulous or uncaring developers.

I was reminded of that this week when the following story arrived on my desk. It concerns a building put up by one of our more respectable developers as a combined hotel, serviced apartments and residential complex with a few shops attached. The Strata Management Statement divided the control of the complex between commercial and residential interests, with the building manager having the casting vote on the management committee.

So far so good, but the building management contract was awarded to the same people who were running the hotel. The end result is sadly predictable -residents are unhappy at the way their part of the building is being run with defects not being repaired while the building manager’s priorities lie elsewhere.

When the building management contract ran out recently, the guy running the commercial side would only consider tenders from his own company. A five-hour mediation at the Office of Fair Trading turned out to be a waste of time, partly because the other side refused to discuss any of the issues but mainly because the SMS had effectively taken the building out of the control of the Strata Management Act.

The result is that people who have poured their life savings into a complex constructed by a reputable developer have discovered that they have effectively no rights and no redress.

The State Government is currently reviewing Strata Law and they need to make sure loopholes like this are closed for good. For instance, building management contracts should not be awarded by the developer beyond the first year and no conflict of interest should be allowed, as in this case.

Developers should not be allowed, either by accident or design, to wriggle out of the Strata Titles Act unless they make it abundantly clear to potential purchasers that that is their intention.

Finally, it’s time we had a Strata Ombudsman with the power to step in and fix problems like this. These are people’s hopes and dreams we are talking about. The home is the biggest single purchase most people ever make so they are entitled to reasonable protection under the law. That’s not a conspiracy, it’s common sense.

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