In this week’s podcast we give the NSW Parliament’s deliberations on it’s new strata pet laws a kick along.
As reported here, the Lower House has taken a good six months to deal with a procedural Bill that would have promoted sustainability and tidied up several odd loopholes in strata law.
However, it was tagged with an amendment that would have meant pets could only be excluded from apartments if it was detrimental to the animal.
The amended Bill, which was approved by the Upper House with its Animal Justice Party alteration, had zero chance of being approved by the Legislative Assembly. Right or wrong, the majority Coalition government was simply not going to approve open slather for pet owners in strata.
So Sydney MP Alex Greenwich stepped in and wrangled a compromise that basically says pets could not “unreasonably” be refused domicile in apartment blocks while getting a commitment to a parliamentary report on what “reasonable” actually means.
And that’s where we hop in with our ten cents worth on the podcast.
Rental as anything
Elsewhere in the pod, in light of the tax and planning breaks now on offer from the NSW government, we discuss the rise and rise of build-to-rent apartment blocks – there are 40 “in the pipeline” according to real estate marketing giant CBRE.
But will they be snazzy upmarket facilities-filled developments like Mirvac’s Liv Indigo? Or will they be cheap and cheerless, renters-only versions of the cram-em-in, stack-em-high chicken coops beloved of some well-known developers? Time will tell.
Commish kicks butt
Finally Sue chats about her recent conversation with Building Commissioner David Chandler.
Six months into his much-hyped crackdown on dodgy developers, is he making a difference, especially with regard to confidence in our high-rise buildings?
We dig around for evidence.
Zany Zoom calls
And keeping things upbeat, Jimmy points us to these two videos.
The first, is balm to the soul of any strata chair or secretary who’s had to deal with unruly members at an online committee meeting.
If you are one of the few people on the planet who hasn’t already seen this, it made a global viral video heroine of Council Clerk Jackie Weaver and her ruthless handling of obstreperous members of Handforth Parish Council in England.
And on a lighter note, there’s the lawyer who appeared on a Zoom video as a cute little talking kitten.
Almost as amusing in the video from Texas is the warning in the top left corner that recording the meeting was an offence. Well, that really worked.
But maybe if we all had to adopt animal alter egos, online strata meetings would be a lot less fractious and a lot more fun.
Enjoy the podcast and let us know what you think of the new format on email@example.com.
Transcript In Full
Big news on the pet front this week in strata.
Yes! it’s all happening, isn’t it?
We’ve got ‘build to rent’ to talk about and you’ve been chatting to Building Commissioner, David Chandler?
Yes, that’s right.
Is he making a difference; let’s find out, later on. I’m Jimmy Thomson. I write the Flat Chat column for the Australian Financial Review.
And I’m Sue Williams and I write about property for Domain with the Sydney Morning Herald and Melbourne Age.
This is the Flat Chat Wrap. Well, let’s get straight into it. The New South Wales lower house (which is actually the most important bit of Parliament), last week debated an amendment to their sustainability strata bill.
That was the one where there was an amendment put on by the Animal Justice Party, wasn’t it?
Yes. This was originally a bill that was all about fixing up loose ends. Things like making anything that’s sustainable in terms of renovations to be considered a minor renovation, so it wouldn’t need bylaws and things like that. There were things like closing the loophole that meant (believe it or not), people could apply to have the votes in a secret ballot, revealed to them. There were lots of little things like that; it was a tidy-up bill. Last year, the Animal Justice Party put in an amendment saying that the only reason you could prevent pets being allowed in a strata building, was if it would be detrimental to the pet.
And that kind of created even more uncertainty and confusion over pets and apartments, didn’t it?
It did, and then subsequently, the Court of Appeal ruled that any bylaw that said you
can’t have pets, and that’s the end of the story, was unfair and unconscionable and discriminatory. Certainly, in a couple of cases, their bylaws were quickly overturned and amended. People think the law has changed; it hasn’t.
It does mean that people who live in buildings with bylaws that ban all pets, actually now have to go to NCAT, to apply to keep a pet where, presumably, their bylaw will be overturned. But, that’s a lengthy and expensive process, in many cases.
A lot of strata schemes have been hanging onto that and saying, ‘well, the law hasn’t changed. It’s just the interpretation of the law that’s changed and we’re still banning pets.’ So, the pet owners have to go through that process.
Okay, so if this amendment gets through, (and I think it’s going this week to Senate), what will that mean?
Okay, basically what it says is, you cannot unreasonably refuse a pet in a strata building, but you can refuse pets, if you have good reason.
What’s the definition of a good reason?
They’re going to spend the next six months trying to define that! Part of the amendment says that, subject to a report by parliamentary committees on what is considered to be reasonable or unreasonable, then this act will go ahead.
It looks like it’s got bipartisan support already.
Cross-party support. Well, yeah, kind of bipartisan, and all the others. It was Alex Greenwich, the Sydney MP; he kind of acted as a mediator between what you could reasonably say were the two extremes. You know, the people who didn’t want pets at all and the people who wanted to make pets compulsory. I think the negotiations (although when you read the Hansard, it’s all very friendly and everybody’s congratulatory and saying it’s going to be a great thing), I believe the negotiations were quite tense.
I think the Animal Justice Party are a little bit sad that their whole amendment hasn’t gone through unadulterated, because it was much more a wholesale, saying ‘yes, you can have pets.’ They’re kind of a little bit disappointed that it’s been tempered, but now it stands a much better chance of getting passed.
It had no chance of getting through before. I mean, I was surprised they went through the upper house with the amendment. With the new one, they seem to be heading towards a situation where they say ‘look, an apartment block can say, we have people in this building who are allergic to animal dander or whatever, so we want to either ban pets, or we want to restrict the movement of pets through common property,’ which, they can do now, anyway. They might even say, (and I think the most likely thing is that they will say), “you can’t have a pet on the same floor as someone who suffers from allergies.”
That is interesting.
Or, you cannot take your pet into the lift when somebody says, ‘I’d rather you didn’t bring the animal in while I’m in the lift.’
How about strata democracy, when, say, you’ve got a smaller block, and maybe 100% of those owners say that they don’t want pets?
I think that would be considered reasonable. If everybody in the building doesn’t want pets, then is it reasonable to have one person from outside buy into the building and say, ‘by the way, I want to have pets,’ and everybody’s going, ‘well, we bought in here, because…’ so this is going to be quite tricky. The one thing that we should make very clear, despite the amendment that went through last year; despite the ruling of the Court of Appeal, and despite this amendment (which is probably going to be approved in the upper house this week) …
The law has not changed, and the law will not change, probably until later this year; around about September/October, when the changes are made. Then, they have to be enacted (whatever the technical terms are).
Also, at the same time, the New South Wales Government’s doing its strata review, isn’t it? Looking again, at the pet’s situation…Presumably they’ll put that on hold to see what Parliament decides, one would assume?
Well, what they’ve actually done is extended the time-period for the review of submissions to take into account this proposed amendment.
Okay, so they are working together, really?
Yeah, kind of in parallel, so there will be two reports come out at some point this year; one will be on what is a reasonable reason for not having pets in the building and the other one will be all the other stuff.
Okay. So, the eventual outcome seems to be that there will be a lot more strata apartments that will allow pets, and that won’t be allowed to ban pets. There may be a few (on certain grounds), that will be allowed to ban pets.
Yeah, I think, certainly they are saying, ‘the majority of people in the past didn’t want pets, so we’re gonna leave things the way they are.’ That’s not gonna fly. The old argument of ‘we don’t want pets, because we’ve never had pets,’ is not gonna fly. However, ‘we have taken a vote and are unanimous among owners that we don’t want pets…’ I would imagine that would be considered reasonable. In those famous cases here in Sydney, where they went to NCAT; they went to the Court of Appeal and all that… I would say in both those cases; those bylaws would have been overturned on a test of reasonableness.
Sure. So, they would they would be allowed animals. If you’re buying into Horizon and you’ve got a pet, then you’re probably going to be safe?
Oh, they’re swarming with animals!
Well, they are! It’s kind of hard to stem the tide!
Although, I suspect a lot of those animals have been there for a long time and they’ve just been kept under wraps…
Now, they’re being registered, and people are signing off to the new bylaws, so they’re both enacted.
I got an email from a strata manager the other day, with his ideas about restrictions on pets. I should actually post it on the website. He said, ‘every pet should be registered with their DNA, so that when you find poo in the foyer, you can send it off to be tested.’
Oh my God! We’ve lived in a pet-friendly apartment building for 20 years, and I don’t think we’ve ever had an instance of a pet crapping in the lobby. We’ve had pets having little accidents with pee and stuff, but geez, I mean, the cleaners are fine to clean it up, or the concierge sometimes cleans it up. I’ve actually seen owners, cleaning it up as well, which is the best possible solution really; if the pet owner’s clean it up. But, you know, I think it’s a myth put out by anti-pet people that pets have absolutely no control over their facilities. That’s quite wrong; most dogs will not crap in lobbies of apartment buildings.
I think we have more incidents of humans peeing in fire doorways…
Oh, yes, that’s very true!
Than we do with dogs peeing. So, yeah, priorities, I’d say. Fix the humans; dogs will take care of themselves. When we come back, we’re gonna talk about a big boost for Build to Rent. That’s after this.
So, what’s new in Build to Rent, Jimmy?
Well, everything’s new in Build to Rent; it’s the new thing. But there’s a couple of things in the past week. In the last week, the New South Wales Planning Department and the Finance Department (or is it the Treasury), announced big changes to make it easier for developers to develop Build to Rent apartment blocks. One of the things is they’re going to cut the land tax by half, and they’re going to lift the extra payment, for foreign investors; it no longer has to be imposed.
Basically, the government is embracing Build to Rent, and it sounds like according to CBRE, (the big marketing arm), so are the public, Certainly, the developers are, according to them, the number of Build to Rent projects has increased 70% in the last year. Now, this is during a downturn in general building and there are 40 projects in the pipeline. There are 40 projects in the pipeline; currently, for Build to Rent apartment blocks, Now, is Build to Rent, the same as affordable housing?
No, not at all; Build to Rent is often more expensive. It offers a more expensive rental than regular rentals; the market price is a bit higher. That’s usually because they have a number of things… They usually have better facilities than private rentals. They are purpose-built buildings and they often have a residence lobby. They have a gym; they might have a yoga room, or they might have a pool, they might have workspaces; they might have all those facilities. But also, the critical thing is they offer longer, secure leases, for tenants. People are often prepared to pay more for them, because they’re nice new apartments in nice, new buildings and they can stay there for as long as they want to. They can just keep renewing their leases every time they come up.
Do you think that’s going to be the rule for everyone? I mean, I can see the potential for some of our more notorious, big-scheme developers to go, ‘well, let’s just build the same crappy buildings, and then just put them out to rent.’
Well, we’ve had positions in the past where developers haven’t been able to sell their apartments that they’ve built for sale, so they just turned them into serviced departments instead. Maybe now they’re turning them into Build to Rent. The difference is now (and we’ll be coming to this later), we have a Building Commissioner in there, who’s inspecting all these buildings and making sure that defect -plagued buildings aren’t getting their occupation certificates. I think, for the first time, Australians are looking at rentals as a viable way of housing and a desirable form of housing as well. If we all rented, we could spend our money on our businesses, or on consumer goods; thinking about overseas holidays, and really boost the economy in that way.
To qualify, under the New South Wales Tax Breaks Scheme, the building has to have at least 50 units, and they’ve got to offer a genuine option of a three-year lease to qualify. They can’t be turned into strata within the first 15 years and it’s got to be owned and managed by one entity, except if they are offering low-cost housing. That entity can be part of the management/ownership team.
Okay; that’s affordable housing and it’s interesting, because they’re saying 50 units is a minimum, so you kind of think maybe everybody will go to these new blocks, and they will turn their back on private rentals. The thing is, when it’s got to be a 50-unit block, it means that you can’t have a big block built in a certain suburb where there is no space left.
So, it might be built a little bit further out, or in the fringe areas. It’s not in the CBD or near the CBD, because maybe there isn’t that kind of space anymore, for those blocks of 50 units. In some locations, it possibly won’t be an option; there will still be just private rentals. Presumably, more and more locations will see build-to-rent as well.
I have a very optimistic view of private rentals. I think once Build to Rent come on stream significantly and renters start making that decision of, ‘actually, I don’t want two levels of potential hassle… I don’t want to have the hassle of the real estate agent or the landlord, plus the hassle of the strata committee. I just want to have to deal with one entity and I want a two or three-year lease.’ So, renters start moving into these Build to Rent buildings. I think what could happen (and what should happen), is that we’ll see private investors get more active in the running of strata schemes, because a lot of them go, ‘just as long as my rent keeps coming in, and the levies’ stay low, I don’t really care. I don’t want to hear about anything that goes on in the building.’ It’s the old thing of “I’ll just do the electronic vote; I’ll just vote yes, for everything.” The structure is already there for owners to get together and say, ‘well, we are all investors in this building. Are we getting the best return we could, with the way the building is managed? Let’s take a closer look at that.” I think that could actually change for the better, the way rentals are run in existing strata buildings.
That’s a bit of a macro solution on a micro level. Those owners might improve their own apartments, because they’re going to be in competition with these new apartments in Build to Rent buildings, so we might see standards lift,
And they might start offering long-term leases.
That would be good, especially because the market rentals don’t seem to be going up at all. Rentals are falling, if anything. They’ve got nothing to lose from a long-term rental and for a tenant, it’s fantastic to have long-term security about where you live.
That’s all very positive. We’re all very happy about that. When we come back, you’ve been talking to the Building Commissioner; is he making a difference? Let’s find out after this. It’s about six months since Building Commissioner David Chandler was given the powers to do all the things that he said he needed to do to clean up the building industry and restore confidence in apartments. So, has it worked?
It’s still very early days, but I had a chat with David Chandler this week and he’s feeling very optimistic. He’s launched 46 audits, so he’s going on to 46 different building sites, and checking the buildings there to make sure they don’t have defects and they’re not being badly built. The engineering is up to scratch; they’re being built to design. He’s been engaging the developers where there are issues and talking to them about how they can remediate those issues.
Generally, he’s finding that they’re extremely willing to raise their standards and for those developers who are not willing to engage or to be better citizens, he has issued stop-work notices or prohibition orders to force them back to the table; to fix up their buildings. He’s feeling pretty buoyant, I’d say, and he was saying that he’s had some feedback, too. He can’t be the judge of whether he’s making that much of a difference, but he said he’s had some feedback. One week, when he went into buildings and started looking at the thickness of the waterproof membranes for instance, he got calls to say that nowhere in Sydney, could you buy a gauge to measure the membrane anymore, because all these developers and workers and contractors were scarring off to make sure their own membranes fitted the criteria. He said, the next week, when he went onto a building site, he was really pleased to see thick membranes. I talked to people in the industry as well (and this is a story in Domain in the Sydney Morning Herald), about whether they feel he’s making a difference, and many people in the industry feel he actually is and that’s from developers for the Urban Task Force and that’s also consumers talking to the OCN (the Owners Corporation Network), about the impact that he’s having.
The waterproofing membrane thing is the perennial problem in apartment blocks, simply because they build a block, they put the slab down, they put the membrane in the bathroom, and they immediately put tiles over the top of it.
It’s very hard, retrospectively, to go back and fix it up. It can be incredibly expensive and awful for the people who are living there, who are having leaking bathrooms from above, coming down into their own apartments.
I heard a story (apocryphal, it might be), from a builder that there’s a development in Sydney where the Building Commissioner or somebody went in, checked the membrane on one bathroom, found it to be seriously wanting, checked another one. It was just as bad, if not worse, made them rip out all the bathrooms and re-waterproof them, at a cost of about a million dollars.
I imagine that was the Building Commissioner.
It doesn’t really matter if it’s true, because if builders are talking about this, then it’s already having the effect.
It’s heartwarming, isn’t it? Of course, it’s miserable that it happened in the first place, but it’s great that it’s being fixed. Looks good for the future.
David Chandler is feeling positive and people are feeling more positive about apartment blocks.
Which is good for people buying apartments in new buildings, and also great for the economy, because the building industry adds so much to the economic stimulus of New South Wales and Victoria, so it’s important that it keeps going.
Now, we always try and finish these things with a fun note and my piece of fun for the past week or so (and I suspect it may have been yours) … There are two zoom calls. One of them was the council somewhere in England and a woman who I think is the administrator for the council. Jacki Weaver is her name; she has become famous around the world for having a way of dealing with idiots, basically.
People couldn’t agree on the time. I think that’s on your Flat Chat website, isn’t it?
I’m gonna put it on to go with this, so it’ll be attached to the show notes. The one that I really love is the lawyer… Presumably, one of his kids put a filter on his zoom thing, that made him look like a kitten. So, this guy is saying, ‘I am not a cat.’
While one of the judges is looking at him.
But the funny thing is, that the little cat looks as if it’s talking.
Yeah, it’s amazing.
I’m gonna get one of them for my next zoom call. Thanks, Sue, for coming in and talking to us and thank you all for listening. We’ll talk to you again next week. Bye.