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Strata Laws: Online Consultation - CLOSED

Strata Laws online consultation logoWe would like to thank everyone who participated in the online consultation on Strata Law reform. We had an amazing response and your comments have been included in a report which was presented to the NSW Government in May 2012. While you are no longer able to comment on the consultation questions, we invite you to read the submissions which will remain on the site as a record. If you would like to receive updates on Strata Reform, please contact us at strata@openforum.com.au. Thanks again for your support.

Read about the launch of the report.

Download the Strata Laws Online Consultation Report (pdf 5MB).

August 2012 update from Minister Roberts.

February 2013 update from Minister Roberts.

NSW FAIR TRADING RELEASES SECOND PHASE STRATA DISCUSSION PAPER.

PARTICIPATE IN FAIR TRADING STRATA SURVEY (now closed).

Strata and Community Title Law Reform Position Paper
 

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The New South Wales Government plans to commence a review of the State’s strata and community title laws in 2012, which may include significant amendments to the existing legislation. To support this reform, public policy think-tank Global Access Partners (GAP) is hosting an online community consultation on Open Forum to give individuals and businesses affected by the reforms an opportunity to voice their opinions, share their experiences, raise specific issues or concerns and suggest possible solutions. We invite your comments on the following 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?

The consultation is open to the general public as well as members of the strata community, including owners, tenants, strata agents, developers, surveyors, valuers, real estate agents, lawyers and academics who have experience and understanding of the current legislation, or specialist knowledge of the strata industry. Larger organisations and key stakeholder bodies are also invited to contribute.

Contributions close 29 February 2012.


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DISCLAIMER: The comments published below represent a wide range of views and interests of the participating individuals and organisations. Statements made during online discussions are the personal opinions of the commentators and do not necessarily reflect those of the NSW Government or Open Forum. Open Forum, at all times and at its absolute discretion, reserves the right to remove offensive comments from the Strata Laws Online Consultation. For your reference, any comments/messages that are offensive for the online consultation would include any or all of the following: breach of privacy, defamatory content, profane content, risk of contempt of court, racial and religious hatred/vilification, confidentiality concerns.
 

 

Comments

Strata Scheme Termination

There are a significant number of apartment buildings in NSW that were designed 20 to 40 years ago. Many of these buildings were poorly designed. The buildings I am referring to do not relate to their surroundings, they look dreadful & impact in a very negative way on the neighbourhoods which they sit within. These buildings have poor aesthetic & spacial planning and have lost relevance when compared to the apartment designs of today.

When these buildings were designed, Aparment living was consdiered to be a stepping stone into a home. Times have changed. There is now widespread acceptance by 'Empty Nesters' that apartment living is a very attractive proposition.  Many of these older buildings have been poorly maintained. Many more of these buildings sit on large parcels of land that are zoned to accomodate higher density buildings.

It is time for some of these buildings to be removed & replaced with buildings that are relevant for todays society. Well designed apartment buildings positively impact on suburbs, better utilise the limited land resorces we have & provide broader housing choice for the community.

Currently all Owners in a Strata Scheme must consent to the termination of the Scheme. This means that in say a building with 12 owners, 11 owners may want to sell to a Developer, but one owner doesn't. That one owner prevents the building from being redeveloped. This has got to change!

I believe that if 80% of the Onwers in a Strata Scheme vote to terminate the scheme then the motion must be carried. This change to the Strata Laws will immdediatley allow the replacement of some of our states most unsightly buildings with buildings that better utilise the limited amount of land we have, in areas with appropriatley zoned land. Our communities will benefit in that broader housing choices will be created.

 

sale of old buildings

We own a unit in Cronulla. It is a 60 yr old building with many serious maintenance problems that would require more than $100 000 from each of the 12 units to remedy. We have no savings in the sinking fund. Only in recent years has forward planning for Body Corp expenses and putting aside a suitable sinking fund been able to be enforced in Strata Law. Because of this there are very many old buildings in this position.

The solution for us is to sell to a developer who is interested is buying at a good price but one owner doesn’t want to sell. We can’t force this owner to sell under the present law. This means all others will lose considerable amounts as the units are in such a poor state that sale to anyone else is improbable even at greatly reduced market value.

There is legal provision to force owners to pay for necessary maintenance when the majority agrees.

This needs to be extended to allow the majority of a Body Corporate to have the legal right to sell the whole building in such situations.

 

Amendment to the Strata Legislation

The following are my main concerns about the existing strata community scheme laws.

I believe there should be more transparency and accountability on Strata i.e.

Proxies

The person should make it very clear in writing what issues the person is voting for, and it should be recorded on the minutes the way the person voted, so that it would be more difficult for the person holding the proxy to use it to his/her advantage.

Funds records

The Strata Manager or the Treasurer should provide the financial records of the Strata to all its members every three months i.e. a copy of the bank’s statement where it shows all the transactions made by the Strata.

I believe that instead of having two funds, sinking and administration fund, it should be only one fund. The Administration fund should have a surplus, for example $500 or $1000 per lot to be able to pay for emergency repairs, for example sewerage repairs or repair of the roof as suggested by Clover Moore. The owners’corporation during their AGM should prioritise items that require fixing and set a special levy to do it and record it in the meeting minutes so if in the meantime there is a purchaser he/she can negotiate with the seller and deduct the amount of the due repairs (special levy).

If there is a CTTT order for a Compulsory Strata Manager, the CTTT should specify the duration of the order plus the kind of work that needs to be carried out. The Compulsory Strata Manager should provide at least two quotes for the specified work. The CTTT, or a new Agency, should be consistent in its rulings and it should be published so the public have an understanding of their obligations so there is one law to all no matter what.

I also believe that the new fire regulation is another regulation that will increase strata levies without showing value for money. Strata levies are increasing at a higher rate than the cost of living so the government should only regulate on matters that makes sense and does not increase the cost of living.

The building can have the most expensive equipment to extinguish a fire but if the people living in it do not have the knowledge or have the strength to use it, it is a false sense of security. I also believe that the government should remind people of how to avoid a fire.

The EC members and the Strata Managers should not waste money on unnecessary repairs or that the person they contracted to do the repairs does it properly. When the strata manager puts his/her business for tender it should be a flat fee and have it in black and white so the Owners Corporation know have much they will be paying and not be surprised with extra fees. Our strata levies after our EC members decided to appoint a strata manager in June 2010 will be increased by 100% by March 2012 and the building is not looking any better.

Finally, I have a friend who advised me not to buy a unit built after the change of the State Government policy of developers paying for private certifiers.  When everyone talks about ageing buildings they should look at the new ones.  I believe that the old buildings are stronger than the new buildings and have better noise insulation than the new buildings. We deserve better built buildings if Sydney does not want to be called the “Whispering City”. I agree with Jimmy Thompson that people should know what kind of dwelling they are buying.

Proxy Farming

I cannot agree more with Sam Kharman about 'proxy farming'.  I live in a complex of 30 units and most residents (owners & tenants) are bullied by the secretary of the body corporate.  A good number of owners are timid, lazy, non-English speaking, or have investment properties that just provide income, so don't care about the day-to-day problems we residential owners encounter. 

The secretary 'proxy farms' each year, either bullying owners into giving him their proxy or giving newcomers his version of past events, most of which isn't true.  Other owners have tried to form committees in recent years, in order to do their share, but because of this guy's vitriolic 'newsletters' defaming them, they have given up.  Yes, he writes his own 'newsletters' and uses the facade of some other building on the letterhead.  Previously he plagiarised the logo of some organisation to encourage NES residents that his documents were 'official'.  As a result, no-one volunteers to work with this person on the committee now, therefore he has total control of the strata plan.  He intimidates the single women in the complex, and they hand over their proxies just to get rid of him.

Even more disturbing is that this person now thinks he can do what he likes around the complex, without going to the owners corporation for approval.  He coerced the owners corporation into using the latest strata management company (we've had 3 in 3 years), but sacked them recently because they tried to carry out their responsibilities in accordance with the Act, not according to what he wanted them to do.  An owner must pay $72 to appeal to the Consumer, Trader & Tenancy Tribunal (CTTT), whereas this guy's fee is paid out of owners corporation funds.  During a recent period of time when he wasn't the secretary, he was a pensioner, and was a vexatious litigant at the CTTT because his fee was only $5 each application.

Limiting the number of proxy votes each owner can hold at general meetings of the owners corporation would stop all this nonsense.  It would allow other owners the opportunity to become involved in running their committee, and would remove the power this guy uses to intimidate, bully and harass residents in the complex.  It would allow the proper democratic process of 'free' and 'fair' elections to take place, and encourage owners to be responsible for their properties. 

Proxy Farming

I understand the problem of proxy gathering.  The difficulity is that in many instances without proxies the meeting will be adjourned due to the lack of a quorum and additional costs are incurred by owners.

An alternatively method regarding proxies is that proxy votes per person be limited but all proxies be used to gain a quorum at a meeting.

what is a quorum

As you would be aware a quorum is about having a certain number of people (or entitlement) who are entitled to vote on a particular motion.

So lets say we count proxies for the purpose of a quorum but only allow a proxy limited voting process .... do we really have a quorum of people (or entitlement) voting. What you suggests redefines a quorum to an even lesser amount that 25%.

At present the numbers that represent a quorum is trivial relative to the 95% participation rate that comes from mandatory voting. The sugestion to count proxies inorder to have a quorum but not to count them all in a proxy limited vote just reduces the poor excuse for a democracy that strata is.

Reading the many posts on this forum about proxies it seems clear people want a limit on proxies. It also seems these people are targeting specific people in specific cases - is there real benifit for the whole strata living community or is it just a simplistic solution to a problem in a small percentage of strata plans?

For me the solution to proxies is a no brainer - get rid of proxies in all but extreme cases by requiring manadatory voting in person or in writing.

Limiting proxies does not make the proxy giver more motivated to participate in person.

 

What is a quorum?

Hi Billen Ben,

I currently have an application in the CTTT that asks this question.

Well, I have sought orders that will require the Adjudicator to ask himself/herself the question? Can an unfinancial member form part of a quorum?

The interesting question is in a two unit strata scheme (or any strata scheme where a significant number of owners are not financial)where a meeting in adjourned because of a lack of a quorum on the basis that unfinancial members cannot form part of that quorum.

An adjourned meeting when it is resumed is considered the same meeting or the 'one meeting'. And as it is one meeting no member who was unfinancial at the commencement of the original meeting can pay the outstanding amount to make themselves financial at the resumed meeting. Additionally no new proxies are permitted after the commencement of the original meeting.

Although the Act does not disqualify an unfinancial member from forming part of a quorum many experts interpret the provisions that disqualify the vote of an unfinancial member to be a disqualification from the quorum.

If an unfinancial member who is present at the original meeting is not able to form part of a quorum and the meeting is adjourned due to a lack of a quorum then what is the purpose of that adjournment when they have no opportunity to pay the outstanding amount before the meeting is resumed?

Note:- If the oustanding amount is paid after the commencement of the original meeting it has no effect because it was paid after the meeting commenced.

Nigel

PROXY FARMING IS ALIVE AND WELL

Proxy Farming is alive and well in Port Macquarie! In fact wherever the holder of management rights is also an owner this will be the case in any residential and holiday let building. Why, because the owners of holiday units are beholden to the Manager to maximise their investment return and accordingly give their proxy to the Manager under  that veil of duress. In our situation the Manager gathers at least 50% of the unit holders proxies and with that overwhelming majority determines every decision made at OC as well as at EC. Those who attend OC meetings do so out of interest only because their votes are ineffective as one person already has control. These decisions include Sinking Fund contributions and the like, EC membership, caretaker contracts, building maintenance, etc. This is democracy at work, but laws should prevent such autocratic power from being pursued or achieved. My only suggestion is to either limit the number of proxies that an owner can hold (as suggested by others), or the more democratic process would be to require those owners who cannot attend meetings to issue proxy votes indicating their 'for'or ágainst' status for each particluar motion, to the Strata Manager. Regrettably the latter option can also be rorted by unscrupulous Letting Managers. For one person to have the power to appoint friends or family members to positions or award them with lucrative contracts is just not the Australian way! Finally, I would support a change to the laws that specifically exclude proxy voters from being counted toward quorum numbers.

mandatory voting

mandatory voting either in person or in writing solves your proxy problem.

i keep reading about proxy farmers and it sems that people feel limiting proxies is the solution. It is a simplistic solution that has problems attached to it and has way around it, next thing people will be asking for is a limit on block/group voting because the individual proxy farmer turns into a small "co-op" of like minded people.

Mandatory voting in person or in writing has many benifits and is a much better way to kill off the proxy farmer.

I really think limiting proxies is a very limited view when so much more could be achieved.

VOTING PAPERS

 

Allowing voting via voting papers is the way they do it in Queensland.  A voter is taken to be present at a general meeting if the voter
is present at the meeting personally, by proxy or by written or electronic voting paper.  But a single owner can only hold up to 3 proxies (depending on size of strata scheme of course).  The outcome is that the quorum is generally achieved. Voting is not mandatory.  If quorum is not achieved at a General Meeting, the meeting is simply postponed by one week at which time, even if quorum is not achieved, as long as Chairperson or Strata Manager delegated as chairperson is there, those attending form a quorum and the votes are counted. 

 

Proxy farming

The building where I own a unit also has the problem of a bullying secretary. She is also the building representative so everything goes through her. She decides if she will pass the information into the other committee members or not. Prior to an AGM or EGM, she will bully other owners into agreeing with her to procure their vote in her favour. If someone is doing something that she doesn’t agree with, she will bang on their door and abuse them.

The current committee consists of her and 2 owners who do not live in the building, so she has full rein to do whatever she wants. Any complaints made to the Strata Manager about problems in the building are not dealt with but passed to the secretary, who will only take action if she agrees with the idea. Otherwise the problem is left unresolved. What is the next step, the tribunal which incurs a cost to the owner?

Whenever we have an inspection on the building where some residents cannot be present, she will take their keys to allow access to their property. I have seen her go through someone’s personal property in their garage while she had access to do this!

There needs to be a way to prevent the situation where one person in the block dominates over all the decisions.

Some suggestions:

1. Limit the term that a person can serve on the committee to one year. This will ensure that all owners really do have a say in what happens in the building.

2.  All committee members must be copied on all correspondence – no exceptions.

3. Introduce a form of mediation that involves other owners, facilitated by the Managing Agent, so that issues can be resolved without the inconvenience and cost incurred by escalating it to the tribunal.

 

Strata rental tenants

Sir/Madam,

I believe that all strata occupants whether they be tenants renting or owner occupieers of strata units, be invited to attend all meetings not only to bring everyone up to date on there obligations to each other when living in a strata unit complex, but for each to be able to discuss there concerns and have feedback provided, from the many different and varied sources of knowledge, experience and interest of residents and stakeholders. This would have the effect of eliminating the disputes that arise when people are not adequately informed of there obligation to each other when living in strata unit complex. Units that are rented by real estate agents on behalf of strata unit owners, who rarely attend  body corporate meetings, whose interest lies mainly in financial gain, fail to provide rentees of by laws in place, or what areas are common property, and what are not, and by inviting rental tenants to attend meetings, might have the effect of making people feel included and members of a complex that values input from everyone, thereby reducing the problems associated with strata disputes   

 

Strata By-Laws and the CTTT & The Minister

For Strata complexes to run efficiently and equitably for the good of all I would suggest that the CTTT be forced to uphold the by-laws and for the public servants who sit on these boards to have to uphold the by-laws and make penalties apply where there are breaches.. 

 

I have been told by Strata Managers that its a lot of time and effort to take a breach to the CTTT and then quite often have the adjudicator ignore the by_laws and rule in favour of the offender..  

 

The Strata By_laws are for the most part sensible rules to keep the complexes neat clean and tidy and maintained with everyone treated the same. It only takes One resident to breach by-laws with misuse of the common property, with rubbish, a car, a garbage can and the whole place can be turned into a slum... The CTTT was formed to enforce the by-laws that the Strata Plans have in place, Not to become judge and jury and rewrite the rules... If Owners want a rule change its up to them to vote on it !! Its not for the public servants on the CTTT to change !!!! 

Enforcement of by-laws

This accords with our experience. Our committee is reluctant to proceed against repeated parking offenders because our experience is that the CTTT presumes everything should be settled by compromise and mediation. If there are by-laws for the benefit of all residents, and which most residents obey, but which some flout flagrantly to the detriment of their fellow residents, why should it not be a simple process to enforce compliance or punish non-compliance? The suggestion that the executive be able to issue simply enforceable fines after a warning is worth serious consideration. Public servants should uphold the law, not make their own laws.

Tenants attending meetings

I do not agree with tenants attending general meetings of a strata or community scheme.

An owners corporation is basically a corporation and customers do not attend share holder meetings.  Discussions of owners are at times delicate and contain many privileged items.

An alternative would be to have a meeting with all residents either before or after the Annuaul General Meeting.  This will encourage a community spirit.

 

rental tenants

I would not want tenants to attend our AGM or even exec meetings but I agree that somehow getting them to understand their obligations is required. I find rental agencies are a problem. We have had a number of druggie types in our building, over crowding of units, bad behaviour, rubbish left by bins drinking smoking on the property. These agencies then will quickly move a new group in when the unit is re-rented and we get a lits of defects to be repaired that are the 'responsibility' of the body corp. But many times we find the defects are the result of the type of occupants and their treating of the building. So we have higher management / repair costs to units in our building that are a comerical investment property to some non occupier who pays the same levy as I do. Better control of non occuying owners is needed I have often thought they should pay a higher levy

Higher levies for absentee owners

I support this idea. In fact I once lived in a strata scheme where absentee (investor) owners were required to pay a 10% surcharge on levies. This could be waived if they showed that they were taking part in onsite working bees etc.

I live in a different scheme now. 5 out of 8 units are rented out. Now just two of us (resident owners) do all the work. The tenants say they pay rent so can't be asked to do any work. The investor owners say they pay strata fees - but invariably fight any increase in levies, and often refuse to approve much needed repairs. One had the gall to suggest that the resident owners should do garden clearing on his property, as he lived interstate!it

In the unit next to me (it has a common wall) the plumbing is shot, and the pipes constantly hammer, with the noise reverberating into my place. Tenants say they've asked for it to be fixed. It bugs me when owners either deliberately, or through neglect, run down their properties. I don't understand why they do this, be we all suffer as a result. Owners Corp should have the power to force them to address issues that affect tenants and adjacent owners.

 

 

Charging higher levies to investors - not on your life!

If a strata scheme charged extra levies on investors, they were acting illegally. No part of the Strata Schemes Management Act permits charging sinking or administrative levies but as per the Unit Entitlement precentage that they own.

There is a myth that owner occupies are more concerned for their property than investors. I disagree. Owners Occupiers can be a source of behavioural and management trouble in a scheme much larger than investors or their tenants. I lived to experience that with owners occupiers thinking that they own the building with an extraordinary resulting dispute.

Working Bees? have you gone mad? anybody injures themselves and you will see the compensations lawyers sueing you for millions. Do everything by the book, hire tradespeople with insurance, qualifications and dont cut corners, otherwise you will learn the lessons I learnt about the true nature of people. "Ecce Homo" they said about what they did to Christ.

Higher levies to investors - and those working bees

Hi Strataspheric

Sounds like you've had some bad experiences too, and I too know the Strata Nazi type.

Re the Act: I'm told that owners can vote to change the basis on which levies are charged eg unit entitlement, flat rate per owner etc.

The point I was making is this: In the three stratas I've now lived in, where there's a majority of owner occupiers, the properties have been better maintained. When the investors become the majority, the property only takes a couple of years to start looking run down, even with good tenants (and there are plenty of good tenants).  It's just that absentee owners tend to lose their connection with the place, especially where landscaping, painting etc are involved. The owner of my neighbour's unit hasn't been near the place since he bought it.

Re the working bees. Nothing about cutting corners or doing building work, just about common sense, keeping the place tidy and taking responsibility. All you do is notify the agent of the day and work and everything's covered by the insurances anyway. Sure there's always a risk that someone might rort things - but they'll find a way to do that just walking to their door!

rental tenants

I dont know how you can fix it .. but maeroero's comments are all too true... 

Owner occupiers often have to put up with tenants from hell breaching all by-laws with NO BACKUP FROM CTTT IN ENFORCING THE BY-LAWS and then be further insulted by subsiding repairs needed from ill treatment of premises by tenants or pure neglect (till its a big problem) by landlords... 

AND TAKE NOTE ... THE BAD TENANTS THAT EXIST OUT THERE OFTEN ARE REPEAT OFFENDERS... THEY KNOW HOW THE SYSTEM WORKS AND THAT THEY CAN GET AWAY WITH BREACHING THE RULES AND MAKING LIFE HELL .. The Minister needs to instruct the CTTT to UPHOLD the by-laws so that good people have some redress in reigning in troublemakers and pests who dont give a toss for their neighbours!

We all need rules and CONSEQUENCES for bad behaviour! July 1, 2012 will mark 51 years since the World's First Strata Law commenced in NSW .... wouldnt it be nice if the Minister saw fit to give these laws meaning again  without the confusion that has crept into the administration of these strata  laws?  For goodness sake make it easier for the by-laws to be enforced... DONT make it more confusing and time laboured to get things done !!! 

tenants attending meetings

I do not agree with tenants attending strata meetings, however, perhaps invite all tenants to a meeting with an agenda suited to tenants and their responsibities would be appropriate.

Strata Rental Tenants

Excellent Idea

 

Tenants attending EC or general meetings

The notion that tenants should have an automatic right to attend formal meetings is absurd.  They have no skin in the game, they do not pay Owner's Corporation fees, they do not volunteer their time to sit on committees and do the work, they have no long term financial interest in the building.  It is called an OWNER's Corporation for very good reasons.

If tenants do wish to attend meetings the mechanism already exists.  They can simply obtain the proxy of their landlord.  If their landlord is happy for them to handle his/her affairs then so be it.  That is a matter between the landlord and the tenant.  But granting an automatic right for people with no financial interest in the building to directly influence its management is ludicrous.

If there is a need to communicate with tenants on a regular basis this can be done via notice boards or letters or seperate tenants meetings that our outside the normal formal management arrangements.

TENANTS NOT OWNERS CORPORATION RESPONSIBILITY

 

I totally agree that Owners Corporations and its meetings are for owners only.  Tenants should not be allowed to attend any more than any person off the street.
Please note that the tenant is not the 'customer' of the Owners Corporation.  The tenant is a customer of the particular owner landlord.
Owners who let out their units are responsible for their tenants and communicating with tenants.  The Act makes it clear that owners are responsible for providing copies of Bylaws to their tenants.  If issues arise with tenant behaviour, the correct way to address this for the Owners Corporation deal with the relevant landlord owner or their agent, as they are responsible for tenant behaviour.  It is not appropriate or logical for the Owners Corporation or Committe to deal formally with tenants on behalf of the landlord owners.  Owners legally wear responsibility for their choice to be landlords.

 

Strata laws

 AGM or EGMs should preferably be held on Saturday,Sunday or public holiday so that most strata residents can attend the meetings without sacrificing their work commitments.

There was no quorum even at our two recent AGM and EGMs even when large capital expenditures were considered at these meetings.

Also Executive committee members should be eligible to  sit on the committee for only five years continuously,even if elected at the AGM.After a one year break,they can join the EC for another 5 years  if elected by members at each year's AGM.

Commercial tenants should be allowed full freedom to let out their car parking spaces just like resident tenants.

 

 

strata laws AGMs

agree with the first point our (soon to be previous) strata management company held meetings week nights starting at 6:30pm and many owners found difficult getting to the meeting afterwork (sydney traffic). I found this a lack of service from the company

not too sure about EC members being restricted to max years being an exec memebr can be a very thankless job so a lot that do it do it as a sence of responsibility although I have noted others that seem to be there for personal inetrest

 

in our scheme we get a lot of members but not all actually do anything or vote on anything making it hard to get a majority decsion even to pay a simple bill or get a costing etc.. somehow weeding these out in someway would help us be more effective

General Meeting dates

Weekend meetings are no more popular than weekday meetings. What works for you won't work for others. Parents with kids don't want meetings in Saturday mornings. There are religious issues, work and social commitments. The answer may be in using Skype and voting slips to allow people to attend regardless of traffic conditions and timing

Strata meeting

Excellent suggestion GNS. Our agent used to hold meetings at 7pm, which I could get to. Then they decided to only hold them at 2pm or 4pm, and only send out notices out a week before. I'm starting to think it's to discourage attendance, so as to make it as easy as possible for them.

A major problem I see it is

A major problem I see it is the lax regulation of financial reporting requirements especially in my strata where the annual budget is in exfcess of $200k but does not qualify as a large strata scheme. If an EC member is so minded to do something within the books it is close to impossible to have the matter investigated and the dispute process is so weak and slow that you end up being worn out by the whole process and people get away with misappropriation of OC funds.

I see this as a particularly serious defect in the legislation. More and more older people are buying into strata units and their ability to perceive that a neighbour to could misappropriate funds is utterly unthinkable (cognitive dissonance). Consider this, if an owner has criminal tendencies, ingratiates himself with his neighbours and then should choose to  become chairman in control of $330k in funds and do some "diddling", and he is really good at it, the chances of his being detected are next to none. If discovered however, he can stare-down the petitioner and use the legal process to utterly frustrate their genuine inquiries.

There needs to be an inspectorate function under the Act that will respond to matters of fraud without the need to go to dispute, orders, and enforcement in the civil courts, or to the police. Working people do not have the time or energy to do this. This is a real life case sadly.

What is a small scheme

I agree with Ned Kelly (08/01/2012).

The determination of a large scheme based of the number of lots is floored.  Whilst a 120 lot scheme could have an annual budget of $240,000 a 4 lot commercial schemes could have a budget of $1,000,000.

Abetter operation of the large scheme definition is that it be the existing definition or an annual budget/turnover of greater than $200,000.

Tennants attendance at strata meetings

While I would agree with Mr Holloways comments with regard to tenants not attending Annual General meetings, due to BC's need to address sensitive matters at AGM's unfortunately, there are urgent matters, involving tenants, and owners responsibilities, that need to be addressed at meetings, as an ongoing part of the effective management of any Strata complex. These may not wait until after the conclusion of an AGM.

Strata: use of multiple proxies

My concern is that there is no limit on the number of proxies that can be held by one person, and the resultant possibility of vote results being skewed towards the required outcome of one (or more) proxy holders, despite the concerns/issues/votes of those who attend a meeting in person.  In fact, in our large complex, multiple proxies were used to elect particular executive committee members, even though some of those people were not even present at the meeting whilst other interested owners were: a weird result!

Strata Title laws

My concern in the area I live in - on the Northern Beaches - is the number of short stay rentals.  We have 5 owners out of 10 who are renting on a holiday/short stay basis.  Some of these short stays can be for only a few days or a weekend even though the local council, Warringah, advised me that in the zone I live in permits short stay rentals of no less than 7 days.  Some owners advertise less than this on their websites.  They also put in extra beds or bunks so that a unit which would normally sleep 3 or 4 people now have six or more people staying in the unit.  

We have a constant flow of people coming and going who do not respect or even know of the strata laws they might have to abide by and treat the place like a motel.  Holiday makers tend also to entertain so there are more visitors here and rubbish bins full of holiday disposable items and many do not bother to recycle.  They cause havoc by not parking in the allocated spaces and many more minor considerations which permanent residents respect and do not inconvenience their neighbours. Because these temporary visitors are strangers and on holidays, there is no point in bringing problems to their attention and the owners of these units are not here to notice the problems.  

With short stays there is a constant flow of cleaners coming and going every few days who do not respect the quiet of residents on Sundays etc.

There are different fire safety regulations by the council for the normal strata buildings and a motel/backpacker/short stay type of building and I wonder if this may void our insurance policy.

As there are only two owner occupied units out of the 10 I do not have a voice at Strata Meetings or with our Managing Agents, so thank you for the opportunity to voice my side of things.  This other owner occupier has his unit for sale partly because of living amongst strangers and then I will be the only owner-occupier.

Thank you,  Jocelyn Nott 

 

 

Short Term Rentals

I have read Jocelyn Nott's complaints re short term leasing.   In any building there can be problem tenants, including owners and permanent tenants.  Often there are perceived problems with short term lettings that actually do not exist, or problems that can occur whether tenants are short or long term.  I am not sure why it makes a difference if a tenant stays 2 days or 7 days.  The 2 day tenant is not likely to be there except to sleep, as who would rent an apartment for 2 days and then not leave it.

Parking problems are usually created by permanent residents who often have 2 cars or use their garage for storage.  Short term tenants are likely to have only one car that they can park in their allocated space and half the time they have no car at all.  Perhaps she should mark her space as private. 

Short term tenants are subject to maximum number of occupiers.  Permanent tenants and owners do not have this restriction.

It is just as likely a permanent resident will clean on the weekend, as many people work during the week.  If she lived in a house she would hear lawnmowers all day sunday.  Who cares if somebody cleans an apartment on a Sunday?  Holiday apartments need to be kept immaculate and vermin free which can only be advantageous to the building in general.

Holiday tenants are subject to stricter regulations and can be evicted immediately (and can lose their bond and unused accommodation for breaches) unlike the permanent tenant who can take over 3 months to remove. And how do you remove a trouble making owner? 

Perhaps the holiday makers would not be "strangers" if she took the time to greet them.  It would be nice if overseas visitors and other visitors are welcomed to the Northern Beaches and residents did not feel that they own the location exclusively.  Tourists and visiting business people are valuable to the community and local businesses.  Many are visiting their families on the Northern Beaches.

Her attitude is similar to people who buy across the road from pubs then complain about the noise, even though the pub has been there forever.  If she does not like the situation in her building, she should have bought in a building where that situation does not exist.

Thank you for allowing me to respond.

Emily

 

 

 

 I absolutely agree with

 I absolutely agree with Stratachic...

We make sure that every new owner or tenant in our large Community Scheme gets a copy of the By-Laws ...by hand...with a brief run down of the most common breaches to avoid. Regardless ,some  occupiers  act as though the by-laws don't apply to them. Appealing and threatening is unpleasant and particularly when some breaches appear too minor to go to the tribunal with.

Is it possible that a Strata Committee or Community Assosciation be given the power to impose fines for minor breaches which would be defined ( eg leaving garbage bins  out when the by laws state they should be out of view...or leaving Xmas decorations  on the outside of the building until July.. parking vehicles on common property that is part of the Community space  ( a park),etc.)  The fines could only be imposed after 3 well spaced official warnings to the offender ,would have to be structured under law and added to the owner's strata fee.The owner would certainly chase any tenant to comply before the fine was applied!

The amount of the fine should be sufficient to bring about the result required by the strata body .Failure to change after this action gives a good reason then to go to the tribunal. The decision to fine  also needs a structured format to follow.

Just a thought..

Waratah

Strata Managing Agents

I have been involved in a number of body corporates over some years in NSW. The matter which keeps re-emerging is the closed shop attitude that Strata Managing Agents convey. By this, I mean, that they bully and intimidate owners' who may not be fully aware of the laws and they can be agressive and evasive when they want. Each year, because the Strata Manging Agent is present at meetings, owners' present feel intimidated and merely agree to the extention of the contract (Agency Agreement). They do not want to cause friction. I feel that it should be mandatory for at least two quotations to be submitted to the AGM for discussion. This may include the proposed renewal of an existing Strata Managing Agency with another proposal from a proposed new provider (another Strata Managing Agent).

Strata Managers TERM one year only

Strata Managers are raking in the $$$$$  overcharging , skimming,  kick backs from THEIR tradies n services that the STRATA MANAGER provides

 their take or Misinterpretation of the Regulations.. This is Common as most owners do not have a single iota of an idea regarding the By Laws n Regulations. Another SKIMM by S .Ms DISBURSEMENTS a Joke, storage fees, inspection fees, pathetic interest rates for Sinking Fund Trusts , they must be obtaining some form of financial benefit, the list goes on n on

 I fully agree with Nello  n I will add "The majority of Strata Managers are Shysters/."

Hers the biggest SINGLE MISTAKE THAT CAN BE MADE BY OWNERS N  THE EXEC COMMITTEE 

and that is

"To hand over all the responsibilities of the Executive Committee to the Strata Manager and the day to day affairs/ running of that particular Strata Svcheme.. In ESSENCE    its an OWNERS COP OUT.. Giving someone else the power to do as they please WITH YOUR ASSET     
                       THOSE WHO ALLOW THIS  AND SUPPORT  HANDING OVER  THE RESPONSIBILITIES TO A STRATA MANAGER
           ARE COMMITTING                                FINANCIAL SUICIDE 

giving their rights and responsibilities TO A NON OWNER can only be

                                    NUTS

Write a BLANK CHEQUE and watch your investment  and or your place of residence  decrease in value , no matter which way you look at it, Place of Residence or Investment IT IS STILL AN ASSET. 

the impossibility of strata management

We have owned an investment property in Manly for about a decade. For the first few years we ignored everything except the AGM but then woke up and realised we should take an interest because all was not running smoothly or fairly in our owners corporation.

We own one unit in a small block and have the smallest unit entitlement which leaves us in a powerless position. All we feel we are there for is to make up the money to the people with the numbers.

I believe, after doing a personal survey albeit with people I bump into in the course of my daily activities, that the current system of owners corporations is an impossible way to run strata title properties.

People bring their personalities into the equation and my experience has been belligerence, self-interest, bullying and allround unpleasantness. And I will now, relucantantly, introduce a generalisation into my post. My modest survey and personal experience has revealed that retired people bring these qualities to strata management.

I wish I could offer a solution to this but how do you legislate to reduce belligerance and self-interest out of the current system - I certainly don't know.

However, I do have a suggestion that documentation from the Land & Property Information office be rewritten so that property owners without a law degree can understand it - or at least when the information is communicated to the general public be done so in language comprehensible to those of us untrained in law.

Committee members they Join to

Feather their own nests n to ensure that they BENEFIT n are in real terms not interested others

Only themselves..THIS ISSUE HAS CONTINUALLY BEEN MENTIONED in this Forum

Tenants at Strata meetings

While I agree that tenants need to be better informed about what is happening in a building, this should not mean they should attend the strata meetings, where those who pay quarterly fees discuss and determine how that money is spent. Having been a tenant, I can recall that I had not idea how much things cost and had unrealistic expectations of timelines for works I thought should be done, and now being an owner have experienced a tenant in the building where I own/occuply my unit, a tenant who really did not seem to realise that every request they made was not free, and actually had significant costs attributed. For this tenant, the meeting would conclude promptly that noone who owned wanted any of these things - yet if she attended, we would have wasted time being forced to discuss the wants of someone who no longer even lives there. These meetings are for those who are paying money into the maintenance of the building to have their say. Communication with tenants should be made better - Real Estate agents should have a responsibility to provide accurate information about the building, and updates provided of any major works or changes to be communicated through these channels. Eg - where and which is the communal washing machine. Which spot is the tenants parking spot. What are the bylaws - and for pets, this does not mean that if the building permits that they are allowed them... as this ultimately still remains the owner's decision anyway. As an owner/occupier, I already struggle in votes where investors have more say than those living in the building on how the money is spent. Their decisions are made on tax deductions and not on what will make living there more pleasant. Add tenants who don't even have to pay for the work to the mix, and I have little reason to remain as an owner/occupier!

Community Title and Multiple Occupancies

We seek to make the review aware that as a subset of Community Title there are Multiple Occupancies seeking to be included in Community Title that are in need of being involved in the consultation project and the formal review of the legislation this year.

Problems: Land Ownership; Our property is currently under a Multiple Occupancy(MO) structure, on a single title.. We are three families, each living in a fully Council approved Dwelling. When we began in the mid-1980s Council was approving “Hamlet development”, which we adopted.  We have made representations to TSC as to the possibility of a Title change, such as a change to Community Title(CT).  However no planning instrument has been made available – unlike neighbouring Byron Shire.

Subdivision: Clause 4.2B of the 2010 Tweed LEP states that no strata or community title subdivisions are allowed on certain rural or environmental protection zones. Unfortunately converting our M.O to Community Title is viewed as a subdivision.

1.     Specific Issues and Concerns.

 Title: The single title on our block means that the Credit Union holds the single mortgage, with each of the three parties being signatories and guarantors of each other’s loans. Not only is this unwieldy and potentially risky, it also makes further borrowing impossible. We cannot use the equity in our property to invest elsewhere. It is difficult if not impossible for one party to sell, as the others would have to guarantee the loan of the purchaser.

Succession: Our children are now mature and as we look past middle age it is very difficult to plan for their futures. Our agreements were relatively easy between three couples of similar age and vision. However, between us we have 9 children, who are now getting to the stage of having their own partners. A more structured plan such as community or strata title is really needed.

Land Management: There are issues regarding fencing with neighbours, weed management, road maintenance, bushfire prevention and water provision that need constant attention.  These issues are being magnified as we get older and have more time commitments elsewhere.

 

2.     Possible Solutions

 .     Possible alternatives to Multiple Occupancy Title Problems.

       Community Title.  If we could have a process created to allow conversion to Community Title  then our internal M.O arrangements could be formalised.

Criteria: Local Councils could set criteria that ensure that properties are well planned and managed to be able to apply for conversion from MO to CT. Criteria could include Council approved dwellings, Surveyed boundaries, Rural Fire Service approval, Suitable access roads and compliance with Sewage provisions. Councils could consolidate its Rates base as a result, as currently many MOs operate outside council control (not ours).

 

Living in Strata Title

Having been a tenant and owner in Strata I cannot tell you the frustration, from noise, to Strata Managers who are a licence to print money. Other owners who no interest in the strata title and leave the responsibility to others to owners and tenants who have no respect for those around them. 

Strata Managers - this is an industry that should be regulated, lets be honest there is corruption the industry should be investigated, there is an owners group available but it is very limited relying on support from those that seek it out, this group should be associated to Fair Trading, so that as owner you are aware that you have this support available to you and can assist in setting agendas and at least providing some support to you when things can do go wrong.

We had a Strata Manager who had no idea of understanding what a lot of the changes were, as an example the law that was passed on making sure that the Owners Corporation had enough funds in the slush fund for any up coming expenses, in his wisdom he would just propose that the rates between the owners be increased, even though there were enough funds to cover the work, it wasn't until I read into this that I realised he did not know what he was talking about and was misleading the Owners Corporation. This highlights the issue that Owners need to be more informed with more simplistic information and not just a lot of jargon from the Government and what their obligations are it is up to Owners to ensure that the know what any changes are. But you are at the mercy of Strata Managers also to ensure that they not telling you things that are not true. Enforced levies, it was decided under the Strata Manager that the sewerage pipe needed to be replaced under the Strata Managers' guidance we were told that we need a special levy of I think around $1500.00 extra between six owners as the cost would be around $7000.00 to do the work. We were never shown the quotes for the work, and I really do not know if you are entitled to see them, it turned out that the cost was less than what we had been told, when I questioned where the other money was he said that it was sitting somewhere I can't remember, but the point of the matter is that if they are enforcing these costs they should be transparent the work that is done should be at a fixed cost to the owners. He then tried to get us to remove a tree that he said had been told to him that was dangerous - under our own interests we had the tree inspected by a tree surgeon who said that the tree was not dangerous at all, he would have then cost another $3-$5k, if we had not taken our own initiative. 

On another side of this when the work was done for the sewerage line the plumber that the Strata Manager employed did not put the mains junction back on so we had sewerage bleeding into our apartment and starting to cause water damage. We were not able to take action against the plumber as the engagement with the plumbing company but they are hired by the Strata Manager even though it is your hard earned money paying for the work. This needs to be changed if they damage your property you should be able to take them to court and the law needs to be changed that even though they have conducted work that lets them off if they damage your property it should be criminal and treated as such, they cost us six weeks of painting and having our unit unrentable during this time and affected them and the Strata Manager in no way. No affect to them at all. How is this right?

Noise is another issue that should be dealt with if you are affecting others with your noise then there should be some sort of repercussion, from animals to stereos (loud music), cars the list goes on it is a community and respect to others should be given, even kids playing - or when construction is done then there should be allocated spaces for kids to play - this would lead to more community, allocated for parking should be away from living spaces, better insulation in properties should be sort to alleviate affecting others. Better builidng codes is a must moving beyond - just code to upping the code for buildings and better design. 

Of course pets should be allowed but people should be aware of the impact on others when their bad education affects others, dogs that constantly bark, people who complain to others but don't complain to the owners corporation for fear retribution, allowing tenants to attend these forums should be made more open to them also, they represent or paying for the owner of the property that they are living in and so therefore should be allowed a voice where the living impacts them or there should be more room for a community voice rather than just calling it an owners corporation, perhaps it should be more like a co-op. Engaging with tradespeople should be up to the "Co-op" and the final decision of the Strata Managers. 

Again I reiterate that Strata Managers should be audited and weed out those that are not transparent in their dealings. Only licensed tradespeople should be engaged. The people living in the strata title should be more informed on the changes and how they will impact them. Rates should not be allowed to just be upped at the whim of the Strata Manager. 

Noise needs to be dealt with more fluidly rather than ambigously as it is a tenancy agreement or living in strata wording. 

Better building and planning of communities is desperately required, not just developers who throw up these cheap options and charge a fortune for badly designed and built buildings, these sorts of environments of living in close quarters causes a lot of stress and unhappiness as they are badly planned and poorly built and councils allow them as they just see more revenue coming their way, rather than thinking about the living impacts. 

BAN PIANOS

I live in an apartment in Ashfield whereby   the tenant above me has a piano. As the walls are very thin,the sound of a piano  drives me crazy as a  pensoiner. I can't  watch TV., use the   internet or phone  and especially  cannot sleep.I had to get the local council to send them letter  re  stopping  the piano playing.It worked and they now only play  it during the weekday   mid afternoons when I am out.Currently section  A of the Strata Act states that you cannot  make any noise thich  disturbes any resident 24/7. Some  councils ban pianos in apartments as do some countries.

TENANT ACCESS TO STRATA OWNERS CORP

I live in a block of 9 apartments, 8 are occupied, 4 of those by owners - all of whom are members of the Strata Committee.

With 50% of the occupancy and 100% of the voting rights, this committee is able to make decisions that completely ignore the other 50% of occupants, even though we contribute, via our rental payments, about 44% of the Strata fees!

This situation is not only patently unfair, it's unsustainable.  Of the 4 tenants, 3 have been resident for 2 years or more.  Surely, this tenure should be recognised by provisions that, at the very least, allow representation on the Strata committee either by representation or by enabling our voting as a block on proposed rulings.

These voting rights could be as simple as a ballot of tenants to allow committee voting rights proportionate to our level of occupancy.  The voting right proportion would be determined by the ratio of tenant to owner occupancy which, in my case, would provide one vote on the committee, cast according to the majority decision of the 4 tenants.

This would provide for a 20% representation on the Strata committee for a tenant density of 50%.  I'm sure the mathematicians and actuaries could come up with a better formula, but it's the principle that needs to be discussed and agreed.

Comments welcome and encouraged.

Tenants Representation

Geoff, you ALREADY have representation on your OC.  It is via your landlord or in his/her absence via their rental agent.  If your landlord chooses not to be active on your behalf that is a matter between you and him/her.

There is no way tenants should have direct access or influence over the OC or EC.  Sure tenants have rights, but these must be exercised through their landlord.  It is the landlord that has the financial interest in the building... NOT the tenant.

You are dead wrong when you say that the 4 owner-occupiers in your building have all the votes.  Whilst this is true at an EC level (in your case) it most certainly is not true at a general meeting where major decisions are taken and budgets approved.

I have been both a tenant and and owner and I can guarantee you Geoff, if you ever become an owner your view will change 180 degrees.  In the meantime, exercise your influence through your landlord.  That is the fit and proper way it should be done.

Strata Laws

Smoking in Home Units

I would like to comment on that currently there is no legislation covering people who smoke and who live in home units.

People tend to smoke on their balconies and the smoke drifts to others' living spaces, making it unpleasant and a serious health hazard for the people living around the smokers.

Ash dropped from cigarettes goes onto the common areas or onto people who walk under the balconies or through entry and exit doors to a unit building.

In almost every other area of life, smoking is governed by legislation, however the Strata Act is silent on this important matter. This silence makes it very difficult for a management committee to try to be proactive and move towards a smoke-free building.

Consideration should be given to protecting an executive committee where the committee has endeavoured to introduce a by-law regarding non-smoking and other measures to stop or limit smoking within a unit block. (ref SMH article 29/12/2011 smoking in home units)

Suggestions in moving towards a smoke free environment are;

-ask all owners to include clauses in their rental agreements concerning smoking to be only within the confines of a person's living space or only non-smokers are to be preferred

-the executive committee to provide a smoking area within the unit grounds, where smokers and any visitors to a block who wish to smoke, may do so, not at the detriment or health of others.

Strata Units, Owners Corporation, Strata Managers & Agents

The current Strata By-Laws are sensible and workable for old buildings (over 20 years old) just need fine tuning to empower the Owners Corporation to enforce compliance with the by-laws without the current red tape as well as few additions to take into account fire safety, OHS regulations and sinking funds regulations. Common Property should remain as it is now. Occupants, whether they are owners or tenants, have rights and obligations.

It should be made compulsory for occupants (owners and tenants) to undergo training on Strata By-Laws as well as rubbish and recyclables disposal.

Providing that the building is maintained, I disagree with strata schemes termination for old buildings unless 100% of the owners vote in favor. A lot of Owners of old buildings reside in the units and don’t have the units as investment.

Since the Owners Corporation is responsible for implementing regulations (e.g. fire safety, OHS, etc) and paying for repairs to common property, Real State Agents and Strata Managers must be stripped off their running powers and be stopped from over ruling the decisions made by the Owners Corporation.

Any amendments to be made to the current strata laws must take into account old strata buildings (e.g. like mine that is over 40 years old, not designed and built to current standards and BCA code) as well as fire safety regulations imposed on Owner Corporations by Councils (e.g. in my case by Warringah Council), OH&S regulations for what Owners Corporation are obliged by law to comply with, etc.

If Owners Corporation (via the Executive Committees) are going to be made responsible for implementing fire safety regulations, OH&S regulations, etc then the Executive Committees must be given the power to make owners and residents to comply with the By-Laws and the regulations without having to endure the extremely amount of endless and useless bureaucracy we currently have.

An owner / tenant engaging in renovations without proper consent and approval are a risk to the rest of the building/occupants, as there may be serious implications on fire safety, damage to common property, increase in noise levels (timber floors), etc.

Parking on common property is a safety hazard. Cats and dogs in units are a health hazard, not to talk about the barking noises that deprive other residents of proper rest. Consideration must be given to the fact that other residents in the building may suffer from allergies and have their quality of life negatively affected. Smoking in units with the smoke and smell going into the stairwell and into other units is a health risk. Leaving security doors/fire doors open is a risk.

We cannot have owners neglecting their units (whether they occupy or rent them out) to the point of causing serious damage to common property and the health of the occupants and then expect the Owners Corporation to have to pay huge bills for the repairs.  

We cannot have Real Estate Agents collecting the rent, pretending to carry out inspections, but turning a blind eye to damage to common property by not reporting to the Owners Corporation / Strata Management. In old buildings, all issues should be referred to the Owners Corporation Representatives for assessment before tradesmen are appointed and given the ok to carry on the repairs.

We cannot have Real Estate Agents arranging for repairs, that although to be carried out in the units they collect the rent from, in the end affect common property meaning the Owners Corporation has to pick up the bill. Time and time again this type of repairs are very poorly done, keep on cropping up, the Owners Corporation keep on paying these bills and in the end the Owners Corporation has to intervene and pay a huge repair bill in the end.        

Real State Agents and Strata Managers as it currently stands have more rights over Strata Units than the Owners Corporation. Strata Managers have the power to arrange for repairs and make payments up to $1000.00 without advising/consulting the Owners Corporation Representatives, even when they have been requested in writing to communicate with us. At the end of the day, is our money and such powers must stop.

I do feel though for tenants that do the right thing, pay their rent on time, yet are subject to defects in their units to the point their health is affected. And, as much as they can and should complain to the CTTT they don’t because they fear rent increases. However, I’m against tenants attending AGMs/EGMs, etc as these are Owners Corporation strict business.

Main areas of the existing strata and community scheme

The enforcement of bylaws should be mandatory and should be reviewed every 3 years.

Pets - Strata By-laws

By-law 16 needs to be changed to give owners the right to own a pet and prevent any blanket prohibition. There should be a mediation procedure introduced to allow owners who are bothered by specific pets to object and the pet owners  provided with the opportunity to rectify any problems. Owners who dislike pets can misuse the current by-law to threaten pet owners and force them into a situation where they have to seriously consider selling their homes.

Pets - Strata By Laws

Not only owners have a right but so to Tenants.   If' you are a 'responsible pet owner' ie your pet is microchipped, registered, desexed, vacinated yearly, not dangerous etc, etc.   Currently, there is a blanket prohibition on tenants and they are blantantly discriminated against by landlords and real estate agents if they have a pet.  Responsbile Tenants and Pet Owners know what is required in maintaining a property especially if they own a pet.  Just because you hear of some reports of owners who don't look after pets or have too many pets don't assume and presume that all tenants are the same as this is a 'generalisation'.   It is imperative that this by-law be brought into and kept up to date with our society and their expectations in living.  By denying anyone to have a pet is taking away a right and a freedom of choice.  

Pets in Strata

In the 2010 Model By Laws, By Law 17 is multiple choice.  When adopting these By Laws the OC can choose to allow cats and small dogs.

Collective Sales

Collective Sales SEPP - Provision of new dwellings in existing urban area/rural settlements

Financing of planning and infrastructure for additional dwellings

Collective Sales SEPP to be issue by state government to stimulate medium and high density construction in existing urban area/rural settlements. Existing infrastructure in existing urban area/rural settlements, much with additional capacity. Well-resourced councils with large existing ratepayer base.  Financing of planning and infrastructure proposed through a combination of special local levies, general state levies and lower developer contributions to lessen the price impacts of existing infrastructure enhancement on new dwellings in existing urban areas/rural settlements.

Strata Scheme Collective Sales

Collective Sales SEPP issued by government outlining collective sales process.

1.       Formation of collective sale committee, signing of the Collective Sale Agreement

2.       Fair market valuation by independent valuer for split of collective sale proceeds and current building valuation (including rezoning value uplift). Dissenters to be identified and dissenter relocation plan submitted for purchasing equivalent value apartments for dissenters including transaction and relocation costs funded from collective sales proceeds.

3.       Owner’s quorum would be required to trigger the collective sales process, 80% quorum required for buildings greater than 10 years old and 90% quorum required for buildings less than 10 years old.

4.       Application for rezoning by sale committee to NSW Planning and Infrastructure for minimum of a 25% increase in floor space and a maximum determined by site capacity  from urban design report. Required reports include infrastructure reports, transport report and human services reports to assess capital and recurrent costs of enhancements to existing infrastructure and scale of special levies required to be applied cumulatively by state and local governments. Impact on existing government infrastructure investments to also to be assessed.

5.       Application of termination of strata scheme to Registrar-General by NSW Planning and Infrastructure upon rezoning.

6.       Termination of strata scheme and exchange of collective sales following public tender. Execution of dissenter relocation plan and settlement and distribution of remaining proceeds.

Site Aggregation Collective Sales

Collective Sales SEPP issued by government outlining collective sales process. FSR increases for aggregated sites to yield suitably zoned sites larger than 2,000sqm in existing urban area/rural settlements suitable for apartment construction. Fair market valuation by independent valuer for split of collective sale proceeds and current building valuation (including rezoning value uplift). Joint application for Minimum 25% increase in floor space up to a maximum determined by site capacity  from urban design report. Required reports include infrastructure reports, transport report and human services reports to assess capital and recurrent costs of enhancements to existing infrastructure and scale of special levies required to be applied cumulatively by state and local governments. Impact on existing government infrastructure investments to also to be assessed. Public tender for collective sales and distribution of proceeds following rezoning gazettal.

Everyone who manages a strata should have a TAFE certificate

My submissions are:
1. Everyone who manages a strata should have a TAFE certificate in Basic Strata Management.
2.There should be open scrutiny of Strata Levy Administration and Sinking funds by interested owners through access to bank account details.
NB. Does anyone know for sure how much money is actually in the accounts to back up strate statements?
3. The Department of Fair Trading should receive an annual strata management form, similar to a tax return, for review, advice and further action if necessary.
4. Strata levy increases should be set at a reasonable level so that pensioners are given a fair go versus rich investors who are only interested in making money.

Wheel clamping of vehicles trespassing on private land

As a member of the body corporate of a block of units, we are frequently inconvenienced by a minority of residents who ignore and openly flout the property by-laws and illegally park a vehicle in a visitor car space.  The law seems to be strongly biased towards the tenant, it being a long and tedious process to have the vehicle removed and to impose a fine.  Even then the fine is little more than a slap on the wrist even if the vehicle has been continually offending for several months.

Currently it is illegal for the land owner (or in our case the Unit Body Corporate)  to clamp the wheels of an illegally parked vehicle and impose a fine even if we have a prominent notice warning violators that wheels can be clamped, the size of the fine and that the vehicle may be towed away.

Whilst I fully agree that it is important to have a fair balance, I firmly believe that the current law is too strongly biased in favour of the offending tenant(s).

I would like to suggest the following changes:

(a) that a sign (or signs) must be prominently displayed warning drivers
that illegally parked cars can have their wheels clamped and be towed away
together with the size of the fine.  It must be obvious that the land is
private property.

(b)  the maximum size of the fine/release fee would be stipulated in the legislation.

(c)  for a private home/residence, the offending vehicle could be clamped on the first offence.

(d)  for a unit block, at least three prior warnings in writing would have to be given for offences on separate days before the vehicle could be clamped and towed away.

Whilst this may seem as a storm on a tea cup, I have no doubt that the majority of strata unit residents would welcome such a small and inexpensive change in the legislation to overcome this extremely annoying problem.

Parking on Common Property

I agree that parking on common property is a serious issue.  The first hurdle to overcome is the privacy act.  It's nigh on impossible to be sure who owns a vehicle and thus to be sure whether the vehicle is a genuine visitor's vehicle.  There needs to some way for owners corporations to have access to the address of owners of illegally parked vehicles so that they can take action.  Then of course there needs to be some real action that can be taken legally.

We are required by the building approval consent to have 8 visitors parking spaces.  Those spaces are never available for visitors.  There are also residents vehicles parked on other parts of the common property that are not marked parking spaces.  Our ability to gain compliance simply does not exist in NSW.

I'm told that clamping and towing is available to owners corporations in QLD.

The strata act needs to allow owners corporations the ability to enforce compliance.

 

Floors and smoke

Other than kitchen and bathroom all floors should be carpet. No BBQs on balconies. No smoking on the property. 

I have lived in a block of units for a very long time. Timber floors no matter how good the sound insulation is, example 15mm rubber plus 19mm plywood and 19mm solid timber. does not work. In our case so many units have now got timber floors the build as a whole now has this underlying background noise.

BBQ smoke just irritates everyone. Also I would like to see smoking banned, the smoke works it’s way through and into other units. In this day and age when we clearly know the heath issues of secondary smoke, smoking needs to be stopped for the health of the community. In our building the vast majority who don’t smoke are all effected by the very few who do smoke. 

Tribunal effectiveness

I believe the system presently available is cumbersome to the ponit of being absurd and favours the recalcitrant owner.

Owners Corporations have become dissolutioned and reluctant to pursue breaches of By-laws due to costs to resolve the issues and the time of EC members who give of their time without remuneration and in many instance have to go to work.

A By-law should be upheld by the tribunal and if a breach has been proven then the offender should be fined appropriate to the degree of the breach.

A public servant should not make law. Their role should only be to uphold the law.

The making of law should only be the prerogative of our elected representatives.

The presumption in seting up of the tribunal was to expedite matters, amicably without costly legal representation and to minimise the time involvement of everyone.

Let us not forget the members are volunteers.

We have in our complex what I believe is a recalcitrant family.

It brought a dog onto the premises without approval which took two (2) years to obtain a final decision for the dog's removal. 

The unit owner appealed the original judgement.

The adjudicator stated the owner was unreasonable in the notice given to engage solicitors.

The combined total cost to the parties is estimated to be in excess of $40,000 inc. the 3 appearances by the owner's barrister.

In addition the same owner has made many alterations to her unit without obtaining approval prior or after the work has been undertaken despite advising the owner these were breaches.

On one occasion it was necessary to seek an interim order against this owner when threatened with major work commencing within 7 days without approval or adequate information for the committees consideration.

Last but not least the family and partner and friend have repeatedly used the visitor parking for 24 hours per day over numerous continuous days and on occasions dominating two of only 3 visitor spaces available.

I believe an indepedent  body should be established with one member beng a solicitor to hear disputes and determine the matter strictly on the body of proof and the determination be the end of the matter.

 

 

 

Pets and the by laws

That old by law on pets was impossible.  The 2010 Model By Law 17, if adopted appropriately, is a much better by law.

Noise

Timber floors should be prohibited in unit blocks. Anyone living below a timber floor knows how much noise there is and it seems that all the padding used still does not match the acoustic capability of carpet.

There needs to be a better way to control the noise made by other tenants in the building, including, but not limited to: loud TVs, loud music, motor bikes, renovations / handy man work outside the permitted times.

no BBQ's on balconies

Absolutely no barbeques on balconies. My home is my castle, but not when it smells of BBQ onions and smoke.

Executive Committee membership

The term of membership should not be restricted.

The apathy of owners is notorious.

If owners do not volunteer or attend ECM's, EGM's, or AGM's to assist in determining who should be a member then they should not complain and only have themselves to blame.

Since acquiring our unit in 1992 I have been the Treasurer every year and have accepted my nomination by the owners who take the trouble to be involved.

The old saying "put up or shut up" is still valid today.

What if no one volunteers for membership and or official positions on the Executive Committee of the Owners Corporation.

Which Govt.Dept. determines who will be the administrator of the Owners Corporation.

Over the years I have assisted the Secratary office bearers who had to go to work. In recent years I felt if I do the work I should have the title.

Most of the problems arise through lack of interest and you cannot legislate against this.

By-Law breaches

The appropriate authority should establish the basic intent of the By-Laws and as is now the practice and embody them in the Strata Living booklet.

The Owners Corporation should not be burdend with having to have amended By-laws to meet the needs of each individual Corporation which is highly inefficient and costly what with solicitors, registration and other fees.

A more efficient way is to permit Owners Corporations to develop regulations/rules/conditions to suit the individual additional needs of the their establishments.

The regulations etc. must be approved at an EGM or AGM and be filed together in a seperate folder by the Secretary and/or the Managing Agent and be available by mutual arrangement.

The committee must be given the power to establish fines within guidelines estalished by the "Authority".

The fines can be for the offence and for each day thereafter that the offence continues.

There must be an incentive for the offence not to occur and the the offender to desist.

All fines to be retained by the Owners Corporation.

The present system does not encourage proper behaviour from recalcitrant owners or vexatious litigants.

 

Tenants rights

Tenants rights are more than protected under tenancy legislation and should not be given any powers to interfere how the Strata is administered.

The tenant has no financial exposure.

If he has a problem with his tenancy then it is a matter between the tenant and the landlord.

The tenants could be encouraged to attend EC meetings and be bound by the rules of nonmembers.

Our experience in 23years they have never attended.

Unit alterations

A simpler system in dealing with applications for alterations to units would be to allow the EC to approve applications subject to adequate information being provided

Such approvals to be fully documented and held by the Secretary and/or Managing Agent in a folder register.

The Act to clearly state that the work is thereafter the responsibility of the current owner and any subsequent owner from time to time.

This shall apply whether the owner has sought approval or not.

This also to apply to work affecting common areas.

The OC has no further responsibility for this work.

Unit alterations

I support the above comment. My neighbour and I have both built pergolas - with OC approval, and on the understanding that we are responsible for future maintenance of the structures. Another  resident also built a pergola, without approval, and insists that the OC pay for the painting and repairs. THe agent lets it through because they don't have any evidence that the pergola wasn't part of the original building. Why should we suffer for doing the right thing?

Smoking

I would also like to see laws changed to protect residents from the effects of smokers in the building. Most people do what they can to stay healthy, eating right, exercising, plenty of fresh air, etc and 'not' smoking. This is then undone by having to inhale other people's smoke. There is plenty medical evidence to prove that the effects of smoking (smoking & passive smoking) are deleterious to everyone's health. As a minimum, smoking should be banned in the common areas (inside and outside) and on the balconies, limiting the areas where people can smoke to inside their own units. They've managed to do this in the hotel's and clubs, so now we also need to protect people in their own homes.

smoking

Smoking should be banned in areas where the smoke drifts into other units. My neighbour smokes outside his front door and the smoke drifts up to our bedroom.

Ban Smoking

 Agree - smoking needs to be confined to inside their space with the doors and windows closed. We are so tired of living next door to chain smokers who smoke in their beds with the balcony door opened.  We are unable to enjoy fresh air in the evenings and early mornings with our bedroom balcony door open because of their smoke creeping into our bedroom. The same goes for the courtyard space.  Two older people continually smoking day in and day out. Please do it inside their place and give everyones lungs a break!!!

Leaf Blowers

I would like to see the use of leaf blowers banned from residental unit properties. The main reason is the CO fumes that are foul smelling and toxic to everyone's health, including the people using them. These fumes waft inside people's units. Second is the noise. Have you tried to talk on the phone or listen to the radio or TV while one of these is operating outside? Thirdly, these days when we are considering environmentally conscious alternatives, why are these still allowed? Surely there is an electric alternative with no fumes, no smell and no noise.

STRATA CHANGES

being in WA and having owned many units i have to say generally speaking it all just such hard work.  in one building we were held to randsom by an 80 year old lady who didnt want the plumbing problems in the building fixed as her's were working fine and she slowed the process down by years becuase of her rediculous attitude.  in the mean time the strata had to spend thousands of dollars on contact cleaning of drains and expensive stop gap measures till it could be arbitrated on.  its crazy that in a building of 60+ units that one person can hold such control. 

i have enjoyed reading so many valid points from so many people.  i do think the %'s need to be looked at for voting on issues.  especially bylaw changes.  in the same building we had an owner who had died and we were unable to trace the current owner of his apartment as his will seemed to have disappeared and he was an overseas resident.  apart from the fact that his unit was unrentable as no agent could contact him to get maintenance issues sorted, when it came to items that needed 100% voting and 100% in favour to pass the motions, it was impossible to do for many years.

pets in stratas has always been an issue for me.  its one reason why i'd never live in an apartment myself.  smoking being the other.  it does seem crazy that we are protected in all other situations but not in our own 4 walls!  what constitutes "uninterrupted use" of ones own space if that's the correct term.  it seems smokers have rights and everyone else around them looses out.  including their health.

finding the right balance is really where its at.  on all levels.  I'm happy if a person wants to smoke in their apartment, as long as I dont have to smell it - with or without my windows open.

thanks

Strata law review - Internal noise; Doors

The Strata Schemes Management Act 1996 (April 2009) by-laws (cl 14) and Strata Schemes Management Regulation 2010 model by-laws (cl 15) make specific reference to noise and disturbance originating from floor coverings;

Floor coverings (1) An owner of a lot must ensure that all floor space within the lot is covered or otherwise treated to an extent sufficient to prevent the transmission from the floor space of noise likely to disturb the peaceful enjoyment of the owner or occupier of another lot.

However, in regard to noise and disturbance originating from contact between doors and door frames, the regulations are silent.

Impact absorbing pads and materials, if fitted, between doors and door frames can harden over time, fall out, or be removed during repainting or renovation. Sometimes they might not even be present at all. Allotment entry doors, in particular, are an issue because in many unit blocks there may by three, four or more unit entry doors per level that are in close proximity, that disperse noise via the common vestibule space. Noise from banging doors can be dispersed via stairwells to additional levels or transmitted through the building structure to adjoining allotments. Without sound/impact absorption materials, even with the best of intentions annoying, intrusive and frequent noises can be generated, especially in high traffic areas.

At present, the only resolution to ongoing noise and disturbances from frequently banging doors causing disturbance is to manage them through the disputation process rather than dealing with them as an engineering or structural matter.

If it is appropriate for the by-laws to concern themselves with noise generated from floor coverings, there should also be a similar requirement controlling noise from entry and internal doors and their doorframes.

Failure of the CTTT to follow the law in its decisions

The following is a synopsis of of six years of futility in attempting to get the CTTT to solve an obvious problem, to have its orders implemented and to make decisions according to law.

There was a discrepancy in the 2005/06 accounts of the Nambucca Plaza of $75,035.43 Plus other matters re levies, accounts and legal fees.
 
a.         The decision of the Adjudicator Stephen Smith was that these matters were easily rectified – case dismissed.     It was then appealed
b.         The Senior Tribunal Member John Borden made 3 orders to fix up the matters concerning the accounts, levies and legal fees.    His order were ignored.    An application was again made to the tribunal.
c.         The tribunal member claimed this was a very serious offence and fined the Owners Corporation $1,250.    The Executive Committee and Strata Manager obtained over $8,000.00 to attend the tribunal hearings without ant authority or advice to strata owners.    A percentage of those costs were taken from my levies to pay for these fines which were never refunded in contravention of the act.
d.         A few years later another application was made to the CTTT, concerning the actions of the Executive Committee, Strata Manager and further problems with the 2006/07 and 2007/08 accounts..
e.         The Adjudicator Hennings found that the Owners Corporation was dysfunctional and not following the requirements of the law.   The case was dismissed as another strata manager had been appointed by the Executive Committee who were the subject of the complaint and were still sunning the management of the strata.
f.          The auditor had to rewrite the accounts for 2005/06 before he could audit them.   The cost was $4,400.    Due to the less than adequate presentation of the accounts for 2006/07 and 2007/08, the auditor required the books to be re-written prior to audit.   The quote was $15,000.     To this day no completed accounts for those years have been produced or audited.
g.         An appeal to the tribunal against the decision of the adjudicator was made.    The tribunal member Titterton dismissed the appeal and based his decision on such statements as “discrepancies with the accounts” ……. “is a bare assertion and unsupported by any independent or corroborative evidence”.   That statement was totally ludicrous and alarming as there was approximately 30-40 pages of corroborative evidence put forward by me as an accountant and auditor of 30 years experience and further evidenced by the previous orders of Senior Member Bordon in his finding and subsequent orders.
h.         Members Titterton’s final statement, that if we wanted to appeal his decision it would cost us a lot of money.    I regarded this as nothing less than subtle intimidation
i.          As the previous strata manager was accorded the blame by the adjudicator, I was advised by the CTTT to take up the matter with the specialist support unit.  
j.          The specialist support unit looked into the matter and advised the problem was with the executive committee and I should take up this matter with the CTTT.   That is where the merry-go-round ended after 6 years
 
Nothing has been achieved in six years and when one looks at the process above, one can justly come to the conclusion that it has been an exercise in futility and makes a mockery of the CTTT and the principles and law it is supposed to follow.
 
In August 2011, I put in a 25 page submission to the Minister,  I will ask the administrators of this forum if they can make a link to that submission which shows even more endemic problems within the operation of the CTTT.
 
Bob Morrison

Sounds Familiar Bob

Hey Bob

Are you talking about our Strata Scheme in the Inner West of Sydney.

Gee it sounds familiar..

In our scheme the Strata manager "lost' 2 years of the Strata Records..Geee

Good luck  the CTTT has no teeth, but how does one legislate..Civil rights, personal freedoms etc etc..

Telling people to have self respect n respect for others..I dont know??

rgds M

BoB is right..Unenforceable Laws ..A joke

Bob is totally right..The system is weak pathetic n has no teeth.. Many n I mean many as opposed to less Strata Managers ARE CORRUPT.

Strata Managers are skimming your funds  ..The Laws HUH.. Executive Comm..I got similar problems Sink Fund Forecast Feb 2012   $69,ooo

lucky to be $10,000. A $60,000 discrepancy.. Strata Managers should not control or manage Sink Fund money..Its the ownrs money..I know of one Strata Man who has invested the Sink Fund money in a Trust Fund.. The interest .7 of 1% on $10,000 lucky to get $50 per year Its rotten to the core. What is the story here?/ it stinks of kick backs.. .7of 1%....??? when 5% is readily available.. Hello Treasurer of EXEC COMM..   To overcome or lessen these problems a strong determined and thorough TREASURER is CRUCIALLY IMPORTANT

Stop the Insurance Commission Rort..20% FOR WHAT?/ a phone call follow up e mail..Electronic payment.. 10 minutes maximum.. $10,000 insurance

$2000 commission i.e 20% for 10 minutes..WATEFUL CRIMINAL n CORRUPT.. The system in a related manner encourages Strata Managers Corruption.. CALL THE POLICE

GET RID OF STRATA MANAGERS altogether, The Paperwork / accounts can be done by a Accountant / Bookeeper.

repairs n tradies.. thats easy.. local papers adverts contact ..internet listing of LOCAL TRADIES.. two quotes..Dept Fair Trade..sets up an on line listing per area..easy.. price indications per repair, records kept of all repairs with specifications of work performed n the record is duplicated, one to an owner n the other to an exec comm member preferrably the Treasurer. Strata Man tradies pay a kick back..Its Common knowledge..Why cant the relevant authorities see this//Staff of Fair Trading are fully aware of this..NOTHIN DONE. More Pro Active involvement from Exec Comm or they are Automatically sacked as NON ACTIVE.. so many are like this..NON ACTIVE but want their egos massaged, their defects fixed first..Its power that corrupts small minded self interest greedy n selfish members,, its NORMAL PRACTICE now.. STOP CORRUPTION N THE RORTS

Get Rid of Insurance Commissions for Agents

Michael Chacha is right.   Get rid of Agents commissions for insurance.   Agents work for the body corporate.   The organising of insurance for a strata is not onerous.   In our strata previously, our premium on the insurance policy was around $72,000.   It is known that the insurance company concerned pays up to 15% commission to the agents ($10,800).   In our case this was not disclosed by the agent (the complaint was ignored by the Specialist Support Unit).   When the agent was confronted for receiving such a commission - his reply was simply that by receiving this commission he could give a low quote to get the job to manage our strata.

This is completely wrong as this can be perceived that the agent could get the best insurance for his own pecuniary benefit rather than for the benefit of the strata he is managing.

In simple terms make it illegal for strata agents to receive commisions and keep the playing field level for an agent applying for strata management.

Bob Morrison

 

evicting a non paying tenant and other things

I have a few things I would like to change that in summary cover:

-the need for plain English instructions for those trying to seek solutions through the CTTT that can't afford lawyers.  Members get quite cross when you don't know the details of strata law but to find the material on the web site is a nightmare.

-not all landlords are the bad guys and so it would be more appropriate if some balance could be brought back into the CTTT environment in the hearing room. 

-the ability for a person to register a body corporate matter with the CTTT and then cancel it knowing that expense has been outlayed and then re-register the matter again.

- an improvement to the speed and process with which the Law directs landlords to go through the process of dealing with non-paying tenants and their eviction.  Let me explain.

The circumstances were this.  I had tenants who were not paying rent.  they were behind nearing $5,000 ($600 per week rent) and using every tactic to delay paying.  This started in April.  I discussed many payment plans but none produced the outcome of having the rent paid up to date and payment on time.  In December I took the problem to the CTTT.  I have used lawyers before and even though this was a great deal of money to me I knew that this would explode if I used lawyers for this matter.  the tribunal issued an order to pay an additional $500 per fortnight (which was what I was told all that could be afforded by the tenants).  I did my annual inspection and found the place had been damaged mainly needing new carpets, new granite in the kitchen and the walls were filthy.  I gave them plenty of notice and wrote the manditory letter excluding the part that says if they paid up I would let them stay.  I couldn't put that in as it was a lie.  But the law says I have to say that even if I know it to be untrue.  When I went in front of the member I was wrong - I can't have an order as I did not comply with the law.  In the hearing room I had to vow that I was telling the truth, the whole truth so help me God.  This is ridiculous.  Now due to the delay of not being granted an order I now have to submit another letter and again try to get them removed.  The have already told me that they are not paying anymore money and that I can take them to the CTTT or anyone else.  They won't be found as I have no way of contacting them after they move out.  I can't have them physically removed and so I have to find the funds to pay the mortgage each week as they live rent free in my property. 

In this case the bond is too small and quickly the rent debt exceeds the amount. Also this does not cover the damage that has been caused which will exceed the bond by 100% by the time the damage is repaired.  

- access to the tenants next address when they run out on their rent and any damage.  Even if I have their drivers license number the police can't help me track down the departed tenant. 

Existing Strata and Community Scheme laws should be removed

The main areas of the existing Strata and Community Scheme laws should be removed for ever and let every one to live their life as owner of their own home.
 
There is a lot of issues that need to be addressed in the legislation. Strata scheme should not have the power to control other residents life and the right of people to maintenance their own home with no order taking from the strata schemes.
 
The best way to improved the strata schemes is to demolish the committee as well as the strata schemes and let every owner enjoy the freedman of living in this beautiful country as citizen's right.
 
There are a lot of changes that needs to be taking place in every disputes of strata scheme applications to CTTT and all the crimes that happens every day of our life.
 
It's because of people understanding and our multiculturalism in Australia that makes the big difference in our life.

Parking on common property

One of the biggest problems in Strata Living is parking on common property. And the fact is that there is nothing much we can do about it, or so our Managing Agent tells us. The process is so involved.

Could the enforcement of the laws be made easier or the penalties made more severe, as some tenants seem not to know they should comply or don't want to know?

Strata Laws: Online Consultation

In response to the 4 questions raised by the Government, I would like to agree with all the points raised by Jimmy Thomson in his column Flat Chat, January 14-15, 2012, in the Sydney Morning Herald's Domain section.  In particular,  I absolutely agree that the enforcement of by-laws should be obligatory, and that executive committees should be allowed to issue set fines for a specific range of breaches.  Our building of 12 units is self-managed, and most occupants know that the Notices to Comply aren't worth the paper they're written on, because it's so hard to get individuals fined.   Furthermore, we believe that tenants have no place at the AGM, as they are inevitably the source of all the problems in smaller blocks. They refuse to abide by by-laws, because they know the law has no teeth. 

Make the laws stricter and easier to enforce so that it's easier for buildings to be self-managed, thereby saving costs for Owners Corporations.

Terminology in the Act

Some committee members are not exactly PhD material and some are totally ignorant of the requirements of the Act.

The Act refers to setting up a 'Sinking Fund'.  The name infers that this is some sort of savings fund into which money is 'sunk' for some unspecified future use.  It should be re-named, the 'Repairs and Maintenance Fund' to avoid any misunderstanding or ambiguity.  (The other fund is the 'Administration Fund' which is an appropriately discriptive and self explanatory title).  Our committee has for years just used the Sinking Fund as a general war chest of money to be spent by the committee, on whatever they deem fit, without obtaining owner approval. This is completely contrary to the Act.

Secondly, the Act requires a '10Year Plan' to be prepared, but doesn't explain what is to be done with it.  My interpretation is, that it is simply a planning document for:   1. To assist the committee to prepare the Sinking Fund Budget each year.  2. To provide owners (and potential buyers) of what the estimated future repair and maintenance expenses are likely to be and what year they are likely to occur, so there are no rude surprises.   It is particularly appropriate in buildings which may have large single expenses such as painting, elevator or air conditioning replacement/overhaul.  By its nature it is a very inexact document because it requires a lot of very approximate guess work. However, our committee takes it as an exact science, (because they paid an outside company to prepare it so they assume it must be gospel), and they simply take the amount fo money shown in the plan and put that amount into the Sinking Fund and ignore making a R & M budget.

KEEP THIS FORUM PERMANENT!!!

The Strata Laws: Online Consultation should remain as a permanent fixture and a meeting place for strata dwellers (owners, investors, tenants) to become aware of issues and exchange ideas. While Flat Chat exist as part of the Domain part of Sydney Morning Herald (I think) it is not that well known and privately controlled. The Department of Fair Trading can sponsor this site and let it be an ongoing "blog" or place to find answers and ask questions from the many talented people who have already contributed greatly to this site. It will also act as a bellwether for government authorities to become aware of new issues and changing trends straight from those affected, rather than via biased reporting from CTTT or newspapers. Think about it, Mr. Minister.

Spot On I agree

Totally Agree

FAIR TRADING TO DEVELOP STRATA EDUCATIONAL VIDEOS ON YOUTUBE

The Office of Fair Trading, responsible for strata legislation and CTTT can use the likes of YouTube or develop its own channel of short educational videos relating to all issues in strata schemes and legislation.

With the assistance of a professional production house, legal consultants and realistic locations and actors, any number of videos (You Tube limits videos to about 10 minutes) can be developed about any subject imaginable:

Let us let a look at a few: Video on renting a flat, signing a lease, how to get repairs done, behaving in a strata scheme (both for owners and tenants), the various by-laws and their meaning.

Training videos for executive committee members on how to hold meeting, how to call meetings, how to present the accounts of a scheme, responsibility to repair (s.62). How to buy and sell a flat (the legal requirements).

There can be a whole host of videos on how to approach the CTTT and its various branches, how to fill in forms, how to write submissions and make and present admissable evidence, the list just go on and on.

Such videos can be used by anyone with a mobile phone to a desktop computer, by members of executive committees preparing for meetings or understanding how to better run a scheme.

It can teach the rudiments of the strata act and its obligations, do I need to say more. A proper budget for such a project and good promotion of its benefits will save tenants and owners (especially ones that english is not their first language) a lot of money and disputation and can become a resource that anyone can turn to.

More and more people live in strata schemes and rent in strata schemes, they pay rates and taxes but are poorly served by the government.

LETTER FROM MINISTER OF FAIR TRADING OFFICE RE REVIEW PROCESS"

THE FOLLOWING EXCHANGE WITH THE MINISTERS OFFICE IS PUBLISHED HERE: THIS FORUM IS ONLY THE BEGINNING AND YOU CAN PUT YOUR NAME ON A LIST TO BE NOTIFIED OF FUTURE PROGRESS.

The Honorable Anthony Roberts
Minister for Fair Trading
GPO Box 5341 Sydney 2001
 
RE: REVIEW OF STRATA SCHEMES MANAGEMENT ACT AND REGULATIONS.
 
Dear Sir,
I recently wrote to you on matters concerning the Strata Schemes Management Act and the Consumer Trader and Tenancy Tribunal via my local member.
I thank you for your reply
I am pleased to see that the current government acted swiftly to announce a review of the Strata Schemes Management Act and related legislation announced in the newspapers last week.
I intend to make extensive submissions.
However, I find the final date for making submissions to be rather short considering the holiday period. The minister may consider extending the time for making submissions till the end of March 2012 instead of end of February 2012.
The Minister is also urged to advertise the review widely and to use the opportunity to appear on TV (7.30 NSW for example or current affair programs on commercial television). One and half million people live in strata schemes and the number is growing daily. There are many issues that need to be reviewed to make the legislation future looking, and as many people as possible should be given the opportunity to contribute.
Respectfully yours, xxxx
 
 
The following letter was written by the Office of Fair Trading in response to my letter above:
 
 
Mr xxxx.
I refer to your correspondence to the Hon Anthony Roberts MP, Minister for Fair Trading regarding consultation on the strata and community schemes laws. I have been asked to reply to you.
As you know, the NSW Government has decided to carry out a fundamental review of the strata and community title laws commencing in 2012. A preliminary online consultation process is running until 29 February and can be accessed at http://www.openforum.com.au. There will also be a number of other opportunities to have your say on strata issues during the course of the review.
The aim of the initial online consultation is to give strata and community schemes owners an opportunity to share their experiences, raise specific issues or concerns and suggest possible solution. These comments, along with a range of other information sources, will be used in preparing a discussion paper which will be released for public consultation later in the year.
If it not possible for you to contribute your ideas during the online consultation period, you may still sent written comment to NSW Fair Trading at any time. Your details have also been added to the review mailing list so that you will be notified of further opportunities to provide comment.
I trust that this information is of assistance to you.
Yours Sincerely.
Leanne Porter, A/Director, Policy.
 
I thank Ms. Porter for her letter and advise all who read this that the Open Forum is only the start of the process. Put your name forward and make submissions directly if the public forum is not the way you feel comfortable with
 

Independent public policy think-tank

I am on a property which has only 2 units operating under Strata Laws and of which I am the owner of one of the two. I have encountered many difficulties in obtaining agreement with the owner of the other unit (who lives interstate so this unit is an investment property) and with the present Strata Manager.

I am aware that the Strata Manager can be changed but this is not easy where choices are limited in a Regional area. In my situation, the owner of the second unit has appeared many time to be dis-interested in the day-to-day issues of building maintenance and the maintenance of the common areas of the property. With an attitude like this can only lead to lengthy and possibly fruitless attendances at mediation sessions or worse still, expensive court actions.

There has to be a solution available to people in such circumstances to reduce the painstaking time in trying to achieve compromising results and at the same time, thus avoiding all the frustrations that are encountered along this very difficult road. In order to keep pace with the maintenance requirements that occur from time to time, I have paid money out of my own pocket to maintain both my unit in good condition and in the common areas so that this is at all times safe and presentable.I have had to do this because of insufficient funds being available in the Sinking Fund. My letters to the owner of the second unit remain, mostly, unanswered so no progress is ever made.

The Strata Manager appears to be only interested in getting their fees and not providing any sensible/acceptable advice. At the AGM's, over the years, the agenda provides only for those regulatory items and any other issues that I have tried to raise in General Business goes unheard as the Presiding Officer makes statements such as - "I have to go now, I don't want to hear any more - any concerns should be taken up with the Dept.of Fair Trading." So where does one go or do in such a circumstance. With such an attitude, my voice is not heard at the meeting designed to bring issues forward for debate or discussion.

Unfortunately, it has been the Presiding Officer who holds a Proxy for the other owner. So it is simply me against the Presiding Officer with a Proxy. I have received some guidance from the Dept.of Fair Trading but difficulties still remain. The drama and trauma that I have had to endure in these circumstances are just untenable and corrections to the laws appear long overdue.

My thoughts are that when there are only two units on any property development being proposed when in the planning stages, the Government regulations should allow only Torrens Title to be applied, full stop. I thank you for this opportunity for the "little person" to be heard and to voice my opinion on this very important aspect of law.

Reply to you...

I posted a reply to you which is a few headlines below. its name is "can I be of help?". You may contact me through that, I hope I can be of assistance.

What I see to be improved in the Strata Law

Lately, there has been a drama within our own small mix strata complex (i.e commercial and residential strata plan). For those residential owners, we are all first home owners and came from non-English Speaking countries, while the commercial Aussie owner took our weak points and take advantages from us. 

Without any quorum in a EGM or agreement from majority of the owners, a new strata agent who is a friend of the commercial lot owner was assigned to take over our complex. A Strata Agency Agreement was signed and seal with the commercial lot owner only without consent to any other lot owners or ECs (his lot was subdivided into two lots not long ago), therefore he signed twice on the agreement and consider himself as two owners. We later found out about all these and was advised by a 3rd party strata agent that the agreement was invalid due to it clearly didn't meet the Strata Act 1997 s238, which is clear and simple stating at least two owners of ECs needs to sign the Agreement. We confirm with Fair Trading, called the strata agent and telling them that what they doing is wrong. Unfortunely we got ignored, the agent just won't pass the keys and books back to the ECs, after months fighting back and forward through Leagal Advise, Fair Trading, communicating with the MP and local council, now we are now finally up to the stage of CTTT.

Therefore it brings to my attention that: an agent can be so easily enter to a strata scheme however it took the owners months to get back what belongs to them, wouldn't it be a little unfair?!!  Espeially now more strata schemes are being developed as lands are more expensive and people couldn't affort a house. Wouldn't it be more cases like ours in the future? As the immigrants entering Australia and who have absolute no knowledge of what strata is all about?! 

I do believe the government needs to promote the Strata Legislation and make it more fair to avoid any more vitims like us. And the process when handling our case was away too complicated and time consuming.

Suggestions for Amendments

  1. By laws must be included on any tenancy lease, or purchase contract so that people aren't ignorant of responsibilities.
  2. Maximum occupancy levels per unit  to prevent overcrowding, noise and excessive vehicle parking on common areas.
  3. Limit on maximum no of vehicles associated with any unit.
  4. All units must have separate water meters (and independent meters for commons areas).
  5. Electrical fittings on common areas must have independent supply & meter, so that an owner or tenant isn't unfairly being billed for usage.
  6. Double or thickened glazing and other noise-reduction features to be compulsory in new stratas.
  7. No in-house self-controlled OC management committees ie must be managed by a qualified agent.

required new/changes to State laws

We are owner-residents in an inner city apartment block with 112 units and mixed commercial and residential units.
 
We are having problems due to:-
- flaunting by some owners/tenents of the by-laws put in to comply with the zoning laws and development conditions put in by the Sydney city council
- over-crowding (~4 adults or more to a bedroom), giving problems, such as, over use of the supporting infrastructures of the building complex, for example, the waste/rubbish disposal capacity of the building, capacity of the fire emergence exits, etc.
- illegal building works by some owners/tenents (building of walls within units to have additional “bedrooms” which would not have windows, adequate ventilation, etc)
- illegal building works by some owners/tenents which can compromise fire safety with illegal internal walls which disrupts the proper working fire safety sprinkle systems.
- disreputable strata managers who were incompetent, corrupt (favouring some owners or others), unethical (puttin their own self interest above the interest of the owner corporation who the are meant to represent); this has been solved in our case with a change of strata manager but is a problem in general.
- disregarding of zoning laws by some owners, for example, the running of a hostel/backpacker accommodation business operation, , short term rental business, etc, in a building zoned for residential use only.
 
Imposition of owner corporation’s by-laws is difficult if not impossible due the lack of resource, authority and policing available to the owner corporation. We also think that it is difficult to have a have change of legislation to boost the owner corporation’s effectiveness to impose owner corporation by-laws due to:
- difficulties for owner corporations to have adequate policing resources and authority, etc.
- difficulties for owner corporations to always ensure due process, natural justice, appeal procedures, etc.
 
We propose that the issues above will be address if:
State legislation is introduce or amended to:- 
1. increase power of State and local government officers (and other appropriate authorities, for example, fire safety officers, police, etc) to inspect, carry out approriate action, etc., to ensure compliance to 
a. zoning laws
b. development application conditions
c. health and safety rules and regulations, laws, standards, etc.
d. any other appropriate State and local goverment rules and regulations, laws, standards, etc.
2. the State to introduce and enact anti-overcrowding legislation to have a maximum limit of 2 adults per bedroom in a residential domestic dwelling/unit (for example, a 2 bedroom residential unit can have a maximum of 4 adults, and a 4 bedroom residential house can have a maximum of 8 adults).
3. the State to introduce or amend suitable legislation so that strata managers meet standards of competent and ethical business practice.
 
The overcrowding issue is a very important matter as it actually affects Australia's international reputation. International students have often be taken advantaged of by being put into over-crowded accommodation, resulting a bad experience. They leave Australia and carry the bad experience back to their home countries. Rather that be an ambassador for Australia's interest, they will pass on a negative image of Australia. Australia will be losing a very valuable and immeasurable benefit of all these overseas students. Speaking for personal experience of an overseas student who have return to Australia and become a citizen of more than 20 years, this is a very important and serious issue that must be address as soon as possible. It is in the interest of all citizens of Australia.
 
Politicians of all sides should act on this urgently.
 
 

Changes to proxy laws

1.    CHANGES TO PROXY LAWS.

The most important change should be -

I).  Executive Committee members should not be allowed to hold any proxies.  Stop the "power and control"  that comes when one member "farms" day and night until she has at least 22-25 votes with only at most 10 other owners present to vote.

Proxies are usually obtained from investor owners who don't come to meetings or very young or aged and seemingly don't read the financial statements.

Owners that attend AGM's and EGM's are dwindling as they do not see the point when the proxies to one person are so high and the rest of concerned owners are out-voted in any case.

II).    No owner should be allowed more than a minimum number of 
proxies ie. 1 (or perhaps 2)  to stop some members of the Executive Committee manipulating those holding proxies.

SUGGESTION::     Do not have proxy votes at all.   Owners either 
living in the strata block or not should either attend meetings to vote on issues or they do not get a vote at all.

EXECUTIVE COMMITTEE MEMBERS

I).    No two people from the same family should be allowed to sit on 
the Executive Committee together, particularly in the position of Chairman and Treasurer, even though they may own 2 units in the same block.

This again is power and control for their own self-interests.

3.    STRATA MANAGEMENTS

Strata Managers who are engaged to do a job should be allowed to proceed without the constant harrassment by any person on the Executive Committee not allowing the strata manager to make even the smallest of day to day decisions without first seeking acceptance by that one Committee Member, particularly for quotes, speaking with tradesmen and overseeing the work being done.


4.    CHANGES TO DISPUTE PROCESS

MEDIATION is fine as long as both sides will mediate and the defenders not decide on the day they that they will not as they are unhappy with the questions for mediation after owners/applicants have taken time off work to appear.

TRIBUNAL Should be open as in a court of law where both sides can present the facts as they are.

Presently there is no way of knowing the true facts by written submission as the panel may find it difficult to differentiate between fact and fiction.  The adjudicator then makes a judgement which is totally incorrect.

It would probably not be any more time consuming to have an open hearing and a decision could be made in a much quicker time with a fairer, truthful outcome.

We do hope these are clear suggestions for the changing and possisble revamping of Strata Laws.  It unfortunately taken only one person the ruin the peace and enjoyment of a strata home.
 

I agree n Disagree with the comments

I agree with most of your comments accept the Strata Manager point, I am a committee Member, and I want to keep the "bastards honest" Strata Managers generally speaking are gouging the Owners Corp funds With their Kick back tradies, their 20% commission for insurance and their support of those who  continually breach the regs.. they are in it for the money.

Find a corrupt Strata Manager Take him to Court , the Agreement will generally have that the Owners Corp pays the Court Costs of the Strata Manager.. an 8 hour day in Court ..There goes $1000.

If you know of an honest Strata Manager..Please advise I would really appreciate it.

Rgds M

Can I help?

I have already written on this forum that the OFT should keep it permanent as a meeting place for people like you to ask questions and maybe helped by others. You may also look at the forum of Flat Chat which is a private forum for strata issues and post questions there, someone may give you good advice. You might wish to connect as my name is artusan at the bigpond dot com. I may be able to direct you in the right direction. Your issues are typical of a major complaint, and that is that most strata managers are more trouble that they are worth and sometimes worse.

Changes to sinking fund

It is mandatory to prepare a 10 year plan for the sinking fund for maintenance and repairs but it does not require the owner’s corporation to make any contributions to the sinking fund. For example, the owner’s corporation can ignore the ten year plan altogether and make no contribution to the sinking fund and use a special levy to raise money for all repairs.

However, in my own experience, owners don’t like special levies any more than they like sinking fund levies, and are reluctant to raise special levies often making excuses such as they can’t afford a special levy or carry out repairs. This can lead to a lot of conflict and hostility between owners who object to having a special levy and owners who wish to keep the building well maintained. It should be mandatory to make contributions that are in line with the 10 year plan. This needs to be a precise figure rather than a vague guideline that owners can ignore.
Tenants
I am against tenants being involved in the financial running of the strata scheme. AGMs are for owners to plan how to manage their investment. Tenants should approach landlords if they believe a matter might be relevant to the owners corporation. Tenants rights are represented under tenancy agreements and have nothing to do with the owner’s corporation financial matters.
Selling to developers
I disagree with a strata scheme being sold to a developer unless 100% of the owners vote in favour. I live in an old building that is well maintained and do not want to be pushed out of it by other owners.
Fire safety regulations
Fire safety regulations should take into account the age of the building and the fact that old buildings do not comply with the current building code. Fire upgrade regulations should focus on saving lives rather than making old buildings compliant with current building standards.

tenants water usage

All owners who use the property as an investment should pay a minimum fee for the water usage of their tenants. Even if it's $20. My neighbours frequently hose down the concrete area which they use to entertain. We don't yet have separate meters.

Community Title

1.I agree that the use of proxies is a major problem. Each owner should be limited to holding a maximum of 5% of the total lots, including their own. In addition the EC should be limited to holding a maximum of 10%. This would be the sum of all proxies held by EC members. The problem is that the EC can farm enough proxies so that they can gain approval at an AGM for any motions they have placed on the agenda. This can happen even if the majority of owners attending the meeting do not agree.

2. The legislation needs to stop developers writing into the management statement that the owners have the responsibilty to maintain such utilities as water and electricity. I live in a complex which has private roads and the developer did some deal with the Water Board and Electricity supplier that we do not know about. The result was that we are now responsible for all the maintenance of these utilities on the private roads. This is unreasonable as with both of these you need specialised people and expertise to maintain the utilities.

3. There is no mention in the Community Land Management Act regarding the installation of green friendly items such as solar panels. Currently approval of such things may or may not be subject to EC approval, depending what is in the by-laws. The Act needs to make clear that approval must be given.

4. The Act needs to clarify who is responsible for traffic regulation on private roads. We keep getting switched between local council and RTA.

Strata Insurance Loophole & Landscaping Issues

I would like to raise the issues of shared strata insurance, and shared landscaping responsibilities.

My 91 year old father owns a 5 year old free standing villa, on a two dwelling strata title.

For the past two years the owner of the property in front of him, has been involved in a marital dispute, and has used that as an excuse for refusing to pay his share of the strata building insurance, leaving my father to pay the entire policy for both properties, which has been just over a $1000 per year. The policy is due for renewal in early March 2012, and the saga appears set to continue.

Whilst the insuring company is sympathetic to his situation, they refuse to allow my father to only cover his own policy.

On checking with Fair Trading, it would appear that legally when there are only two (2) freestanding dwellings are on a strata title, they can be separately insured, but the problem is that no insurance company will do it, because of the shared common driveway. Trust me when I say I have spent many, many hours on the phone with brokers and other companies to NO avail!

Also, the other owner has had a passing parade of less than desirable tenants in his property, who have progressively destroyed what origially was very attractive landscaping. All that remains now is a bleak garden of weeds, an overgrown half dead lawn, untrimmed hedges, overflowing garbage bins, childrens toys and bikes discarded in the garden bed, and an overgrown driveway. He has also allowed trees on his property to grow unchecked to the point they are now over the roof and gutters of my father's property. He refuses to respond to my calls to cut them back.

The upshot is that the value of my father's property is beng seriously impacted, by the lack of attention to the gardens in the front property, and common areas of landscaping. I recently paid to have the driveway shrubs trimmed back, as they were impacting on being able to negotiate the driveway in a car. My father's property has been sitting vacant, as we have been unable to find a tenant willing to rent due to the poor first impression they get from the front villa, despite my fathers property being immaculate!

The owner refuses to communicate with my father and I; will not return calls and has moved away from the area, and I do not have a contact other than his mobile phone number. The tenants in his property will not tell me who they are renting through, so I do not know how to contact him or serve papers.

The insurance company tells me that this is not an uncommon problem where elderly people get exploited by this insurance loophole, and I would ask the Govt Review committee to consider finding a way to enforce that an insurance company MUST allow an individual in this situation to be able to only pay their own share of insurance.

This man knows my father will not leave his property un-insured, therefore, by default, is covered when Dad has to pay both premiums. This loophole needs to be addressed sooner than later.

Any suggestions how I enforce the replacement of common landscaping and be re-imbursed for monies already spent to tidy thigs up ? I'm utterly fed up with the clumsy laws of this State, and how slowly the wheels of NSW Govt. turn!

I begin to understand why the Mafia preferred knee - capping as a swift and effective means of sorting things out!

Feedback vital for strata regulatory reform

The Hon Anthony Roberts's pictureI am very pleased to see the tremendous response on this open forum to date. Many hundreds of people have taken the opportunity to have their say on these important set of laws. This initial round of feedback will be vital in assisting the Government on the complex and difficult task of regulatory reform.

Reforming the strata and community scheme laws is a big and challenging task. Unlike the previous Government, which put these issues in the ‘too hard’ basket, the NSW Liberals & Nationals Government is determined to get it right. The sector will only continue to grow and develop if we provide a regulatory framework that supports innovation, reduces red tape and sets clear rules for everyone involved.

I have read a lot of the comments and I am happy to see so many constructive suggestions have been put forward for how the law could be improved. Parking, pets, proxies and passive smoking are some of the recurring topics which were only to be expected. However, I have been pleasantly surprised by the breadth of issues the forum has helped to identify.

Many of those leaving comments have done so on multiple occasions or in response to issues or ideas raised by others. This type of positive interaction between stakeholders would not have been possible using more traditional consultation methods.

However, it is easy in a process like this to focus on the negatives. There are no doubt provisions in the legislation which are working fine and do not need to be changed. I am equally keen to hear about the good bits of the law as well.

The Hon Anthony Roberts MP is the NSW Minister for Fair Trading. Prior to becoming the Member for Lane Cove, he was Mayor and Deputy Mayor of Lane Cove Municipal Council.  Anthony proudly served with the Australian Army on peace keeping operations in Bougainville as part of Operation Bel Isi.  He was also an adviser to Prime Minister John Howard.

Response to the minister.

The Honourable Mr Anthony Roberts,

The Strata Schemes Management Act and its predecessor The Strata Titles Act had built into them an institution and a process that was intended to be good, should be good and can be well functioning. It intended to operate as the European style investigative magistrate who asks the questions and forms an opinion as to the relative positions of the adversaries, consider the provision of the legislation and try to dispence not just procedural law, but a measure of reasonable justice and conclusion. As a matter of fact, courts of Petty Sessions operate much the same way. The Minister wants to hear of the good points, and that is one of them. The Minister is encouraged to read the provisions of the Consumer, Trader and Tenancy Tribunal Act and the way it should operate, i.e. financially accessible, legally informal with some tolerance to the rules of evidence, etc.

The Minister is encouraged to read the submissions and hearings of the Legislative Council Standing Committee on Law and Justice held towards the end of 2011 and to reform the CTTT so that it operates as intended. (The minister has probably done so already).

It must meet the following requirements:

1. Reasonalby prices (it still is at $76 or so for application).

2. Informal: that will be achieved if an open court is used as was the case with the Strata Titles Commission previous to 1996. Adjudication in writing only should be only on minor matters or a choice. Owners Corporation may choose to submit in writing to save time, while owners can represent themselves by turning up on the appointed day.

3. Mediation should be an option. That is, any side can refuse it to facilitate a hearing and save time. Adversaries who are disadvantaged by any mean should be encouraged to be represented by "friends of the Court" rather than lawyers.

4. The quality of adjudicators should be upgraded to equivalent to magistrates. While the government is saving some money on wages (I earn more in wages as a tradesman that the CTTT advertise for part time adjudicators) for peanuts you get monkeys. But worse than that the litigants lose a fortune due to the incompetence of the tribunal and its cumbersomeness.

5. Yes, the CTTT is a good idea. Give it some teeth, make it like a court of petty sessions, give it good quality people and make it efficient and you have fulfilled a major part of your job as minister for fair trading.

Managing the building fabric

Congratulations on this initiative;

Two issues of strata living I have encountered:

1. Currently there is no formal system to manage the following issues with the building fabric;

  • Keep records of the building construction to inform future work   
  • Keep & retain records of building and repair work done over time. 
  • Control quality of unit rennovations where they meet the common property but are concealed ; eg  waterproofing bathroom renovations to warehouse conversion stratas.   

This is particularly important for older , smaller  strata schemes. 

And 

2.  A simple system for recovering strata fees from owners who are clearly in default. Currently, a long and arduous court battle is required. This should not be necessary when payment of strata fees is not discretionary.  A dispute and claim against  with the body corporate should only be possible if the owners levies are paid up ( or similar condition. )

 Strata Laws Online

Strata Laws Online Consultation - 15 Dec 2011 to 29 Feb 2012

Q1. What are the main areas of the existing strata and community scheme laws you would like to see changed?
Hardship relief provisions
1      Introduce a right of an owner, who as a consequence of unemployment, illness, a special levy, or other reasonable cause, suffers financial hardship, to apply to the owners corporation or executive committee for relief, being:
1.1 Defer payment of whole of part of the levies, 
1.2 A flexible payment plan,
1.3 A reduction of accrued interest charges. 
This is in line with the rights already granted to home owners under the Local Government Act 1993 (NSW), section 601(1).
 
2      Introduce a right of an owners corporation or executive committee to do any of the following:
 
2.1 Defer the whole or any part of the levies payable by the owner debtor, for a reasonable period and conditions as it thinks fit, similar to s 601(2) of the Local Government Act 1993 (NSW).
 
2.2 Approve a flexible payment plan, for a reasonable period and conditions as it thinks fit, similar to s 601(2) of the Local Government Act 1993 (NSW).
 
2.3 Write off accrued interest if an owner was unable to pay outstanding levies due to reasons beyond the owner’s control, or the payment of accrued interest would cause the owner hardship. This is line with s 567 of the Local Government Act 1993 (NSW).
 
2.4 Write off accrued interest for an owner who is in receipt of a pension, benefit or other allowance under the Social Security Act 1991 (Cth). This is in line with s 582 of the Local Government Act 1993 (NSW).
 
3      Introduce a right of an owner to have a decision made by an executive committee or the owners’ corporation to be reviewed by the owners’ corporation at a general meeting. This provision is in line with s 601(3) of the Local Government Act 1993 (NSW).
 
4      Prohibit the owners’ corporation accruing legal enforcement expenses in hearing the hardship application internally/externally or during the CTTT proceedings.
 
5      Restrict an owners’ corporation’s right to disclose information about an owner debtor’s financial position. That is, limit disclosure to the executive committee and the CTTT. Information about an owner debtor’s financial position should not be disclosed to all members of an owners’ corporation on the grounds of privacy.
 
Consumer, Trader & Tenancy Tribunal
 
6      Introduce a right for an owner in financial hardship to apply to the Consumer, Trader and Tenancy Tribunal (CTTT) for a payment arrangement in relation to strata debt.
 
7      Introduce a right for an owner to apply to the CTTT for a stay of enforcement action pending the hearing of an application for hardship relief by the CTTT.  
 
8      Introduce a power for an Adjudicator on an application for financial hardship relief, to make an order to vary the manner of payments of contributions.
 
Consultation required before taking legal action
9      Introduce a right for an owner suffering financial hardship to engage in a consultative process prior to legal action, with consultations to give due regard to their financial hardship and with flexible payment options.
Requirements to be met before legal action
10   Introduce a requirement that an owners’ corporation must, prior to taking legal action, provide a notice giving at least 30 days for the owner to remedy non-payment of levies and the right of an owner to request hardship relief. This is line with the mortgagee’s requirement to provide a default notice under section 88(1) and default notice requirements under 88(3) of the National Credit Code, Schedule 1 of the National Consumer Credit Protection Act 2009 (Cth). The default notice must list the following:
10.1.1    Details of the amount outstanding
10.1.2   Action necessary to remedy the non-payment
10.1.3   The period to remedy the non-payment
10.1.4   The date after which legal enforcement proceedings for non-payment may begin if the non-payment has not been remedied
10.1.5   Information about the debtor’s rights to make an application to the owners corporation or executive committee for relief, such as deferred payment, or a flexible payment plan
10.1.6   Information about the debtor’s right to seek mediation in the Office of Fair Trading (OFT), and Adjudication in the CTTT.
 
Problems with the current legislation
 
11   The legislation does not provide adequate protection for owners who are suffering financial hardship. It does not take into account the impact on those who are unemployed, suffering illness, or experiencing temporary reduced income.
 
12   The legislation does not recognise there are substantial social costs, resulting from premature legal action including bankruptcy as an enforcement method, which include:
 
12.1       Loss of a person’s home;
12.2       Homelessness and the need to seek emergency housing accommodation;
12.3       Financial stress and the need to seek financial or other counselling;
12.4       Depression and the need to seek counselling;
12.5       The need to seek government assistance; and
12.6       The need to seek help from charities and welfare organisations. 
 
13   The legislation does not take into account the impact to those on fixed incomes who find it difficult to manage unforseen expenses, and those on low incomes such as Government pensions.
 
14   We believe that these social costs associated with legal action and bankruptcy could be avoided or significantly reduced by embedding a mandatory requirement in the legislation for owners corporations to consult with debtors in financial hardship prior to taking legal action, and inform debtors of their right to apply for hardship relief.  
 
 
15   There are no processes or guidelines embedded in the legislation to encourage a consistent approach to dealing with debtors in financial hardship, apart from taking legal action, as highlighted in the following case study.
 

Case Study  1

 
Our clients are a family of four adults of Macedonian background, with limited English skills. Our clients experienced financial hardship, due to the primary income earner being unable to work temporarily due to a back injury. They had difficulty paying their strata levies and their mortgage during their period of hardship. 
Legal proceedings were commenced by the owners corporation seeking recovery of $3,381.09. The owners ledger showed that unpaid levies were $1,575.15. The difference of $1,805.94 being sought purportedly included legal fees and interest accrued. In addition, at the Local Court the owners corporation sought an additional $229.24 pursuant to s80 of the Strata Schemes Management Act for the period between the filing of the Statement of Claim and the application for judgment. Default judgment was obtained in the sum of $4,344.89 as a further $559.02 in solicitor fees and filing and service fees were incurred.  The total legal bill was $2,728.20.
Four days after judgment, the owners corporation used bankruptcy as an enforcement method. Their lawyers applied for a Bankruptcy Notice, incurring a further $400 fee to our clients. Our clients were made bankrupt by creditor’s petition and sequestration order. Our clients had paid a lump sum of $2000 prior to the creditor’s petition hearing, but this was barely covering the legal fees. A further $3,400 in costs was incurred as the costs of the Creditor’s Petition.
With the assistance of CCLC, the family were able to set aside the bankruptcy sequestration orders. However they had to pay an additional $3,000 in fees to the bankruptcy Trustee. The family also faced another bill of $4,000 from the owners corporation’s lawyers for the hearing of the application to set aside the sequestration order.  
The family’s financial circumstances have improved; they are all working and able to pay their strata levies and mortgage. 

 

 
16   Case Study 1 highlights that the owners corporation could have chosen other enforcement proceedings to collect the debt rather than swiftly proceeding to bankruptcy, such as garnishee of our clients’ four wages which would have paid the small levy debt very quickly. Our clients faced the risk of losing their home due to being made bankrupt. The only people who seem to have benefitted were the lawyers, whose fees were paid by the strata corporation who would then apply that amount to the families’ levy ledger.
 
 
Q2. Can you see any future issues that need to be addressed in the legislation?
17   A relevant issue is the impact on elderly Australians (as seen in the case studies below). This is particularly concerning as statistics show that there is a trend for Australia’s aged population to increase. The Australia Bureau of Statistics Publication 3222.0 states “In 2004 people aged 65 years and over made up 13% of Australia's population. This proportion is projected to increase to between 26% and 28% in 2051”. An elderly owner on a fixed income such as the Aged pension is likely to need the support of special hardship provisions to meet unforseen expenses such as special levies.

Case Study 2

 
Dawn is an elderly widow, receiving a Widow’s pension. She owns her home outright. The owners corporation obtained a judgment against our client for $4,853. A bankruptcy notice was served on our client within just days of the judgment, and a creditor’s petition was filed less than a month later.
With the assistance of CCLC, Dawn was able to seek time to obtain a reverse mortgage of $25,000 on her home.
The solicitor acting on behalf of the owners corporation had incurred substantial legal fees of $17,265 in the period of 5 years and 4 months, with $14,393 being incurred in the last 15 months of that period.
The solicitor for the owners corporation informed CCLC three business days prior to the creditors petition hearing that the amount required to dismiss the creditor’s petition was $8,217 and payment in cleared funds must be received prior to the petition hearing.
Fortunately, Dawn was able to arrange for the payment to be made and the creditor’s petition was dismissed. She was able to keep her home.
Case Study 3
Dorothy is an 81 year old widow suffering from a stroke, who lives alone with no family support in Australia. She relies on the Aged Pension.
Dorothy had an on-going dispute with her strata manager about damage to her property. After non-action by the Strata manager, she disputed the matter in the Consumer, Trader and Tenancy Tribunal (CTTT). Her matter was dismissed by the CTTT, and subsequently she faced $39,000 in legal fees. The owners corporation proceeded with legal action and then commenced bankruptcy proceedings.
With the assistance of CCLC, Dorothy was able to obtain a reverse mortgage to satisfy the amount specified on her bankruptcy notice and save her home.
There was a debt of $3500 still owing because the strata manager had diverted her payment to meet their legal costs. With our assistance, our client negotiated a payment arrangement over 20 months using her Aged pension. She relies on her carer to assist her to make the payments as they fall due.

 

 
18   These case studies demonstrate the punitive approach of taking swift legal action as opposed to negotiations in good faith for the repayment of the debt. In our experience, owners corporations engage in legal action without first engaging in adequate negotiations or offering hardship assistance. Owners corporations usually proceed to bankruptcy as an enforcement method. Bankruptcy also appears to be used as a way of evicting those who they regard as undesirable owners.
 
Q4. Are there any changes needed to the way disputes in strata and community schemes are resolved?
19   Yes, there needs to be established into the legislation a mandatory consultation process encompassing the broader strata membership prior to legal action being commenced. Consultations need to give due regard to an owner’s financial hardship and the opportunity of flexible payment options. 
 
20   There also needs to be a process embedded in the legislation that enables an owner to apply to the CTTT without restriction e.g. without having to pay strata arrears before they can make an application.
 
 
 
 
 
 

Stronger protection against smoke drift required

The risks to health from second-hand tobacco smoke exposure are well documented in the medical literature.  After all, tobacco smoke contains an estimated 4,000 chemical compounds including 66 carcinogens.  The International Agency for Research on Cancer has classified second-hand smoke as a Group 1 carcinogen (as is asbestos).  Smoke-free public place and workplace laws are based on recognition of the serious health impacts of second-hand smoke exposure.

At Cancer Council NSW most of the passive smoking-related public enquires we receive from the general public are from people seeking advice on what they can do about tobacco smoke drifting into their homes from other parts of the apartment blocks in which they live.

 

One remedy available to those who live in strata scheme housing is to encourage their owners’ corporation to adopt a by-law that would, in effect, eliminate second-hand smoke from the entirety of a property.  We are aware that the legality of this approach has been validated in at least two legal cases in NSW.  However, under current strata legislation, barriers exist for many who would otherwise pursue this remedy.  Such barriers include:

 

·         An apparent lack of awareness of some owners’ corporations that action can be taken under strata laws to address the problem of smoke drift

·         The requirement for a 75 per cent majority vote of owners to pass a by-law

·         A tenant will require the permission of their landlord to be eligible to vote at a strata meeting and so will not necessarily be able to use this remedy

·         Strata laws do not explicitly acknowledge the desirability of strong measures to prevent second-hand smoke exposure

·         The strata complaints process appears to be characterised by inconsistent decision making of the NSW Consumer, Trader & Tenancy Tribunal with regard to the problem of smoke drift.

 

Cancer Council NSW provides the following suggestions for improvements in Strata laws to address the problem of second-hand smoke exposure in strata schemes:

 

·         Strata schemes legislation should provide definitions of ‘nuisance’ and ‘hazard’ for the purposes of the legislation, recognising that second-hand tobacco smoke is both a nuisance and serious health hazard

·         Related to the above point, the legislation should explicitly establish that any tobacco smoke that drifts into any residential lot a person owns, leases or rents is a hazard for the purposes of the legislation

·         Include a smoking-related model by-law in the Strata Schemes Management Regulation 2010 (Part 9.27, Schedules 2 - Model by-laws for residential strata schemes)

·         Smoking-related Orders should be included in Chapter 5, Part 4 (Orders of Adjudicator) of the Strata Scheme Schemes Management Act 1996.

·         Adopt in law the recommendation of the Commonwealth Government-appointed National Preventive Health Taskforce that:

All state governments legislate to require leases for multi-unit apartment buildings and condominium sales agreements to include the terms governing smoking

·         Introduce a requirement that all new strata developments comprise sections of developments that are subject to mandatory smoke-free environment rules.

 

Strata law and related judicial processes need to exhibit recognition of the public health and civil benefits of preventing involuntary second-hand smoke exposure in residential settings.

Four Major areas for consideration/ Strata Reform

To progress and to  Legislate Effectiveily the Suggestions I have  noted below will be  the Domain of the Lawmakers, a great deal of the suggestions will be difficult to enforce, the system in its present form is uneneforceable due to issues of Civil Liberties etc there needs to be an effective system of fines and penalties introduced, but crucially owners of Apartments should be far more proactive and involved for any real changes and or benefits for any determinable progress into the future. Its complex and has its difficulties, its the owners with the Legislation Guidelines who can make the System work successfully. ITS  an EXTREMELY LONG READ, I hope there are many valid and useful ideas for reform in this posting.

After reading many of the comments by fellow Strata Owners it is apparent that the Strata System in its present form requires a judicious assessment for reform. The majority of the comments / issues  fall into certain categories. I have identified four areas that need to be considered.I have owned a Strata Unit for 8 years, like many others on these pages I  have observed an incredible amount of waste, poor management etc etc.

Some observations:

The SSMA  Legislation appears to have been written  with the consideration that all owners i.e. occupiers and investors, will be interested and involved in the Maintenance, Improvements of their Strata Plan and abide by the proper procedures outlined in the Legislation by all members of the Owners Corporation. Its predicated on the basis that owners want to preserve the quality of their asset, like a home owner, and there lies a major problem. Its a "shared" system that can only succeeed as long as the owners having a reasonable knowledge of the Legislation (a basic outline is sufficient) and to have a proactive approach to their Scheme.  Majority of Owners have no idea of the Regulations, are too busy, do not want involvement prefer anonymity, its politics, are lazy, own a unit for ease, pay their Levies therefore "all will be taken care of", a plethora of excuses, but fundamently they  have very little knowledge of the Regulations or procedures.  This area needs to be remedied, the owners should be made aware of their rights and obligations under the Act and to make positive contributions to their respective schemes.

 One Suggestion for Reform.  There should be an introduction of a Legal Mechanism added to every Contract of Sale as a condition of such Contracts an ATTACHMENT to be  included in the Contract, outlining in simple to understand language a basic outline of the Regulations, By Laws of the Strata Schemes Management Act, Common Property Issues, the Rights and Obligations of future Owners. The prospective purchaser must  READ and  Sign the Attachment, otherwise the Contract will be deemed Null and Void. Knowledge of the Act is CRUCIAL.

  Owners should be required to attend at least one Annual General Meeting every two years, failure to attend (written explanation of why cannot attend a meeting, sick relative, urgent business etc) will result in a fine, one comment noted suggesting an infringement system a la speeding Fines or Parking Tickets should be introduced, the Funds to be deposited in the Sinking fund. An idea that should be explored. There is a need for deterents. Streamline the Procedures of Meetings.

                          Executive Committee Members

A similar concept should be introduced to Members of the Executive Committee, their role basically is to ensure that "they have to protect the best interests of all owners in the Scheme." There are too many "self interested" Exec Members, in many cases have delusions of grandeur, control freaks, are part timers, form their own power groups and usually are the biggest offenders . There are two on our Committee that are in Breach of Sec 65a 1-6, Sec 62, ByLaw 19 and other Regulations and they hold the balance of power. There should be a much harsher penalties levied on  Exec Comm Members who knowingly breach the Regulations.

There should an offical Executive Committee Pledge signed and witnessed, a Legal  Mechanism resulting in  harsh financial penalties if contravened, not the weak points penalty system that we now have, its weak and does not deter breaches. 

There are Exec Comm (in our case ) members who are ignorant of the Regulations, cunningly attempt to manipulate the Meetings Procedures and interpret the Act to suit their requirements. Clover Moore suggested that there should be a " Mandatory Exec Comm Training scheme to be explored for large Schemes." I agree but it should be extended to include all Strata Schemes that have more than 10 Apartments. Inactive Exec Committee Members. They join for the prestige, they join as they think that if there are repairs needed for their apartments they will be "first cab offf the rank.' System of Favouritism and it isnt based on merit or the need of others. One case , two years waiting by an owner for a repair to a cracked glass window, the Secretary had his repaired in two days not 2 years. We have two Exec Comm Members who seldom (around 5% reply rate) reply to e mails, are always overseas, when they do reply to approve quotes  it is apparent that they do not properly assess the quotes, I am overseas I will not be contactable for a month and this is a regular occurance. They agree with their "BOSS" the Secretary on all issues, its the blind leading the blind. There should be some mechanism introduced that dismisses such non active Exec comm members. There is Legislation whereas the Owners Corp can dismiss an Exec Comm Member but with no involvement by owners how can one obtain the numbers required? It does not work.

A signed Pledge by Exec Comm Members that ensures Responsibility to other owners on a equal basis, that Exec Comm Members can be held accountable re negligence, improper conduct, breaches. Failure to comply with the Regulations to be enforceable with financial  penalties that deter intentional wrongdoing  . Quick dismissal of non active Comm Members. Knowledge of proper procedures and practices to be Mandatory. Exec Comm members should be held accountable. Nothing to worry about if one complies with the Regulations and has genuine intentions.  A crucial member of the Executive committee is the Treasurer a PROACTIVE and Thorough Treasurer will save a Strata Scheme thousands of $$$.

Stop the REPAIR RORTS. My brother is a Tradie he loves Strata Scheme jobs he can charge 2 to 3 times more and the majority are in ripp off mode, two simple examples Garage door causing problems, Strata Manager obtains quote $1,200.Our non judicious exec comm approves, quote has no terms n conditions , no emergency call out fee, only to be  supplied on request, I obtain a second quote $600 inc GST, finally obtained Emergency call out fee from the Rip off garage door crowd $430 per hour. Another example, emergency garage lighting problem Strata Manager Quote $700 my quote $350 . Strata Managers in this area (other areas also) are obtaining kick backs (majority) its common knowledge in the Building Industry. Contact Fair Trading 133220 certain "consultants" have told me that it is a "GIVEN" simply put , its CORRUPTION

Possible Solution. Two quotes for every build work no matter how large a Scheme may be. Strata Managers not to supply tradesmen AT ALL, there should be a  Building Standard check list, providing estimate tradesmens costs per repair this to be placed on a website for all owners to access as an indication of costs n procedures. A record kept of all repairwork,  a detailed description to be provided outlining completed work and materials used as part of the payment invoice, a record kept by the Body Corporate (not Strata manager) Executive Comm Treasurer and the owner in which the repair was effected, this to be kept as future reference in cae of inadequate work, its to stop "repeat repair offenders". Use Local tradesmen , in the larger Metropolitan Areas there are  Local Papers with Tradies adverts, the internet is full of them , the yellow pages, Fair Trading should also provide a preferred Local tradesmens list for each area of Sydney, i.e. Eastern Suburbs , Northern beaches etc this will eliminate Travelling charges, one can also build up a rappor with your "local tradie"

For extremely large schemes: a suggestion only, allow sub committees who specialise in specific areas , i.e. A committee who deals only in repairs, a committee who specifically check the accounts and Levies, a committee who handle Common Property matters only etc etc. Just an idea.

                                         Strata Managers roles should be limited to a few areas only

The best run and properly organised Strata Scheme that I have observed is in a Southern Beach suburb of Sydney, the majority of owners are retirees, they have time. THEY LIMIT THE ROLE OF THEIR STRATA MANAGER to PAPERWORK ONLY. Two quotes for every repair, once job is completed and the owners  accept the work quality , they send the invoice to the S.Manager advising payment, they employ their own auditor to check the accounts every two years, they meet once a month or when required. They advise Strata Manager to obtain Insurance quotes but they have the right for determining their Insurance  Policy as THEY OBTAIN THEIR OWN INSURANCE quote which is usually a more competitive quote. They have a Treasuer who was once an Accountant, he is thorough. Their Scheme is a similar size to the Scheme that I am involved in , their Yearly Strata fees are $15,000 less than  my Scheme and they have $40,000 more in their Sinking Fund. My cousin owns an apartment in the block.

Insurance Commission to Strata Managers   10-20% is outrageous and should be eliminated. For a $10,000 premium the S.M obtains $2000 this is gouging its criminal and should be stamped out. The Insurance provider should allow such a commission to be passed onto the Owners Corp. an additional $2000 could be used for repairs, improvements etc. Of course the Agent (of GREED) will always advise the higher "SUGGESTED' quote to an O.C. The higher the Premium the larger the Commission, for what a 5 MINUTE call a 5 minute Computer fillout form??? Its a rort.

Agents Disbursements. Another Rort, padded out and skimming is the norm. Paying an Agent to check your own records is another, ownes should not pay to access their SP records, potential buyers different story.

The regulation where an Executive Committee or an Owners Corp  allows and or designate and empowrs a Strata Manager complete Control of the runnings etc of a Strata Scheme should be eliminated. Carte Blanche to the Strata Managers for easy skimming higher fees n expenses. Owners should have more control of their Scheme, be more responsible and more interested in their HOME UNITS. its their money. Allowing a Strata Manager to do whatever they want with your money is an invitation for corruption. No wonder Sinking Funds are so depleted. The Strata Community of Australia is a toothless watch dog. Its a joke, they support the Strata Managers not the owners.

 The owners MONEY THE ACCOUNTS: Strata Managers have Accountants who do the Accounts and store  this information on their computers.

If the Accounts are stored on the Strata Managers Computers then why cant there be a program in which owners of a SP can access their own accounts at any time day or week. ?There are  computer programs that can easily provide this information to owners, certain access codes etc.   THIS SHOULD BE COMPOULSORY FOR EVERY STRATA MANAGER take note Strata Community of Australia.

The relevant Authority should set up a special Strata Taskforce with powers to investigate and audit the Accounts and Records of Strata Schemes. There should be a hotline that disgruntled owners who have "genuine concerns with a Strata Manager" to lodge an anonymous complaint. The Taskforce should  have access powers to enter and check the records of Strata Schemes held by Strata Managers, random and  without warning. Harsh penalties with the powers to cancel Strata Managers Licences should be introduced. "Keep the B..t....s Honest" Harsh penalties for "missing" records" that were once kept by Strata Managers. Our scheme had 2 years go missing. The Taskforce should have a " success program" that allows bonuses to members of the Taskforce for a successful investigative performance. A percentage taked out of the Strata Managers fine to Fund the Bonuses.

Strata Managers should only have a Tenure of ONE YEAR ONLY  to be reviewed yearly. There should also be a rating system for Strata Managers performance.

                                      AGENCY AGREEMENT STRATA MANAGERS.

There are conditions that I believe are non binding and not lawful. An Example , The Agent gets his 20% Insurance Commission but if he makes a claim on behalf of the O.C. he obtains a fee of $145 +GST per hour.  Cutting the Insurance  Commission altogether will end this rort. its extremely simple to make an Insurance Claim Contact your insurance provider e.g CHU "hello I am an Exec Comm mem of SP 123456 can you connect me to the claims Dept". Bang .. You are transferred ," Hi the Sp is 123456 we have a defect issue please note that this is my phone number please advise the assessor of my contact details. " FINISHED in 5 minutes or less, the assessor will call you for an on site meeting. If the strata Manager does this 9 out of 10 he will NOT BE ON SITE. You are whacked for $145 +gst..errrrr

There is a a contentious andd extremely unconscionable clause in our Strata Managers Agreement and that is if the Strata Manager has to attend (outside his terms of the agreement) Court cases, make Insurance claims.......... etc etc  that the Agent will recieve a fee of $145=gst per hour."The clause goes on and on and is very thorough it notes almost everything that you can think of, but the main sticking point is that " if an  Owners Corp  commences a legal action against a Strata Manager , the Strata Manager is paid a fee of $145=gst to attend court , this fee is paid by the Owners Corp who are taking the Strata Manager to Court..ITS ABSURD. In many instances I have requested the Strata Manager by e mail to provide a Notice to Comply to a fellow owner who is in breach ..No reply. There must be a" three and your out" fine system levied on the Strata Manager for non replies.  There should be a Statutory Requirement requiring Strata managers to reply with 7 days, failure to do so, should result in a fine. This is frustrating and deters progress on important matters. There needs to be a compulsory referesher course i.e. Regulations By Laws as per Strata Managers knowledge of the  SSMA 96, Strata Managers are required to attend, once every two or three years.

An Employee of a Strata Manager/ officer should not be burdened with more than 40 Strata Schemes that he or she should manage, once they exceed  that amount they simply cannot efficiently manage their folios.. Its too much for any one person , it creates a system that is inefficient and does not provide a quality service to owners. Employees in this area of Managing Strata Properties should not be on a part time basis.

                         Sinking Fund Trust Account

A Sinking Fund trust fund should NOT be managed by a Strata Manager, this should be controlled by the owners of the Scheme i.e. Treasurer and a non Committee member (an owner)  the two can only access the Funds with dual signatures and have to provide written submission to all owners for approval to withdraw funds etc etc. A requirement of 50% of owners for approval. I know of one Strata Scheme where the Sinking Fund recieves LESS THAN 1% interest per year, this is under the control of the Strata Manager. Something is drastically wrong, its extremely fishy, on a Sinking Fund Trust Account for $10,000 the yearly interest is $50. It smells of a kickback. The Treasurer should be able to set up a Trust account with an interest component of at least 4.5%. Any suggestions??/ Public Trustee??/

 Clover Moore  has noted that the "CTTT should have powers to set aside such unconscionable Strata Managers Contracts",  I completely agree but I would like to add the CTTT should have the authority to cancel Strata Managers Licences if found guilty of illegal activities.

 

Weak and Ineffective unenforceable Strata Regulations as per SSMA 96 and Amendments

So many have written about this area and its extremely crucial that the Legislation has some real teeth with bite, as they stand the Regulatory System with the slap on the wrist penalties are fatally flawed weak and ineffective , it relies on Public Servants who people have ccomplaints, not withstanding that the Office of Fair Trading advisory contact 133220 is an exceptional service, outside of this Dept Fair Trading is a non player when it comes to obtaining fair and equitable results. An example, if an owner applies for  mediation  for resolution n or discussion with a fellow owner,  he pays the fee and  attends the designated venue and his fellow owner IS A NO SHOW then what happens? Does the non attendant recieve a fine?/ I think the answer is No.. Maybe a Local Magistrate or a more effective Court established, if the System is effective the money that can be saved could easily  finance a better structure / system.

FAIR TRADING TO ASSIST OC ON COMPLIANCE

More than 60% of strata schemes are still self managed, that is to say they have no managing agent. The reasons for that are that most schemes are still small schemes (the average size 10 flats) and only 3% are large schemes of 100+ flats. The other main reasons is the expense and shocking service that managing agents provide. (There should be a royal commission into the strata management industry, they are worse than real estate agents and second hand car dealers). 

A large number of them are successfully managed by volunteers who are honest and well meaning, but are not always knowledgeable enough about the myriad rules and regulations and sections of the SSMA regarding presentation of accounts, conduct at meetings, etc. When trouble starts at a scheme like this, these volunteers (and I managed a scheme for 10 years till one lot in a small scheme that never paid levies and caused endless trouble decided to start third world war about petty compliance with forms and procedures) may find themselves in a legal battle out of their own pockets that can send them broke.

I have already suggested on this site that the Office of Fair Trading creates educational videos on youtube or its own channel on how to run a scheme, how to run meetings, what forms accounts and reports should be in, etc. etc.

The Office of Fair Trading can also open a site in which will present sample documents of a typical 10 lot scheme with levy notices, annual accounts, forms of motions, sample letters re breaches of by-laws and any other documentation that owners corporations are required to keep by law.

It will be a great help to those 30,000 executive committees, owners corporations, etc that a self managed. An investment such as this will save a lot of grief later. The Office of Fair Trading can advise ALL schemes in NSW about such site by writing to them directly using land titles records.

strata and pets

I came from the UK to Australia 6 years ago. I am a vet and when looking for a rental with a cat offered double bond and  was turned down so many times. I think we are a very sad society if we can allow 30% of pets at one centre to have to be there due to landlords/agents not allowing pets.

I believe that strata laws that ban pets are being discriminatory it is like asking about color, religion etc and then not allowing those population groups. I can understand that one cannot have a large dog in a small units etc so within reason, or a barking dog all day  so common sence must prevail but the default should be allow. Also the question of do you have a pet should not be allowed - is like asking color , religion, sexual preference.

If strata allows pets then landlords would have to allow it. If a prestigious group like the Meriton allows pets that should be telling landlords something

Countless studies have shown that pets keep people healthy, made them happier and are of benefit for older people, there are so many more reasons which can be seen in numerous studies done. So it benefits soceity to have healthier and happier people with less burden on the healthcare system.

From a financial point it has been shown that strata that allows pets can get more value for their homes. Generally speaking pet owners are a caring bunch and would look after property-there is always a few bad apples but that is in all sectors.

I have seen many rants of how pets destored lawns etc but I am sure many lawns/houses have been destroyed by people.

If there is fear of damage and I can understand then take extra bond to cover it, most pet owners will have no problem with it.

THis discrimination of pet owners and the needless DEATH of these poor pets should be stopped.

 

Q2. Can you see any future issues that need to be addressed

Background

The strata scheme I am involved in has 186 lots with 10,000 unit entitlements in two buildings which are about 40 years old. It was originally a hotel but was turned into a Strata Plan in 1993 and the apartments sold off with a guarantee of good returns on investment. Over 19 the years since there has been a significant change in types of owners with a mix which now includes:
1.       a hotel operator who leases lots from owners,
2.       an investment conglomerate which owns or controls a significant number of lots which it uses to run in direct competition to the hotel as serviced private holiday lettings.
3.       owner occupiers
4.       owners who rent out their lots privately
5.       some businesses
6.       the building manager / caretaker who is the hotel operator
 
The conflicting objectives of all these owners/parties has resulted in CTTT applications flying thick and fast over recent years (since the start of 2008 there have been at least 16 applications), together with legal actions which have  all but bankrupted the OC.
Against this background one owner has been snapping up apartments for his DIY unserviced accommodation business and must be raking in a fortune which doubtless supplies the finance for more purchases to come. He currently owns 13% of the unit entitlements.
 
My question is – what happens when he has majority control? What happens to the rest of us?

Appointed Strata Managing Agent

What person sits down and reads the Act, regulations and other things that govern the way we live? The Strata Schemes Management Act 1996 and all the periphery that go with it is long and complex. People have a problem that they want resolved, but who consults all this stuff? Why can’t it be easier?

The scheme I am in is now in its third year of Administration (Strata Managing Agent appointed by the CTTT) and its second Administrator, possibly soon to be a third Administrator or a return to an elected EC God forbid. But when there was an elected EC there were at least monthly meeting you could attend and minutes issued. With an appointed Strata Managing Agent there is zilch, zip, nada – scarcely a word is volunteered.
The Strata Managing Agent is, as I understand appointed with full delegated authority as Chairperson, Secretary and Treasurer of the OC. I believe that this delegation implies that all decisions of the Strata Managing Agent are required to be approved as if a meeting of the Executive Committee or a General Meeting of the Owners Corporation had been held. That being said all such meetings are open to owners to attend, and are also to be duly minuted and minutes subsequently accepted at the following meeting and displayed for all to see. None of that is happening with this particular strata scheme. I am told that it is not a requirement for any of this communication to be undertaken.
One CTTT Member said, in part of his decision, that a wise Administrator would consult - but he would not set out what expectation he had about the nature of that consultation.
There is nothing to compel the Administrator to communicate with or consult owners and other interested parties. Decisions and actions can be taken completely in secret and no-one knows what exactly is happening, except the Administrator. This is farcical and, for a scheme of 186 lots with a $million budget, is an utter disgrace. Owners are being treated like naughty children – owners are being denied natural justice.
Seems to me like it is time that consultation and communication was mandated.
With many strata agents having sophisticated websites there is absolutely no excuse for information to be made readily available on a timely basis; for those owners who don’t have internet there is always Express Post mail. A change to the law is desperately needed that forces transparency, timely and equitable information distribution so that owners are not disenfranchised.
My question is -  I would have thought with modern technology it would be simple to scan and post
·         Copies of all invoices greater than say $500 or maybe x% of the budget– so owners can see where the money is going and on what
·         All delegations and decisions of the Strata Managing Agent
·         A list of all payees each month so Owners can see who is being paid and for what
·         Building Managers monthly report
·         Copies of all contracts
·         Notices
·         Correspondence – at least on matters of significance
Why doesn’t this happen automatically so that all owners are kept informed and up to date simultaneously? What has happened to openness and transparency?

Change the law

Another issue is that, in appointing an Strata Managing Agent there appears to be no requirement for a formal process of handover/takeover. Sure the incoming agent picks up all the archive boxes and the Trust Account but there seems to have been no accounting from the old to the new Administrator of the files (both electronic and paperbased), the issues, the long and expensive list of building works that have yet to see the light of day (and touted in my block as being urgent and mooted to cost in excess of $5,000,000).

There is no formal process of meeting all the owners withg say, both the outgoing and incoming Agents. I think this should be mandatory so that all interested parties can ensure that the big issues (to them at least) are given light of day and not swept under the carpet.

Change the Law

Should strata schemes be allowed to have the mix of residential, hotel and holiday apartments – or should they be either one or the other. I believe that the scheme I am in should be wound up and the hotel and private holiday letting business be required to either sell out of their investments or buy out the residential owners at fair market value of a purely residential building.

The Scheme I am in is a mix of all this and more and it is causing almost open conflict between the various factions. Lets have buildings that are hotels and buildings that are backpacker accommodation and buildings that are residential - not all mixed into one. How do we untangle this mess??

Change the law

Strata Schemes or more specifically lot owners should be allowed to use their lots, or change use, as they see fit provided they dont cause any undue disturbance to other lot owners, with the approval of the owners corporation.For example, i believe, if the majority of lot owners permit short term residnetial letting, then it should be permitted. Likewise if the majority of owners dont want short term letting then it should be outlawed. This vote can occur every say 5 years? Buildings change and giving the OC the power to change the use  overcomes the issue. Those who dont comply could be fined for by law breaching.

Either way a document should outline how the builing operates like a " lifestyle statement " so owners know what type of building they are buying into this lifestyle statement can also include the StrataHistory of the building with other valuable documentation for transparency.All of this could be online.

Within the lifestyle statement owners corporations can outline how they want their building to operate.ie Primarily for Investment, Primarily Owner occupier say with elderly, it could even be an open minded building, pet friendly,  etc. etc

 

Poor Drafting and use of lexicon and the neglect of correctly dr

  1. In reading Bylaws they are not drafted with the correct use of English. In 2012, whilst many think it is 'beyond them to draft documents' that is to me very false. Educated with a good grasp of 'intent' must exist and be never left open and remain having ambiguity. 
  2. A submission to F T re 'laundry and the hanging of it on balconies is classic. E.g: if viewed from street then it is prohibited ' [ this is not nn exact quotation ] Point is; 'who ever views from a street?' Persons drive on a street, not walk on them to look up to observe any washing on balconies. 
  • If you look up it is from a foot-path area and you can only see approx 3-4 levels of a strata building street facing balcony. Above that your line of vission stops...you can't see through concrete / bricks ok. So you live on level 2; remove laundry..on level 5...no one can see it so that fine.
  • Level 2 & 5 pay rates, levy and all required fees. All are equal!!  Total crap because level 2 can't dry laundry in fresh sunny air; acording to the lexicon as pre drafted Bylaw by F T.

Disputes: O M G read the blogs. These occur due largley to the ambiguity of drafters lacking skills and basic knowledge of community ot strata living. Some have never put a foot on a strata title property

  1. We have an E C person who dislikes reading anything longer than 3 sentences. ' Oh not this diatribe again!!?? '. We are all prone to 'venting' however poor drafting skills in this proposed new F T Legislation must be rectified.
  2. BUT we all get told ' there is no time and what is in place is good enough '. Wrong I suggest. Total lazyness and contempt for those who live in high density.

Dear oh dear!  We no longer have Capital Punishment; so why put up with rubbbish that impacts on high density living and everyones health?

  • Strata Managers must be held accountable and have time restraints imposed i.e. ' reply to all O C & EC emails / letters within 14 days ' OR pay a fee to the OC or EC. I am not interested in their internal problems of 'work-overloads'. Employ more staff as this area of administration is vital. Not all replies require the expertise of any SM ... 'if the subject in not spicific to The Act'. 
  • Many SM complain ' I just returned from lunch and I have 23 emails to deal with!' Yes, I say complain and not comment. 
  • That is an area of their office duties. THEIR professional expertise is only called upon when issues relate to The Act and Specific Bylaws.

Many of us can draft such documents and would enjoy it, howevr even 'hard-copy' from the Min for F T gives information to you as if you are inept of ill-educated and have no T F or OC or EC experience.

Why bother?

Being pushed for time many at the office use their employers' IT software and hardware ' at no cost to them. All matter of email etc is via this and so we see employers exploited.

  1. Some provissions in the Telecomunication Act and associated ones permit this.
  2. However if an owner uses their specific IT devices that cost is theirs; not the OC or EC or SM. Many SM firms charge to read,and respond to all emails. 
  3. F Y I some even state ' we will change you if we deem the email/s to be time-wasting '

Minister:- Please define '''' deem to be time wasting ''''. If any client who employes a professional and pays them expects respect as a base line. Sadly but very true, SM treat their employers i.e. ' a Strata Corp. ' with distain and contempt.

  • ' I will NEVER come to your property so stop asking '. 

It is high time Legislation existed wherin and wherby O C  ' MAY NAME AND SHAME '  S M firms and sight reasons in the media.

O C  & E C Members fall into a trap of their own making. They place these SM on a 'magic-carpet' and exhault them...'''' Oh they are experts in all fields '''' we will do what you tell us to do.

Just how stupid is the mind-set to go along with this. I have been told by the owner of a S M Company ' we are nothing more than glorified accountants and can given you details of The Strata Act. '

  • If your SM is constantly handing out Work Orders ti the same bunch of trades etc WHY is it so?
  • So trades are fine; others are beyond standards of Duty of Care.

Is it wise to change S M after every 5 - 6 years or retain low professional performances? If your tooth is hurting ...see a dentist to rectify it.

To whom is best to rectify S M problems? F T gets results but too complex?

AN OMBUDSMAN dealing directly in this arena would greatly assist I strongly suggest. What do others think please?

Smoking - why is it allowed in strata units?

 I have struggled for years with 2 smokers who smoke underneath my apartment, each lives in a different unit .  Their smoke drifts up and makes my place smell of smoke.  They argue it is "their right" do do what they want in their apartment.  I have tried the CTT.  All I seemed to get was a lecture on how I should adjust to "communal living" and the burden of proof seemed so high to prove that it was impacting on my level of enjoyment of my unit.

It really seems ridiculous that smoking is allowed in a strata building.

In my mind strata buildings by default should be non smoking buildings, in private and common areas.  Then the strata if they want can have a vote to change that if they see fit.  At the moment it is the wrong way around, people are allowed to smoke and you have to fight the CTT or strata to get them to stop.

Renters & Strata Committee

I feel if someone has rented for 1 year or over, they should be able to attend and vote at strata committee meetings.  Often the decsions impact the renters, and often the renters would like to contribute their time and effort positively.   

Renters & Strata Committee

 I agree.Some I knoe have rented for 5-8 yrs. Know the place 'as home'. Currently they can attend, but sadll con't vote.

Minister. This need to change. Great expertise exist on-site, but neglected or nor even made aware of.

We have a 'Common News Sheet '. Some space is given to residents specific..if they want it. 

Confidentiality & ID being lost or stolen

 With advanced IT and E-Communication all owners and residents are at risk of being 'hacked into' by very >>IT savy persons <<.

E.g:- In a general conversation with a itinerant owner I was informed that the online sites I was visiting were diverse and some-what interesting and why did I go to....[ name os site withheld by me for specific reasons ]..as it was explicit and not theraputic ? And did I know I did not have a security password?

To my amazement this person told me he had viewed my computer in total;and the he was head person of P S A Computer Network and VERY ...'swithced-on IT wise '. This person had in fact used his advanced IT work related skills to invade my privacy. Little did he know the other party to my computer is a very highly advanced IT party who built my computer and could 'trace his invasion for me'. My password had been 'hacked' however there was provision to stop at a certin point as it was in-built. :)) Joke was on the first owner.

Point is, all such persons can and well may invade and take advantage of persons in a community or strata setting. The existing legislation to protect us; '''as we think it does''' can only do so IF suspected instances are reported. Actual proof may be very hard.

Just make sure if you are new to the IT networks and not having some skills, be careful to obtain them and keep a good password. If not your total ID and stored information data can / may be stolen I suggest. Such an event that did happen to me was made known to others in the small strata block in face to face conversations.

Do all EC have to ''cc'' others on matters?

 O C & E C can restrict their email address being open to all. That is their right and some site reasons of 'lack of time to read and or not interested so don't include me' Fine up to a point. If constant disputes on-site are not resolved and SM do not act as requested the entire block can loose and suffer capital loss.

Racial issues do exist;hard to prove as many are 'covert in nature'. Lack of respect and 'name-calling' and personality issues do exist by virtue of dealing with other humans. That is a clinical fact of life.

Moving on:- Some EC who are in the common email system of contact do not live on-site. I suggest they are at a great disadvantage in that, day-to-day matters needing resolution, take time and added work on E C members who do live on-site. With the best of intentions informing other E C you even get abused ''' we know who is ill ''' + + + and such matters do undermine total EC Duty of Care under the act I suggest. Have you had this happen to you?

SM don't want to become involved. When two or three EC do 'cc' some and exclude others on matters, and if required to be voted on latter [ E G M wise ] the matter had been decided prior to the meeting and IF you are the one excluded you vote is of no real importance and no discusion takes place. You have been 'side-lined'. 

Is this the right method or ought legislation be changed that all E C persons can never be excluded from email cc by the S M or EC members? Please comment / suggestions welcome. 

I have excluded other EC persons and stated explicit rational logical reasons for doing so. The SM has been informed to act on making Work Orders and responds[ even when knowing all matters as explained in cc rounds ] this person was not included. How perverse can you be?

  1. Is that a reh--hhh--torrrr--ical statement,  and or
  2. Proof that the SM can read but lacks comprehension of written facts?

QUESTION:- Why own a dog and bark for it?

Numbers are vital in vote terms. However 'they must needs-be stacked' in many areas so we can all move on I suggest. Some OC and EC are totally dysfunctual due to existing methods of strata living and community lots. Some follow one person as if they '''' know all things great and small ''''  lol lol :)

Minister, please do not dismiss we who own / dwell on site / relate to and with our neighbours...in this vital reform process. Tenants can have greater insight than many of the OC and 'feel powerless and very frustrated' due to current legislation. Please change it.

Authority to gain entry to buildings :- KEYS & FIRE COMMON LISTS

 Depending on the architectural plan many strata lots have a variey of secure entry / egress points. Many have just one.

Residentail Living as an owner or tenant has responsibilities at Common Law and basic ethics. This structure is built in a >> U << configuration; having three small towers each having 4 lots. All have specific secutiry doors, with one tower having two entry/egree points.

KEYS:- These can be reproduced and Security Doors have common type keys here with normal entry-to Lot- intercoms. However if you live in one tower you do not have security keys to the other two. Hence three seperate keys are required to gain overall access. This presents problems of safety

  1. A resident falls in the stairwell area and calls for help
  2. You dont have that specific entry key. You can't assist them. They may need immediate assistance
  3. No one else is in that tower as being at work
  4. Children do get left at home

In such cases access is vital as the fallen person may be critical. You have then to do what? ''Walk away / dial 000 / or break the glass to reach in and open the door ??? ''

Same applies in the case of FIRE. You are locked out..the Strata Fire Hose you have but can't gain entry to assist and the trapped resident can't get to the security door and the intercom has been damaged by heat. OMG..POINT IS:- 'If you or others had access this may save life '.

How do you feel on this point?

  • Should the OC have a By-law to cover such an event,and
  • As each Lot has specific keyed doors of entry their own security is maintained;and
  • Should all front Fire Rated front main entry / egree doors have ' eye access devices ' so you can see who is at your door, and
  • Is there an increased risk of entry to your Lot if others have common Secturty Door Keys,and
  • Do you want to be left in pain after a stairwell fall?????????

Are we as residents under the current legislation covered At Law or not? No one wants to live knowing that IF a key stopped me saving a life.....'''''this system killed them'''''. Do we / you have Common  Insurance in place or not ???

Some non-residential E C persons have no keys. Some 'copy them' and hand them to others; even knowing S M refuses to issue all three Security Door keys on request from residing E C owners.

Unqualified E C has a key to Power Switch Room. They are not electrical persons but attend to some electrical site matters ... ''and'' read power comsumption of other Lots.

This point must have new legislation Minister. Basic human care of another can not be denied under Human Rights Charter I suggest.>>>>>> ' snooping or stalking' of another is an offence I believe<<<<<<.

If others reading this have experience like this, please do comment. Density of living is advanced, however many current Drafted By-laws lack clarity and contain ambiguity.

FIRE ESCAPE PLAN & SECURITY KEYS:-  Site safety and a LIST of Occupants i.e numbers only to protect names and ID     and Lots needs to be on-site in the case of 'check-lists' so a common MUSTER AREA or AREAS are known. Language can be a barrier however numbers are a vital component to egress lists.

Ok, we in most places of work have this under O H S and Fire Laws and Duty of Care in legislation; be it Industrial of others forms.

Why have Fire Extinguish devices ...and can't gain access to them >>>>NO KEYS AVAILABLE..... 'how mindless and inept  of real though is that?'

STRATA   oh dear!! Have or has anyone ever seen one document issued from F T or your SM on this life issue? If not why not?

Financial Security & ID at Risk

It is know how easy your ID can be stollen + all your financial details be put where you have no control. Posted on-line and that is it.

It is the same now with Strata Managers i.e. the E C can be informed of any Lot owner if in behind in Levy payments.

I became aware being on an EC and informed by another on the same EC; but this party do not live on-site. Hence if the persons who it is aleged are behind; and close friends of yours as neighbours etc..a dicotomy and ethics conumdrum arise.

Current legislation must be changed to protect your privacy; you financial status and financial ID for all others of an OC. If this is not upheld via change, you can suffer massive losses and if such information is ever 'posted on-line' that is the end for you I suggest.

E.g:-

  1. You may have been made redundent and 'job-searching, and or
  2. Been hospitalised due to illness or acident, and
  3. As you live alone, no one is there to inform the S M.
  4. Thus payments that are not direct debit, but Bpay are not made

Privacy must be of a first consideration between SM and each owner; not for public disclosure. I don't need to know or want to know what or how my friendly neighbours effect payment.

Doyou wnt everyone knowing the 'ins-nd -outs' of your life?

Strata problems

I have read many blogs written about strata living and have found that they confirm my experience and often reflect the despair and distress associated with living in a strata scheme. Most of the problems seem to centre around the issue of "power" and the lengths that some owners will go to, to control a scheme and other owners for their own benefit and/or to boost their own selfish ego. Central to this is the misuse and abuse of the proxy system. Strata living unfortunately places a group of often incompatible people together in the one building with many pursing their own agenda, life style and activities without any due regard for others. The assumption seems to be that people will work together for the good of all but unfortunately this does not occur particularly when one, or a small group of individuals want to gain control of the strata scheme for themself. These individuals use a variety of tactics to ensure that they maintain power - the main one being the  use of proxies.

The current system seems to support and favour owners who contrive to gain a majority vote through the use of proxies. I have corresponded with various past Ministers describing my experiences and expressing my concern with the Strata Act and with the functioning of the CTTT - all to no avail.

The following incident highlights one of my many experiences - I own a unit in a small block of 12 and this incident highlights how the continuous misuse and abuse of proxies by one owner has been used to effectively sideline myself along with four other owners from having any say in the management of the strata scheme. This action is supported and condoned by the CTTT.

We do have a managing agent but they gained the business of the owners corporation when this particular owner secured enough proxies to dismiss our previous agent - he didn't like an agent who followed the Strata Act.  He provided his proxies with misinformation about the agent and strata scheme, any attempt by myself to talk with these owners was dismissed. I was told that ..... kept them well informed. The agent has since displayed a bias towards this owner.

I attended our AGM to find that one owner had secured five proxies for himself - all from owners who either rarely or have never attended a meeting of the owners corporation. He then proceeded to  use these proxies, along wth his own vote  and that of one other owner to gain controll over all decsion making.

Some of the outcomes of this meeting were:

  • The use of his proxies and vote to limit the executive committee to consiist of only two members - being himself and the other owner that voted with him. Three other owners present at the meeting also wanted to be on the executive but were excluded due to the voting power of this individual. Comments were made that no owner who doesn't live on the property should be on the executive, neither should any foreigners be allowed.
  • The use of proxies were used to allow these two individuals, now on the executive committee, to spend up to $1000 on any item and up to $2000 on emergency repairs without having to consult other owners.
  • They then proceeded to accept a quote ((organised by themselves) for $22,000 to carry out work on an item of common property just "in case" it would break. No independent advise was sought or other quotes obtained. At the  same time these same individuals would not allow regular maintenance by a qualfied tradesperson. Instead one of them would work on the system himself, he was not qualified to do so. This incident was such that the five sidelined owners sought the assistance of the Office of Fair Trading and eventually the CTTT to be advised that "it is not the function of an adjudiator to review a decision of the owners corporation merely because a minority of lot owners disagree with the majority". My questions would be - what if the majority is wrong, what if the majority has been gained through proxies and why was the owners corporation denied the right to expert opinion and more that one quote???? The process of seeking mediation before being able to lodge an application with the CTTT would seem to be a revenue raising, time wasting exercise. Such individuals will never agree to voluntary mediation.
  • The use of proxies to refuse the replacement of trees and shrubs removed without authority by this owner, the removal was also in breach of local council regulations. Bullying tactics were used by this owner to intimidate the local council officer.
  • Motions were on  the agenda, designed to harass and intimidate owners who had voiced their disagreement with the actions of this owner. Threats were made during the meeting with no action taken by the managing agent against this owner.

This is just one example of the misery this individual has brought to our strata scheme. The current system allows such owners to continue as there seems to be no means or effort to restrain such individuals. I believe the Strata Act needs to be reformed to protect owners, particularly those in small blocks, where it seems to be easy for proxies to be utilised by the "power hungry" to benefit themselves (or their friends) at the expense of other owners wishes. The number of proxies that one individual can obtain for themself should be restricted. - owners should also be restricted in how (and perhaps how often) they may give their proxy without ever attending a meeting or even visiting the building. All proxies should clearly indicate how they wish to vote on all issues - perhaps a voting form should be required as part of the proxy system - no individual should be able to just give a "blanket" vote with no real indication of their intentions. Such proxy forms are open to abuse and misuse.

Strata Problems

I must congratulate Louise 16 in the succinct way she put forward the deficiencies of management of a strata.   Her experience almost mirrors that of the strata I am involved with.   I have for 6 years attempted to get an appointment of a compulsory strata manager which would have assured correct management.   the EC and strata manager refused to follow tribunal orders and were fined, they were later found to be dysfunctional and not following the law .   The CTTT dismissed the case ad suggested I take up the matter with the Specialist Support Unit (which managers competencies and licensing of strata managers).   The specialist support unit put the fault on the EC and suggested I take up the matter with the CTTT.    To rectify problems so far, it has cost the owners corporation over $20,000 and could be up to $40,000 by the time  the books have been re-written and audited.   

So much for a problems solving body.   Louise your problem could be solved with the appointment of a competant compulsory strata manager.    The only words I can convey to you is good luck and hopefully miracles may happen.

Bob Morrison   

Strata Laws Online

The strata laws need ammending,any one living in this situation is at the mercy of the operator. 1 the operator should not be able to buy into the schemme where they are acting as operators, Reasons: they become owners and influence the management board and there is no seperation & consequently no privacy when confidential matters are discussed, especially if the site manager also acting as & for the mangement committee secretary.

2. Any operator should not be able to ask for medical details a condition when a tennant buys into the operaters homes, there is an implied threat the these tennants can have the lease terminated at the wim of the operator, all elderly persons have health issues.

3.The site exit fees should be ammended & backdated & capped at say three years, if these changes are not ammended, that all owners will have equity not debts at year twenty. The lack of equity for the owners and resident is particuly noticed when an elderly person wants to leave to go into a nursing home. These days in public and private nursing homes appear to want equity brought with the person going into the nursing home, it means many will live their life in a misarable situation and will have to use many state services. This would help protect them from debilitating situation and maybe lessen the chances of suicides.

4.Improve & Manage of strata schemmes. 1 The operator where I live is using a outdated set of American guides (THIS GUIDE IS AVAILABLE FROM THE CANBERRA LIBRARY WITH A MEMBERSHIP FEE OF $200) on how to run meetings and appears reluctant to go to FAIR TRADING AS THE MINIMUM STANDARDS REQUIRED. This minimum standard should be legislated in law.

5. A simpler set of guide lines for potential purchaser of strata properties, this could lessen the issues that they may have once they have bought in, many issues arise with time may be as late as twelve months later, and I am sure many would have not purshase a strate propery.

Management rights

1/ We have in our building a person who holds management rights to manage those units whose owners wish to tourist let their units and of cause maximize their investment (nothing to do with the caretaking duties of the building). Most of these unit owners do not live in Port Macquarie, so therefore when it comes to voting time, whether it be The Annual General Meeting incorporating the voting for the Executive Committee or any other voting issue, the tourist letting agent is given the proxies by all his customers and he is allowed to vote which ever way he wishes. In the Sandcastle’s case at the moment it is 50% of the vote and the agent decides the make-up and numbers of the Executive Committee which is in the Sandcastle’s case for 2012, two permanent resident owners, seven none resident owners out of a total of nine. The Sandcastle Executive Committee has not met since 5 November 2011 straight after the Annual General Meeting and as of this date, we have not received an agenda for any Executive Committee meeting. We believe that it is totally wrong that one person (an owner but not a permanent resident) who stands to gain a monetary sum can hold so many proxies, and in the Sandcastle’s case, we believe, constitute a conflict of interest. 

2/ Also, we believe, that for the building sake the make-up of the Executive Committee members should be drawn from owners who are permanent residents who live on site and understand what happens in the day to day running of the building. 

STRATA LAWS

Concerns from Strata Title Residents in West Albury NSW

a)  In view of the Govt. making it necessary for payment of aged care (H/N-H) any future contracts under Strata Title be subject to re-purchase by owner or manager after 6 (six) months vacation of unit to more readily ascertain the departure fees & levies payable and any residue available for H/N-H care.

b)Retain the status quo where Retirement Village Law & Strata Law run side by side - neither having precedent over the other.or make Strata Title Law the same as Retirement Village Law where the 2 (two) converge to avoid disputes over timing of budget & annual meetings.

Retirement Village Law has less onerous constraints on timing of these. 

encourage - don't discourage participation with fines and jail

Yesterday's smh about individuals on executive committees could be fined $600,000 and/or get 5 years jail is a great encouragement for individuals thinking about getting involved in their owners corporation - NOT !!!

I've been on my EC off and on for about 15 years - mainly because either no-one else is interested, or I can see a need to fend off self-interested power brokers trying to steal our money for their personal profit.

to look at the role of unpaid volunteer (EC member) then say OK - if you make any mistake, you'll be liable for a $600,000 fine or 5 years in jail - to my mind is simply unfair, unreasonable and unconscionable.

if such law comes in, then I can predict my and many more owners corporations will see a sudden lack of willing volunteers to join their ECs.

Why would they?  What's the upside?  It's already a thankless task - I give hundreds of hours of my time - freely donated to help others in my community, for what - so they can turn around and threaten to sue me every time there's something they don't like ?!

This morning I have already received my first email along this lines - please I would like a extra light in my stairwell to improve my perception of the safety, and by the way, yesterday's smh says you could be fined or sent to jail if you don't.

You see - just a hint of the news and I'm already being threatened with it!

If you want to bring in such law to catch the very worst operators, then please require a sufficiently high standard of evidence that actual good-intending hard-working volunteers can sleep at night - thanks if you can.

Strata Living

The document of legislation relating to the issue of Strata Living is indeed a very formidable volume. For the simple reason that I am not a lawyer, I am unable to answer every question listed in the mission statement contained in your brochure in a consecutive and precise manner.

I am however an owner of an apartment in a building that contains well over 100 units. I have been living in the building for some 17 years and speaking from observations and experience gained, I have come to the conclusion that levy increases are of great concern. It is true that the legislation is very clear in respect to this matter, which is to say that levies are determined by the owners at the AGM. It is also true that cost of new levies and to be voted on, is made known to all owners by way of the Agenda issued prior to the AGM. Alas, the fact of the matter is that not much more then between 40 and 60:% of owners turn up at this important meeting. The rest may or may not forward a proxy form allowing the Chairman to vote as he thinks fit. Naturally, the people who are at the meeting are in the first instance those which have the greatest voting powers together with a number of owners who do have an interest in their surroundings. The result of this is that levies increases up to the tune of 90% are passed.

The fact is that a survey made by me of some 12 units of similar dimension (1 bedroom & bath) the costs of levies are between 800 and 1000 dollars per quarter.

A number of the units investigated also offer car parking facilities. By way of comparison, the cost for a similar unit, without car parking, is 1500.00 per quarter.

The result of this state of affaires is that it is impossible to sell my unit for the simple reason that the levies are to high.

May I suggest that a law is introduced which on issue of the Agenda papers for a forthcoming AGM every owner will receive a separate paper which states the anticipated levy payable and provides at the same time the opportunity to tick the box of either Accept or Reject? Those papers MUST be forwarded to the E.C. by the individual owners. In the event that the rejections are in the majority, those present at the meeting will have the right to determine a new levy which is at least 10% below the anticipated levy

Obtaining a copy of the Strata Roll. One would be forgiven to think that a Strata roll is nothing other then a few papers with all the names and addresses of owners.

I have such a copy in my possession; alas it is a few years old and out of date. I had no problems whatsoever to obtain that paper from the last Strata Managers presiding over the affaires of this building. Well, not so, this time. Instead of paying a few dollars to obtain a copy there is a regular litany of reasons together with an indication of very substantial expenses as to why this paper can only be obtained by what very much looks like the “Third Degree” treatment for those who dare to ask.

In view of the legal somersaults that are very apparent in every aspect of Strata living, I would be most grateful if I could receive information as to reasonable costs and procedures to obtain a copy of the Strata Roll relating to this building.

Finally,. The Strata Management Legislation Amendment Act 2008 spells out in clear and precise terms what a Building Manager can and can not do. This most defiantly does not apply to this place. Here the Building Manager can cut locks, remove personal property, cause enormous cost in time and money and in the eyes of the court he has done nothing other then to enforce a bylaw. An objection lodged based on the above legislation was rejected. My question here is: in the light of this verdict which clearly fly’s into the face of an Act passed by Parliament, does the whole of the Strata Legislation mean anything at all or is it just a very rewarding playground in which solicitors earn their not insubstantial income.

Power of the Owners Corp to approve a DA

At present most change of usage or minor fit out within a Retail/Commercial premises will need a DA consent from the Council before it can proceed. The Council however will not consider any DA application from a strata premises without a consent from Owners Corp to that application first. Thus this puts the Management Committee of the Owners Corp in a unique powerful position. They can reject an application out of unfound prejudice or simply commercial self interest. Most of them are not professional town planners but yet they are given power to make such decision (including purposely delaying it) without any responsibility or liability. There is very little an applicant (strata owner/tenant) can do to overcome this without incurring considerable expense. In event of a tenant, he/she will simply walk away. In event of an owner they will be intimidated, "learn their lesson", & will vote with those that control the Owners Corp from then on. So more power to those already in control.

To overcome this, I suggest that the power to approve a DA be removed form the Owners Corp. It should be dealt only by the Council with their professional impartial town planners. However the Owners Corp can mount an objection on behalf of the SP.

I also understand that the existing Strata Schemes Management Act is mainly formulated towards residential units. A Retail/Commercial unit often have different needs. I believe there should be a sub-section to deal with Retail/Commercia strata premises which is now becoming much more common.   

We are the registered

We are the registered proprietors and have lived in our town house more than 20 years. Our Strata plan consists of 6 townhouses. There are four in one block ( Lot 1 Lot 4) and lots 5 and 6 are individual free standing located at the rear part of the land. Excepted Lots 4 and 5, all are occupied by the owners. The buildings were constructed over 25 years ago.

Duty of care was not exercised by the owners of Lot 5. She bought for leased out for a catering business using heavy machines in the residential premise. Some of her tenants were undisciplined and had been reported to the Police Station .We believed  that the cracking walls is the result of her previous tenants who operated the heavy industrial machines.

In the letter of the previous Strata Manager to the Registrar of CTTT clearly stated that the building defects being experienced by Lot 5 are due to the numerous business previously & currently operating out of the Lot, and that these faults are not the Owners Corporations responsibility but are due to the negligence of Lot 5.

A dismissed order for the application was made by the CTTT on 2006:

These points are important, as the submission from the Strata Manager says that the problems being experienced are attributable to business previously carried out on the Lot. This is confirmed in remarks made the owner of Lot 1 in a meeting( not a mediation) held on 18 July 2006.

... The cause attributed is a commercial activity carried out in Lot 5 by a predecessor in title to Mr W.  and Ms L.

On this evidence, I am not satisfied that Mr W. Has shown that the order sought should be made, and I therefore dismiss the application.

On 2 April 2007,Mr W obtained an order from an Adjudicator required the Owners Corporation to rectify certain crack in the Lot 5 and on the driveway. No specific method of rectification was required and it was not ordered that any underpinning take place.

 

At the same time a dispute arose between the Owners of Lot 5. The dispute resulted the Supreme Court ordering (on or about April 2008) that the ownership of the Lot 5 vest in Mr R. And Mr A.R as Trustees and in effect, ordered that the trustees facilitate repairs to the Lot and sell same.

Subsequently the Trustees (in his capacity as owner of Lot 5) applied to an Adjudicator for the appointment of W. J as a Strata Manager pursuant to section 162 SSMA and the appointment was made on 6 January 2009.

The terms of the order appointing Mr J  all the powers of the executive committee of the Owners Corporation and each of executive committee office holders.

 

On 17 February 2009, Letter from the Trustees for Sales to Mr J stated that:

We refer to the litigation in this matter commenced by Mr W. Being proceedings brought by one Lot owner (Lot 5 ) against the Owners Corporation within the meaning of section 229(1) of the Strata Schemes management Act 1996 (NSW). We act for Mr R and Mr A.R, the registered proprietors of Lot 5 in the Strata plan.

Whatever the outcome of these proceedings, we request that you instruct Mr M.G. Lawyers that they seek an order pursuant to section 229(2) that any money (including costs) payable by the Owners Corporation under an order made in these proceedings must be paid from contributions levies only in relation to Lot 1 to Lot 4 inclusive and 6 in accordance with their unit entitlements ( and not by any contribution levies against the Owners of Lot 5).

We enclose an update of the Strata Roll Information Form and would you be obliged if you would ensure that all future notices are forwarded to this office.

Would you please confirm that you will so instruct Mr M.G. Lawyers.

After the appointment of the Compulsory Strata Manager and on 10 March 2009 we were notified that Mr W.had commenced legal proceedings seeking damages from the Owners Corporation based on claim that they have lost rental by reason of the state of Lot 5 and they have incurred costs in having the Owners Corporation effect repair to Lot 5.

16 June 2009, M.& dApice Lawyers (trustees for sales) letter to the Compulsory Strata Manager stated that:

We confirm that you are taking the following steps with a view to the following outcomes:

1.      You have commissioned a survey report which will plot the location of the Councils stormwater and drain and the Boards sewer lines in the vicinity of unit 5.

2.      You have commissioned a geotechnical report to firm up the information available to you concerning the underlying soil conditions.

3.      Upon receipt of the survey and the geotechnical report, S. Esk. Will refine the specification for the rectification work and review the quotation provided by T. Bowles.

Upon you having, to your satisfaction, a clear understanding of the cost of the rectification works, you will call a general meeting of Strata Plan for the purpose of raising a Special Levy for the purpose of funding the rectification works. At this stage, you expect that the Special Levy will be in the vicinity of $60,000.00 per lot.

 

Residential Strata Insurance Plan from CHU company recorded that the period of Insurance for the Strata Plan from 9/5/2009 to 9/5/2010

Policy 1     Insured property decreased  from current $1,925,000.00 to $1,614,000.00

                    Loss of Rent/Temp Accomm (15.0%) decreased from 288,750.00 to $242,100.00

Policy 8     Catastrophe Insurance( Insured Property decreased from $577,500.00 to $484,200.00

We are the Owners Occupiers are suffering of the excessive and unreasonable Special Levies due to the bullying and misconduct of the Compulsory Strata Manager dealing with conflict of interests and misleading CTTT.

Within two years we have been forced to pay $60,000.00 each Lot raised by the Compulsory Strata Manager for the repairs of Lot 5 and loss of rent claimed by Mr W.

An initial quotation from the builder T.Bowles was approximately $38,000.00. From the same builder the quotation was increased up to $325,000.00 for the repair obtained by the Compulsory Strata Manager Mr J.

The actual repair and renovation the whole property of Lot 5 costs about $68,000.00

 

The affidavit of the engineer appointed by Lot 5 stated in Paragraph 15 -17:

15. As can be seen from my initial report dated 11 April 2003, it was clear to me on inspection of the property that there was no danger of the building suffering any immediate collapse and that it was generally sound in its construction. This fact is clear because the movement and cracking which I initially examined in 2003 has not progressed at the date of this report, namely 2009. That is, there has been no movement over six years.

16. The last question I have been asked is as to the degree of habitability and rent ability of the property with this disability. That is, should the average tenant have been asked to pay a normal rental for a property in this condition? At the time of my first inspection, the defects in the building, namely the cracks and the movements observed, did not affect the habitability of the unit in that they did not compromise the weather proofing or result in any instability of the internal finishes(i.e. nothing was going to fall off).

17. I have seen a number of properties in far worse condition where the tenants have been paying markets rentals. I therefore see no reason why a tenant should not have been in the premises and paying market rental over the period between the time of my first report in 2003 and the date of this affidavit.

In the affidavit of the owner of Lot 5, Mr W . stated that:

25... I gave permission to Mr C.C to occupy the property at that time. Mr Chang did not pay any rent to me. He left the town house in June 2008, after the Trustees were appointed.

26. My mother and I have never lived in the town house, nor as my sister. It was purchased for the purpose of investment, and to be let out.

27. The townhouse had a various cracks to the external walls and other areas outside it such as adjoining paved areas. By the time Mr Tikuye had vacated in January 2003 the cracks were sufficiently large to cause the property to be unfit to be let.

28. I seek the damages against the Defendant for rent which I have lost in the period from February 2003 until present, together with future losses which are continuing. I also seek damages from legal costs which I incurred in bringing proceedings in the Consumer Trader & Tenancy Tribunal, for the purpose of compelling the Defendant to carry out repairs to the town house.

Mr W claimed loss of rent from the Owners Occupiers $30,000.00 + Legal fees $ 58,000.00 were compromised by the Owners Corporations Lawyer without the consent of the Lots Owners.

Being appointed for a period of almost 12 months Mr J the Compulsory Strata Manager had not made any substantial progress in the [proposed works.

He had incurred to the Owners Occupiers a large amount of costs and that such costs would in all probability be ongoing. He had relied very heavily on the lawyer for advice thus incurring more than $100,00.00 in legal fees and had spent more money on consultants than he will spend actually fixing the problem.

The Compulsory Strata Manager each year had spent a few thousand dollars from the Owners Corporations fund for the application to extend their period from CTTT with the misleading information.

 

No investigate from Fair Trading! No hearing from CTTT! The decision made from CTTT only based on the written submission.  Even with all the documents submitted but we were always unsuccessful to remove the Compulsory Strata Manager and the Owners Corporations Lawyer appointed by the Trustees for Sales of Lot 5 and the Compulsory Strata Manager.

On March 2010,the Trustees for Sales correspondence to our Lawyer stated that:

 

Would you please obtain your clients instructions to discontinue the application to remove the Managing Agent which is listed for hearing tomorrow and to pay their levies and let me have your advice on their instructions to you. That application is strenuously opposed and an order for the costs incurred by us will be sought against your client if the application continue beyond tomorrow.

 

 

 On March 2010, the Compulsory Strata Manager resolved to borrow $110,000.00 from the finance company without the consent of Lots Owners Occupiers. We have been forced to pay Special Levies $5,500 per quarter for one year!

With a small Strata Scheme without lift , pool... the Compulsory Strata Manager is raising $ 1,600.00 Strata Levy per quarter.

We look forward to see the reform of the Strata Laws in the flexible and fair way to resolve the dispute avoiding the stress and financial hardship.

Secondhand tobacco smoke is toxic in strata living.

Non-Smokers' Movement of Australia Inc. (NSMA) has been fighting since 1977 for everybody's right to breathe clean air, free from the poisons in tobacco smoke. If you can smell tobacco smoke, then the poisons are going into your lungs and your family's lungs and doing you harm (Advice from Thoracic Surgeon, Sydney). With the proliferation of multi unit housing over the past 50 years in Australia, and the success of smokefree legislation in most other aspects of our lives,(public transport, private vehicles carrying children, indoors in all public buildings, at outdoor places such as beaches, playgrounds, crowded events, and some restaurants) we have come to an unfortunate situation where families are often subjected to assault from tobacco smoke in one important area - right where they should be able to lead healthy lives - in their own homes. Clean water, clean air - everybody's basic right. We expect clean water out of our taps at home. So should we be able to expect to breathe clean air, free from poisons. Secondhand tobacco smoke triggers life-threatening heart and lung conditions, including asthma, as well as irritations to eyes and throat, nausea and headaches. Smoke drift occurs when tobacco smoke from neighbours drifts away from one property and into others, onto balconies, through open windows and doorways Smoke seepage occurs when tobacco smoke "travels from its point of generation in a building to all other areas of the building. It has been shown to move through light fixtures, through crawl spaces, and into and out of doorways. Once exposed, building occupants are at risk for the irritant, allergic and acute and chronic cardiopulmonary and carcinogenic adverse health effects which are known to be associated with environmental tobacco smoke (secondhand smoke) exposure" California Chief of Occupational Health and Safety 1993. Secondhand smoke is very difficult to remove, as it lingers and becomes entrapped in rooms and small spaces. Smokers are often unaware, and some don't care, that their smoke affects others around them. When told, they often become aggressive when asked to prevent their smoke from seeping and drifting into other properties. They say that, because they are using a legally available product, they should be able to use it anywhere, especially in their own homes. Our peak civil rights body, NSW Council for Civil Liberties, says that although tobacco is a legally available product, smoking should not be allowed in places where it may harm others. NSW Strata Law must be changed, to recognise that secondhand smoke is not simply an annoyance or a nuisance. Tobacco smoke is a health hazard and, must be prevented from affecting others, just as in the workplace and in public spaces, indoors and outdoors. We call on the NSW Government to make the following regulations: 1. All new-build multi-unit housing to be declared smokefree, with allowance for residents to apply to be allowed to smoke within their own property only if they can prove that their smoke will not affect others, either through smoke-drift or smoke-seepage. Specific smoke-tests would be required for proof. This would be similar to applying to have a specific pet, and ensuring that the pet does not affect other people in the property. 2. Declare that all current multi-unit properties must introduce smoke-free by-laws within 12 months of the regulation, application fees being waived and support funding sought from Federal Tobacco Taxes. Similar to Item 1, smokers could then make individual applications to be allowed to smoke, but with the same proviso, i.e. not to affect others on the property. The advantage of having all established properties lodging within a limited time-frame is so that all property-owners would know their buildings would be safe in the near future - a "level playing field". Another advantage - some smokers would, with further limitations on where to smoke, consider and try quitting, for their own and their family's sake. Studies have shown that the majority of smokers wants to quit. There are many quitting therapies now available, harmless to smokers and, more importantly, harmless to the smoker's family, friends and innocent passers-by. Margaret Hogge Non-Smokers' Movement of Australia Inc. .

Tenants at AGM's???

 Many tenants are not able to respect the rights and responsiblities of the owners corporations.  Who even suggested the idea that tenants attend agm's?  More hazards and repair costs are caused by tenants not being responsible. They never contibute to the improvements and upkeep of the common areas financially or voluntary.  Majority of units we manage are now tenanted which puts more demands and cost onto our business maintaining and enforcing by-laws.  We have no problems with tenant requests and improvement of their residence however it has to be a give and take situation.  Tenants now having to be issued with copies of by-laws is a great idea and we have been working with property managers to assist in providing these to tenants and for them to acknowledge and accept the by-laws at the time of signing their lease agreements.  However, there is many tenants out there that would not of been provided or notified of such by -laws by self managed owners and/or property managers not fully understanding the strata industry.  There needs to be more training and awareness to property managers when taking on their roles.  We have had feed back from both tenants and owners regarding rentals in strata complexes.  Tenants complaints are that common property repairs are not always passed onto the strata managers from property managers.  Delays with maintenance issues being passed on usually ends up with small maintenance issues becoming larger ones.  Owner occupiers ask that units not be leased that they are only for owner occupiers.  Owners leasing their units (and owner occupiers) would like to see property management carry out more regular inspections of units and I think that strata management should be invited to attend some of these inspections with them to identify any common property maintenance requirements that may be visible only from inside the units.  Property management, owners and strata management need to work together to ensure that buildings are well maintained and managed effectively which will result in happy tenants that like to do the right thing and not have to attend agm's.

proxy system

The proxy system needs to be reformed to stop one owner in a strata scheme from gathering proxies to dominate/manipulate the business of the Body Corporate to the detriment of other owners. May be one solution is to restrict the number of proxies that one owner can obtain and use.

The CTTT is an ineffective body which is unable to solve strata problems.  I am not sure if this is because of the type of people who staff such an organisation or the procedures followed.

NO SMOKING AT UNITS - MAKE IT THE LAW

Smokers living in units are a health hazard and are usually unaware of or disregard the danger or discomfort they inflict on other residents.        Typical smokers do not smoke within their unit.      They smoke on the common area or on their balcony, after closing their doors or windows to prevent smoke entering their unit.     The match stick is flicked on to the common area and smoke belches into the atmosphere or common area or permeates across or above into adjoining balconies and into units through open windows and doors.     The cigarette butt is then usually thrown on to the common property.  

The Consumer Trade & Tenancy Tribunal - Strata and Community Schemes Division at hearings SC06/44767 and 06/44783 ordered the respondents - the tenant and the unit owner landlord - pursuant t Section117 (1) (a) of the Strata SWcheme Management Act to cease using or permitting a lot to be used in such a manner to cause a nuisance or  hazard to any other lot owners.  The case involved smoke and odours entering other units.      Under existing laws an Owners Corporation or owner may seek orders under general provisions of nuisance and hazard, requiring several standards of proof.     NO SMOKING at or on strata properties and common area should require only proof that smoking occured.        NO SMOKING health laws should also apply.

Cigarette smoke and its effects is recognised as a serious health hazard - banned from hospital precints, work places, entertainment venues and vehicles under certain circumstances.      Tobacco products cannot be displayed or advertised for sale.       Proposed new laws require generic packaging plus explicit health warnings.

Reports today indicate that health laws regarding passive smoking are to be  extended and a reported 4 metres exclusion zone from apartment entries is to apply.    This may be suitable at high rise buildings.        Many unit blocks have ground floor and first loor units above garages.      A smoker may be 4 metres from an entry , but adjacent to or under a balcony with open door or windows.

NO SMOKING AT STRATA PROPERTIES - IS THE SOLUTION - MAKE IT THE LAW

Stand up and be counted

I have been participating and following the review topics with interest.  It would appear that there are two main themes being the use of proxies and dissatisfaction with the CTTT.  This does not surprise me having 30 years experience within the industry, an educator of the industry and participant in many public presentations.

The last review of the Strata Laws commenced in 1994 (I was a participant) it is now 2012, 18 years on.  The current Strata Schemes Management Act is 1996, Community Land Management Act 1989, Strata Schemes (Freehold Development) Act 1973 with all legislation having numerous amendments.

Both industry participants, owners and occupiers must get involved and continue to be involved.

Consultation

I have been the Secretary/Treasurer of a Owners Corporation for a number of years and I would like to make you aware of a factor that arose some years ago in the complex which I am involved with which I feel needs to be addressed to the Strata rules governing such complexes.

It was in a development of some nineteen units, all on ground level and most of which were built in pairs in an open complex.  A unit had a problem with the flooring of one of the units which had sunk and it needed to be repaired.  At one stage it was taken to the Dept. Fair Trading and they said that we would have to fix it, even if it meant that the unit had to be demolished, along with the adjoining unit and rebuilt.  Fortunately, we did not have to go to those extremes, but it meant quite a lot of anxiety and negotiations to have the unit fixed by repairing the floor, the walls of the unit and having the  interior of the unit repainted.  It also meant quite an amount of money outlayed from resources of the Owners Corporation.

I believe, that because the unit was freestanding, not in any way encroaching on 17 other units in the complex it should have been up to the owner of that particular unit to have the unit repaired himself.

If he had bought a home in a street and found the problem he would have had to fix the problem  himself, surely in this case it is honestly, no different.

When buying a unit you get a building certificate for that unit, and have a builder look at the unit for any faults or discrepancies and that unit.  If in the case of a high rise you would also get a report on the particular unit in which it is housed, not on every separate building within the particular complex..   At the time of getting the unit fixed the usual comment from builders, engineers and the like was "what did it matter to the Owners Corporation and they were astounded when they learnt that the Owners Corporation were responsible for the repair of the unit"'.

I believe that many of the complexes that are like this are owned by people, in many or most cases by elderly people, and they are not aware of the consequences that should arise with the unit that they themselves own.

Therefore, I would like to see the current ruling changed so that if you are the owner of a unit which is freestanding or in the case of one which is in a building of two or more units and something happens to the interior of a unit that you or your adjoining owners are responsible for the repair or rectification of that or those units but not responsible if you are separate from that or those units.

Proxy farming is no asset to communities

As a resident owner in a community title estate I have been able to observe the negative effects of excessive proxy farming at community general meetings upon the principles of open debate, the  diverse expression of opinions and consequently upon the achievement of more broadly based outcomes.  It has become apparent that one member of the community is able to gather sufficient proxies to establish a majority voting bloc in his /her own right. I have also observed that such enthusiastic vote gathering is often not done with the finest of motives, but may contain strong personal agendas and the desire to disenfranchise others.

A restriction upon the number of proxies which may be individually held will encourage broader community participation in discussion and provide a more democratic base for voting.  It may even jolt the apathetic out of their seats long enough to attend.

Additionally, the CTTT is currently a toothless tiger with no real power to address or redress significant by law breaches after the event.  This is even more evident when a hearing is so far after the event which precipitated it that circumstances have moved on and redress is not easily accomplished - particularly in building matters.  The CTTT has demonstrated that it lacks the authority or will to initiate correction in such cases even if the breach is acknowledged.  Change is required.

Equality of parties to be assured

Q 1.1 Equality of parties to be assured, specifically, an efficient advocacy system to protect ageing unit owners living independently in their units,from strong parties and strata managers.

1.2 Individual storage enclosures  to be identified on a title, if
feasible.

1.3 Beneficiaries of public housing to be made subject of a
periodical means and assets tests, taking into account  "divorce" occurrences (really, not confined to eastern suburbs in Sydney).

1.4 Scrutinise for the motives interstate property investors and
those coming from overseas.



Q 2.1 Ethics standards for elected office bearers/executives.

2.1.1 Impartiality in dealing with all strata matters, in particular,
not to use the discretionary power against a personal adversary.

2.1.2 Not to enter into a civil arrangement with someone else's
tenant without the knowledge of his/her landlord.

2.2 Multiple proxies to determine the quorum, however, their
impact to be sharply reduced for voting purposes.

2.3 Only the owner present at the meeting to be seen eligible to
become an executive.

2.4 Strata manager not to be allowed to charge a fee for answering
a phone or face-to-face inquiry from an owner.



Q 3.1 In a multiple block of units, a new owner to be seen eligible
for election as an executive only upon a year since settlement.

3.2 Executive meetings to be scheduled in advance for the whole
year.

3.3 Office bearers to notify on a notice board the time and venue
of their availability to unit owners.

3.4 Unit owner to be allowed to sit in at an executive committee
meeting.

3.5 If a unit owner is found to have damaged the common property, has to be made accountable for it.



Q 4.1 To make it mandatory for a defendant to respond to a mediation application.

4.2 CTTT to subpoena vital documents, if requested by a party to
the dispute.

4.3 An officer of the Department of Fair Trading to be allowed, at
their discretion, to sit in at a strata meeting, if a concerned unit owner gives a good reason to do so.
4.4 To publish online most significant strata litigation cases (precedents).
 

Executive Committee Members holding too many Proxies

A1. Executive Committee Members holding too many Proxies, 2-3 Members who are allowed to have 7-8 Proxies out-vote all other owners.
Members remain too many years  on the Committee - they vote themselves in.
Executive Meetings should not be by emails only with members residing overseas.
Approvals should be given to Strata Managers for urgent works to be  done within days, not months. eg. not 4 months.

A2. Section 116/117 does not cover sufficiently  small and large every day problems that upset the life of decent living owners.
The look-of Strata buildings should have same color awnings, same everything on the outside.
Balconies not to be used for back-yard barbeques, kitchens with smoke & smell billowing into the windows of bedrooms and other parts of their home or the streets of large cities like Sydney. It is as bad and ugly as the cigarette smoking.
Our cities can become unsightly in the future. We should follow other capital cities eg. New York, London, Paris, and other smaller cities in civilised countries, how orderly, clean they are.

A3. Strata Managements should have more power over riding selfish Executive Members by following the LAW of Strata Living!...
Book keeping is also a ?questionable? mater, when it is prepared by 1 Committee Member who claims to be an accountant with a questionable background.

A4. Changes ARE NEEDED for stringent rulings for breaking Strata Laws, and for Tenants, that destroy rented properties. Rental Shortage is also due to the above problem with Tenants, who get away easy with their careless, treatment of rental properties.

I have 50 years of experience in Real Estate investments, also held a RE Licence in SA since 1966, the 1st licenced  female in the State of South Australia. I have held rental apartments  in Strata Buildings for 30 years in NSW & SA.I also had dealings with the NSW Fair Trading during   Labor  
Governments.

THE TIME HAS COME FOR OUR NEW GOVERNMENT TO MAKE SOME THOROUGH, DRASTIC CHANGES.
 

I am offering the following thoughts and suggestions

I am offering the following thoughts and suggestions for consideration based on many years of active and continued involvement as a member of a Strata Building  Owners Corporation Executive Committee  living in, owning and renting  a strata unit. These ideas are presented  under three main headings as follows:
1.By-Laws for Strata Residential Buildings

These are living guides for residents covering owners and other occupiers
(tenants) and as such should be written in plain English, dealing with the most frequently occurring issues, and hence should be presented in a user friendly format.
(a) Coverage

The Strata Act by-laws most recently issued were in 2010. They represent the nucleus of a building's by-laws, supplemented whenever the need arises with by-laws formed  by  an Owners Corporation to meet the special needs of an individual building.
These Strata Act By-Laws are included in all tenancy leasing agreement The current 2010 Strata By-Laws (no 492, schedule 2) total 22, but it is proposed that additional by-laws are needed in this generic coverage to cope with the changing needs of building residents. These are:

i.Notice Board showing minutes of a building's executive committee meetings and other building items of interest to residents. (was previously included in 1996 Strata Act By-Laws number 18, the wording of which is proposed to be expanded as indicated here)

ii.Making it mandatory to develop a ten year building upgrade plan, updated every five years. This is equally important for both older and newer buildings as the process ensures that buildings are effectively upgraded and repaired, the costs of which are monitored, providing a history of the state of the building for new owners, enabling  properly planning for  preparing, implementing and funding projects.

iii.Stating that owners / occupiers have a responsibility for common areas located in their lots. giving examples such as pipes, etc.  This is becoming increasingly important with the higher proportion of tenanted strata apartments.

iv.Residents responsibilities outlined when moving in-out of a building rules especially relating to the protection of common property and minimizing disruptions to other residents. (This is a phenomenon occurring more frequently as a  high proportion of lots are occupied by tenants who regularly change their location. There is therefore a greater risk  of common property being damaged with the moving of furniture and other heavy personal belongings. ( Such a by-law was previously included in 1996 Strata By-laws, number 18).

(b) Format

It is suggested that Building By-Laws be presented subdivided into five distinct heading categories as follows:
LIVING GUIDES - COMMON PROPERTY - KEY RESPONSIBILITY - LOT ALTERATION - TOTAL BUILDING.
Whilst there may be some overlaps, my experience has indicated it to be minimal. This facilitates both accessing and reading By-Laws, which assists
compliance.  

2.Strata residential building responsibilities

The owner and owner's corporation financial responsibilities within a Strata Building are important matters.  During the past 12 months guideline papers have been publicly released to assist in their interpretation. One such example was Memorandum AG520000 dated September 27th 2011, prepared by the Strata Industry Working Group (www.Ipma.nsw.gov.au).  Responsibility matters do not arise on a daily basis when living in a Strata building, and hence are not of concern to most residents. However, when such matters arise they are usually referred to the Owners Corporation Executive Committee and the Strata Building Manager for a ruling. It is therefore recommended that such a document as the Memorandum AG520000 be included in the Strata Act as a reference source for all parties to access  when matters need resolving.
 
3.Overview of living trends impacting on Strata Building Maintenance.
 
I have observed over many years the rising proportion of tenanted residents relative to owner- occupiers which reside in a Strata Building. In many of these buildings tenanted residents represent the majority of the residents.
This involves tenants frequently changing in line with their tenancy agreement expiry dates. Much movement of furniture and other heavy belongings occur. New tenants also require building guides to acquaint themselves with the building configuration and the building living guidelines. Issues of reserved parking space available for each lot with multi vehicles / lot  are continuously arising. Overall, therefore there is an increased likelihood of common property damage.
In contrast owner occupiers have a much more direct interest in the ongoing maintenance  and upkeep of their Strata Building, and they stay longer in
the building.  
The Strata residential building act should recognize these important trends which are rising.

Reallocation of Unit Entitlements

The proportion of strata levy and statutory charges that a strata unit pays depends on their UNIT UNTITLEMENTS. Thus the annual outgoing cost to an unit owner depends heavily on their Unit Entitlements. However circumstances may change that makes their allocated Unit Entitlement rather unfair. Under such circumstancies, the unit owner can make an application to CTTT under SECT 183 of the Strata Schemes Management Act for a reallocation of Unit Entitlements. But the Act also requires that the applicant provides the Tribunal with a valuation certificate of ALL the strata units in the whole Strata Plan regardless whether the valuations on some units are relevant or not.

This may appear reasonable in a small Strata Plan. But in a large SP of over 100 unit, the cost to comply with such requirement is simply financially prohibitive.

My suggestion is that such requirement be removed from the Act; and the Tribunal can rely on the submission of the applicant together with the relevant professional valuations to make an order. The Tribunal shall have the discretion to request additional information if necessary.    

Complete rewrite needed

The current laws are a dogs breakfast with bits tacked on here and there to address the perceived issue of the day. You could knock out half the laws overnight and I bet most people wouldn't even notice they were gone.

The drafters should go back to a plain canvas and start again from scratch. Some of the more important provisions are hidden away at the back in the Schedules. However, why is there a need to repeat many of the provisions for the first AGM in those applying to any other meeting. Same goes for the by-laws. There is a standard set in the Act and numerous models in the Regulations and it is very difficult to spot the difference between them.

Having lots of sections solely dealing with the Tribunal's/adjudicator's power to make very orders is a waste of space and makes the Act much longer than it needs to be. These should be put in the relevant sections covering the same subject matter.

You could also get rid of the silly 'introductions' at the start of each part. That's what an index and proper section headings should be for. 

Putting the definitions at the start of the Act would help as well.

Strata managers are R-souls.

 

I have been told whilst on the executive committee of my strata, due to the privacy laws I could not directly contact other owners with issues/concerns I had with the Strata Managers. All such contact had to be made via the Strata Managers themselves & they would forward on my message. To me it seems inappropriate Strata Managers should be able to have access to the concerns I whished to convey to other owners. If I have concerns about corrupt behavior of the Strata managers, I should be able to notify them (those who don’t live in the building ) directly, that should not go via the corrupt Strata Managers.
There is another piece of legislations that says that if I don’t receive my quarterly levy, and don’t pay it, then the Strata Managers are entitled to send me a reminder with a fine on it for not paying. From what I have seen on this legislation is that  the “quarterly levy” is a regular occurrence the owners should be aware of the regularity & pay it with or without receiving the “quarterly levy” notice in the mail.
This is utterly preposterous law, as it assumes all people are the same, and have all their faculties to remember these types of things in the busy lives they lead. Owners should get at least one warning before being slugged with a fined for not paying on time.
The other outrage of this law is that if the fine is not paid, it can make you “un-financial” and unable to vote at the AGM, & a daily interest rate is charged. This seems like a clear tool to shut down people from participating in AGM’s or scam extra money from forgetful strata owners.
 
In a block of 15 units, I am constantly frustrated at the lack of turnout at the AGMs. For the past decade only about two owners turn up, and about one or two proxies to have the Quorum for the meeting to take place. Legislations should be look at to improve the involvement of owners into strata management.
Fair-trading should have tougher laws to clamp down on incompetent, corrupt, unproductive Strata managers. Strata managers are a law unto themselves, it has been my experience there is no transparency of the relationship they have with contractors they hire on behalf of the owners. They seem to have a list of people they regularly contact, and there is no shopping around to get best value for money.
 
If Strata Managers are not providing satisfactory service currently there is the www.fairtrading.nsw.gov.au to mediate disputes. The mediation is just that, it’s a platform to raise issues & have a talkfest to find solutions /workaround to issues. My understanding is resolutions aren’t even binding. In effect it’s a small inconvenience for the Strata Managers for something that could be a serious misbehavior. 
There is no mechanism to penalize or fine misbehavior/incompetence /defrauding etc. This is not good enough, there should be legislation for Strata managers to adhere to the Strata Laws, and if they misbehave and cut corners/ mislead/lie to their strata owners’ appropriate penalties should apply.

STRATA MEDIATION & ADJUDICATION

By reference to the "Mediation", quoted proudly in the CTTT annual report for 2010-11?

 

 

A strata scheme, comprising 10 units and 4 shops in a 1930’s art deco building, had ongoing issues with water penetration through the roof.  Numerous repairs to patch the leaks had been made but they failed to fix the problem.

 

 

One of the lot owners, whose unit was most affected by the water penetration, lodged an application with the Tribunal for Adjudicator’s orders that the owners corporation carry out a complete replacement of the roof and undertake repairs to her unit including replastering and painting of damaged walls.  She provided photographs showing extensive mould and water damage to her ceilings and a quote for the repair work coming to a total of $170,000.

 

 

A number of submissions were received from other lot owners who generally supported the application.  The submissions confirmed that many attempts had been made to patch and repair the leaking roof and that water penetration into the applicant’s unit had been an ongoing problem.  However, it was apparent there was much disagreement between the lot owners about how and when the roof repair work should be undertaken.  Some submissions contended that other common property repairs were more of a priority than repairing the roof.

 

 

After reviewing the submissions and evidence, the Strata Schemes Adjudicator was satisfied that there was a problem with water penetration into the applicant’s unit and that extensive repairs were required.  However, the Adjudicator considered that the owners corporation should be given an opportunity to obtain a report which clearly articulated the scope of works.

 

 

The Adjudicator declined to make the orders sought by the applicant, and instead ordered the owners corporation to obtain a report from a suitably qualified person to investigate the cause of the water penetration into the applicant’s unit and provide options and solutions for the repair works.

 

Who's interests are being served by such injustices, and what's the point?  Why should the OFT retain the right to force people to undertake the time and expense of "mediation" when such outcomes are being experienced?

 

STRATA LAW REFORM

 

 
Management and strata managing agents appear in need of substantial upgrade in many essential areas:
a)Legislation may be essential to set the maximum number of Strata Plans a Strata Manager can handle: at present a Manager has a portfolio of some 70-80 strata plans; very often suddenly this manager leaves the company without any notice to owners (their employers) and the replacement has no idea about the status of every plan totally loosing continuity and we pay for this (but they advertised promising professional management)                                                                                                                                                                          No normal person can properly service thousands of matters taking place in numerous strata schemes
Agents do not seem capable to perform all duties and as such the Agency Agreement may not be a valid contract in respect of lack of capacity from their part to fulfil this contract: agents do not return calls, do not comply with their promises to attend matters, do not reply to written requests, do not follow problems to the end, etc increasing costs, adding frustration, have an enormous and dangerous influence on the executive who are not strata experts, which will need to be addressed, etc. plus Additional grounds see Q3                                                                                                        Agents do not seem professionally/equipped organised to satisfy all these requirements
b)Legislation may be essential for all Strata Managing agents to have Construction Professionals in their team to perform all maintenance work: I believe no Strata Managing agent on the market have this sort of capability at present: the major part of the expenses represent construction items ( in our building about 90%); this area cannot be done by owners who believe that agents do "everything" .Owners cannot be or perform as Contract/Project Engineers, Contracts Administrators, Supervisors, etc . Many agents have a portfolio of some 600 strata plans at an average approximate estimated market price of $ 5 million each represents $ 3 Billion in assets under management but they lack these essential qualifications and tools
The following must be implemented in all schemes under the Management of Construction Professionals:                               
·         discuss repair/problem with consultants
·         adopt/design as applicable best option
·         call tenders and deal with contractors
·         process tenders
·         form of contract
·         licenses monitoring
·         public liability insurance and workers comp.
·         supervise works
·         perform all contacts administration
·         my payments, retentions, backcharges
·         Implementation Home Building Act
·         Implementation Security of Payments Act
 
c)Because the complex maintenance and repair is so important and the most expensive, the owners interests will be better served if established Professional Construction companies have the Strata Management under control to protect the building as this takes the major expenditure; will perform the strata management portion under their control as an small extension of their main construction activity instructing/monitoring all strata managers. Great savings, simplification and other benefits are obvious.                                                Legislation welcome to implement it
d) Legislation to overhaul system and create a NSW Government Strata Department comprising:
 
All Office of Fair Trading strata operations (support, advice, mediation, adjudication, CTTT processes, etc) plus a new Strata Schemes Management Center for all NSW. This Strata Schemes Management Center shall be equipped with a Professional Construction Teams of Project Engineers, Supervisors and all required to perform all required maintenance and replacement under the Act.
All strata activities will be under one roof professionally organised: Fair Trading and Strata Management providing all strata management needs to the NSW strata schemes
 
Legislation will terminate all strata managing agents who shall be replaced by this new entity
 
System up to date appears to have been operating upside down against owners: this will eliminate an extremely expensive and inefficient system; no need to change managing agents
 
 
New System will originate substantial savings and boost the quality of management. We have an extremely expensive, risky, unstable strata market with too many agents without proper tools (we don't know who they are) open to many sorts of irregularities, originating enormous amounts of liability in lieu of a central effective management professionally organized right the first time we can trust and with sound stability and with one fair contract
I feel this to be the best alternative in my 39 years experience living in strata scheme
e) Alternatively, legislation to implement a strata managing agents performance monitoring system implementation but I feel this may be substantially more costly than d) which is obviously the best alternative to originate the best management
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To Q1, Q3, Q4
-------------------------------------------------
1)As Q1 above
 
2)By Designing A New Strata Management Agency Agreement For All NSW Strata Plans
 
That a Standard Form of Compulsory Strata Management Agency Agreement be drafted and implemented under legislation for all NSW strata schemes protecting owners interests including replacement of all existing     
Some essential control is required to this Agreement which seems to be ruthless, unfair to owners and appears to contain sections that agents may charge for it but are not qualify capable to implement which may renderthis agreement invalid.
 Every owner has the right to access and read exactly what is signing                                                                               
 A majority of Schemes use the Institute of Strata Management form (their product) which does not seem to protect the owners interests and is provided by the agent to the following:   
a) No notice of renewal of this agreement given with a motion placed in the agenda for the general meeting                                             
b) No copy of this agreement is provided to all owners with the agenda to the meeting to allow them to analyse the conditions of contract and propose amendments/additions at the meeting. No copy given to all owners after the meeting with the final contract signed by executives.                                                                                                      
c) Generally agreement duration is 2 years; in the event of termination the owners corporation must pay the agent the balance for the full 2 years for the agent to do nothing even if they may be responsible for liabilities affecting a several million dollars property                                                                                                                                           
d) Under clause 6.4 the maximum liability of the agent is limited to 10 % of the fee, about $220 in our scheme, this looks ruthless and grossly out of proportion because our building has an approx. value of $ 3 million; agent total assets under management estimated in the order of $ 3 Billion and reportedly all these plans with the same form of contract                                           
 e)Under Schedule A Repairs and Maintenance, clause 2: "Obtain quotations for repair, maintenance and replacement..."  and clause 2 "Liaise with tradesman about work..." these agents cannot perform these duties as they are not construction professionals as it its required to show all scope of work on site, discuss method of construction, have full understanding of the work required, perform tender analysis and report to owners ...none of this is done. Next, supervision of the work and contracts administration of these works is not done either. In addition, they have no capability to implement the Security of Payment Act and Home Building Act protecting owners. Is typical that Executives order payment to contractor by phone following advice from agent without any of these essential implementations. In many instances work are defective and should be done again; in our plan several times executives paid for faulty work without knowing on whether the job had been done and done properly as some of them were not residents 
 f) At Schedule B clause 2 "Review of essential services such as fire safety", they are not fire engineers or suitable qualifications, cannot provide this                                                                                      
g) Same Schedule clause 3 " Management of major refurbishment projects" they are not construction Project Managers                  
 h) Same Schedule clause 4   "Management of defects rectifications in new buildings" again they are not construction professionals or project managers                                               
 i)Clause 5 "Building condition surveys..." same lack of qualifications                                      
 k) At Schedule C part 2 Statutory compliance: " Overseeing contract required under the Home Building Act" are not qualified to supervise                                                                                                            
 l) Same for "Management of defect rectification in new buildings" they are nor project managers            
n) No provision for Professional Indemnity Insurance      
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I have obtained several Adjudicators orders against the owners corporation in the past with one case comprising 28 orders against owners corporation to perform maintenance work because the strata manager was negligent and had the major influence in the complex: method is extremely time consuming, expensive and leads to the managing agent to increase their income: in other case the executive paid to the agent $ 500 for a 50 minutes attendance to mediation in circumstances that the Agency Agreement fee is 100 $/hour to perform a structural work which everybody knew from the Consulting Engineer report that is essential work and all the special levies raised to fund this project already have been paid by owners.
With alternative Q1 d) above with all activities under one control center (under one roof) these wrongdoings will evaporate and there will be substantial performance improvement and room for shortcuts to simplify matters
 

Strata Schemes

Education of Executive Committees,Strata Managers and Owners Corporations re strata laws needsto be addressed.

FUTURE DIRECTIONS FOR LEGISLATION

 

CONSUMER PROTECTION AS THE FOUNDATION OF THE MANAGEMET ACT.
 
WHERE ARE WE NOW?
The separation in 1996 of the Strata Titles Act to two acts, one concerned with the development (i.e. property law) and the other concerned with management was a step forward. The government now intends to rewrite the book.
The government should be congratulated on this initiative and the Standing Committee on Justice and Law review of the structure of tribunals in NSW in particular the CTTT.
The original Strata Title Act and its successor the Management Act intended to make strata schemes self-governing, and leave them, largely, to their own devices with little interference from a nanny state. The Owners Corporation was structured to be a local government of a limited geographical boundary. (See The Owners of Strata Plan 3397 v Tate [2007] NSWCA on AustLii.edu from paragraph (39)). However that “self-government” was not intended to be a free for all, but is restricted as to all its actions by the Act that established it (“delegated legislation”).
Strata Schemes are made up of various owners at different times who have both rights and obligations. Their main right is to a peaceful enjoyment of their property and that the Owners Corporation at all times act for their benefit, not to their detriment. Their obligations are also defined in the legislation which governs their scheme –generally compliance with by-laws and paying towards upkeep.
It appears that the “hands off approach” of government failed. This forum have shown that when trouble strikes, people’s lives are destroyed, large financial losses are suffered due to fraud that in other circumstances would send people to jail, and the abuse of power and corrupt practices are rife. The lot owner is entitled to the protection of the law, and the government should pay close attention and force owners corporations to obey the law by legislation, enforcement and protection.
WHERE ARE WE GOING?
Strata Schemes are no longer on the fringe of society, housing a minority of people, mostly young on the way to home ownership or the old who can no longer maintain a home. It is now, and is going to be the preferred choice of habitat for the majority of people. Already in NSW more than one and a half million people call a flat home. Their value on average is now nearly on par with freestanding houses – a flat is the person’s largest financial asset if he/she lives in one.
Most of the problems in strata schemes have been known for a long time and certain measures taken to prevent them from happening or resolving if they do. The pages of the forum are testimony that the solutions to date are far from satisfactory. Many residents find living in strata schemes unsatisfactory and when trouble starts it can literally destroy them financially, emotionally and physically. The various cases in the Supreme Court and Court of Appeal concerning strata schemes, sometimes on minor matters can be devastating financially and otherwise. Cases such as Ridis v OC, Seiwa v OC, Nicita v OC, Andrews, Young, Houghton v Immer, etc. are examples of what happens when things go wrong. The legal fees for such cases emptied schemes of their owners, broke and disillusioned.
The lessons from these, is that trouble should be nipped in the bud before it grows into a monster, and for that purpose, this review should focus on solutions.
Accordingly, a lesson must be learnt from other levels of local governments, be it councils or state level or other organisational structures, as to how communities are to be managed for the benefit of all, and Law and Order maintained.
The government must learn from local councils who have control of the streets (by – laws) and development (maintenance and repair and fire regulations), and empower, but also supervise, Owners Corporation to enforce the obligations (levies, by-laws, etc) and protect the rights (property and peaceful enjoyment) of those living in strata schemes. It should also provide an enforcement structure (CTTT or Local courts, maybe even inspectors of some type) where the Laws can be enforced in a meaningful way.
Every council enforces parking, cleanliness and other uses of the public areas under its jurisdiction by a system of prohibitions and penalties, these are policed and applied by various means. Owners Corporation should also be given the required teeth to enforce the provisions of the Act in their area of control and those rules must be obligatory and enforced. The state must assist them via the courts (or tribunals when reason fails). Currently the CTTT is a toothless tiger, many comments in the forum and submissions to the Standing Committee on Justice and Law confirm that. The CTTT seems to wash its hands off any responsibility to carry out the work it was created to do, and when it intervenes, usually more trouble than good follows. Local courts do not question penalty notices from police or council officers – they should also enforce notices and apply proper penalties for breaches of regulations the meet the required standard of proof.
The requirement for being “suitably qualified” applicable to professionals and tradespeople should be introduced into owner corporations some of whom ran budgets of millions of dollars a year and are similar in size to country towns, yet are managed by volunteers, part time who have no training or qualifications. The alternative, i.e. strata management companies is a whole chapter in itself. Substantial parts of the current act are written to protect owners corporation from this profession. Perfectly reasonable and experience people described them in extremely negative terms.
The qualifications of the strata management industry should be also reviewed, the current knowledge of strata managers is poor and its application a cause for concern. Few act properly or honestly.
This whole area of how to make owners corporation better equipped to manage buildings worth millions of dollars, and do so competently and according to the act should be a major area of legislation.
HOW TO GET THERE?
AT ITS FOUNDATION THE STRATA SCHEMES MANAGEMENT ACT MUST BE SEEN AND WRITTEN AS CONSUMER PROTECTION LEGISLATION. 
THE INDIVIDUAL MUST BE PROTECTED FROM INJUSTICE, DETRIMENT AND LOSS FROM THE “COMMUNITY” OF THE STRATA PLAN.
THE COMMUNITY OF THE STRATA PLAN MUST BE PROTECTED FROM THOSE WHO REFUSE TO OBEY THE RULES.
Currently the Management Act lacks the provisions and the infrastructure to enforce that protection –  both Owners Corporation and the CTTT must have more teeth.
Parliament must walk away from its “hands off” approach, letting people do as they like with no supervision. It must now, with the increase in size of individual schemes, their increase in value and increased complexity of form and function. It must more closely regulate the behaviour – be more of a police force, and more closely regulate the finances – as the tax office and ASIC do for businesses and corporations, and more closely regulate the enforcement – as do the courts and tribunals all for the benefit of those that live in strata schemes.
The various courts have recognised that Owners Corporations are local governments of a defined geographical nature, but while local councils have many tools available to them to regulate the behaviour of citizens in the street and in their homes, the Owners Corporation lack the tools or processes that deal with law breakers. It is excruciatingly slow, ineffective and expensive in time and money to correct the smallest infractions.
The prevalence on this forum of complaints about breaches of by-laws, and the inability to deal with the offenders summarily or in an economic manner is an example.
The government must legislate to prevent abuse of power – proxies are an example. It must provide information via videos, educational web sites and other means so Office Holders understand their responsibilities and act accordingly, that they carry out proper financial reporting and that the records of the owners corporation are transparent, accessible and conform to proper guideline – while being conscious of the cost of such obligations.
When intending owners buy into strata schemes they must have a clear and transparent view of the state of the common property, as they are liable to contribute to its repairs.
The Government may consider introducing an annual statement of requirements lodged at the annual meeting which summarises the state of the infrastructure (common property) and any legal liabilitys. Intending owners and present owners need not search for these on a “buyer beware” principle.
This is only a brush over the issue. If the Strata Scheme Management Act (the most important one) is to be modernised, it must make sure that people can buy into schemes with reasonable confidence, and where owners corporations act illegally, there must be a means of redress.
The act must be modernised to take account of email, video conferencing, web sites, phone hook ups and all other virtual presence means of making sure owners know what is going on at their property. The old notice board must be made a thing of the past and the form of meetings modernised.
This is just touching the surface, the lawyers, legislators and planners should now get to work.

Changing Strata Laws

My property consists of two units under Strata Title. However, the building structure is one ground floor unit which includes a reasonable size parcel of land and the above unit being compensated with a very large balcony. The common area includes a parthway plus an area near garages, which has always been used as common parking. My wife and I own the ground floor unit, while looking after our land we keep this common area maintained “cleaning and sealing tiles etc”. In our circumstance, an unwritten agreement has always been that each owner attends to their own maintenance costs, which includes any outside living areas. We have repaired our own patio area as agreed. The owner of the above unit has gone and done repairs to hers and is now seeking compensation. Insurance, guttering, painting and any roof repairs is shared by agreement. My suggestion to eliminate any doubt as to who is responsible for what is to have a document such as a “Deed of Agreement” to be part of the transaction at the time of purchase, to be agreed and signed by both parties. In that way when ownership of a unit changes there is no question about the incoming owners responsibilities. With the passage of time other issues may need to be included or eliminated as the case may be, but such changes would become subject of negotiation.

Life Cycle of Strata Title Buildings?

 

There are many strata buildings located near major transport and other community infrastructure which are now nearing the end of their economic lives and there should be a mechanism for such buildings to be replaced with more efficient buildings of good urban design which will benefit the community and utilise the existing infrastructure, including transport, schools, retail with nearby work opportunities.
 
Many of these buildings were constructed 60 or 70 years ago and have subsequently converted from company title to strata title. These buildings were built to a design and style to match a different era and are not always suitable for today’s standards, including fire safety, utilisation of internal space, provision of off-street parking, provision of useful common areas, steep internal stair cases with no lifts to help older residents or younger families, etc.
 
Often these buildings also need significant and expensive repairs and maintenance due to structural wear and tear, including water penetration, concrete cancer, asbestos removal, etc. Often there is reluctance by owners to spend the money needed to undertake these major repairs as the investment is seen as wasted on an old building of limited useful life, thus the buildings become “shabby” and less desirable.
 
Sometimes, there is the opportunity for the owners of these buildings to sell to a developer (often at a premium to market), however, under the current strata laws unless there is 100% acceptance by all owners then the opportunity to redevelop is not possible.
 
It is not fair or reasonable that a small percentage of owners in a strata plan can prevent the redevelopment of an old building where the significant majority of the owners are in favour of a disposal. 
 
 Accordingly, the strata law should be amended to provide that where a significant majority of the owners are in favour of a disposal of a building for redevelopment that the minority should be compulsorily required to also sell under the same terms and conditions. I suggest that where 85% or more of the strata entitlements of a strata plan are in favour, that the balance of owners are required to sell.
 
Properly and sympathetically undertaken this will allow the renewal of old run-down and inefficient buildings to be replaced by new buildings of a modern and efficient urban design that utilises and benefits from the existing infrastructure and lifestyle offered by established areas.
 
This is a much needed reform.

Improving strata living and experience - missing ingredients

Strata Law Review

 

The Big Picture and Missing Ingredients

Whilst particular aspects of strata management practice and legislation represent problem areas that certainly need attention, the following general but  fundamental deficiencies also need attention. Whilst addressing particular problems may lead to improvements in particular respects, without addressing these general deficiencies qualitative improvement in general strata management practice is unlikely to be achieved.

Improve public awareness and education of strata living

 

The number of people in NSW who live in strata schemes is now of the same order as the number who live in free-standing houses. Unfortunately, relatively few fully appreciate the differences between the two and tend to view the former as a version of the latter.

Better public awareness of the nature of strata ownership is required to improve the quality of management of strata schemes, to reduce conflict and to improve conflict resolution. Such improvements are unlikely unless most owners are aware and understand the key implications of strata ownership:

  1. Ownership of the lot
  2. Shared ownership and responsibility for ‘common property’
  3. Automatic membership of the ‘owners corporation’, the governing body of all owners,  which has responsibility for the management of the scheme and for common property, including the setting of by-laws which govern code of conduct and other aspects of the scheme
  4. Shared financial responsibility, through levies,  for the cost of running the building and maintaining common property
  5. Being part of a community of strata owners and residents and acceptance of the lifestyle restrictions  implied by the strata scheme, for example by-laws agreed by owners that may affect doing renovations to a unit, that state where one can and cannot park a car, where one can dry washing or whether or not pets may be  kept etc.

Unfortunately presently the focus and interest of most strata owners is limited to point 1 above.  There may be some awareness of 4 and 5 but an all too common perception of owners is that governance and management of the strata scheme is taken care of by someone else and is not their concern.

The NSW Fair Trading booklet Strata Living summarises the information strata owners should be aware of in a compact, user friendly fashion. It is the type and of style of document that, with review and a few improvements, is considered appropriate to address this issue and is therefore considered a ready-made solution.

Unfortunately, relatively very few strata owners are aware of this document. There needs to be a public awareness campaign via TV ads to make strata owners aware of the nature of strata ownership that points to this document. A copy should be given to all purchasers of strata units as a form of product disclosure statement.

One relatively minor concern about the Strata Living booklet is that it presents a paraphrased version of the by-laws from Schedule 1 of the Act without explaining that the wording is different. Whilst OC’s are free to modify by-laws or adopt the more user friendly version in Strata Living the advantage of the version in the Act is that it has been subject of case law over many years. The Strata Living booklet should be subjected to a legal review to ensure its contents are legally sound and defensible. (For example the booklet contains a paraphrased version of the standard by-laws. This is confusing and legally unacceptable)

Recommendations

  1. Review and if necessary revise the NSW Fair Trading Strata Living booklet to ensure it is legally sound and consistent with the Act.
  2. Require that the Strata Living booklet be given to all purchasers of strata units by strata managers along with the 109 certificate.
  3. Devise and implement a TV ad campaign to raise awareness of the nature of strata living and access to the Strata Living booklet.

 

Clarify the Act and provide an “Operating Guidelines for Executive Committees” manual

 

The Strata Schemes Management Act reflects a style and approach which aims at being simple, brief and user friendly and at the same time cater for the great variation in the size and complexity of schemes and the sophistication of executive committees. To meet these requirements, the solution which seems to have been adopted, is to include in the legislation the bare essentials and leave everything else unsaid and undefined.

The Act does not provide, even in outline, the intended underlying operating model for strata schemes or a description of the roles and responsibilities of all the parties involved in such a way that a holistic understanding of what is intended may be gleaned.  Instead the reader and practitioners need to form their own view of what is intended by piecing together the puzzle based on fragmented information that is actually contained in the Act.

For example the Act defines lists of duties of Secretaries and Treasurers but the only duty it assigns to Chairmen in passing is to chair meetings of the OC and EC when they are present. Realistically, there will be a need to represent the OC in various situations and to provide leadership. Chairmen and EC’s will adopt different interpretations of their role and in some cases this can lead to abuse of position and dysfunctional outcomes. 

Key terms in the Act are not defined and this can lead to significant confusion and misinterpretation. For example Section 65A of the Act is a 2005 amendment aimed at allowing OC’s to “add to” or “alter the common property” but only if this is approved by a special resolution at a general meeting. Whilst s65A was clearly intended to provide a mechanism whereby OC’s may implement significant changes in he nature of modifications to common property (as it is currently defined), there is no definition or explanation of the term “alter” or the complementary term “repair and maintain” to refer to works which improve the condition of common property but leave it consistent with current specifications.

Consequently considerable confusion now exists where, contrary to NSW Fair  Trading advice,  strata lawyers advise clients who wish to carry out routine apartment renovations which involve only repair, renewal or restoration of the lot and associated internal common property, such as bathroom tiles, that such works “alter” common property. The consequence of this advice is that  even the most routine renovations are subjected to the demanding approval process of S65A of the Act (approval by special resolution at a General Meeting. In the past such routine renovations were approved by executive committees (and in most schemes still are) under the standard by-law 5, as unavoidable collateral damage and repair of common property during renovations, which owners should be entitled to undertake with relative ease, provided quality controls imposed by the OC are met.

It is clear that the Act needs to be reviewed and revised to avoid such ambiguities, to clarify intentions, and to provide a holistic and complete operating outline at least in terms of the role definitions of all key entities involved;

Owners

 

The owners corporation

 

The executive committee and its members

 

Office holders: chairman, secretary, treasurer

 

Strata managing agent

 

Building manager or caretaker

 

In addition, there is clearly a need for a publication, possibly entitled Operating Guidelines for Executive Committees that would provide essential need to know information and a tutorial framework, in the simple user-friendly style of Strata Living, to guide the activities of EC’s various shapes and sizes.

Recommendations

  1. Review the Act to identify key terms which should be defined; amend the Act to include such definitions and, where ambiguities exist, clarify
  2. Amend the Act to provide a holistic operating framework in terms of the role definitions of all key parties
  3. Develop the Operating Guidelines for Strata Executive Committees booklet and distribute it to the EC’s and strata managers of all strata schemes
  4. Include references to this booklet in ad campaigns relating to strata schemes as appropriate.

Clarify the role of strata managing agents

 

The executive committees and office holders of owners corporations consist of volunteer owners or their representatives. It cannot be assumed that the management and other skills necessary to effectively run the owners corporations will be available from its executive committee members.

Therefore the strata schemes concept is critically reliant on the assumption that any gap in skills and capability amongst the scheme’s members and executive committee can be filled by strata managers as independent expert advisers and representatives of the scheme. Strata managing agents usually carry the delegations of all office holders and are therefore in a position to act as administrators of the scheme if necessary.

For this arrangement to work strata agents must be strictly independent and stringently represent and pursue only the best interests of OCs that they represent. Accepting commissions from suppliers is inconsistent with this view and represents a clear conflict of interest. The fact that strata agents accept currently commissions for insurance and from other suppliers is clearly a case of conflict of interest and a sign of significant role confusion amongst agents that needs to be clarified.

Currently strata agents operate under the Property, Stock and Business Agents Act 2002, an Act which circumscribes the activities of various types of business agents but which does not specifically subscribe the role of strata agents.

Inclusion of a role definition of strata managers in the Strata Act may provide a part solution to this issue. Whilst there is likely to be a case for strata mangers to continue to operate under the general provisions of the Property, Stock and Business Agents Act 2002 there is also a case to further circumscribe their role in the Act in order to provide a complete operating model for strata schemes.

Recommendations

  1. Amend the Act to define the role of strata agents as independent professional advisors who must, at all times and under all circumstances, represent the interests of the owners corporation to the best of their abilities and without conflict of interest in carrying out their duties.

Community title

We (my wife and I) would like to respond to the (hopeful) proposed update to the Community Title Laws. Before I initially respond to your four questions, I would like to explain that I am a farmer (and though I make mention to the fact later on, I suppose on re reading this I should say here that I am Deputy President of the Tweed’s Combined Rural Industries Association…the Tweeds largest rural representative body) We have for years looked at what would be the best way forward for our land, for us and for our local community in a quickly changing world. With this in mind we will try to include the CT Development proposal that we put to our Tweed Shire Council…that was denied. Feed back from our Council’s Future Planners was…we really like the concept, but because the minimum lot size here [by default I might add] is 40 ha, it can not be even considered, let alone allowed. Our proposed CT Development’s inclusion is given purely to put to you an idea of what we believe could be done. As we do not have a scanner to scan our farm maps, an aerial view is available via our address….491 Baker’s road, Byangum 2484 on Google Earth. If, as you state NSW is lagging behind everywhere else in the rest of the world in relation to CT Development, surely we as a State could make a giant leap forward to set the desired parameters for others to once again try to match? We put to our council, too, the possibility of doing our proposed development in conjunction with them, so that we all had a better understanding in relation to trying to set the parameters to achieve the best outcome for others who might wish to take this path….so that we were all winners. But the system appears so set in concrete that it can not be! To emphasize just how interested our Tweed Shire Council are, perhaps I could mention that along with this Community Title re assessment, and the NSW Planning Issues Review , we have had absolutely no word from TSC suggesting that we enter a submission….our responses have had to come 100% from us…as I have said in this document…it would appear that TSC is not at all interested …their continuing apathy does not inspire any confidence at all.

 So onwards to firstly cover your 4 questions…
 
1.What are the main areas of existing CT Scheme that you would like to see changed?
Answer…Whatever avenue we have tried to take to get to the concept of CT we meet a dead end…. We are once again told that the minimum lot size is 40ha…end of story. I find it ironic that CT was rejected here on the Tweed in favour of SEPP 15. Yet SEPP 15, being the next step on from CT has its mathematical equation for habitation density….4+ [your ha -10] divided by 3. For us on 24ha, this means 8 dwellings at 3ha lot size each. This is a far cry from the 40ha for CT here.
 Also, your questions come from an” established practice” direction. We rural people on the Tweed have never been allowed to get to the start line! You too could probably count the number of CT developments approved here on the Tweed on one hand….maybe 2 or 3 fingers would be enough. Maybe when you state that Australia is lagging behind the rest of the world….maybe it is the Tweed dragging it down as the establishment here seems terrified of change.
 
2. Can you see any future issues?
Answer OK; you are naturally always going to ask continuing questions from an established standpoint….but we have hardly, if at all, got to the beginning of CT, so we can hardly pass judgment in relation to future issues.
 However in our dealings with The Powers That Be, over the years, we have consistently called for a greater amount of flexibility to be incorporated in any legislation. Legislation can be quite a restricting thing. Flexibility should be created, for where something doesn’t quite fit into the designated box, especially where rural application has to comply with regulations that were primarily formulated from an urban view point, that one can put one’s case to a panel of local business people whose job is to assess as to whether an application has merit for their area or not. How can a panel of so called academic experts, who have probably never even visited the area in question, adjudicate when they have absolutely no local knowledge? What might be good in one area might not be good in another area….One size does not fit all!
 I have a further comment to make on future issues, but I will put it at the end, under Fears. To me it is a serious concern re CT. To you the reader, I am just someone writing a submission, but may I state where I come from please…..a now retired mango grower, who set up the industry here once said to me…you are the only person I will discuss mango prices with because I know that you are the only person here who will tell me the truth. I hope in reading my pages that in whatever I say it comes from a 100% truthful belief.
 
 3.  How could the management of CT be improved? Having tackled the Planning System Review’s 230 questions, it would certainly help to be written in user friendly English.
 
4. Dispute resolution. If there are a drawn up set of guide lines to adhere to, with their areas of incorporated flexibility, then a majority decision should suffice. Beyond this, a community should be able to put their unresolved case to a higher authority, or committee, made up from local people, for their consideration.
 
 You asked for our views, with suggested solutions…so now I will put mine.
 
   The World has changed since the turn of the last century, when around the First World War, the land sizes here were set at 100 acres…40ha, being the then considered area of land required to run a dairy farm on. Now, 100 years on, there are only 8 dairy farms left on the Tweed….yet the 40ha remains, because no one in authority either knew what to do…or had the courage to do it. Yes, the World has changed, but on the land we have not been allowed to change with the times. As a result, there are NO young farmers on the Tweed anymore. Our problem can actually be seen right down the East Coast of Australia. Why is this? I will explain…
 Back in 1974 the then opposition, the ALP under Bob Hawke, came up with an election winning plan…”if inflation rises by X%, then we will raise your income by X%. This was fine for the urban workers. However, when you tilt the once level playing field in favour of a group, those at the other end must lose out. And so it was that we farmers were not included. Since then, beginning with Wage Indexation, following through the past 38 years with Workplace Relations, Fair Pay Tribunals etc, income for the urban workers has risen by approximately 20 times. [Question….what did someone doing your exact same job earn in 1974? What do you earn today….20 times?] Yet we on the land still get the same product price as of 1974…whilst our on farm running costs have risen by 20 times. In short, we were discriminated against… you do not need to have studied economics at Uki Primary School to realise that we were sold out for political expediency, sold out to keep industrial peace! Tell me, who else is expected to run a business today, in 2012 with a product price of 1974 and a cost structure of 2012?
 I have been at meetings where our academics try to explain why there are no young farmers anymore. Someone higher up the knowledge level at University has told them…so it must be true. When will these people learn to question and challenge their experts? I will explain how their belief is so wrong…Here on the Tweed we officially have 1200 farmers. I at 67 am the average age of the Australian farmer….interesting point. We have land, and we have children….and our land is FREE to our children, but they have seen how hard we had to work for so little, so have no desire to even contemplate trying to earn an income from the land. They see that we have no income, no superannuation, no medical cover, no holidays, no trips overseas; no weekender by the beach…the list just goes on and on.
   They are also wise enough to read between the lines. Have you ever noticed how Australians bury their head in the sand? They do not want to face controversial issues…so they turn away! Our farming programs are lacking in the real truth about the demise of Agriculture. They prefer to present programs about…eg Jim So and So who has retired from the city and is going to grow avocadoes…[they are pushing here for farmers to grow rice and cotton too, so shortly we will be fed programs on these topics. Us old hands listen in disbelief.]  Now this Jim so and so has come from a much grander life style in Sydney, and has money to spend. Go and talk with these people a year or two on…you’ll probably find that their place is on the market…the usual comment is….I was spending money faster than I could make it!
 For years now I have tried to explain to people….due to the initial policy of Wage Indexation back in 1974, we have lost our PROFITABILITY. So when I hear politicians say….we can fix that…we’ll get more agriculture courses put on at TAFE. In fact our High school got 1.25million$. Are they too ignorant to know the meaning of the word profitability? If they restored profitability, our hills would be alive with people working…but these youngsters have not got a chance…if we can’t survive today…and we have the land and the machinery, how on Earth does the system justify its actions?
   So what has all of this got to do with CT you might ask? This Country is at a crossroads. If we keep going the same way we have been going …for decades now, then there will be no farmers left within 10 years or so. Today, if you talked with every one of the Tweeds 1200 farmers, you might find one family that could totally earn a living from the land per 100 farmers. Invariably one person has to leave the farm to earn real money to pay real bills….and surprisingly; this applies to sugar cane farmers too. The old adage of…”there have always been farmers ...there always will be”………...is very ignorant and foolish. Farming is like any other business….if there is no profit, it can not survive. We MUST be allowed to adapt and change with the times. We personally put over one million dollars into our farm’s running and infrastructure. Doesn’t it seem the sensible option to allow CT developments on existing struggling farms[ before they close down], where the new small acreage land owner can have a job in town to earn real money, and grow meat, herbs,fruit and vegetables to supplement their income? This is what we have been trying to achieve for years…with still absolutely no light at the end of the tunnel.
 We have had that many meetings with our council….the message that we come away with comes over as…this is our area…we are quite capable of running it ourselves without your input. Well, very soon we will get to a point of saying…at the moment you have us farmers as a resource…you can use us. But if you chose to do it your way…well then go ahead, we will be interested to see just how you bring back life to our rural area when we are all retired and our farms are all rundown with weeds and regrowth taking over. We are very close to that point I can tell you!
 If we stop maintaining our farm, then the entire infrastructure….the 100 internal roads, the 40 acres of terracing, the many kilometres of both underground mains and surface laterals will all deteriorate through lack of use and maintenance. No new farmer…IF there ever was one could afford to do today what we did. Where is the proof that there always will be farmers? I personally raised this question with John Anderson, when he came here to visit and talk with us farmers during the Howard years…I said we need radical change…he just turned away and ignored the point…after all what can a stupid farmer possibly know. Well 10 years on and we farmers are still going downhill. Remember the Crisis in The Bush meeting? I wrote putting my points…but once again, this meeting was a political meeting…in true Yes Minister form, it was construed by academics for academics…what could the rural people possibly know about such matters! I’d have thought that even an idiot could see that when you drain the financial lifeblood out of the rural sector, you would get all of the associated problems…suicides, an upsurge in domestic violence, people going broke, shops closing down, (our town Murwillumbah currently has 37 empty shops) no social life in town,…so how does one expect people like doctors to want to move there. Did they solve anything? Of course not! This is what happens when academics believe that they know everything and take control. We have got to give power back to communities!!!
 If our Experts approached every real estate agent, in our town anyway, and asked….when did you last sell a farm to someone to genuinely farm it for a living?…I’m sure that you’d hear the same response….no one wants to farm anymore. It does not help rural towns when our Federal Governments, both Left and Right are forever calling out for ….we must keep the price of food low…we’re signing yet another trade deal with Asia to allow more food to be brought in from overseas.
   Yes, we were sold out to provide cheap food for the urban masses…the graph lines of income and cost of living must not close, or there will be serious industrial unrest. The Australian population looks down on farming…after all, if all else fails, one can always become a farmer. We farmers have not ever received 1% in a pay rise; whilst at 20 times; the urban workers have received 2,000%. We struggle on, getting labelled as whinging farmers….but listen to the urban masses response when they are offered a 3% pay deal over 3 years…how mean can a Government be!!!
    Australians have been indoctrinated about their right to cheap food. Forcing the price of food up, to give the farmer a fairer return will never be…purely because of the industrial turmoil that would follow. The 1974 Wage Indexation decision was very short sighted…you can not keep giving away the big slices of the cake…there has to come a time when there is no more cake left. Like cancer in remission, this policy was always going to come back to haunt Australia…and that day is getting closer and closer. All we need is for China for whatever reason; to stop buying Australian minerals….and that day will be upon us!
   Remember how in the Howard years this country was force fed with…this is God’s Country….we are living in paradise, where all other nations envy our high standard of living? Well, suppose that the price of food had gone, keeping parity with everyone else’s incomes over the years, to give the farmer a fairer return….where each family had had to pay an extra 100-200$/week for their food, then Australia’s economy would not have looked so rosy would it? How can we get a fair and honest resolution to our problems when our politicians keep lying for political expediency?
 
 I’d like to carry on with a few reasons as to why CT MUST be expanded.
 
a.   A social calamity is on the cards for this country if there is no change. For years, since the Second World War, everyone’s desire was for more wealth. As a result, many became very wealthy….[I am in favour of a wealth tax at death set at say 5Million$, so that the wealth procured by those so lucky can be put back into general revenue, to build hospitals etc for those less fortunate than themselves. Why should the children of the mega rich never need to work for a living?] Anyway, as their wealth amasses the poor slip further behind. When we had MO’s, the poor at least had a chance to purchase a parcel of land upon which they could build a house. We can see on the World news overseas what happens when tomorrows youth finds that they can never afford to buy a piece of land, or build their own house in their own land. What will happen here when Australia’s youth mobilise? That is why I am in favour of a freshly updated form of MO…or for there to be enough inbuilt flexibility within the proposed CT legislation to at least give them a chance.
 
b. As a farmer is not allowed to cut the family home off his farm…unless he has 80ha, in the olden days, the farmer virtually had to sell the farm in order to buy a retirement house on a housing estate. There was never much capital left over after all due costs were taken out. His farm then often became the property of some cashed up Southerner, escaping the city. He would never farm…he’d buy a tractor, put up a big shed to house the caravan, the boat, and the 4wd…get a pony for the grandchildren to ride whenever they came out to The Farm…..funny how The Farm has now become a status symbol! But that has all changed…the present way is to close the farm down, get rid of what’s not needed and retire in the house that one has lived in for years. It doesn’t cost anything either.
   But, in our case on the Tweed, we are noted for our rural beauty. And what is our most prolific tree species? Camphor Laurel. So as farmers retire, the area gets more green as the Camphor Laurels grow up along the now unattended fence lines. Very pretty! But there is a deeper concern…Camphor Laurels exude a toxin that saturates the soil. They are immune to it, but it prevents other plants from trying to grow under their canopy, and take up the available nutrients. Thus, where ever you see Camphor Laurels, you see poisoned soil. Cutting them down does not help….that soil will not be useable agriculturally again for decades, until these toxins have been washed out.
   Our neighbour, a 4th generation farmer, has lived on his property for over 80 years. He recalls travelling to Kyogle, some 80k’s away as a child and observing that there were no Camphor Laurels then, no thickets of Lantana, no hills covered with Bracken or Crofton Weed. In those days, the family working as part of a community helped keep their farm clean and tidy, to be as productive as possible. We have got to restore community back into the equation….it seems the only logical answer
.
    c. Back in 1918-1920 there was the Spanish Flu outbreak which claimed 20 million lives. That was in the days before the mass aerial transport of today. Recently we had Swine Flu and Bird Flu. Our experts tell us that the next World Pandemic will be a strain of these two flues. Now, suppose someone sneezes the seeds of the World’s next Pandemic in Heathrow airport, in London. It will be around the World within 24 hours. Suppose 800 million die in N and S America…800 million die from Russia, Europe, and Africa….and 800 million die in Asia. What will we do? We are an island…we can completely quarantine …isolate ourselves. No one in at all. But as we do not have a Domestic Food Supply Security Strategy, who will feed this country when we have eaten all of our reserves? Shouldn’t we consider that both Swine Flu and Bird Flu were warnings? Shouldn’t we demand that current out of date policies of….”we want our area to be kept looking exactly the same for our great great, great grandchildren as we see today”   be scrapped and replaced with….bring in CT developments, and create a ring of 5 acre blocks around each and every village, town and city….at one or two blocks per 100 inhabitants, so that in the event of a calamity, these blocks could supply local food to local people? One could always put a caveat on such blocks that total roof area…unless hot houses, or greenhouses, can not exceed 10- 20% of the land area. Initially, they would appear as rural residential….but in the event of a dire need…like a World Pandemic, or food shortage, these people would quickly realise how they could increase their incomes dramatically by supplying food to a hungry population. Surely CT is the sensible answer. We need a merit based assessment too to cut the Red Tape Trail.
 
 And what are my fears?
 
For 20 years we have been attending conferences, meetings etc and putting in submission after submission…and never ever seeing any results. So, yes we persevere…but we are rapidly becoming cynical, tired and disillusioned. Why? I see our entrenched bureaucracy as akin to a 10,000 piece jigsaw. Trying to adjust any one piece is nigh on impossible because each piece is so locked in place by its neighbours. And the more the rules and regulations are fragmented; all we see is an ever increasing paper trail…with more and more boxes that we have to get ticked off before we can get consent for our application.
   The whole system needs to be streamlined, simplified and shortened. Maybe the entrenched system is incapable itself of making such a move…but that is a Minister’s job. After all is said and done, our Planners have already had 200 years to get it right…when is enough enough? Whilst everyone is currently looking at the Rules and Regulations through a magnifying glass….the Minister needs to put his magnifying glass down, stand up, stand back and look at the big picture, as it is in reality….and have the courage to lead the way!
   What is the real reason for now examining the rules and regulations? I said I was becoming cynical. Could it be that in truth, our system is so entrenched that getting real change is impossible…so that in reality all we are doing is just creating ongoing employment for our myriad of bureaucrats?
   To make a point of how “overkill” some of our rules and regulations are, may I give you an example. On the Tweed, to get any Development consent/ approval one must get an inspection and certificate from the Fire Authority. They have heard about the SA and Vic fire storms. The fact that our area is much wetter, has a different aspect to prevailing winds, and does not have eucalyptus forests that are subject to crown top fires, makes no difference….if you want approval here…even for a boundary change, you are going to have to clear everything that could be considered a fire hazard….a lone tree on a hill top, 200 meters from a building site?...it must go. Why?...it could get struck by lightening! A flower garden?........it is a fire risk…it must go. Have we gone bureaucratically mad? Once you have got your approval there is absolutely nothing stopping you from replanting a garden, or from planting another tree in place of the one you were forced to cut down. It is all part of the never ending paper trail, where everyone is doing their best to pass on the onus of responsibility!
 If you have stuck with me so far, thank you. I will now go to my contentious bit. You are after promoting CT as much as we are after being able to take this path. But you must build in the necessary flexibility, the opportunity for us, in the event of what could be construed as,…not in the countries interest [(out of date ideologies being used as management tools in creating decisions made by any council), to appeal. I will explain. As I said, I write the truth, so will be as open and frank as I have been so far.
   For 19 years we had just one Mayor….Max Boyd. Just as the “new rules” were being implemented re no more subdividing, he applied at the very last minute…according to a local Consultant Engineer…under very dubious means. Look, how it came to be is irrelevant…the fact is that he subdivided his property. Since then, he has been a stalwart…proclaiming we will NEVER allow subdividing here again. How hypocritical…if he had been so idealistic, he should never have subdivided his property in the first place! He has long known our desire to do a CT development. At a meeting just before Christmas 2011, once again I tried to explain my reasoning to those present for wanting to do a CT development. He caught me at the end of the meeting and said …they’ve been tried before…they never work…we don’t need them here. How negative. But the problem comes now. I as Deputy President of the Tweed Combined Rural Industries Association am there to represent our rural landowners…so hear many things. One is that Max, at nearer 80 than 70 is getting a group together to run for council at the next council election. He will have a lot of support from the retired sea changers, and from a new group raising its head…The Northern Rivers Guardians. They stopped the World Rally championship here…they are against our council building a new, larger dam on land bought by us ratepayers 30 years ago for the express purpose of water supply security to drought proof the urban people…they are real NIMBY’s…not in my back yard brigade. They are an extreme green group. Their approach is….now that I am here, close the door. We do not want any development whatsoever………...nothing. Now, if our ex Mayor does get in, would it concern you if to keep our area as it was when he was a child, that he closes any chance of change, and expects the other shires to carry us in the event of a catastrophe? We rural people have too few numbers anymore to be able to fight.
 We also have a General Manager retiring. Now Max Boyd chose his team well when he was Mayor…he chose people who would fulfil his personal desire for the area. One councillor tells us that the old Mayor is seen in the council each week. Most of TSC’s top people were appointed by Mr Boyd…and there is talk already that maybe our new General Manager will come from within the council’s hierarchy. We need new blood, we need a General Manager who is going to try to help us move forward…not to stay 100 years behind the rest of Australia, someone who can balance the needs of the people as much as the needs of our shire.
 
   I am getting near to the end, so will elaborate a bit on our CT proposal. Our desire has been to do a CT development, with 8 dwellings. This in some way would allow our farm to continue, whilst promoting the rebuilding of a community…something we have seen totally disappear whilst we have been here; where I, as probably the more knowledgeable person (…..Sorry, on the vegetable front, my wife is the expert!) would be there to suggest, help and advise the chemical free path that we eventually took. Selling the created CT blocks would be our superannuation, with us remaining here and giving my parents’ block and house to our daughter. I personally would also like there to be enough flexibility for us to make the blocks a whisper smaller, to gain 4 house blocks that we could give away. We know many people who have nothing, and never will have. I personally would like to give 4 people a block free….with a 10 year caveat, meaning that they must build, and can not sell for 10 years, unless the 8 CT members see fit through circumstance to allow this. Maybe if I fought and succeeded with this, others might follow. In the council’s eyes, each block would have to comply with council regulations…and at the end of the day; the council would have 4 extra rate payers. So we would all be winners. If only Life was that simple and easy!
 So, as for CT…it MUST be encouraged, if not forced onto short sighted councils. What did Martin Luther King say…? There are none so blind as those who don’t want to see….none so deaf as those who don’t what to hear.
 The future is out of my hands…it is in yours! You must make the final decision….do we just get carried along further by the tide, and do nothing? Or do we bring in radical change, with a big double dose of flexibility and urgency. For any area to survive, whether on the Far North Coast, or down Bega way….there must be development (It doesn’t have to be a mega multi million dollar development)…as it creates jobs. These NIMBY’s are going to be the first to complain in years to come…why haven’t we got jobs here for our children and grandchildren…it is all the Government’s fault! As I said……..I am 67…we have tried and tried for 15 years. Do I/we have to wait another 10 years…till I am 77? One thing is for sure…there is no second chance…if you chose to do nothing now, then the food producing rural sector here, right down East of The Range, in NSW is finished.
 I guess like other establishments have done in the past, you will respond to my words with…”you have raised so many problems.” So I ask…”Are you going to take all of my points, and more into consideration? Or are you just going to look at a much narrower section whilst putting the rest into the too hard basket?”  
 And finally! This email/letter is neither private nor confidential. You are totally free to share it with whosoever you chose. As a farmer all I can say about my lifetime farming is that I fought, and had to fight every inch of the way.
. 
 
 
If I haven’t brow beaten you enough already, then here is a PS.
 On our farming report this morning, 20th Feb 2012 ran a story about a 35yo fisherman found guilty of catching crabs illegally. The Department of Fisheries man gave a long talk about the sheer greed of this fisherman. Coming from a rural background I felt some sympathy for the fisherman. He was fined 3,005$ for his crime.
   From my viewpoint, I see a continuous proliferation of rules and regulations forced onto us. You by now know my understanding of what Wage Indexation did to the rural sector…including fishermen. But I bet you do not even bring into consideration that “everyone else, except us takes their pay rises,[ and has done so for the past 38 years] for granted. What is the average income of the Australian worker….50,000$, 60,000$? It could be considerably higher. This is totally ok to you.
       However this fisherman’s income will have been like ours I presume….we consistently earnt less than the minimum wage and regardless of what the experts believe, it was not for want of trying. For the majority of our farming years we’d have earnt less than 20,000$/year gross, in a bad year much less…from which we still have to pay: the rates, car registration, electricity, gas, fuel, on farm maintenance and running costs… etc…it does not leave very much . So to hear the magistrate and the Fisheries inspector put this crime down to pure greed riles me. This could easily have been a farmer, and under this country’s laws and in everyone’s eyes he would have been just as guilty. I can not speak for the fishermen…but this country has got to try to understand what you have done to us. One way forward, for us on the land, is to make Community Title MUCH MORE ACCESSIBLE, so that the future food producers do not have to cross the Law’s line in the sand in order to try to earn a living!

Darkness

Most current thing is the strata manage agent use OC money to buy committee member, CTTT officer,fair trading officer, insurance officer to get the best benifit (not legal money) for their business. this already cause big social problem and decrease appartment velue and force investment owner increase their rental fee, all this directly effect millons people`s life.
all of this happen is the law let strata agent is the boss because they hold the OC money and other party become their empleyee and working for their benifit. only the money can drive people forget who is he or she.
How to explain the committee member do not care the levy from $1000 up to $2000 because they do not to pay the levy and strata paid for them.
How to explain the repair job can be $500 up to $2000? All contractor working for strata knows the under the table rules.
How to explain strata agent can not provide the information as the owner or OC requested and even go to CTTT still no result?
How to explain even no strata agent lost licence or get panalty in the CTTT history?
Can the strata agent  business bank transaction and cash management report, invoice, insurance claim be examed.
How the strata agent  so happy to be the compulsory agent and CTTT as well?  just  have look how much levy increase under compulsory agent.
 
Conclusion;
Fair trading and CTTT of NSW is the main responsible for the darkness of strata living.

Strata Law Anomolies

 There appears to be a perception that one set of laws fits all in the field of Strata Law This cannot be. How can you compare an estate with an average of 16 units with one which has 300 plus ?

The large estates  have a problem which is unlikely to happen in small estates. Imgine a large estate of 300 plus units,200 of which are rented out to tenants. The absentee owners of these rented units do not see the day to day happenings on the estate, and provided they receive a rental on a regular basis, they assume that all is well. They also feel under an obligation, if called upon to vote a certain way at an AGM, to adhere to that requst.

In certain circumstances this can result in block voting for an EC whch is biased in favour of matters which are detimental to the estate as a whole and allow a small number of people to run the estate to further their interests,and block any AGM motions which may oppose them. If someone objects to what is going on. they find they have to take action against the Body Corporate of which they themselves are members, and they cannot compete, on the basis of legal costs, with the financial resourcs of the Body Corporate.

There have to be laws to restrict the number proxies one person can hold, and that no one can serve on an executive committee for more than 12 moths 

Strata insurance is often

Strata insurance is often compared, wrongly, to household insurance and this is a dangerous thing for anyone owning or living in an apartment.  It is even more dangerous for the team of volunteers charged with the responsibility of taking out the correct level of insurances for their building, the Executive Committee members.

 There are some important differences from a domestic household policy and strata insurance:

-          Full replacement value. Legislation demands that the level of insurance taken out is for full replacement value. In other words, the insurance in place MUST protect all owners from the full financial shortfall relating to their building i.e. should it be destroyed or have to be re-built the insurance will provide the funds to completely reinstate it as it was when new.

-          Unlimited liability for lot owners. If the strata insurance does falls short, every lot owner will have to make up  the shortfall because as a member of the Owners Corporation, each lot owner has as unlimited liability status under the law, with a legal obligation to plug any financial gap.  In practice, this means all of their personal assets are exposed.

Unfortunately, many unit dwellers are simply unaware of their responsibilities or the legal requirements for strata insurance. Alarmingly, many are unaware that when there is a financial shortfall, their unlimited liability status exposes all their personal assets.  Education can help but where knowledge is lacking unfortunately ignorance of the law is no defense.

Suggestion to help the Lot Owners

We have highlighted 4 key changes that would help reduce some of the risks faced by both owners of strata and the executive committee members. These suggestions will help with properties being insured for the correct amount and encourage a more comprehensive level of insurance for Owners Corporations. These are:

1.       Valuations for insurance purposes (ACT Sect 85)

Issue: Relying on a five year old insurance valuation exposes an Owners Corporation, and lot owners, to underinsurance because their insurance policy is unlikely to cover the full cost of a full re-build when a major storm or event occurs, and extensive damage or even destruction of strata buildings and assets occur.

Over the last 5 years, Cordells CHIP Reports show building costs have increased by 16.5% in NSW. Increase in building costs is just one factor that may make a valuation figure redundant very quickly. For example, when severe storms or catastrophic events happen, there is typically a sharp increase, or demand surge, for both labour and materials which can cause a spiking in these cost of up to 50% or more.

Proposal: To help buildings have the correct sum insured amount by keeping pace with cost increases, we propose:

-          Valuations be completed at least every three years, and

-          A minimum level of annual indexing on Building Sum Insured amounts is made mandatory.

Outcome: The potential for a gap in cover is reduced, helping to lower the financial exposure for consumers.

  

2.       Allowance for increases in expenditure (Strata Schemes Mgt Regulations 2010 (REGS) 12 (b))

Issue: Under the current calculation shown in the REGS, only 18 months from the inception of the policy is factored in for expenditure increases for the reinstatement of strata buildings. Should a loss occur on the last day of the insurance period i.e. date of expiry this allows for just 6 months to get the damage assessed, for building plans to be approved and completion of all works. We believe this to be impractical and unrealistic as experience shows that very few buildings can be reinstated to a ‘business as usual’ status within 6 months. 

Proposal: It is proposed that the 18 month term is adjusted to commence from the last day of the policy, instead of the current start date of the policy. This will extend the 6 months to 18 months for increases in expenditure costs, should a loss occur on the last day of cover  i.e.

‘(b)  the estimated amount by which expenditure referred to in the preceding paragraphs may increase during the period of 18 months following the last day of the damage policy.’

Alternatively, the same outcome can be reached if the term is adjusted to 30 months from the commencement date of the policy, which will also provide for an 18 month period from the last day of the plicy.

Outcome: By extending the term by an additional 12 months, this produces a more practical timescale which reduces risk and exposure for consumers.

 

3.       Liability Cover

Issue: The current minimum cover of $10 million for Liability Insurance was set more than 10 years ago and is out of step with today’s strata living requirements.  The risk of being sued for injury or death beyond the historically set $10 million limit places the Owners Corporation at risk, and untimely, exposes the personal assets of the consumer or lot owner.

 You may recall the recent and very sad case of a three-year-old girl who fell approximately seven metres from a balcony in Auburn. And only last month, five people were injured after a balcony collapsed in Sydney's north-west.

With more people living and visiting strata communities, the Government needs to legislate for a more realistic level of cover to ensure when tragedy strikes, adequate funds are there to help those who need it.

Proposal:  Update the cover by re-setting the current the minimum requirement to $30m (or possibly higher) for Public Liability cover.

Outcome: The risk of a large deficit in funds is reduced, and the new limit will lower the risk to the consumer of having to foot the bill for any financial short fall.  

 

4.       Office Bearers Cover

Issue: Those who serve on an Executive Committee do so in a very selfless manner but are often simply unaware of the risks they face, personally. An office bearer, similar to a director, can be sued for wrongful acts but unlike someone sitting on a company board, are often left unprotected or inadequately protected because they do not have the equivalent of officers liability insurance in place.

The Government needs to support those who volunteer their time free of charge by serving on an executive committee.  At the moment, Office Bearers are exposed as cover is an optional only cover. So volunteers serving on the Owners Corporation, can find themselves held responsible for any financial shortfall when a substantial loss occurs and as such are open to legal action by individual members and other parties.

Proposal: Office Bearers Liability is mandated and furthermore, we advocate a minimum limit is prescribed.

Outcome: Greater encouragement is provided by the Government to those serving on executive committees. By making this a compulsory cover, executive committee members and the end consumer (lot owner) are better protected.

CHU Underwriting Agencies Pty Ltd (CHU) is Australia’s leading strata insurance specialist, and we appreciate the opportunity to comment on the strata insurance requirements of Owners Corporations and unit owners. A separate and more detailed written submission, covering these and other aspects of strata insurance, will be submitted by CHU to the Minister’s Office.

 

Parking

My main concern is about parking.

I have served on many Management Committees over the past 30 years.  I am currently the Chairman of a Management Committee in North Sydney.
 
An issue which constantly concerns most Committees and owners and occupiers is that of unlawful parking on Common Property.
 
I won’t bore you with the unbelievable bureaucratic process your predecessors created regarding the enforcement of same, suffice to say that it would make Sir Humphrey blush.
 
I think we agreed at the meeting that it is incredibly costly, time-consuming and has little effect in dissuading those who wish to park unlawfully on common property.
 
I have an office in a block in Neutral Bay.  There are about 64 apartments and 50 parking pays.  There are about 10 Visitor’s Bays.
 
It’s a security carpark, and you need a remote control unit to enter.
 
Parking space is incredibly valuable.  If you wish to park next door, it’s $50 a day in the Woolworths’ carpark.
 
We have had people park their cars here unlawfully for 2 to 3 months and have been unable to do anything about it.
 
To take any form of action, we have to know who the owner of the vehicle is.  That person may be a friend or partner of one of the owners or occupiers.
 
But if they park here, we have no way of finding out the owner unless we apply under GIPPA (FoI) which is very costly, very time consuming and generally results in refusal.
 
Even if we see the person getting into or out of the vehicle, we have no right to ask them their names or contact details.
 
If you call the police and ask them to consider taking action for trespassing, they refuse saying it’s a private matter.
 
We’re not even allowed to de-activate the remotes so they cannot leave the premises, because that may be seen as “entrapment”.
 
It’s utterly absurd.
 
Here’s my suggestion:
 
As Chairman of the Pedestrian Council of Australia, I have had an enormous amount of experience in the administration and enforcement of illegal parking on public streets.
 
I even recently wrote an article for the Telegraph on the matter and worked with Andrew Stoner, prior to the last election on improving same. 
 
 
I have had meetings with the Premier and Ministers for Transport, Roads, Local Government and the Attorney-General at which we discussed on-street parking.

I have been a guest speaker at the NSW Rangers’ conference, every year for the past 4 years.
 
I believe we can learn something from this system.
 
In my view, you must create a system which focuses on the registered vehicle, not a human being (as is the current system).
 
That’s the very reason the system is so complicated, expensive and bureaucratic.
 
It’s vital to devise a system where the Management Committee or a formally delegated person such as the Strata Manager can issue a Formal Notice to a registered vehicle (unregistered vehicles are more complicated).
 
While it would be difficult if not impossible to make members of Management Committees (or the Strata Managers) special constables, it would be easy to devise a Standard Form which would contain all the details of an alleged offence.
 
That would be completed and signed by the authorises person/s and left on the windscreen of the offending vehicle.  It would also be a requirement that digital photos be taken as evidence.
 
The Form would also require that the person who left the vehicle there contact the person issuing the Notice within a given period to explain the reasons for parking on the common property.
 
You may wish for a second form to be issued.

The form would also state that if there was no response, a penalty (suggested the same as for parking overtime on a Parking Meter of $88) be imposed.  This may be repeated each day.
 
If there were still no response, then a copy of the form would be sent to the Office of State Revenue and they could be responsible for the collection of same.  Persons wishing to contest same could request to appear before the Strata Titles Commissioner.

It may make the system much simpler if Management Committees restricted parking in any one bay to a maximum of 24 hours as we have tried to do in our block (see attached).

Perhaps this could be the state standard and regulated as such, unless the Owner’s Corporation gives specific permission otherwise.
 
That way it would be far easier to prove an offence.
 
Of course there may be far simpler solutions, but I encourage you to ensure you focus on the registered vehicle and owner onus.

CTTT

Last year the Shadow Minister for Fair Trading wrote to me that "The CTTT is a very low cost forum established to assist in rapid and inexpensive conciliation."

Unfortunately, my experience with the CTTT over the past three years is the exact opposite.
 
The renovation in our apartment cost us $11,000 but it sparked a petty dispute with an over-officious executive committee. That dispute escalated into a three-year long legal battle which cost both parties more than $140,000 in legal fees, in addition to the cost to the public purse of possibly another $100,000. All that this time and money finally achieved was the reinstatement of nine square metres of tiles, based on the absurd definition of common property in the SSM Act. These tiles affected no one and the CTTT Senior Member said there was little practical purpose in reinstating them. This exercise in futility was neither very low cost nor rapid and inexpensive.
 
The Shadow Minister wrote that "the CTTT is incapable of acting in the same manner as a court where 'justice' and 'rights' are central." With all due respect, the last T in CTTT is for Tribunal; and all witnesses are sworn in. When a witness deliberately makes a false sworn statement, a serious offence is committed. When that witness subsequently confesses to the tribunal that he made a false sworn statement, no
action is taken. What manner of tribunal is it that is   incapable of acting in the
same manner as a court" to do something about it? Does not this incapability of the CTTT encourage witnesses to lie, as is commonly conceded by all the legal practitioners who work with the CTTT? It is little wonder that as shadow minister he receives "a constant stream of correspondence from disappointed consumers"; and that he is "are aware of a groundswell of complaint."
 
Hopefully, my dealings with the CTTT are over; and we do not intend to appeal against the final Adjudicator's decisions, wrong as they are. You suggest that we need to consult a solicitor, but we have been there and done that. We engaged a solicitor to fight and win our appeal to set aside the original Adjudicator's orders, but that was a Pyrrhic victory. Our legal fees for the appeal were over $40,000 but we were denied costs by the CTTT, simply because we were the appellant. I do not propose to accept the Shadow Minister's suggestion to repeat that exercise.
 
In our experience, there is no justice in the CTTT. Our opponents knowingly presented false evidence, which misled the adjudicator into making wrong orders. When we proved this, our opponents belatedly conceded that their evidence to be false, and they withdrew it. Our appeal was finally upheld 22 months after it was lodged, but we still had to foot our $40,000 bill for legal fees.
 
The CTTT Chairperson told us "I note your allegations about the provision of false and misleading information to the Tribunal.... The Tribunal plays no regulatory or prosecutorial role regarding such breaches." This confirms the Shadow Minister's statement about the incapacity of the Tribunal to administer justice. The Minister for Fair Trading is in a position where he attempts to defend the indefensible.
 
I trust that this forum will provide a new broom to sweep away some of the absurdities and abuses that currently exist in the CTTT. With all due respect, I suggest that you might consider the following:
 
1)       Simplify the SSMA to make it fairer and clearer and easier for laymen and
lawyers to understand and for the Tribunal and its staff to administer.
 
2)       Encourage more negotiation and mediation between disputing parties without
involving lawyers. Insist that the parties participating in mediation are empowered to take binding decisions.
 
3)       Change the absurd classification of "common property" by excluding ceramic
tiles fixed at the date of registration of the strata scheme to a common property surface.
 
4)       Train CTTT adjudicators to seek final acceptable settlements rather than
merely postponing further arguments and prolonging disputes.
 
5)       Demand that CTTT adjudicators apply section 186 (2) (b) of the Act which
says "The Tribunal…must act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms." In my experience with three different CTTT adjudicators, two of whom were Senior Members, this section of the Act was simply and totally ignored.

CONGRATULATIONS TO ALL PARTICIPANTS

CONGRATULATIONS AND THANKS TO ALL THE EXTRAORDINARY PEOPLE WHO CONTRIBUTED OF THEIR TIME AND EXPERIENCES TO THIS FORUM. COPIED TO A BOOK FORM, THE TOTAL OF ALL COMMENTS WILL FILL MORE THAN 660 PAGES. IT SHOULD BE PRESERVED AS A SOCIAL DOCUMENT ON LIFE IN OUR TIMES.

THANKS IS OWED TO THOSE WHO IN POOR ENGLISH TRIED TO VENT THEIR FRUSTRATIONS, AND TO THE ARTICULATE AND KNOWLEDGEABLE WHO SOMETIMES LIKE ME HAD TO LEARN THE ACT TO PROTECT AND DEFEND THEMSELVES AND THEIR PROPERTY WHEN MADNESS AFFECTED OTHER OWNERS IN THE SAME SCHEME.  

ANGER AND HUGE LOSSES BROUGHT ME TO A DETERMINATION TO TRY TO HELP OTHER PEOPLE NOT TO SUFFER THE SAME. YOUR STORIES AND EXPERIENCES AMAZED ME AND ENCOURAGED ME. THIS POLITICAL ACTION SHOULD CONTINUE BY LETTER WRITING AND FORCING THE GOVERNMENT TO PROTECT THOSE WHO INVEST THEIR LIFE SAVINGS INTO STRATA SCHEMES, SO THAT THEY CAN LIVE THERE PEACEFULLY AND THEIR INVESTMENT IS PRESERVED.

THE GOVERNMENT MUST NOT BOW TO COMMERICAL INTERESTS, EITHER DEVELOPERS OR MANAGEMENT COMPANIES AND TRULY REFORM THE ACT - TO PROTECT THOSE WHO CHOSE TO LIVE IN SMALL COMMUNITIES. OTHERWISE THERE MAY JUST FORM A STRATA PARTY.

THANKS AGAIN.

address the imbalance

I have just gone through  an expensive experience where the tenant has skipped out leaving me short over 10 weeks rent (over $5,000), done $8,500 of damage and the bond is not even close to covering the loss.  I have taken them to the tribunal more than once and the system is only a great delaying tactic for them, making 3 promises to meet a payment plan and then not coming through.  the system does not support owners at all.  these people cannot be evicted.  the process takes too long, is expensive if the owner has to get a lawyer involved each time and the tenant does what they want.  And how do you find them when they have skipped out?  the present method doesn't work.  And how do you stop the vandalism and damage?  A poultry 4 weeks bond is no deterant. The police can't do anything either.  they present system is not about equity for both parties.  it needs to be addressed. 

 

Also, I think any owner, and for that matter tenants too I am sure would like a better self help system that spells out the CTTT, the process and unravelling the language, jargon and system so that either party can attend to their affairs through this environment and not be dressed down by members who are clearly frustrated too, but navigate with a little confidence and know what to deliver up when and proper transparency of what to expect next.  The call centre people are great and try their level best but something that explains forms and a better laid out web environment would be a start.  the forms are buried in the bowls of the site.

Pets, tenants & tiles

A suggestion has been made that owners corporations should not be able to ban pets.  However I think that the present law should stay.  This permits an owners corporation to allow all pets, some small pets, or no pets at all.  This is the fair way to do it and enables the cases for and against pets to be argued by the owners.

Another suggestion has been made that tenants should be able to vote at owners corporation meetings.  This would not be fair to the owners who have paid for their ownership.  Instead, the present law should stay.  This allows an owner to nominate someone else as a proxy for him or her.  That person could be the owner’s tenant.

I agree with another suggestion that the definition of common property should be changed so that wall or floor tiles are part of a lot and not part of the common property.  This would make it easier for owners carrying out a minor renovation of a kitchen or bathroom.  The tiles are not seen by persons outside the lot, the building structure would not be affected, and the principle of lot property being property within the airspace would be substantially adhered to.

 

Executive Committees (ECs)/Strata Managers/Disputes

EXECUTIVE COMMITTEES (ECS)

1.   the composition of Ecs needs to be addressed by, for example:-

2.   polling and proxies should be prohibited at elections for ECs; a few proprietors with LARGE unit entitlements (UEs) and or a SINGLE person WITH MULTIPLE PROXIES can and do, as opposed to a larger number of proprietors with smaller UEs, stack ECs for their own purposes; after all, the wealthy only have ONE vote at State & Federal elections; being wealthy doesn't entitle them to more than one vote;

3.   non proprietors should be barred unless there are no nominations by or on behalf of proprietors;

4.   persons with a potential or actual conflict of interest should be expressly disqualified;

5.   preference should be given to resident proprietors;

6.   preference should be given to resident proprietors who have relevant qualifications or training relating to strata schemes;

7.   EC members should have fixed terms (eg 3 years) and be ineligible then for re-election unless no alternative eligible proprietors nominate; &

8.   EC members should disqualify themselves from voting on matters in which they have a potential of actual conflict of interest, or financial interest whether directly or indirectly.   

STRATA MANAGERS

1.   should be made more accountable and should be more regulated:

2.   at least, there should be a name and shame register for serial recalcitrant managers who repeatedly fail to return telephone calls or respond to email messages.

DISPUTES

There should be more "teeth" in enforcing compliance with By-Laws and a speedier process for dealing with breaches etc.

Exec Comm n Strata Manager

I agree with most of the points raised by Chook except his point 5..

I wish to add   ALL EC members are obigated to sign a formal documet pledge/obligation to ensure that they do not have any pecuniary interests and that they will ensure that the welfare and interests of all the owners will be protected  irregardless.

Point 6 is a great suggestion. as is the case with Chooks' point 8

I wish to add lso if an EC member has breached the Regulations or By Laws  there should be a financial penalty system that is  accessed on the severity of each breach. There should be provisions for instant dismissal i,e breach Sec 65A damage to Common Property if a notice to comply is issued and the recipient of the Notices does not comply with the order within 21 days or something to that effect

The deadline is up But its not OVER

The fat lady sings but it aint over..I suggest that all those who are concerned send letters , call, e mail n make appointments with your Local member who will be voting on or submitting changes to the regulations. Lets put our ideas  clearly and firmly to the political representatives.

Its apparent that the Regulations under the Strata Scheme DO VERY LITTLE in Deterring ofences etc..

SOME HOW there has to be a SORT OF COMPROMISE and a comfortable position where the present sysem has more enforceable laws  that have teeth. To delienate an area of Strata Scheme Regulations and actual Home ownership.

 

REPEAT .Finding a compromise wheras Strata Scheme and home ownership systems n  responsiblities meet. Bring Strata Laws closer to HOME OWNERSHIP LAWS

People who own their own home  as a rule take care of their own home  the yard etc in  Strata Common property Issues are controlled by a select few i.e. Exec Committee and Strata Manager.

Somehow there has to be a compromise found that can join the two areas more closely..Make a system that ensures Strata owners their own responsibilty and involvement with their scheme..

THE PRESENT SYSTEM DOES NOT WORK..People who own their OWN HOMES ARE MUCH BETTER OFF.

I WISH THAT I HAD NEVER PURCHASED A STRATA PROPERTY   OWNING A HOME IS FAR FAR BETTER

Section 65A of the Act: Apartment Renovation Approvals and Bui

 Section 65A of the Act: 

Apartment Renovation Approvals and Building Maintenance

 

Background

Chapter 3 of the Act – Key management areas in the Act sets out the key management areas and related responsibilities of the Owners Corporation (OC)

In particular, s61(1) makes it clear the OC has management responsibility for common property

 

“(1) An owners corporation has, for the benefit of the owners:

(a) the management and control of the use of the common property of the strata scheme concerned, and

(b) the administration of the strata scheme concerned”.

and s62 sets out the duties of the OC in this respect:

“62 What are the duties of an owners corporation to maintain and repair property?

(1) An owners corporation must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation.”

The Act does not define the precise meaning of terms such a “maintain in a state of good and serviceable repair” but the net effect of the powers conferred in s61 and the duties specified in s62 is that the OC, and its executive body the EC, has considerable flexibility in maintaining the state and quality of common property beyond fulfilling its s62 duties in a minimalist sense, similar to that of any property owner.

In a somewhat indirect way, model by-law 5 in Schedule 1 of the Act also provides the basis for apartment owners to renovate their lots:

By-law “5 Damage to common property

(1) An owner or occupier of a lot must not mark, paint, drive nails or screws or the like into, or otherwise damage or deface, any structure that forms part of the common property without the approval in writing of the owners corporation.

(2) An approval given by the owners corporation under subclause (1) cannot authorise any additions to the common property.”

By-law 5 gives the OC and the EC the power to approve apartment renovations that involve unavoidable damage to common property such as tiles and waterproofing attached to floors and common walls during bathroom renovations. NSW Fair Trading advice in response to the question ‘What is the simplest way to approve apartment renovations, including bathroom renovations in the scheme?” is as follows:

“An owner would need to request in writing to the Secretary or the managing agent before commencing a bathroom renovation where common property is involved. The simplest and quickest option for the owners corporation is to give consent under by-law 5. Decisions of this nature can be made at an executive committee meeting or general meeting by a majority vote”.

Whilst the above provisions of the Act provide for the repair, maintenance and renovation of common property and of lots, until 2004 the Act was silent regarding works which would significantly change common property by adding or modifying common property in a way that represent a departure from the strata plan or architectural plans on which current building approvals are based, in other words, which introduce changes to common property as it is currently defined. The Act was amended in 2004 by Section 65A, which states:

65A Owners corporation may make or authorise changes to common property

(1) For the purpose of improving or enhancing the common property, an owners corporation or an owner of a lot may take any of the following action, but only if a special resolution has first been passed at a general meeting of the owners corporation that specifically authorises the taking of the particular action proposed:

(a) add to the common property,

(b) alter the common property

(c) erect a new structure on the common property.”

Introducing the amendments into parliament on 4/12/2003, the Minister for Fair Trading explained the intent of s65A as follows:

“The bill makes it clear that the owners corporation has the necessary power to add to, alter, or erect new structures on common property or allow others to do so. This previously uncertain area has often resulted in bylaws being devised to overcome the doubtfulness of the situation. The powers of the owners corporation and the responsibility for ongoing maintenance of common property affected in this aspect of strata life will now be made clear to all concerned.”

The Issue

It is clear from the above that the intent of introducing s65A of the Act was not to constrain the activities of the OC to maintain common property or to complicate the approval of routine apartment renovations by owners. Nevertheless there is a danger of exactly this happening.

Some strata lawyers have been interpreting the term “alter common property” in s65A of the Act to apply to ALL works affecting common property not just modifications which alter common property in the sense that the works represent departures from existing plans and specifications.

“Renovations to replace bathroom tiles and waterproofing are clearly ‘alteration’ to the common property for which a special resolution of the owners corporation is required”

These lawyers maintain that the Executive Committee no longer has the power to approve routine apartment renovations that involve bathroom renovations under
By-law 5.

NSW Fair Trading disagrees with this view:

“A resolution under section 65a of the Act is only required where an owners corporation or an owner proposes to add, alter, or erect a new structure on common property for the purpose of improving or enhancing the common property of the scheme. Consequently this provision is not applicable to the renovation of bathrooms by owners to their individual lots”.

Adjudication of a recent case arising from this disagreement resulted in the Adjudicator ruling in agreement with the former view (of lawyers) but with even more disturbing consequences:

“It is not in dispute in this matter that laundry tiles and the waterproofing membrane constitute common property. In my view removing these items and replacing them with different tiles and a new waterproofing membrane constitutes altering the common property, unless such work is done by the Owners Corporation for the purpose of maintenance or to repair defects.”

At the time of writing this decision is under appeal. The appeal argues that this ruling does not reflect the intentions of the Act, that it is unreasonable that exactly the same work should under some conditions be considered to change and alter the common property but not under other circumstances and that the consequences of the ruling have detrimental effects on the operation of strata schemes.

Legal strata lawyers and the adjudication decision relies on a 2009 Supreme Court case, Stolfa v Owners  Strata Plan  4366 & ors [2009] NSWSC 589. The works under consideration in Stolfa are clearly major modifications to the building that require Development Approvals. Stolfa uses the terms “additions and alterations” to refer to such major modifications without defining these terms. The context of Stolfa is consistent with the narrow interpretation of the term “alterations and additions” and when read using this interpretation Stolfa actually effectively illustrates all the nuances of s65A.

For example, whilst the works the OC normally carries out under its s62 duties to “ maintain common property in good and serviceable repair” usually involves the repair, replacement, renewal or restoration of common property, Stolfa points out that under some circumstances the OC may be required to carry out alterations and additions to ensure the integrity or serviceability of the building. Under such circumstances the OC may carry out alterations and additions as a s62 duty as "repairs and maintenance” and approval under s65A in such cases is not required.

However, these Stolfa rulings take on a different meaning if it is assumed that the term “alterations and additions” should be used in a broad sense to also include works which only involve repair, restoration, renewal or replacement of parts of common property. The controversial ruling arises from this difference in interpretation.

Should the broad interpretation of s65A prevail it is likely to have a number of adverse consequences for owners and for strata management:

  • Whereas, according to NSW Fair Trading, routine apartment renovations can be approved by  the Executive Committee, according to the CTTT ruling owners would either have to wait for the next general meeting to gain approval or try to arrange a general meeting to gain approval for even the most routine bathroom renovation. In large schemes this would involve considerable cost and no guarantee of a forum. Thus in practice owners would have considerable difficulty in gaining approval for the most routine renovations.
  • The ruling implies that anything that is considered “enhancement” rather than “essential repairs and maintenance” requires s65A approval. However, these terms are not defined and in the normal course of events repairs and maintenance can involve a variety of works. Works are carried out by OC according to what owners consider appropriate to maintain the common property “in good and serviceable repair”. Without being specific the ruling implies that without a s65A resolution, OC’s are restricted in carrying renovations, replacement or renewal of common property because such works may be considered “enhancements” rather than “repair and maintenance” and therefore subject to s65A. This is contrary to the commonly accepted rights associated with .
  • The ruling calls for treating the same works as “repair and maintenance” under some circumstances but as “alterations” under other circumstances and to justify works as essential maintenance rather than enhancements of common property before the EC can authorise such works. Strata management which depends on such distinctions, without agreed definition of any of these terms, is a recipe for disputes to arise. The number of cases presented for CTTT adjudication is likely to skyrocket.

It is clear that s65A was not intended to complicate the approval of routine apartment renovations or to limit the freedom of executive committees to act in line with the collective wishes of owners as they best see fit. The broad interpretation of s65A makes no sense and it is important to address the ambiguity and confusion which is now arising as a result of the institutionalising of the inappropriate interpretation of s65A

Solution

Section 65A(1) should be modified to make clear that it refers to works that change or modify common property  as it is defined for the scheme and not to works that simply repair, replace, renew, repair or restore the condition of common property as it is currently defined.

The following change in wording of s65A is possible solution:

“65A Owners corporation may make or authorise changes to common property

(1) For the purpose of improving or enhancing the common property, an owners corporation or an owner of a lot may take any of the following action, but only if a special resolution has first been passed at a general meeting of the owners corporation that specifically authorises the taking of the particular action proposed:

(a) add to the common property,

(b) alter modify the common property, resulting in departure from the strata plan, currently applicable architectural drawings or other specifications

(c) erect a new structure on the common property.”

and adding a new clause:

(7) The provisions of this section do not apply to works and renovations, which merely repair, renew, restore common property or replace parts of common property without changing the nature of the common property involved.

Strata Pets

Pet ownership in strata buildings has a significant impact on the lives of all of us who live in strata buildings.  There seems to be little information about for those of us who want to have a pet.  I have found a great web site for this: see www.stratapets.com.au

Review of Strata & Community Title Laws

Review of Strata & Community Titles Laws

The Institution of Surveyors NSW (ISNSW) commends the State Government in undertaking a root and branch review of the NSW Strata and Community Title Laws. In the current land development climate where medium density and high density housing is being promoted by government it is critically important that we have a strong and resilient titling system. This system must allow for flexibility in the types of development currently in vogue in housing, commercial and industrial development and have the capacity to accommodate development form yet to be devised.

ISNSW has over 1000 members who are Land Surveyors registered by the State of NSW to prepare plans of subdivision for the purpose of property transfer. More and more these plans are strata and community title subdivisions.
In addition the Building Professionals Board of NSW has accredited 24 persons to issue Strata Certificates in lieu of Local Government. Of the 24 accredited persons, 10 are Registered Land Suveyors.
Several members are also Strata Managers and it is from an amalgam of expertise of these three specialties in the Strata and Community Title community that the views expressed in this paper derive

ISSUES WITH STRATA LEGISLATION

ISSUE A - UNIT ENTITLEMENTS

Under the Strata Development Act allocation of unit entitlements for a new strata plan does not have to be based on a professional valuation nor signed by a registered valuer. However if there is a dispute about the allocation of unit entitlements then, in considering a re-allocation of unit entitlements, the Strata Management Act requires that CTTT is provied with a valuation of the strata lots at the time of registration of the strata plan which is to be prepared by a registered valuer. On average there is one such dispute before the CTTT every fortnight which is at a significant public cost. The Community Legislation requires that the unit entitlements for a community plan are certified by a registered valuer. Further the word "value" has not been defined by the legislation.

RECOMMENDATION.

  • That the legislation be changed so that unit entitlement must relate to market value.
  • That the schedule of unit entitlements for a strata plan needs to be certified by a registered valuer.

ISSUE B - There are many ongoing disputes regarding who is responsible for maintaining parts of a strata scheme. The owners corporation has the responsibility to maintain the common property. This responsibility is not in dispute regarding maintenance of common property items such as the roof, lift, stairways and driveway of a building. Numerous disputes arise when, for example, each lot in a strata building has its own hot water service and 70% of the hot water services are located within the respective lot but 30% of the hot water services are located outside of the lot which they service. The hot water services may be situated in the ceiling space of a common property corridor or are outside the building and are standing on common property. The issue then arises as to who is responsible to maintain these 30% of hot water servies. They are located on common property so by the law the owners corporation is obliged to maintain them. However the other 70% of owners say that they have to maintain their own hot water services and so should the other 30% of owners. This is an example of a maintenance dispute which is dealt with on a daily basis within NSW's 70,000+ strata plans.

RECOMMENDATIONS

  • That the legislation be amended to include a concept/definition of 'implied exclusive use'. This term would apply to the example described above so that is a hot water service which services only one lot is located on common property then the owner of that lot would be obligated to maintain that hot water service. In strata buildings across NSW there would be thousands of hot water services, air conditioners, grease traps etc which are situated on common property but only service one lot. If such components of a building could be classified as 'implied exclusive use' then it would resolve many disputes which occur very regularly. Under the current legislation it is possible to create an 'exclusive use by-law' so that a lot owner has exclusive use of a part of the common property and is required to maintain that part of the common property. This principle could be extended to 'implied exclusive use' and would greatly assist in reducing the time & cost of resolving disputes similar to one described above.
  • There should be compulsory adoption (with appropriate amendments) of Memorandum AG520000 which provides a comprehensive list of matters which should be considered in By-laws.

ISSUE C

The Office of Fair Trading (OFT) is often asked by the general public to provide advice on who has the responsibility to maintain a part of a strata scheme. Quite often the OFT seeks advice from the office of Land & Property Information (LPI) to clarify if the said part of the building is shown as common property on a strata plan. In so doing, registered strata plans are being used as the source of information to determine maintenance responsibilities.

Strata plans are being used to try to determine if such items as electric motors, hot water heaters, sun louvres, pavers, pergolas, timber decks etc are common property or not so as to determine the responsibility for maintenance. The primary role of a strata plan is to determine the boundaries of the strata lots and not to be used to determine (for example) if the electric motor for a garage door is common property or not.

RECOMMENDATIONS

Responsibility of maintenance of strata building is a strata management matter and should be addressed in the Strata Management Legislation. It is suggested that a schedule of "maintenance by-laws" be established in the Strata Management Regulations. Instead of attempting to resolve maintenance issues by reference to strata plans a schedule of by-laws could state who has the responsibility to maintain items within a building. The items to be addressed in these maintenance by-laws would be those that have generated ongoing controversy regarding the responsibility of maintenance.

Samples of such by-laws are:-

  • The maintenance and replacement of unsecured pavers in an outdoor area of a lot is the responsibility of owners of that lot.
  • The operation, maintenance and replacement of an electric motor which operates a garage door of a lot is the responsibility of the owner and that lot.
  • The maintenance and replacement of any deck built of timber or similar material (which was in existence at the time of registration of strata plan) is the responsibility of owners corporation.

These examples are only put forward to promoted discussion and the division of responsibilities are only suggestions. Such by-laws could be amended/repealed by owners corporation as required. However there would be a set of "model" maintenance by-laws which would consider the appropriate issues.

At present, a lot of time and resources are consumed by OFT and LPI in dealing with these strata maintenance matters.

It is noted that the only references to maintenance matters in the current Model By-laws extend to windows and security doors. There is a great deal of scope for by-laws to consider many other maintenance matters.

ISSUE D

CTTT consideration of disputes involving Strata Schemes.

  • Experience at CTTT hearings has shown that in many cases decisions are being made by Commissioners without Strata Title Knowledge or experience and indeed decisions are being made without reference to the actual Strata Plan or By-laws.

RECOMMENDATION

That any tribunal must contain a qualified person on the panel & a copy of the registered Strata Plan when considering disputes involving strata schemes. This could be achieved by setting up a structure similar to the Administrative Decisions Tribunal (ADT) wherein it has Non Judicial Members. These are a Ministerial Appointment. The role of these lay Members is to assist the Judge or any Judicial Members determine a Hearing (dispute).
Where required (e.g. a complaint against a Vet or an Accredited Certifier etc) a Non Judicial Members sits on the Bench beside the Presiding Judicial Member and hears the Matter. The Non Judicial Members' opinion is asked for and is relied on by the Presiding Judicial Member for the Deicision.

ISSUE E

DEFINITIONS
The definition of a Strata Plan of resubdivision needs to be clarified.

ISSUE F

Strata Certificates cannot issue until OC's issue.
Frequently Councils are making condition of Development approvals that "a Strata Certificate" shall not issue until an Occuaption Certificate has issued. This is an unnecessary impost and cause of delay in the registration of Strata Plan as the consumer is protected by the Conveyancing Act.

RECOMMENDATION

Amend Clauses 37 and 37A to the effect that "the issue of a strata certificate should not be contingent on the issue of an Occupation Certificate."

ISSUES WITH THE COMMUNITY TITLE LEGISLATION

The Community Legislation was enacted in 1990. Over the past 22 years there has not been a significant legislative review. In essence, the Community Legislation allows for land to be subdivided into private lots and communal land on which communal facilities can be built.

ISSUE CA

Staged Development

There have been many successful community title schemes created in NSW over the past 22 years. However many more projects which should have been developed as a community scheme were not developed at all due to the legislative hindrances relating to staged development of a neighbourhood, precinct or community scheme. The issue eing that it is not possible to create additional association property in a staged subdivision without obtaining the unanimous approval from the relevant association.

As a comparison, since 1985, under the Strata Legislation there has been a staged strata development process which has worked well and has stood the test of time. It is recommended that the community legislation adopts the legislative framework within the Strata Development Act. This would allow staged community schemes to be crried out in an orderly & transparent manner.

RECOMMENDATION

The legislative amendments include:-

  • That the format of a neighbourhood/precinct/community development contract is similar to the current format of a strata development contract.

There should be rigorous Communal Property in each stae. Community legislation should reflect Strata legislation

  • That a neighbourhood/precinct/community development contract is only required for a staged development.
  • That it is possible to create neighbourhood/precinct/community association property in a staged development without requiring the consent of the relevant association.

ISSUE CB

Ability to add adjoining land to a Precinct or Community Scheme

- At present, after a precinct/community scheme is created, it is not possible to add adjoinging land to that scheme. To be able to add adjoining land to a scheme would allow more flexibility in the development. It is possible to add land to an existing strata scheme.

RECOMMENDATION

  • The Community Legislation be amended to allow for adjoinging land to be added to a community/precinct/neighbourhood scheme.

ISSUE CC

Inability to subdivide community or precinct association property.

This is a hindrance as there are circumstances where the association would like to divest itself of some of its property and/or an owner within the scheme would like to acquire some of the association property.

RECOMMENDATION

  • That Community Legislation be amended so that the procedure for subdiving community and precinct association property is similar to subdividing neighbourhood association property and strata common property.

ISSUE CD

Requirement for unanimous agreement

In the community legislation nearly all dealings with the community/precinct/neighbourhood association property require a unanimous resolution from the relevant association. Achieving a unanimous resolution is most difficult and very impractical. Since 1997 the strata legislation has only required a special resolution (75% majority) in dealing with matters relating to strata common property such as creating easements or subdividing common property.

RECOMMENDATION

  • The Community Legislation be aligned with the strata legislation and require only a special resolution for matters dealing with association property.

ISSUE CE

The definition of the initial period in community and precinct schemes

The current definition requires that a third of either community or precinct development lots need to be subdivided by a subsidiary scheme before the initial period will expire for the relevant scheme. There are very few community or precinct schemes for which the initial period has automatically expired.

RECOMMENDATION

  • That the initial period for community and precinct schemes be similar to that for a strata scheme and that there should be more flexibility in matters which can be changed during the "initial period."

OTHER ISSUES

Difficulty in variation of Unit Entitlements

Currently the only resolution is through the CTTT

Currently we can't undertake a strata scheme within a neighbourhood scheme

There is no opportunity to terminate a scheme in the legislation for community schemes

Consideration of community leasehold legislation.

SUMMARY

The issues detailed above are ones which surveyors and accredited strata certifiers grapple with on a daily basis. Often confusion generated by strata plans for strata managers stems not only from flaws in the plans and management statements but more from shortcomings in the underlying legislation.
The Institution considers that the recommendations herein if acted upon would go a long way to ameliorate the problems which currently exist.

 

Grahame Wallis
President
Institution of Surveyors New South Wales Inc.

 

Common property

My issues revolve around "common property", and why Body corporate money is used to say fix someones garage door or front door when clearly these are not used by everyone like the driveway is.

Improved procedure for achieving by-law compliance

The current procedure for achieving by-law compliance is too time consuming and lacks clarity in relation to penalties for breaches. I would suggest the following improvements to the Strata Schemes Management Act and Regulation.

- Prescribe penalties for the breaching of a by-law within 24 months of the issuing of a section 45 notice, with a progressively larger penalty defined for successive breaches (eg. first offence - one penalty point, 2nd offence - two penalty points, 3rd offence - five penalty points).

- The executive committee should be authorised to impose a prescribed penalty, but the offender should have the right of appeal within 14 days of receiving notice of the penalty.

- The appeal should be done in writing and submitted to a general meeting of owners. Because of the potential conflict involved at a face to face meeting, there should be provision made for such a meeting to be held in writing. Such a meeting should only deal with the appeal.

- If the meeting confirms the penalty then the penalty becomes a debt to the relevant owner. If the lot is tenanted then the owner may recover the penalty through the bond or other means.

- Perhaps provision should be made for an appeal to the CTTT against the decision of a general meeting within 14 days if there is clear evidence of a breach of procedural fairness.

concerned citizen

These are our concerns.

1.       Strata fees should have a clear definition of how they are set. Unit entitlements should be set on square meters of the living space, garage space and position of unit.
2.       A body should be set to hear these problems-not have a court case
3.       Developers buy the land and engage the cheapest builder ( sometimes not a ‘builder’ but someone who has to Tafe for 2 years), who was the cheapest tradesmen( some not qualified) and use the cheapest tiles and fittings.
4.       Who inspects the developer? They take the money, when the purchaser pays their money; the purchaser has to deal with the builder, not very satisfactory.
5.       After 5 years it should be law that all units are re-valued. ( our units acceding to the surveyor who we spoke to were set by the developers valuations of the price paid—not very satisfactory if the developers has a …sale to sell)
6.       Faults should be dealt with by the developer not the builder who caused the problem in the first place.
7.       Owners who are renting out properties should pay more levies because renters damage properties - couldn’t care less.

Passive smoking

Whilst I respect an individuals right to smoke, I do not believe it is ok for that person's passive cigarette smoke to make its way into my apartment, where it can affect the health of all from babies to adults - we wll know the evidence is compelling that cigarette smoke is detrimental to your health.

Smoking should be restricted in apartments, and other strata living, to not be allowed to make it's way into other apartments by way of wind direction or other means of being carried from the actual cigarette to affect others.

Smoke being a substance that manages to make its way through the smallest of cracks needs to be limited so that others who share strata living are not negatively impacted by it.

This to me is common sense and also shows respect for fellow human beings.

Here's looking forward to the Government's response...

KR

Surveyor's Perspective

Strata Schemes

As surveyors working with and creating with strata schems we would like to see a revision of the current Strata laws making it manditory for Unit Entitlements to be based on value and that such value must be provided by a registered valuer in a similar manner to the current Community Scheme legislation.

Currently, many issues of maintenance and ownership are up to the prudent surveyor to identify and allocate in the Strata Plan before the scheme has been created.  Issues such as who owns and maintains the tiles on the balcony (are they common property or part of a lot) or  a hot water heater in common property (which is for the exclusive use of one lot) or the batteries in the remote control for the garage door, would be much more effectively dealt with in the by-laws which can be amended by the owners corportation once the strata scheme is up and running.  The establishment of a set "maintenance by-laws" and the inclusion of a definition for "implied exclusive use" in the legislation would go a long way to solving many issues resulting from the management of a strata scheme.  This would also remove much unneccessary clutter from the strata plan.

We look forward to the review of the current Strata legislation.

concerns for the aged

Aged are encouraged to downsize when they become empty nesters. More housing for the up and coming young, with families. Illness, death, expence and loneliness seems to help the aged make up the decision to sell and move into a smaller home.

Strata can offer multiple storey flats and units, resort style living, or just that nice 2 or 3 bedroom villa or townhouse with a little yard and perhaps a small garden.
Entering into STRATA can be very affordable or very expensive.
There is not much information available to people who are not computer literate. While the Minister of Fair Trading did express to me by letter that a book “buying into STATA” was available, this book hasn’t been in print for some time.
Many estate agents do not explain about STRATA to potential buyers, nor do solicitors or people in conveyancing. With all the rules and regulations that makes up STRATA, perhaps a fact sheet and a document of understanding should be given and signed by the selling agent and the buyer. This could prevent a buyer from entering into STRATA if they couldn’t afford the ongoing expence or the rules and regulations were not what they wanted.
The Ten Year Sinking Fund can cause hardship due to the need to get the money needed to satisfy this fund. This is more so in the case of a NEW Complex. WHT can’t a hump sum of $2,000 up to $5,000 depending on need of complex be paid in hump sum at time of purchase. This would alert a buyer if they were going into something they can’t afford.
Perhaps there should be a limit to how many complexes a STRATA MANAGER can manage, and what they can charge in fees. More estate agents should be encouraged to become STRATA MANAGERS to give more competition. AGENTS who manage should be more transparent in their role as manager.
If there has to be an EXECUTIVE COMMITTEE OF THE OWNERS CORPORATION, then they should have to abide by the rules of, once elected they take office-bearer positions, and have meetings with their body corporate. If this does not occur, then it becomes a false. It also means that meeting such as the A.G. becomes the only chance for people to air complaints.
My concerns are for the aged pensioners who sell their homes, buy into STRATA and find they need a lot more money than the pension to live there. Also people aged over 60’s to got years are often discriminated by younger working people. This can result in pensioners having no say due to small numbers and so being out voted, when it comes to rising fees. It seems if unable to afford a large rise the aged should “Get out” or “Bring in the sheriff”.
How disgusting to treat any aged person who sold their home, the downsize so that they can live in peace, remain independent, be able to make some decisions about their small home, and live in it for as long as they can.
STRATA living may work for some, but please look at the aged and make some changes to accommodate or not allow pensioners into STRATA. Perhaps over 60s complex could be made available to aged pensioners “only” and managed by a select body. The pensioners would sell their home and move into a villa or townhouse under “AGED STRATA”.
As far as complaints made to fair trading, you are sent forms to fill out and a list of costs to be paid if you want to complain.
I am a lot owner, a proud Australian, like to pay my way, am a widow and aged pensioner. With the cost of living rising, I and others are finding it hard. We could also be called Fools, trapped in STRATA, with no one to listen or care.

NSW Parliamentary Committee – Strata Schemes Management Act Inqu

NSW Parliamentary Committee – Strata Schemes Management Act Inquiry

I am the owner of one unit in a two-unit strata scheme. The property is a duplex now twenty years old. I have been responsible for operating the scheme for the last 10 years and there have been a few changes of ownership and tenancy in both units. The scheme has always been operated without a professional strata manager or accountant to minimise expenses and the strata levy. Apart from easements and a shared wall there is virtually no common property. Each owner has been responsible for maintaining their lot personally rather than being a shared responsibility through the strata plan. A quarterly strata levy of $250 is paid into the strata plan's cheque account and is largely used to pay the annual cost of the building insurance on the property by cheque signed by both unit owners.


Based on my experience of this property, I have a number of concerns with the NSW Strata Management Act & Regulations (the “NSW Strata Legislation”) particularly as it applies to the operation of two-unit schemes.


Accordingly, I wish to submit four broad recommendations to the Inquiry that I believe would assist small scheme operators to run their schemes cost-effectively in accordance with the law. I apologise in advance for the scanty nature of this submission and the lack of professionalism in its preparation.
 

  1. Two-Unit Strata Plans – Allow Exemptions

I strongly recommend the Committee review the NSW Strata Legislation to clarify the operation of two-unit strata plans under those arrangements. The legislation is necessarily designed for schemes that have more than two units and a substantial amount of common property.

Complying with those requirements when there are only two units and no common property is expensive and uneconomic. 

Creating a separate account with large strata levies to provide a pool of funds from which future maintenance on the building can be drawn down creates the need for strata managers, investments, detailed accounts, auditing and anti-fraud measures. Costly overheads for a two-unit scheme. 

Two units do not have the economies of scale to justify those expenses. Individual unit owners financing and paying for maintenance costs as and when they arise works well. Unfortunately under the existing legislation it could happen that a future owner buying a lot in a 2-unit scheme that has been neglected could demand an equal contribution from the two unit owners to repair the strata corporation.

I think the law should incorporate exemptions that allow 2-unit schemes many exemptions from the Strata Law as it currently stands.

 

  1. Web Publish All Strata Law Cases Judgements – Poor Man's Legal Advice

I recommend that all NSW Strata Law case judgements be published in full on free-to-air websites.

Many strata plans are operated by well-meaning unit owners doing their best to run a scheme for which they have no relevant professional training. Managers and agents of schemes may be able to assist with many of the problems that arise, but often the legislation, by-laws and management of a scheme raises questions that have often been addressed in judgements handed down previously.

Written judgements provide a poor man's source of legal advice particularly for the smaller schemes (less than 10 units). They provide examples of how particular situations were addressed by the Courts and suggest appropriate solutions. Often they provide specific examples of how one might approach solving the types of problem that confront strata schemes.

While specific legal advice from a qualified professional with access to the latest law is always preferable, it is always expensive and its use is necessarily limited to the most difficult questions. Being able to research such problems through old judgements at least ensures that the owners are better informed about potential issues when they approach a legal adviser.

I think you will find that at present only a very selective sample of judgements are published on the relevant NSW Government and Austlii websites. The latest privately-published case reports are expensive and beyond the reach of the ordinary man.

I recognise, however, that the judiciary and the legal profession rely heavily on the editorial boards of private publishers to produce from a selective sample of judgements, a consistent interpretation of the law as it stands at any point in time.

 

  1. Provide Pro-Forma Sample Accounts and all other documents required by the Strata Legislation on the NSW Government Website

I recommend that the NSW Government website provide sample pro-forma accounts and samples of the most common strata scheme documents including minutes, strata rolls, certificates, plans, deeds.


I believe providing such information ensures all strata owners can quickly develop a clear understanding of their obligations and what they should expect from their strata scheme, the executive committee and strata agents. Such measures reduce the risk of fraud, increase the alertness of owners and ensure that schemes are managed in accordance soundly and efficiently in accordance with the law.

  1. Standardise Strata Law across Australia.

    As with all NSW State Legislation, I strongly recommend that the NSW Government's Strata Legislation be consistent with and preferably mirror the equivalent legislation in the other states and territories of Australia.

That approach strengthens the Australian Commonwealth by reducing barriers to the free flow of services within Australia. It also means that State Governments are better able to provide the Australian public with comprehensive, well-drafted legislation that is accompanied by extensive supporting educational material (eg descriptive brochures, pro-forma accounts etc). Case law develops more quickly to clarify the interpretation of the law. Strata professionals are able to transfer their skills and compete with each other. Strata owners are better able to transfer their knowledge of the law from one state to another.

 

Please do not hesitate to contact me if you would like a more detailed submission on any of these recommendations.

Some Thoughts

Some Thoughts on the Review of Strata/Community Scheme Legislation
NB 1: an attempt has been made to follow the headings suggested for this discussion forum but sometimes the distinction was a hard one to make so some submissions may appear under one heading when they could just as well appeared under another.
NB 2:      while there is a regular reference to the Community Land Development Act and the Community Land Management Act it should be pointed out that the strata legislation (Strata Schemes (Freehold Development) Act and the Strata Schemes Management Act) are not referred to here, for the most part, it does have parallel provisions hence the comments have application to it.
 
Q1.         Main areas that should be reviewed
 
1.            There should be a code of conduct, backed up by sanctions, for executive committees. It should emphasise the fiduciary nature of the position and the legal need to act in the best interest of the members and not personal interests. It should also emphasise the representative nature of the duty and how its improper use will reflect negatively on the whole community and not just on them. More specifically the code should cover,
1.1          the relationship with residents/owners;
1.2          the developer,
1.3          contractors,
1.4          non resident/owners use of common property,
1.5          the making/receiving of donations to or by the executive committee from the developer/its associates/affiliates/servants and agents (or from any other person or legal entity ?) to members of the executive or to the   associates/affiliates/servants or agents of members of the executive. For example, making donations to a non-resident group, the head of which was the chair of the executive committee, and that executive went on to reject an agreement that had been negotiated between the developer/subsidiary/affiliate and a differently constituted executive and enter into one more favourable to the developer/subsidiary/affiliate. During this same period the servants/agents/associates/affiliates permitted the chair’s non-resident to use community facilities without executive or association permission. See also at paragraph 3 and also consider this example in terms of the social impact on community cohesion.

1.6          The code should also go a step further than the traditional model and alert those coming under its umbrella that some of their actions may attract the provisions of the Crimes Act, e.g. Part 4A (fraud and obtaining financial advantage by deception provisions to mention two of them).

2.             There should be qualifications for being members of executive committees, e.g., being of good fame and character; not previously disqualified from being a director; or a bankrupt; or charged with a criminal offence etc.

3.             There should be tighter controls over income and expenditure. For example can the executive use community funds to make donations or spend funds for or on things other than the maintenance of community property? As presently framed the legislation would seem to say no but executive members without legal experience (or the ethics involved in using other people’s money) may not come to this conclusion from reading the relevant sections. This lack of direction can lead to the abuse and misuse of funds. It should not be allowed to happen. The inherent risk is too obvious to require comment. An illustration of how this would work would be an executive committee that used community funds- to make a donation plus GST (sic) for something that had nothing to do the management or maintenance of community property. Indeed the donation involved a body outside the State. See also paragraph 1.5.

4.             The duties and responsibilities of the community/strata manager should be spelled out in some detail. For example, the provisions should,

4.1          spell out that its duty is has a fiduciary duty and that this means that the interests of the members take precedent over its own interests,

4.2          that the primary duty of the managing agent is to the members and not to the executive committee. Properly exercised such duty would stop motions being put (let alone passed) that were or were likely to be unlawful, unenforceable or contrary to law. The managing agent should be required to take an active (rather than passive) fiduciary duty.    

5.             There should be clear cut provisions regarding the use of common property by members and non-members alike and the power of executive committees and community associations (or strata corporations or other subsidiary bodies) to make rules and by-laws. By way of illustration one can refer to by-laws, which purported to apply to non-residents i.e., to persons not covered by the relevant DP, and authorising them to use the common property for a fee (which was unlawful – by-laws a limited in their application to a specific geographical area). The existing provision is open to the abuse of the property rights of the residents and of the non-residents using the common property. Such action has repercussions over and above the mere use of the common property and the abuse of the rights of owners because it extends to other areas of the law e.g., if the use of the common property is unlawful the duty of care owed by the owners to the non-residents is lower, with consequences (that may not be appreciated), on any compensation for any damage or injury, to say nothing of the insult implied in being sold something unlawful and the possible application of the criminal law.

6.             Some community associations have extensive access ways and call for special considerations to permit them to function effectively. There should be provisions requiring that they be clearly sign posted so that any non-resident who uses them appreciates that they are private property and that their legal rights and obligations will be different from those attached to public roads. By the same token the sign posting will signal to all concerned that the occupiers’ liability attracted will vary depending on the status of the entrant. It is imperative for both residents and non-resident users to be aware of these distinctions. All users should know the extent of their rights and responsibilities. See also under Q1 paragraph 9.

7.             The use of access ways by non residents is a common problem because they are regularly used to park vehicles on them- sometimes for months on end (for example advertising vans parked for months along the access ways) and neither the police nor the council can do/will do anything to stop these practices. There should be a simply way to stop non resident parking, to remove abandoned vehicles and other vehicles that should not be there e.g., hoons and ice cream vans with their mind numbing music playing ( in fact the current legislation has provisions that can be used for this type of issue but it’s the enforcement side that lets residents down).  

8.             The use of the access ways by non residents is also an issue because they add to the maintenance costs and this has a direct financial impact on the levies that residents have to pay. Where there is an element of non-resident use consideration should be given to the local council being responsible for the maintenance (at present this is met by the residents). See also under Q 2.

9.             The question of parking and the abandonment of vehicles is an issue not just as regards non residents but also as regards to residents. As far as residents are concerned the current procedure to move them on (which relies on the issue of a compliance notice) is too slow and cumbersome (having to be enforced through the mediation and CTTT process). An easier procedure should be developed. As far as non-residents are concerned there is no way, short of a suit for trespass, by which to deal with the issue. For this issue the right to remove and fine and clamp should be considered. The ability to be able to manage the use of access ways is important because, not being able to do so carries significant legal implications for community schemes. Thus, in large schemes that have many access ways, it is daily observed that many drives either do not know how or do not care where to park safely e.g., they park directly opposite an intersections, or too close to a corner so that they block the view of oncoming traffic, or in places where common sense would dictate that they should not park (because the street is too narrow) to permit the safe movement of traffic. These deficiencies increase the risk of litigation for community schemes because they can be the source of or a contributor to accidents and ensuing claims for damage or injury, The current legislative scheme should not leave community associations in such vulnerable position and, in this sense, developers should not be allowed to leave development schemes “half done” like this because, by the time the residents realise that this is a problem, it might well be too late and they might, by then, be a party to litigation. It would not be an expensive proposition for the developer to appropriately sign post the access ways (the developer has to lodge a traffic study with the development application so this additional step would not add much to it in terms of time or costs). By the same token the developer should not be allowed to sign post its own trading/commercial activities being carried out within the scheme without association prior approval.  See also under Q 1 paragraph 15.

10.          Parking is also an issue from another angle. Visitors to strata, neighbourhoods and precincts and development lots park on community access ways. This needs to be reconsidered. It is submitted that each of these types of residences should have its own visitor parking area and not rely on the access ways otherwise parking on the access ways tends to be favour the larger strata, neighbourhoods and precincts and this would be contrary to the rights attached to the joint ownership nature of the access ways.

11.          Along similar lines is the issue of police entry/use of access ways. This is a difficult issue but it needs clarification as the existing provision is unclear. The issue is complicated when it is sought to apply the existing law to large community associations that are made up of,
11.1        open access ways.  This attracts consideration of the law of entry as it applies to the association common property,
11.2        common property (as distinct from association property). This attracts consideration of the law of entry as regards the common property within a strata/subsidiary body’s property;
11.3        private residential properties within a community association parcel. This attracts consideration of the law of entry as it applies to private property.
 
12.         At the very least the provisions should attempt to codify the common law regarding police entry (and non-resident entry).

13.          Developers need to make a contribution to councils under s94. However, some of these s. 94 contributions, on closer examination, turn out to be a contribution not by the developer but by the residents e.g., where the developer purports to grant an easement to the council and from them to the public to “pass and repass” over association property. Because this is a restriction on the title of the common property owned by all residents, is not if fact a contribution by the developer but by the residents. Moreover, this fiction misleads and deceives because the law applicable to easements in gross (which these turn out to be) cannot extend or be made to cascade from the council (or prescribed corporation) to members of the public. This technique is not capable of doing what it purport to achieve and simply serves to pull the wool over the eyes of the affected persons.  The Community Land Development Act should be amended to prohibit the practice and the practice mentioned in the next paragraph.

14.          The use of association property by the developer to promote non- developmental activities such as its other trading or commercial activities. For example the developer should not be allowed to use common property for advertising its trading/commercial activities (or to sign post street signs with private signs) and the exclusive use of car parking areas owned by strata/subsidiary bodies by its/associates/affiliates/subsidiaries’ employees working for these trading/commercial activities because it gives the developer more rights to the use and enjoyment of the common property than the other owners (this would breach the rights to the use and enjoyment of the property as provided by law. The reference to these two issues is not an attempt to trivialise the issue but it is used because it is a simple way to make the point. In fact the issue has important consequences, thus to support its commercial/trading activities or other non-developmental activities, the developer might design and set things out in such a way that they will depend on and impose a burden on the residents for their very existence e.g., they are designed to use the access ways to bring non-residents onto the estate (as distinct to serving the residents). Such design component has a direct financial impact on the levies that residents have to meet while the developer and its (possible) subsequent assignees in title do not make a greater contribution to levies as the result of the greater benefit they receive. Example there are a few e.g., placing air conditioning units servicing such private trading/commercial property on common property. 

15.          Another example of development schemes design dysfunction is seen in those cases where the scheme was developed in stages under separate DPs but apparently meant to be a composite design with access ways feeding into each other as if each separate DP was part of the same scheme. Thus, in one scheme (call it the major scheme) the development approval has a Conveyancing Act s 88B restriction limiting non resident use “on foot” and for the purpose of recreation and yet the access ways of the minor schemes feed into the access ways of the major scheme. The obvious consequence of this arrangement is that the residents of the minor scheme cannot leave their scheme except for the purpose of recreation and provided they do so on foot. This is just crazy stuff. It should never have been allowed to happen. If the residents of the minor schemes seek and get an easement they will have to pay for it and they will have to maintain it (or at least contribute to the maintenance of the access ways. In the current circumstances they are getting a free ride (they do not make a contribution to the maintenance levies) at the expense of the residents of the major scheme (who have to meet the maintenance costs through higher levies) and that is unfair. The developer should never have received approval to develop the schemes in this way. See also under Q 1 paragraph 9. 

16.          The different powers of the community association versus the executive committees should be clearly delineated. Some executives committees act as if they have the same power as the community association (which is not the case). Both the Community Land Development Act and the Community Land Management Act distinguish between the two. This distinction is particularly important as regards the power to do things and acts that impact on rights title and interest in property. This is a distinction that is mandated by the provision in the Community Land Development Act that makes the community association the agent of the owners who are tenants in common in the common property. This distinction between, legal and beneficial ownership, is received judicial attention and has implications not only in terms of the power of executive committees versus community associations but also as between these two bodies and the actual (beneficial) owners. Thus, problems can follow were an executive or community association purports to give “land owners’ consent” e.g. to the developer or the council which, it would appear, would not be within power because it could affect the beneficial interests of the owners.
 
17.          There is a need to introduce competition over the agreements/licences that the developer/associates/affiliates/subsidiaries/servants and agents can enter into with the community association either with itself or with its servants and agents or affiliates and associates (both before and after the initial period). This practice helps set up a “closed shop” between developers/subsidiaries/etc and managing companies. These practices have “first mover advantages” over other (non- affiliated and non-developer owned managing companies). Such agreements/licences attract costs for the residents that have not been tested in the open market, often involve terms for very long periods (twenty years or more), and are a barrier to entry for competitors in the building managers, strata managers and community managers industry. The industry has to be opened up to market forces by removing barriers to competition like these ones. A possible reform would be, at the initial annual general meeting, for such agreements/licences to automatically be put to tender i.e., there should be no verification or certification of existing agreements/licences (avoids first mover advantage) and should go to tender for every ensuing year.
 
Q2.         Future issues
1.       The impact, if any, of the proposed changes to LEPs on the Master Plan/Concept plan design.
 
2.       The management of some community associations is getting very expensive in part because same managing agents charge fees that would make lawyers envious even though the work is of a routine nature. The fees charged by agents should be scrutinised on a regular basis. There is no justification for the high hourly fees being charged for work done and, for example, for photocopies, or telephone calls or, for the failure of the agent to account for any commission received from doing the work of a community association. These days, with professional fees (read high fees) being charged by managing agents, there is (a) no justification for retention of a commission and (b) the commission is in fact unlawful because it breaches the fiduciary nature of the agency agreement.  
 
3.       Independently of the fees charged by managing agents the issue of the duties and obligations of the managing agent to the members of the community association (as distinct of the executive committee) needs attention because it is otherwise likely to lead to litigation over these issues. The fiduciary nature of the agency agreement, the duties imposed by the Community Land Management Act, and the high fees being charged by managing agents imposes an obligation on them to exercise a professional standard of skill that is not currently being manifested by (apparently) merely acting as clerical support service for the executive committee. This is an area where managing agents are prone to suits both in law and in equity and they need to get their act together sooner rather than later (it’s surprising no suit has been filed already).
 
4.       Presumably community scheme developments will increase over time and this makes it important to sort out the vexing issue of the number of votes that the developer can exercise after the initial period. The current provision of reducing the vote to one-third until the developer’s unit entitlement falls below fifty percent when it can vote its full entitlement is just a silly hybrid. It is unfair to firstly empower the residents to run the community then, once the 50% limit is reached, switch over to the developer who can change the work that had been done up to that point. Either permanently limit the developer’s vote or leave the developer with its entitlement as reduced over time. The present procedure is misleading and deceptive for potential new resident because, on the face of it, it looks as if the community is running itself while the reality is that the developer with its 50% can control the vote and can control anybody else who wants to be on the executive by giving or withholding support. This is probably a common occurrence. Potential residents need to make an informed decision and the present system does not allow them to do it.
 
5.       On the question of votes another issue is the present legislation has two different voting systems. Thus, for the election of an executive, election is based the number of lots in support (not unit entitlement). Especially in the early periods of the development of the scheme this puts the developer in the position to dictate the number of executive members that can be elected because it has the largest number of lots. This places the developer in a very powerful position which undermines the rationale behind restricting the developer’s vote on any motion to one third of its unit entitlement. There should be an amendment to remove this inconsistency and rebalance the voting rights for the executive to match the voting rights on motions. 
 
6.       The unfairness of the present system of voting for the executive can be shown by reference to the fact that some lots are too small to have a unit entitlement which means they do not make a contribution towards the financial upkeep of the community and yet can be determinative of the executive committee. Such lots include what may be called “inchoate lots” which are lots that are a necessary element in the creation of a neighbourhood or a precinct but cannot be used for anything practical. This can easily lend itself to abuse of power while the development is still in progress. A possible reform of the voting system would be to recognise and treat undeveloped lots differently to developed lots because undeveloped lots are not controlled by the community association and whatever happens to them is completely in the control of the developer. The same thing cannot be said for developed lots. These are within the control of the community association and the developer/subsidiaries/etc has a say in their management while, inconsistently, the owners of the developed lots do not have a similar say over undeveloped lots. Fairness would suggest that the undeveloped lots (either as lots or as unit entitlements) should not be taken into account in any vote. At first blush this might seem unfair to the developer but in fact it is not because it simply gives effect to an owner’s right to decide how his/her property is used and enjoyed as provided under the in law. There is no reason why the developer should retain any residual rights over property it does not own and is out of its initial period. At law this would seem to be an incongruous position and, at best, would have to rely on some tortuous piece of logical for its justification. The situation would be different if the developer retained some interest in developed lots in which case it can exercise its vote and unit entitlement like anyone else.
 
7.       Another possibility to the reform suggested in the previous paragraph would be to, for the reasons suggested there, treat undeveloped lots as one lot attracting one vote and giving it the unit entitlement attracted by the least valuable undeveloped lot  or , possibly, the median of all lots (subject to control over possible abuse).
 
 
8.       Some of the larger community developments will have increasingly large budget and this makes it imperative to tighten the rules regarding financial management, auditing, and risk assessment from misuse/defalcation of funds. See the reference to donations and the use of common property as examples of things that are going wrong now and see also the point regarding resolutions. As a further example of the misuse of community funds consider the situation where a security guard payed to patrol the common property is/was also used to patrol the private property of the developer/subsidiaries/etc.; and as a further example consider a claim that one strata executive spent $7.000 (in round figures) sending out voting papers and self-promotion material to its residents. Sending out “newsletters” is a common device for executives to promote themselves using community/strata funds. The potential for abuse is obvious and they should be rigorously controlled. Financial and legal risk management processes are imperative to safeguard the hundreds of thousands/millions invested by residents. This is particularly mandated by the fact that many executive committee members lack necessary expertise.
 
9.       Because of the likely increase in community development schemes the relationship between councils and community associations there should be some regulation of the relationship. One reason for this is that councils do not seem to understand that community association property is jointly owned by all members that means that one member does not and cannot have greater rights to its use and enjoyment than another member. Thus, councils need to understand that one member cannot ask it to grant it an exclusive car parking space and that it has no power to do so. This is because the right of members as beneficial joint owners (the legal title being in the community association/strata/subsidiary body and case law has it that the relationship between these bodies and joint owners is dictated not only by the law of agency but also, by analogy, by the equitable relationship between trustee and beneficiary. A council cannot change these rights or relationship unless it first resumes or acquires the property. The failure of councils to appreciate such a basic notion of land ownership means that they do not understand community scheme development and their actions create unnecessary problems for residents.
 
10.    Large community associations collect a lot of private information from the residents. Provision should be made to keep it confidential and to ensure that it is not used for or by third party purposes e.g., to send residents advertising material from third parties or disclose email information to third parties.
 
11.    It is a common practice for a developer, once a Concept Plan or a Master Plan has been approved, to alter the density of the development. This is done by the fiction of comparing the proposed density to the previous one rather than to that proposed on the Concept Plan or Master Plan. This approach of making the comparison with the previous approval tends to understate the increase from the original Concept Plan/Master Plan approval thus, for example, if the developer was allowed to increase the number of residences from 500 to 520 in year one and from 520 to 540 in year two the increase from year one to year two (20) is and gives an entirely different picture and impacts on the existing residents and facilities than making the comparison from 500 to 540. In one scheme, using this process, one developer increased the number of residences by 37% (even before the development was completed) and yet the common facilities were not increased but some of them were in fact reduced (from a three story building to a two storey building). It’s a simple device that consent authorities either miss or turn a blind eye to in circumstances that could conceivably leave them open to a suit for breach of professional duty of care (unless they have statutory immunity) at the hands of dissatisfied residents (see cases dealing with development approvals by councils in circumstances were the exercise of professional skill was remiss). It is submitted that, save in exceptional circumstances, the number of residences within a development should not be increased. If there is to be an increase then it should be accompanied by a corresponding compensatory increase in the common recreation facilities (buildings and parks) and the availability of car parking areas. In other words the ratio between recreational facilities and car parking facilities should be maintained (relative to the density of the development).
 
12.    An approach like that mentioned in the previous paragraph is necessary in order to ensure that residents who purchase on the basis of the existing Concept Plan/Master Plan are not treated unfairly by having changes imposed on them that they did not know about beforehand. Moreover, the Concept Plan/Master Plan, need to be given some backing by requiring adherence to it otherwise they will be used to disadvantage existing residents. Furthermore, it does not make sense to approve a Concept Plan/Master Plan and then see it altered by what can only be described as a significant extent (minor changes with compensatory provisions as previously suggested should be permitted). The obvious implications of the existing system is that the process of approval is fundamentally flawed and allowing significant changes in resident density without compensatory increases in common facilities will be unfair for the purchasers who bought after a change and before future changes to the density level were made. Moreover, it means that the original approval (and every subsequent approval except the last one) was incorrect. It is improbable that the approval at the Concept Plan/Master Plan stage and (each of) the latter approvals will are correct/proper ones. One of the two has to be wrong. Moreover, it is improbable that any developer worth its salt would get the density level wrong at each stage of the development and has to continually seek approvals to increase it. It is more likely, that the process is a deliberate device to achieve by creeping what it cannot achieve by early disclosure.   
 
13.    Community development scheme are designed to last for many years and are structured around certain design standards that individual residents have to meet and cannot vary from them without difficulty (e.g. changing the community management statement). This is fine as long as these standards are the optimum ones available at the time. Take, for example, the use of solar panels, some schemes have by-laws against them. This is short sighted. The developer should have installed them in the first place and should have been prohibited from including restrictions on their installation in the by-laws. In one scheme the common facilities use up some $50,000 p.a. in electricity. This is a big financial burden to impose on residents when, with government subsidies, it would have been a cheap improvement to have incorporated in the design. Of course this is only an example and not the “be all and end all” of optimising developments to reduce future costs in the management of common property and private residences (for example, using trees and other plants that do not require much water; using light coloured tiles on roofs to reduce use of air conditioning; installing water collection tanks or better ones; and see other examples herein e.g. paragraph 14). At the individual resident level the existence of by-laws against installing solar panels (without permission) is a barrier to individual residents taking improvements into their own hands. Accordingly, each future scheme should pass an independent energy efficiency test both at the individual residence level and the community scheme level.
 
14.    A salient point about the issue in the previous paragraph is that the design of community schemes, especially the larger ones, is the propensity for social fracture because of infrastructure (and other) burdens that some schemes carry because the access ways and common facilities impose significant financial burdens (who are not assisted in ameliorating them) by councils and non-residents who make use of them (e.g. car parking, use for recreation for purposes as a s94 contribution and so on). This financial burden can and does reduce cohesion and wellbeing. It is submitted that both the developer and the public authorities should have an obligation to identify ways and means to remedy this situation and support them in their own ways and means. A model community development scheme should be designed that, for development schemes that have a commercial neighbourhood, set aside a portion of the commercial neighbourhood for the community association use to generate income that can defray levies to offset all of the maintenance costs of the access ways and common facilities. There is a need to move away from levies as the sole means of supporting common property. For large development schemes the present model unsuitable and unsustainable in an age of significant growth in maintenancecosts that residents have little control over and need to be contracted out. This is the sense in which the “self sufficiency” idea mentioned in paragraph 13 should be viewed. The present model is past its used by date. Unless changes of this type are mandated large community development scheme will implode under raising maintenance costs (which include the raising costs imposed by the professionalization mandated by high risk management that is necessary by large communities). A possible way of doing something like this is to redirect s 94 contributions to this function. 
 
15.    There is another way by which to assess scheme efficiency. This is to recognise that the level of efficiency enjoyed by a development scheme is very much in the hands of the developer, as some of the examples given here attest, and that developers have a propensity to build-in inefficiencies. In part this is due to the “first mover advantage” that the developer enjoys. This allows the developer to fix the “pattern of thinking” that strata will follow for years before they notice the duplication and take steps to remove it. For example, during the initial period the developer may put in place a building manager and a separate strata manager for each strata and a community manager and a separate estate manager for a community. From the point of view of the developer the imperative for this set up is an obvious one and it follows from the fact that the developer has associates/affiliates/subsidiaries etc. that provide these services and by putting them in place it guarantees an income stream for years to come over and above the sales of residences. This, of course, is good for the developer but the duplication of services that this practice represents does nothing to ensure the future survival and wellbeing of the development scheme (residents). There is no need to have both a building manager and a strata manager or both an estate manager and a community manager because there is nothing that a building manager does that a strata manager cannot do (and actually do). Some strata “cotton on” to this and moved to stop the duplication but others are a bit slow, for example, if the lift breaks down either can call the lift maintenance man- so why pay an annual fee for both? Similarly, there is nothing that an estate manager does that cannot be done by the community manager (if a resident needs a plumber both of them can call one so why pay an annual fee to both?). The model community/strata management statement should remove these and any other built-in inefficiencies.
 
16.    It would appear, as some of the issues mentioned here suggest, that community development schemes are viewed as nothing more than “bricks and mortar” to be built at the lowest costs possible and with as much perfunctory designs as is possible. In fact some of these schemes are large enough to qualify as small towns and should be seen and promoted as communities i.e., as living things rather than a mere collection of residences. This means, for example, that the scheme should encourage social cohesion, engender a community spirit and promote the continual development of improvements to the use and the functions of the common facilities (bearing in mind financial constraints). These may sound too much like “touchy feeling stuff” but social psychology has been doing this sort of things with groups since the 1950’s (?); and human resources management has adopted them since then to build team spirit. For example, the scheme should promote the estate as “our estate/common property”, “our access ways” and so on. Individuals are not likely to approve of expenditure and effort that is going to used by someone else (non-residents). The concept of “pride,” in general, will only stretch so far and will stop when one can no longer say “my/our” property when referring to the community scheme’s access ways and facilities. When residents ask “why doesn’t the council pay for its maintenance?” it shows that they do not understand that they are the owners and are responsible for the maintenance of the common property. For example, in one development scheme the members regularly and in big numbers attended social functions at the “club” until issues with the developer over its management (by one of its subsidiary/affiliate) and its practices with executive committee elections, caused the patronage to drop significantly. The facility can now be fairly described as a financial millstone for the community association (around four hundred thousand dollars per year worth of running costs). To be fair there are probably other issues at play but a large part of it would have to be an absence of a “sense of ownership” engendered by the division between members and the developer’s desire to see its subsidiary/affiliate/servants and agents make money out of the facility.
 
 
17.     As to promoting improvements in the use and functions of facilities it can be done by removing barriers to efficiency e.g., remove interference by by-laws by putting a presumption in favour in the community statement rather than a direction against (and especially ones slanted in favour of the developer). These are all things that the developer should include in any Master Plan or Concept Plan and if it is not included it should not be approved. As elsewhere stated digression from such approved plans should only be approved in exceptional circumstances because nothing destroys the notion of community and cohesion that not having control over “our property” and seeing your vision changed or by the developer every time it erects a new building or hinders it by the developer purporting to retain control over land that has been alienated from the developer’s ownership.
 
18.    There should be a study designed to model the optimum residential size, type and combination of different types of residences, common facilities such as open areas and social facilities that are reasonably sustainable, in the long term, from levies alone; and, similarly, model the size that must be supported by means other than levies, for example, by having a commercial component allocated as common property and identify the means that can be used. An alternative to the latter model would be to authorise a higher levy for any commercial/trading activity (they and their patrons make more use of the common property) which is not permitted at present.  
 
19.    When property comes out of the initial period it should be checked for compliances with development plans, Occasionally, one sees things that do not appear to accord with development plans e.g. buildings seem to have been erected too close to another building so questions arise about compliance with the plans; or there are air conditioning units on what appears to be common property but serving private property; or car parking spaces on common property being ostensibly assigned (not mere use) to private individuals even though the strata plan does not disclose the excision of the lot; sometimes the primary DP shows a lot as being common property but later plans show it as private property. There needs to be a way to clear these types of issues. One way of doing it is to have all lots coming out of the initial period certified as being compliant. Such certification should be done by an independent person appointed by the association so that residents can have confidence in the certification.   
 
Q3.         Improvement to management
1.       At the risk of using a “fad” word there should be more transparency and more/better delineation of powers and duties between the members of community associations and executive committees.      
 
2.       As to transparency executive committees should, other than in exceptional circumstance,
 
2.1    table all legal advices and tender documents within a specified period. It has been known for executive committees to keep such documents off the association file so that neither existing members nor potential members searching the file are aware of them—a situation that can place the community association at risk of a law suit from a purchaser who was deceived or misled by the absent documentation. Tender documents in particular should be disclosed because some may involve the developer (who may have been instrumental in getting the executive committee members elected (see the example given earlier of the community association security guard being used to patrol the developer/subsidiary/etc’s trading/commercial property). This issue should not be sidelined by consideration of “commercial in confidence” questions by making it known to all tender suppliers that the documents will be made available on the community association file and to the members of the community association. As to legal advice this should not be sidelined by questions of privilege because the privilege belongs to the principle i.e. the members of the community association and not to the agent (the executive committee or community association itself).
 
2.2    table independent legal advice whenever it seeks to add, alter, amend or repeal a by-law such advice to include but not be limited to whether the proposal is lawful, enforceable, supported by relevant legislation and otherwise within power and, in all of the circumstances, if it is in the best interest of the community association to adopt the proposal. It has been known for unlawful by-laws to be passed simply because the developer/subsidiaries/etc wanted it (and the executive committee were persons elected with the support of the developer).
 
 
3.        If the proposal mentioned in the previous paragraph involves the expenditure of funds or has some other impact on the current or future budget the proposal is to be accompanied by an independent accountant’s report that sets out, but not limited to, the abovementioned impact and if it is in the best interest of the community association to accept the proposal. 
 
4.       Another way to deal with some of the issues over by-laws and advantages given to the is to have a model community statement that applies during the initial period. After the initial period safeguards against the type of conduct referred to herein should be apply e.g. if the proposal gives or purports to give the developer/subsidiaries/etc (these are not words of limitation) a financial or non-financial benefit the proposal must be supported by an independent legal and (where appropriate) an accountant’s report. Such report to cover the benefit to be given, the loss/disadvantage to the other members; that it does not detract from or interfere with the rights, title and interest or the use and enjoyment of the common property or private property by other members; that the proposal does not give any advantage of any type to the developer/subsidiary/etc over those enjoyed by other members; that the proposal is otherwise lawful. Enforceable and accords with law. Where there is a financial advantage, identify its value, whether it is temporary or ongoing and whether the proposal could be carried out in a more financially beneficial way by going to tender or otherwise. Before giving such advice the legal/accounting advisor is to call for submissions from members and take them into account in the report.
 
5.       Table independent legal advice whenever it seeks to initiate or defend legal proceedings. Such advice is to cover, but is not limited to, whether the proposed action is reasonable, the reasonable chance of success and the likely costs involved if the action is successful or fails.
 
6.       Every person seeking election for the executive committee or to serve on any committee/subcommittee should sign a statutory declaration attesting to any association, membership or relationship etc. that could result in a conflict of interest (with examples to help those who have a propensity to look with their eyes closed). For example, membership to an organisation that might have an interest in using association property. Furthermore, any donation received by that person or associated individuals/corporations (see example under Q1).
 
7.       In addition to the examples given during the period that the developer is still engaged in development activities, such person should specifically disclose any relationship with the developer its servants and agents and its associates and affiliates together with any contact with such others within the last twelve months and in particular whether such contact involved the election process or the candidate and any support or exchange of support with any of the candidates. This is important because the current provisions restrict the developer from having more than one representative but one can get around this simply by reaching an understanding with other candidates. 
 
8.       Community management statements contain a lot of material that should not be there either because the provisions are unnecessary or because they are simply wrong or because their wording is unclear and confusing. Thus, prior to its registration every community management statement should be certified by a legally qualified practitioner that the provisions in it are fair and reasonable, do not contain provisions that purport to limit the rights, title and interest of owners at all or in favour of the developer/subsidiaries/etc and that they are otherwise not ultra vires but lawful, enforceable and comply with the Community Land Development Act, the Community Land Management Act and do not in any way limit or reduce the owners rights title and interest under property law.
 
9.       The community management statement should be reviewed, in part or as a whole, by an independent legal practitioner, as distinct from a legal practitioner that is or has been brief by the executive committee to advice on other matters, at any time after the initial annual general meeting but before the next annual general meeting.
 
10.    The community management statement should not contain provisions that give the developer/subsidiary/etc any rights to the use and enjoyment of the common property after the property has passed into the control of the community association. This is necessary in order to give effect to rights under the general property law. In some schemes the developer has included in the community management statement the right to decide what notices/posters/etc an owner may put on his/her property thus, it could, for example, not approve an owner’s intention to put a welcome mat on the front door! Exceptions might be necessary in so far as development activities are concerned but not otherwise e.g., not to promote secondary interests of the developer.
 
11.    In some schemes the community management statement requires the community association to provide free accommodation for an estate manager (its affiliate) and office space at a peppercorn rental from which to run its secondary activities. These are things that are put into place before the initial period and they reflect the powerful position of the developer and the residents need to be protected from such unfair practices.
 
12.    The current legislation empowers the members of a community association to call for a general meeting and to place motions on the agenda. This should be extend to empower them to call on the executive committee/managing agent to seek independent legal or financial advice on any issue or on any issue placed or to be placed on any agenda at a general meeting or of the executive committee. It has been known for executive committees to do things on the urging of or for the benefit of the developer/subsidiary/etc (see example of changes to by-laws mentioned earlier) or personal interest (see reference to donations) that was unlawful and not backed up by legal advice (e.g., amending the community management statement to extend its provisions to residents not covered by the community association so that they could use the community facilities). A by-law is limited in its geographical operation to the DP area applicable to the particular community association.
 
13.    As to the delineation of powers this is necessary because executive committees tend to confuse their identity with that of the community association and make decisions that are not within the scope of power of an executive but within the power of the community association. This makes them treat the common property and the owners of the common property as a fiefdom which is not good management. This can lead to an abuse of authority e.g., permitting persons who are not members/residents to use common property (with all the associated risk that can follow as the result of harm, injury or damage to a person or property. See also under Q1 for other possible sources of abuse e.g., donations.
 
 
14.    One area in need of reform is that involving motions before meetings. Some issues need only fifty plus one in favour to be passed (ordinary resolutions); some issues need seventy five percent (special resolutions) and other issues need a unanimous resolution. Experience shows that some motions for agreements for the running of the community, that had terms and conditions that needed a unanimous resolution, were presented as and passed as requiring a special resolution. These agreements favoured the developer/subsidiary/etc, and the executive committee, did not disclose the existence of these terms and conditions nor did not present legal advice to support the special resolution process. Moreover, one of these agreements involved financial benefits in the million plus dollars, over its term, for the developer/subsidiary/etc who got it without competing in a tender process and without legal advice to back it up.  As indicated elsewhere in this document the sort of money some community associations deal with are significant and the members need to be protected from those individuals who set out to abuse their position and from the well intentioned ones who do not know what they are doing.    
 
15.    While the ensuing suggestion probably would not be necessary for all community associations, for the larger ones, provision should be made for the better use of the managing agent. At present managing agents are mostly operating as support staff for the executive committee. This is contrary to the managing agent’s fiduciary duty (their agreement with the community association is one of trust and confidence) to the members of the community association with which it has an agreement and which pays its fees. In other words the managing agent’s agreement is with the members of the community association and not with the executive and yet managing agents tend to act as if they are an extension of the executive committee. This misunderstands their duty and their obligations under the law. Rather than wait until equity gets to deal with the issue it would be better to tackle it in the proposed changes to the legislation by specifically codifying the duties and responsibilities and setting up a process by which the managing agent can discharge them. One possibility would be to require the managing agent to vet all agenda items for executive committee meetings or general meetings and to advice, in writing, on any issue that, on reasonable grounds, would appear to be unlawful, unenforceable or contrary to law. The writing would be necessary for the agent to protect itself from a suit for breach of contract or negligence or fiduciary duty.
 
16.    All members of the executive committee should keep a diary note of any meeting with the developer/its servants/agents/affiliates/and associates and table them within a reasonable time. Similarly, for any other contractor/licensee and services provider.
 
17.    A further provision, as mentioned in one of the blogs on the web site for this discussion, should consider placing a limit the number of times or successive times that a person can sit on the executive committee. Admittedly this could be a problem in small communities but not so in larger ones. This issue is particularly important while the scheme is in the course of development and the developer has significant unit entitlements (votes) to get its supporters elected. This will also stop the development of dynasties and the treatment of the common property as a private fiefdom (see example regarding donations and allowing non residents to use common property). This same notion would support the argument put forward elsewhere in this submission in favour of going to tender for agreements/licences for the provisions of goods and services (including managing agent’s services).
 
18.    Agendas for meetings of the executive committee should, as a rule, be distributed seven days in advance. There are executives that send out the agenda on Friday for a Monday meeting. The obvious intention is to reduce the time that anyone has to consider and take action on anything in the document. Other than in exceptional circumstances there is no justification for an approach like this. One needs to bear in mind that some issues are very important and members need time to consider them and if necessary seek legal advice and initiate injunctive proceedings.
 
19.    Minutes of meetings of the executive committee should follow same basis ground rules e.g., unless an issue has been circulated with the agenda it should not be included in the minutes. To do otherwise would deny members the right to be prepared and to be heard on the issue. Where this happens it is an abuse of procee.
 
20.    Under the present legislative provisions the Director-General is empowered to give advice to community associations and members but experience shows that this is often not forthcoming or otherwise satisfied. This provision should be strengthened and advice readily given. Indeed there should be provision for officers from that department to attend and advice on issues identified for them that are coming up in general meetings or at executive meetings. Furthermore, the provisions should be strengthened by empowering the Director-General to, on request by a member to issue a please explain letter.
 
21.    Currently the legislation does not require community scheme to be audited and this is probably right for small schemes. The same thing cannot be said for larger ones. The examples given here show many ways by which residents can be taken advantage off and an auditing system akin to that undertaken by the Auditor General (not the perfunctory audits undertaken at present and in which the auditor relies on the information presented to it and does not investigate the propriety of the decision behind the expenditure) is needed and the managing agent should be required to certify that all resolutions and decisions of the executive and of the community association satisfied the requirements of the community scheme legislation. It should be clear that the type of audit envisaged is more than the traditional financial audit and, a good and reasonable innovation would be for the audit to call on the members to report any concerns for it to investigate and report on. Similarly, the community solicitor should report on advice given to the executive and the community association. These elements of an audit would serve two functions. The first would be to protect the residents and the second to inform potential residents.  A function like this is necessary because irrespective of the good intentions of the executive (or of the members) they are inexperienced with this type of management. They may well be experienced business people (where bosses and employees all know their places and their roles) but running a community calls for skills that most business people cannot automatically be assumed to have (more political than entrepreneurial and more ethical than either). 
 
22.    There should be comity in the decision making of executive committee unless there are special circumstances dictating a different approach. When considering similar facts (and law) an executive should follow the decision of a previous executive committee on the similar facts (and Law) and not be swayed by considerations that it would not have made the same (prior) decision if it had come before it. To do otherwise is to introduce an element of arbitrariness in decision making reflective (more) of bias rather than reason and introduces an element of uncertainness for residents and other persons and corporations having dealings with the associations. This is because the process takes away certainty and replaces it with whim and “payback” and neither of these is likely to promote good relations amongst the residents, confidence in the executive and to good business practices. For example, if one executive resolves not to permit a non-resident to use the common property an incoming executive should not resolve otherwise unless it can point to the earlier decision as being clearly wrong.  
 
Q4.         Dispute resolution
 
1.       Present system is too cumbersome. There should be a better and easier way of resolving disagreements concerning interpretations of by-laws and the law between members e.g., a quick conference call with an officer of the Department.
 
2.       The same thing cannot be said about the enforcement of by-laws e.g., as regards parking issues between members and the community association. In theory the present system could take years to enforce a notice to comply. Something similar to a normal parking ticket should do as far as members are concerned.
 
3.       A system has to be found to apply to non members who park on community property since neither the police nor the council have right of entry for this purpose. Some communities might feel inclined to enter into an agreement with council transferring to it the right to levy fines but a careful reading of all provisions (including the Local Government Act) shows this to be unlawful and easily defeated in any prosecution. Perhaps the biggest problem with this approach is that it would render nugatory the civil dispute resolution provisions in the community land management act and criminalise the process. However, since this is an issue some attempt should be made to find a solution.
 
 
Conclusion
 
The number of strata and community schemes in this State run into the thousands, so that, even if a small proportion of the residents living in them have experienced issues of the type and extent mentioned here, they will represent a significant number whose property interests and enjoyment of them are in need of protection.
 

Some Suggestions

1.       There should be a limitation of number of proxies held by one person depending on the number of units.

2.       It should NOT be possible to limit the number of people elected to the Executive Committee to fewer than the upper limit. For example in our block of 24, 9 members are possible. Even through 6 people were nominated at our last AGM a motion was passed saying that the EC should comprise only 5 people thus blocking a new owner. In previous years we have had as few as 3, although others accepted nomination.

3.       In tendering for business the Management firms undercut one another. As a result they are unable to charge enough to properly manage the scheme. They rely on one or two people in the block to do the spadework and these people become too powerful. There should be a minimum cost of management. It seems that it is more economical for the Managing Agent to manage a large block. Therefore, the minimum cost should be set higher for small blocks.

4.       In our block the EC has not physically met for over eighteen months (except to elect the Chairman etc. straight after the AGM.) Decisions are made by postal voting Interchange of opinions is done by email. This excludes the unit holders who are not on the EC from having much idea of what is going on. Email has changed the necessity for the EC to physically meet but their email exchanges should include all owners willing to take part.

Garden Maintenance

My opinion is that tenants need more autonomy in the garden for tasks like weeding, planting shrubs and pruning. Often, the Owners Corporation disregards garden maintenance, as they don’t live here, they don’t really care about the garden. Our block currently has an asthma weed infestation, and little is done to combat the problem.

Furthermore, tenants should be allowed to set up small compost areas which are later turned into vegetable plots. Composting is good and saves on landfill with all kinds of benefits like carbon capture. People growing vegie is good as food prices go up, it is just nice to have some herbs like parsley on hand. Now, many owners’ corporation are reticent to allow tenants to modify garden common areas.

 

sub section

Q1.     Introduce a sub section to deal with the aspect and precise  in protection of Residents/Owners of Strata Title Retirement Villages.
 
Q2.     as above
   
Q3.      as above
  
Q4.      To ensure that the Residents of Retirements Villages have clear and well defined clauses. The purpose should be to protect such Ageing Members of the community and Residents from Operators who undertake measures against such people.

SM Agent Proxies

It appears that a licensed SM Agent can appoint several persons to act for him in various capacities. Such persons need no licence, indeed no relevant qualification at all. My experience in 3 Strata Schemes and 6 SM Agents has been that once the Agency Contract has been signed then an unqualified person is appointed by the Licensed SMA to “look after” the Strata Plan. This may be generally suitable for day to day routine matters. However it is not suitable for Annual General Meetings or for EGM’s particularly where serious questions may have to be dealt with.

At our last AGM the appointed person quite clearly had little knowledge of the Act and no knowledge of procedure at meetings. He had to ask why a certain resolution, concerning the alienation of Common Property had to be a special resolution.
I believe it is of some importance that if for any reason a licensed SMA is unable to attend AGM’s or EGM’s that he can appoint only a person who has passed as intermediate qualification which includes procedure at meetings and the elements of the provisions of the SM Act and Regulations, including the specimen By-laws.

sinking fund

I am the Chairman of the Body Corporate of Strata Plan 3190.

We have been fortunate to be able to rent a portion of the rooftop to Telstra, Vodaphone and Ausgrid, and currently receive over $80,000 in rentals per annum, increasing annually.
 
Under the current law, all such income must be paid into the sinking fund. As a result, our sinking fund has a balance currently at around $180,000, which is more than we would need to spend in years. At the same time, owners are having to contribute around $60,000 per annum to the Administration fund to pay for the annual running costs of the property.
 
We have, in the past, attempted to have a resolution passed at our annual general meeting for a portion of the sinking fund monies to be passed back to owners. As the law stands now, this requires a unanimous vote. However, we have been stymied by one ‘rogue’ owner who votes against the resolution.
 
My request is for an amendment to allow for such a resolution to be passed by a simple majority vote, which is what the requirement is for approval by owners at the annual general meeting of the annual administration and sinking fund levies proposed by the executive committee.
 
I frankly don’t understand why the process should not be uniform.

Levies

In the ACT and NSW there are 4 Stake Holders, namely:

--Owner Occupiers (mostly aging retirees like me who MUST pay ever increasing levis on the due date with no write offs whatsoever to tax.)
--Absentee Owner Investors (can write off to their tax all levies, repairs, maintenance etc. thus gathering wealth). Grossly inequitable.
--Renters (they don’t care as long as their rent does not increase.)
--Commercial Real Estate Agents who are Strata Managers( do as little as possible—are only there to venerate large profits. My Strata Title Manager Goodsell Real Estate clearly stated on their Notice of Levies Due “late payment- if payment not made by the due date interest will be charged at an annual rate of 10%" whereas there is NO financial penalty if they (RE agent managers) ignore Owner Occupier requests for repairs/maintenance etc. be done. They are very selective in what they choose to do. Inequitable. I am 80 next year single live alone in my own unit with a high home loan a Centrelink Aged Pensioner with increasing medical/dental etc. costs who is finding it very difficult to live a reasonable life, and pay the Strata Title Levy So it is hoped the Review will carefully consider my comments with the view to allowing me to write off my levy/repairs/maintenance etc. as the Owner of Unit 1 right next door who is MAKING money. It is grossly inequitable, and NOT the Aussie way.

Tenants Abuse

I would like to raise objections to my money (Sinking Fund) being spent on my repairs caused by wear and damage caused by numerous tenants abuse of the RENTED villa in my complex of 3, this villa changes tenants about every 6 months.

Parking

As an owner of Th38 since 31-8-2001, I believe all Owners Tenants and Residents should be required by Law to sign the necessary document sating that they have received all the By-laws prior to purchase or renting in a Strata Complex.

Having read the same and fully understanding the By-laws that they will abide by all the By-laws applying to the Strata Complex and will ensure their visitors will do the same.
If By-laws are ignored by Owners, Tenants, and Residents they should be fined by the Executive Committee of the Owners Corporation of the complex in which they live and all fines should remain with Executive Committee.
The main problem in our complex of 107 Townhouses is, parking along the street in front of Townhouses, blocking the footpath or roadway which is not very wide compared to a normal street width, also using the garages as storage areas for furniture, instead of parking cars.
Some of the Owners, Tenants, and Residents have Company Vehicles which they park in the Visitor Car Parking Spaces instead of parking outside the Strata Complex.

Preventing Children Falling from Residential Buildings

In 2008, The Children’s Hospital at Westmead (CHW) identified falls by children from residential buildings as an increasing cause of injury, often associated with serious and fatal outcomes. Further to this, the number of injuries with a high Injury Severity Score1 was also a factor in identifying the significance of the issue.

As a result, the CHW brought together a number of key people and organisations and established the “Working Party for the Prevention of Children Falling from Residential Buildings’. The Working Party identified several key issues and made a number of recommendations to address the problem. Two of these recommendation are detailed below, however the full report is available at http://kidshealth.chw.edu.au/sites/kidshealth.chw.edu.au/files/attachments/758/outcomes_report.pdf
 
 
Recommendation 1;
The Children's Hospital at Westmead, Working Party for the Prevention of Children Falling from Residential Buildings would like the Residential Tenancies Act 2010 to be amended to require landlords to provide, in addition to security locks which are currently required to be provided, safety devices (window guards, durable and sturdy mesh screens, locks, window opening limiters) or other permanently affixed devices on openable windows located above the ground floor (i.e. window sills more than 3 metres above an external surface below) to allow occupants to limit openings to a maximum of 100mm.
 
While the law does not generally regulate the behaviour of owner-occupiers in relation to on-going maintenance and safety in their own homes, where justified, the law routinely imposes mandatory obligations on landlords and owners corporations as their behaviour has the potential to detrimentally affect others.
 
The Residential Tenancies Act 2010 and/or the Strata Schemes Management Act 1996 could be altered, without any amendment to the Environmental Planning and Assessment Act. This would achieve narrower coverage, leaving out owner-occupied freestanding homes, but would still capture a large proportion of children at risk, as:
apartments present a particular risk as they are obviously higher from the ground and children are more likely to fall on to concrete than softer surfaces such as grass or garden beds; and 70% of children who live in high-rise buildings in Sydney are the children of tenants.1
 
Thus, legislative amendments aimed at strata and tenancies would provide protection to a significant proportion of children likely to be at high risk of a fall of this type. Overseas experience demonstrates that mandatory provisions result in significant decreases in child fatalities. As noted above, in New York, education campaigns produced a 50% reduction in incidents, while legislative change almost doubled that figure to a 96% reduction in hospital admissions.  Amendments to the Residential Tenancies Act 2010 and/or the Strata Schemes Management Act 1996 would also fit with existing legal obligations landlords and owners corporations have to address safety measures in their properties.
 
Sections 70-73 of the Residential Tenancies Act 2010, require premises to have locks or other security devices. Failure to comply could render landlords liable for losses suffered by tenants from burglary.2 A tenant can also be reimbursed for the cost of installing locks themselves if the landlord unreasonably refuses to do so.3 Landlords of single storey dwellings must install locks on every external window and door. Landlords of two-storey premises and apartments are essentially excused from the obligation to install locks on higher windows, on the assumption that they do not present a security risk.
 
If legislation can compel a landlord to protect a tenant’s property, it may be reasonable for it to also compel a landlord to afford protection to a tenant’s child by providing windows that are able to be made safe for children. While second storey or higher windows may not present a risk for intrusion, we know through the CHW accident statistics they present a risk to children’s safety and lives (refer to Figure 8). With increasing numbers of children living in apartments most of whom are children of tenants, windows present an increasing risk. Section 66(2) of the Residential Tenancies Act 2010 provides that a landlord may not unreasonably withhold consent to a tenant’s written request to install a fixture or make a minor alteration or addition. In the Minister’s Second Reading speech for the Residential Tenancies Bill 2010, she specifically flagged the installation of window locks for children’s safety as a minor change to which a landlord could not reasonably withhold consent.4
 
While this change is welcome, it alone is not sufficient to protect children’s safety. A tenant would still have to obtain a landlord’s written consent to the installation of the lock and consent might be withheld. The tenant would then need to make an application to the Consumer, Trader and Tenancy Tribunal for an order that the consent is being withheld unreasonably. In the meantime, they could install the lock and take the chance that if sued for breach of s66(1), the Tribunal would hold that the landlord had acted unreasonably. This can be a convoluted path for a tenant to take. Further, installing permanently fitted locks or guards on some windows may not necessarily be a “minor” alteration. Drilling through window frames requires tools and if not done properly, can compromise the weatherproofing aspects which may cause damage to internal parts of the building.
 
Even if s66 allows some tenants to install locks or other safety devices, this presupposes they are aware of the risks that the leased premises‟ windows present to children. Children who live in apartments are overwhelmingly young children and the children of recent migrants.5 As new members of the Australian community and/or new parents, tenants may not have been exposed to education campaigns highlighting the risks of unrestricted windows to children. Landlords, on the other hand, as the long-term owners of premises, have a greater opportunity both to be made aware of the risks and to remedy them.6
 
It would seem preferable that responsibility for window safety devices, like other security and safety measures in the fabric of the building, rests with the landlord. There is nothing unreasonable about imposing this additional obligation on landlords which may not rest on all owners, as this is already the case with locks for security. Owner-occupiers can leave their residential properties without locks, landlords cannot.
 
It is therefore considered appropriate that the Residential Tenancies Act 2010 be amended. This could include an amendment to s70(1) to require that:
A landlord must provide and maintain the locks or other security devices necessary to ensure that the residential premises are reasonably secure and that windows located more than 3 metres above a surface below are fitted with safety devices on openable windows to allow occupants to restrict openings to a maximum of 100mm.
 
Recommendation 2:
We also believe that The Strata Schemes Management Act 1996 should be amended to require owners corporations in residential buildings to have all common property openable windows fitted with safety devices (window guards, durable and sturdy mesh screens, locks, window opening limiters) or other permanently affixed devices on windows located above the ground floor (i.e. window sills more than 3 metres above an external surface below) to allow occupants to limit openings to a maximum of 100mm.
In addition, we request that the SSMA be altered to include an express statutory prohibition on by-laws that are unreasonable, oppressive or discriminatory, similar to provisions in other Australian states.  In addition, the protection of devices on common property for the safety of children should be moved from the model by-laws into the main body of the SSMA.  There is no reason for this provision to be optional or alterable.
 
Amendments to the Strata Schemes Management Act 1996 could be considered for three reasons. First, as highlighted above, most strata schemes involve buildings of two or more storeys. Second, the number of children living in apartments in Sydney is steadily increasing. Third, strata schemes have the complicating factor that the windows are invariably common property. As a result, they do not belong to the owners of units, but to the owners corporation.7 As a general rule, individual owners own the “inner core” of their apartment, from the underside of the ceiling, the upper surface of the floor and the inner surface of the external walls. The structural shell of the building, including windows and balconies, is generally common property, owned by everyone.
 
Individual owners are not permitted to damage common property. The standard Residential By-law 5 that applies to most schemes states that an owner “must not mark, paint, drive nails or screws or the like into, or otherwise damage or deface, any structure that forms part of the common property without the approval in writing of the owners corporation”.8 However by-law 5(3)(c) exempts from owners corporation approval any structure or device that prevents harm to children “unless the device is likely to affect the operation of fire safety devices in the lot or to reduce the level of safety in the lots or common property” Any such device must be in keeping with the appearance of the rest of the building. The owner of the lot is then responsible for maintenance of the installation. As a result, it is possible for individual owners (including landlords) to install window safety devices without placing them in breach of strata by-laws.
 
It may however be more logical, efficient and safer to impose the obligation to install safety devices on owners corporations. First, the reason external windows are designated common property in strata plans is to ensure a uniform appearance to a building. If every owner could replace or paint their windows any way they chose, the facade of buildings would look like a patchwork quilt. The installation of different devices (especially grilles) could potentially detrimentally affect the visual appearance of the building facade.
Second, the responsibility to maintain and repair common property is imposed on the owners corporation, not individual owners. This is an absolute 9 statutory obligation under s62 Strata Schemes Management Act 1996 (SSMA) to maintain common property in a “state of good and serviceable repair”. It includes an obligation to ensure common property does not pose a safety risk to occupants or entrants, including children as visitors to a residential property.10
 
Further, under the common law, as “occupier” of common property, an owners corporation owes a duty of care to entrants. If a child fell out of a window, it is arguable, but by no means certain, that an owners corporation could be liable as a result. While common sense might prompt us to think that a parent is responsible for a child’s safety, the law rarely finds parents legally liable for their children’s injuries.11 Courts however have found other people liable for children’s injuries quite often. For example, the South Australian Court of Appeal found a landlord liable for injuries a child suffered when she fell through an insect screen while climbing on a bunk bed that the landlord had positioned next to the window in a holiday apartment.12
 
An owners corporation’s liability for a child’s fall would hinge on the question of whether s62 13 the common law imposes an obligation to install safety devices on windows that are otherwise in a state of repair. Analogous cases are those involving injuries from non-safety glass. An owners corporation would certainly be liable if an entrant injured themselves on broken glass in a door, but is it liable when someone is injured by non-safety glass which can no longer be installed in buildings, but which owners are not required to retrofit? The majority of the Court of Appeal in Ridis v Strata Plan 10308 [2005] NSWCA 246 held that an owners corporation was not liable for failure to retrofit glass. However, in contrast, in Morgan v Owners Strata Plan 13937 [2006] NSWSC 1019 Brereton J held an owners corporation liable for failing to provide a non-slip doormat in accordance with non-mandatory safety standards.14 Brereton J said that ‘In the context of the front entrance of a multi-unit residential building, where the landing was located at the top of a flight of five steps and was known to be exposed to rain, and given the availability of such mats for only $25, reasonable care for persons exiting the building required compliance with the Standard by provision of an external slip-resistant weatherproof doormat, [emphasis original].
 
With increased public awareness of the dangers posed to children by unrestricted window openings, a court could hold that a reasonable owners corporation should address the risk and install safety devices. It could be seen as unreasonable and may possibly be culpable for an owners corporation to fail to take relatively simple precautions to prevent extremely serious injury. Many owners corporations, particularly in well-managed schemes, are already aware of this and are addressing the problem. Unfortunately, it is often the run-down strata schemes, with large numbers of landlord owners, which are often the least well managed and least likely to act in this regard. These are also the schemes in which young children are most likely to live.15
 
In recognition of this danger to children the ABCB has amended provisions for openable windows and balustrades for the NCC 2013. From 2013 all openable windows in Early Childhood Centres and in habitable rooms in residential buildings, where the floor is more than 2m above the external surface below, will be required to be fitted with a screen or have the window opening limited to 125mm.
 
Under s65 Strata Schemes Management Act 1996 an owners corporation has the power to enter individual apartments to carry out work required under the Act and an owner must not hinder or obstruct an owners corporation or its agents in the course of carrying out the work. This is in part because the owners corporation’s obligation to maintain and repair common property under s62 is not discretionary, it is absolute.16 Under s65A, an owners corporation has the power to make additions to common property for the purposes of enhancing or improving it, if approved by a special resolution passed at a meeting of the owners corporation.17
 
It is recommended that the Strata Schemes Management Act 1996 be amended, such as by the insertion of an additional provision s65D. This should require that:
The owners corporation in a residential strata scheme has an obligation to ensure that all common property windows located more than 3 metres above a surface below are fitted with safety devices to allow occupants to restrict openings to a maximum of 100mm.18
 
 
In recent media discussions of children's falls, it emerged that some parents had, at their own expense, purchased netting to render their balconies safe for their children, but were then refused permission to attach the nets to common property balconies by their owners corporation.
 
Many schemes have model by-laws which prohibit lot owners attaching or adding anything to common property without owners corporation permission.  However there is an exception for devices for the safety of children.  Netting would be such a device and thus, if a scheme has model by-laws, lot owners do not need to ask owners corporation permission.
 
However, this begs the question, what if a scheme does not have model by-laws or has changed them? Under the current SSMA it is possible for an owners corporation to create a blanket by-law, requiring owners to ask permission for all additions or a by-law prohibiting any additions to common property altogether.  It should not be the case that private citizens have the power to prevent their neighbours from protecting their children.  While all owners in a strata scheme have a legitimate interest in the building's facade, aesthetics should never be placed above children's lives and safety. 
 
It is recommended that the SSMA be altered to include an express statutory prohibition on by-laws that are unreasonable, oppressive or discriminatory, similar to provisions in other Australian states.  In addition, the protection of devices on common property for the safety of children should be moved from the model by-laws into the main body of the SSMA.  There is no reason for this provision to be optional or alterable.
 
 
1 B Randolph, Children in the Compact City: Fairfield as a suburban case study, (2006), City Futures, Sydney: 16.
2 Verano & Crofts v Alibrandi (Tenancy) [2006] NSWCTTT 232 (3 April 2006)
3 Evans, Joanne (Tennant) v Power, Marion (Landlord) [1998] NSWRT 108 (1 June 1998).
4 Virginia Judge, NSW Minister for Fair Trading and Minister for the Arts, second reading speech, 10 June 2010.
5 B Randolph, Children in the Compact City: Fairfield as a suburban case study, (2006), City Futures, Sydney.
6 The South Australian Court of Appeal used this reasoning in refusing a cross-claim against a parent by a landlord who had been found liable for injuries suffered by a child who fell out the window of a short-term holiday rental apartment: Towart v Alder (1989) 52 SASR 373. The Court reasoned that as the person familiar with the premises, the landlord should not have placed bunk beds next to the window.
7 Owners corporation is the NSW term for body corporate. It is the body made up of all strata lot owners: s11 SSMA. On registration of a strata scheme, the common property becomes the property of the owners corporation: s18 Strata Schemes (Freehold Development) Act 1973.
8 Strata Schemes Management Regulation 2010, Schedule 2, cl 5.
9 “The obligation under subsections (1) and (2) of s.62 is not merely to exercise reasonable skill and care with a view to achieving the requirements of those subsections: the obligation is absolute”: per Hodgson JA in Ridis v Strata Plan 10308 [2005] NSWCA 246 at [5].
10 For example, it is possible for an owners corporation to decide to not to replace or repair common property, but not if this would compromise the safety of the building: s62(3) SSMA. See Ridis v Strata Plan 10308 [2005] NSWCA 246 and Morgan v Owners Strata Plan 13937 [2006] NSWSC 1019.
11 Hahn v Conley [1971] HCA 56; (1971) 126 CLR 276.
12 Towart v Alder (1989) 52 SASR 373.
13 Courts have long held that the obligation under s62 can require the owners corporation to make additions to common property if this is necessary to keep the common property in a state of repair: Proprietors Strata Plan No. 6522 v Furney [1976] 1 NSWLR 412; Lin & Anor v The Owners - Strata Plan No. 50276 [2004] NSWSC 88
14 AS/NZS 3661.2:1994 Slip resistance of pedestrian surfaces - Guide to the reduction of slip hazards.
15 B Randolph, Children in the Compact City: Fairfield as a suburban case study, (2006), City Futures, Sydney documents the connection between high levels of socio-economic disadvantage, poorly maintained rented strata housing stock and disproportionately high numbers of children.
16 The Strata Schemes Management Act 1996 applies to all strata schemes, many of which are commercial.
17 Although additions to common property for maintenance and repair under s62 do not necessarily require compliance with s65A: Stolfa v Hempton [2010] NSWCA 218.
18 Landlords of premises in strata schemes would effectively have their obligation under an amended s70(1) Residential Tenancies Act 2010 to install window limiting devices discharged by the owners corporation of which they are a member.
The question of whether an owners corporation would be liable under the common law could ideally be avoided by imposing a direct legislative obligation on owners corporations in residential strata schemes31 to install safety devices.
 
 
(Submission from Candace Douglass, The Children’s Hospital at Westmead, on behalf of the CHW Working Party for the Prevention of Children Falling from Residential Buildings)

Retirement Village

The following observations and thoughts are those of a resident in a Strata Unit Retirement Village. The operating rights to the Village were sold about 3 years ago to a company with little (or no)experience in operating Strata Villages, but with extensive experience of Leasehold Villages. Consequently, the operator (through the Village Manager) seems to think that the Executive of the Owners Corporation is there for its convenience and to raise levies to provide it with money for it to spend as it sees fit. In many instances the operator (through the manager), takes it upon itself to grant permission to new residents to do things which according to the by-laws are the responsibility of the Executive. When taxed with these occurrences the excuse is “I will take care of it”, (but never does). Unfortunately, the majority of the residents moved into the Village so that they could lead a carefree life and are not interested in the “politics” of running the Village Common Property.

Points to be included in the revised Act for Strata Units in Retirement Villages.
Because this is such a complex issue, I consider it necessary to have a section of the Act which applies exclusively to Retirement Villages, as the points below relate exclusively to Retirement Villages.
1.       Common property and final say of how it is managed is the responsibility of the Owners Corporation and not that of the Operator. With this in mind the Operator must carry out only the wishes of the Owners Corporation, and not follow its own agenda.
2.       It needs to be made clear which will take precedence—the Act of Parliament (
as now being revised), or any Deed of Management with the Operator, which previously exists within any Retirement Village. (This would only come into effect should the Act and Deed of Management be at odds with one another.)
3.       Provision of a Bus---The Strata Act states that the Operator will provide (amongst other things) the services of a bus. Does this mean that the Operator provides the bus itself, or must it be bought by the Strata? The wording of this is ambiguous, and needs to be clarified for Strata Villages.
4.       Budgetary Requirements
a.       The Act needs to be very clear about the provision for unexpected expenditure sought by the Owners Corporation Executive, e.g. Legal Advice. What happens if, or when, such advice is sought and the amount needed is not in the Budget, or that amount in the Budget is not sufficient. (Is a full meeting of the Owners required to increase the amount, or is there a limit which can be reached before such a meeting must be called.)
b.      A list of items which must be included in the Budget and those which should not be included e.g. wages? It must be made clear where the wages for the Village Manager (the representative of the Operator) are listed—Strata or Village Levies. Other grey areas include staff who are employed by the Operator but spend a lot of their time working on common property (e.g. gardener). These employees are also required by the Operator to carry out duties relating to Village requirements, e.g. driving the bus.
c.       There must be no coercion, harassment or any other means used to influence the Owners Corporation Executive to include in the Budget any items which the Operator wants but are not wanted(or needed in the executive’s opinion) by the Executive.
d.      Perhaps a suggestion could be included that the use of the same Accountant for both Strata and Village is not to be encouraged as there is clearly a conflict of interest for that Accountant. (He is clearly working for “2 masters” and it is much easier for the figures to be “massaged” for the desired outcome.)
All the above need to be spelt out in plain English with no ambiguities and not in convoluted legalise which can be interpreted in more than one way. This is the only way in which the rights of residents in Strata Unit Retirement Villages can be protected.
 

Termination of a strata scheme

Termination of a strata scheme should be permitted if 90% of the unit numbers ,or 90% of the Unit entitlement approve of the termination.(if not 90% some other fair figure)The value of the land ,or the ammount payable when the strata scheme is terminated and sold, should be divided by unit entitlement and distributed accordingly to each lot owner.However each lot and its  Unit entitlements should be re valued upon termination sale to account for each lot owners true value at the time of termination of the scheme.

Proxies to be replaced by a Ballot or Voting Papers; Misuse of proxies can occur ,to stop this a voting paper should be sent to each lot owner requesting it be filled out and submitted.Perhaps make it mandatory with those voting recieveing a slight discount off their levies.A simple explanatory note should be provided for every motion to allow owners to make informed decisions if absent. Open ended proxies are an issue issue and this should be changed or limited.


Executive Committees (ECs)/Strata Managers/Disputes

EXECUTIVE COMMITTEES (ECS)

Readers may be interested in the following which involves a strata building comprising over 50 residential lots.
1.             Of the 9 executive committee (EC) members:-
1.1            5 are resident owners;
1.2            2 are non resident owners;
1.3            2 are not owners (“NO1” and “NO2”);
1.4            NO1’s partner operates serviced apartments in the building;
1.5            4 EC members own investment apartments managed by NO1’s partner;
1.6            2 EC members are closely related; one is NO2.
 
2.            NO1’s partner has use, for free, of large common property (CP) rooms, for storage of items used for that business, to the exclusion of owners.
3.            One EC member owns a shop in the building in which his tenant conducts a business which uses, for free, CP to the exclusion of owners.
4.            The EC has refused resident owners use of those CP areas.
5.            Several EC members own lots whose combined unit entitlements (“UEs”) alone substantially outweigh a much larger number of lots but with smaller UEs.
6.            NO1’s partner manages at about one third of the lots in the building as serviced apartments and usually holds proxies for those lots.
7.            Rarely do all members attend ECMs.
8.            At AGMs, EC members nominate and re-elect themselves and, if required,  call a poll to secure election.
9.            The strata manager employs the building’s cleaner who has exclusive free use of CP as his residence.
10. EC meetings are held only at 2pm causing inconvenience for most who may otherwise wish to attend.  
 
 

Strata Laws – One Line Consultation

Shared costs under a Strata Management Statement heavily burdens residential owners in a shared facility where there are two or more lots. Owners are extensively burdened from the time when the Strata Management Statement is registered. Our experience relates to a large scheme which has a residential building with commercial, retail and car park stratums

In fact, our entire experience from the first Annual General Meeting held by the Owners Corporation has involved on-going problems with shared facility costs and approval processes for the inclusion of another large tower to be constructed by the developer under the current SMS that reflects the problems with many features of strata and planning legislation

These problems require amendments to legislation to stop undue influence by developers in placing a huge financial burden on owners of the residential lot following the commencement of the scheme and to stop developers using residential strata buildings to subsidise their continuing expansion of commercial and retail space.

We have set out our experiences and suggestions for legislative change that will assist strata owners better manage their relationships with developers who continue to influence and affect the direction and operation of Owners Corporations.

What are the main areas of the existing strata and community scheme laws you would like to see changed

1.    Coneyancing lawyers have inadequate knowledge of mixed development schemes

Experience has shown that converyancing lawyers fail to disclose to purchasers what their financial obligations are when they purchase apartments in a mixed scheme where there are other commercial buildings, retail shopping centres, car parks, sporting complexes, day care centres, medical centres and the like.

The apartment owners are told that they will need to pay levies for the maintenance of the residential apartments. That is as much as the public know when they buy into a mixed scheme.

It is not what the conveyance lawyers tell these purchasers but what they don’t tell them. Little do these owners know that throughout the life of ownership of these apartments they will be subsidizing developers for the upkeep of other parts of the scheme, as well.

Purchasers are ambiguous about the difference between levies and contributions. This ambiguity must be clearly clarified to the extent that the purchaser fully understands. Contributions are added to Levies to improvise for the wider scheme called the “Shared Facility”.

What governs the Shared Facility is the “Strata Management Statement” which is included in the Sales Deed”. The Strata Management Statement is like a Constitution for the Building which has been written and registered with the knowledge of Legislation where the Purchasers suffer. The Purchaser must know that the developer owns other buildings outside of their Residential Strata Scheme where they will be required to pay “contributions” for the entire Shared Facility. So these purchasers are not just paying for their owns strata scheme, the residential apartments they may have just purchased, but subsidising the developer who built their residential apartments, for all the other stratums the developer owns viz. the commercial buildings, retail shopping centres, car parks, sporting complexes, day care centres, medical centres, whichever other facility that is integrated into the scheme as part of a shared facility.

The Conveyance Lawyers must be able to clearly and concisely explain the powers of the Developer in the wider scheme called the shared facility. The purchaser must be told if the developer has the power to increase the contributions from the residential owners to the extent of what the developer needs are and the owners have no say whatsoever and the owners have no say in the contributions the developer levies. Inadvertently the purchaser may be paying for the entire scheme called the Shared Facility in which the purchaser has no standing or rights for the life of the investment in their greatest asset. 

What needs to happen in legislation is purchasers must be well informed or legislation must change to contain the developer which is recommended.

If the latter were not to happen there must be detailed education for the purchaser to familiarize themselves about that particular scheme. How will this happen? 

·         Before any Deposit is taken from the Purchaser by the Real Estate Agents, the Agents must educate Purchasers about the burden they are likely to face when they buy into a Shared Facility 

·         The Conveyance Lawyer must explain the Requisition on Title to the Purchaser 

·         Their must be a break down of levies and contributions in such Requisition of Titles and in s109 certificates 

·         The Vendors Lawyers should be barred from practicing Law if they conceal the truth 

·         The Purchasers Lawyer must demonstrate a “duty of care” to its client. They must obtain a certificate from the Council to state that there a prospective development being considered by the Council or any other assessment body and what impact on amenities such future developments will have. 

·         Council staff should face severe penalties and investigated by ICAC if they conceal facts about impending development. 

·         There should be Government sponsored TV advertising, every quarter, where owners can learn about such unconscionable schemes 

·         There must be training offered by Agents, Coneyancing Lawyers and Local Government to Purchasers in Strata Schemes where there is a Shared Facility  

2.    Developers must not commit future owners to long-term contracts 

Developers are presently able to enter into contracts for the provision of services, such as building management and concierge services, cleaning and security, before an owners corporation is properly constituted. 

Future strata owners are locked into agreements they were unable to review, negotiate, amend, approve or reject. These agreements can commit strata owners to paying above market rates for services, bind them to long fixed terms and restrict their rights to approve transfer of agreements or subcontracting. Sometimes these agreements are made with an entity associated with the developer and/or the developer receives payments for arranging them. (We are presently involved in proceedings in relation to agreements entered into by the developer for precisely these reasons.) 

The current legislation does not address adequately this problem. Existing prohibitions on developers entering into contracts with third parties during the initial period simply do not go far enough.  The NSW Supreme Court has decided that the current laws do not mean the agreement itself is illegal and the third party service provider cannot be paid: merely that the developer has to indemnify the strata owners if they over paying or otherwise detrimentally affected. The legislation does not stop dishonest third parties from suing if the strata owners end their agreements when they discover the relationship with the developer and the fact the agreement provides for payments that are above market value. 

The legislation should prohibit developers from entering into any long term agreements, and provide that full disclosure of any relationship should be mandatory before strata owners ratify any agreement. Failure to disclose relevant facts or the discovery of any benefits to the developer should result in the agreement being void ab initio, disentitling the contractor from suing and allowing for damages claims by strata owners. These remedies should be available alongside the existing rights in section 113 of the Strata Schemes Management Act 1996. 

3.    Developers restricting owners' voting rights and appropriating funds under Strata Management Statements 

We have also been involved in an ongoing and expensive dispute regarding the shared facility costs under the SMS and their allocation between the separate components of the Shared Facility - the residential, commercial, retail and car park strata.  The developer drafted and registered the SMS without any input from the strata owners. But the residential strata owners are thereafter bound by the voting and funding provisions of the SMS. 

In our scheme within this Shared Facility, the SMS provides for the affairs to be controlled by a Building Management Committee (BMC), with each of the four members entitled to one vote on the BMC. The residential strata vote is controlled by the strata owners and the other three votes are controlled by the developer. In other words, the strata owners are outvoted 3-1 on any and every issue in dispute with the developer at the BMC.

The absurdity of this arrangement is best illustrated by the car park stratum, which has no residents or other parties to represent, has significantly lower overheads and yet has the same voting rights as the residential stratum which represents 241 lots (including families, individual residents and investors). In addition to the problem that this arrangement is imposed upon strata  owners before the owners corporation even comes into existence, the SMS and the provisions about shared facility costs cannot be changed without the agreement of all BMC members - which will never occur given the developer’s ability to outvote the strata owners on any matter which does not benefit the developer. 

This causes significant unfairness and hardship as the residential strata owners are subsidising up to 65% of the developer operating, repair, maintenance and replacement costs in other parts of the building and even more. 

The expenses allocation to the Residential Owners have failed to comply with the distribution schedules in the Strata Management Statement (SMS)

The developer has asserted, and continues to assert that it is entitled to calculate shared costs on the basis of floor space, rather than proportionate use.  Additionally, the developer argues that there is no capacity under any Act, Regulation or in the SMS to review prior shared facility costs and/or for the strata owners to be compensated if there was over-payment on their part. The developer has continued to assert, in the face of notices of dispute, meetings and requests for a review of the shared facilities and shared facility costs, that it is not required to do anything about prior costs and that there is nothing the Owners can do about shared costs, either past, present or future, as the legislation and the SMS contain no remedy. This is an untenable situation.

Whilst we disagree with the developer as to there being no remedy, we have to go outside the Strata Schemes (Freehold Development) Act 1973 and argue that the Contracts Review Act applies to an SMS. The NSW Supreme Court has made some decisions about SMS but, to date, has refused to give any real remedies under this legislation. 

So strata owners are stuck, particularly where they have no voting power with only 1 of 4 votes on the BMC and can do nothing to change the shared facility costs.

Additionally, the developer has not provided proper budgets for the BMC or justified any increase in BMC levies for the last 6 years. Accounts have not been kept and the developer continues to increase the strata owners share of and level of BMC levies. (The developer is now in litigation with the strata owners over other matters and we believe the increases in BMC levies are an attempt by the developer to drain the strata owners of funds so that they cannot litigate properly). 

So, there is no protection against – oppression of the minority in BMCs or in SMS matter, or undue influence by developers or majority owners in the BMC, or unfair contract terms in the SMA.

Additionally the strata legislation does not gives the Consumer Trader & Tenancy Tribunal jurisdiction to deal with disputes about the BMC, the SMS or shared facilities and shared facility costs.

Adjudication is the only method allowed under the Strata Management Statement.(SMS). The adjudicators’ decision is final. So, while expensive Supreme Court proceedings against developers with deep pockets are not an option available at the moment to residential lot owners, legislators need to seriously consider this change in legislation and now.

Regulations allowing owners to engage in proceedings must be retrospective and limitations must apply from the time the owners caught of sight of unfair and unjust practices adopted by Developers, their Building Managers, their Strata Managers and the Builders 

Specific prohibitions need to be contained in the legislation, and strata owners need a right to ratify any SMS and a right to have their views expressed and considered about what should be in the SMS.

Further, there needs to be prohibitions on the developer controlling the financial interests of residential strata owners within the legislation. In our case, the developer controls all the insurance policies for the building and for protection for office holders of the owners corporation which is outside its commercial interest and is being used to thwart office holders making complaints about developer conduct. To date, the developer has caused the insurer to increase premiums for office holders to the point where they are prohibitive, leaving office holders open to being sued by the developer and having to pay their own legal costs and for any verdict against them. Office bearers insurance should be compulsory and should not be under the control of the developer. 

4.    Changes to relevant legislation

The areas which require attention and legislative change are as follows.

(a)  Legislative direction as to the standards that are required for budgets and their preparation in strata buildings and in BMCs.

(b)  There needs to be a remedy if there is a refusal to comply with standards and other requirements.  Apart from offences being committed, the developer should be prohibited from collecting levies from residential strata unless there is compliance with proper accounting standards.

(c)  There needs to be a legislative prohibition against oppression of the minority, undue influence, unconscionable conduct and misuse of power by the developer and other majority strata owner groups.

(d)  There needs to be a statutory formula for shared costs to prohibit residential strata subsidising commercial and retail stratum lots.

(e)  There needs to be a legislative prohibition on developers influencing the insurance decisions of the residential strata owners and office bearers insurance should be compulsory and affordable.

(f)   There needs to be legislative prohibitions for misuse of funds should developers fail to prepare appropriate budgets and reports and continue to collect levies without any justification. This should include offences, fines and other penalties which stop a developer from continuing to draw levies from the residential stratum whilst their practices are in contravention of the legislation.

(g)  There needs to be legislation preventing developers from exercising their influence in the running of residential buildings beyond the First AGM. All developer proxy power must cease immediately.

Given the substantial period of time involved in changing legislation, we would be grateful if the Minister could give consideration to making some of the above changes, where possible, by regulation.  

5.    The Development dispute

There are disputes on foot where the developer wants to include a further multi-million dollar commercial and retail development into the BMC and under the provisions of the SMS.

The residential owners have tried to stop this development. A number of the residents bought off the plan and were induced to do so by advertising (of a very persuasive nature) from the developer regarding the maintenance of iconic views of Sydney Harbour, including the Harbour Bridge and Opera House. The prices paid for individual units by owners reflected access to these views. A certain flank of the building paid higher prices that other aspects of the building for reasons of the views

However, since selling the apartments, the developer has had the further adjoining development approved by the Labor Government under the former Part 3A of the Environmental Planning and Assessment Act,, including a hotel which is to be joined by a tunnel from Walker Street North Sydney, the Hotel to be built later as part of a “Staged Development”. None of this was disclosed to any purchaser and, more importantly, the strata owners had no right of participation in the planning consent process as, even though they were the owner of lands affected by the development, and were to be joined in a further SMS which also requires them to meet over 27% of the total costs of shared services of strata owned by the developer, there was no legislative directive allowing the strata owners any real say whatsoever in the process.

The blocking of any of the iconic views will affect the average residential owner’s asset base by about $200,000 if not more. And including two new large developments into the BMC with the strata owners will increase the residential owners levies by hundreds of thousands every year. The developer is arguing that the residential owners who bought into the strata have no right to withhold consent from the developer including these new developments into the BMC and the Strata Management Statement (SMS).

The Strata Schemes (Freehold Development) Act 1973 does not provide any specific remedy or give the strata owners any power to object to new developments being added to the BMC and the SMS. The legislation gives the developer wide powers over the contents of the SMS but few (if any) rights to strata owners over changes. This is a lacuna in the legislation allowing developers to abuse their self created position to have strata owners subsidise their commercial and retail costs.

At this stage, the developer has asked residential strata owners to consent to the addition of the new buildings to the BMC and the SMS, however, we are left with a very limited range of rights in the SMS which the developer drafted to protect itself to argue that we have a right of refusal.

This situation should not have arisen. Residential strata owners should be protected by the various Acts from developers introducing new costs and new charges and strata owners should have a right to refuse changes. The methodology for calculating who is responsible for costs should not be in the hands of a developer who has 3 of the 4 votes at BMC meetings and who will always vote in its own interests.

The Minister needs to exercise power to make fundamental changes to the strata laws to protect strata owners from the oppressive conduct of developers who set up the entire system of shared costs and voting rights to benefit themselves, and which result in strata owners subsidising them and having no capacity to refuse to pay or to have costs reviewed.

Our experience should not be repeated. And. we should not have to spend hundreds of thousands of dollars running Supreme Court proceedings when this government could provide specific statutory remedies over which the Consumer Trader & Tennancy Tribunal has jurisdiction, so access to justice is not denied by prohibitive costs. 

Q1. What are the main areas of the existing strata and community schemes laws you would like to see changed?

Suggestions are raised in this submission which relates to:

a)    Legislation must consider the contractual rights of residential owners, their property rights and their rights in Equity

b)    Training should be introduced and Buyers must be well informed when they into mixed strata schemes with retail, commercial, parking and other lots of the like in a shared facility context

c)    Owners need to have a greater stake in the operation and management  of large strata schemes within a shared facility

d)    The Developer must advise Owners of their desire to further develop the site, when they sell apartments off the plan and at the First Annual Genera l Meeting of the Owners Corporation

e)    There must be no false advertising.

f)     Independent of the Stock of Apartments which remain unsold and which the Developer Retains, the Developer’s Voting Rights within the Owners Corporation must be no more than 20% at the First Annual General Meeting and abolished after the first year.

g)    The Power for an Owners Corporation should not be limited to the operations and management of Common Property. The Act needs to be modified so that the Owners Corporation can protect the rights of individual owners against developers and their future development schemes

h)    Developers Schemes for maintenance of the Shared Facility should not be subsidized by Owners

i)      The Power of the Owners Corporation must be directly proportional to the Financial Contributions they make to the Shared Facility where multiple Lots are owned by Developers

j)      If allocations within a Strata Management Statement are made based on Floor Space Area then so must the Voting Rights of the Owners Corporation

k)    The Strata Management Statement should be open to contestability through Dispute Resolution in the CTTT, the Supreme Courts, the Court of Appeals and in the High Court. The Owners rights must not be thwarted by Developers.

l)      Like Developer Donations to Political Parties, Developer Contributions must be banned.

 

Q2. Can you see any future changes that need to be addressed in legislation? The simple answer is yes.

a)    Changes in Legislation are required to the Real Property Act, Conveyance Act,  the Freehold Development Act 1973 and the Strata Schemes Management Act 1996 and regulations 2007 and 2010 of the Strata Schemes respectively

b)    The Act needs to consider Public, Community and above all the interest of the affected parties, particularly when residential buildings are included within Mixed Use Strata Schemes or Shared Facilities

c)    Legislation needs to consider all “negative covenants” so any council engaged in the writing of past Deeds between parties in commercial interest, must ensure that the negative covenants are registered on title by the office of the Department of Lands.

d)    The Councils must not be able to sell the same floor space over and over again for financial interest allowing Councils to Dip in the proceeds multiple times

e)    Developers Deposit Plans for Shared Facilities must include plans for the sub-division of lots, clearly identifying the stages of development to include bulk, mass scale and size of the development

f)     The Environmental Planning Act, the LEP and the DCP should not be amended to increase the Bulk Height, Scale and Mass of those Lots to allow Developers to benefit from the subsequent sale of the Lots by which they burden residential lot owners.

g)    Past Deeds or Agreements with Negative Covenants on the sale and transfer of Land and Strata Development Contracts must be submitted to the Land Titles Office for all staged development of Shared Facilities, whether current buildings exist on those adjacent lots or not.

h)    Initial Sub-Division Plans should be submitted to the Land Titles Office before the commencement of Residential Development and finalized when the building is complete

i)      Voting on the acceptance of the Strata Management Statement must occur at the First Annual General Meeting of Owners

j)      The legislation should prohibit developers from entering into any long term agreements with the Building Managers of the both the Strata and the Shared Facilities, and that the provision of full disclosure of any relationship should be mandatory before residential strata owners ratify any agreement. These remedies should be available alongside the existing rights in section 113 of the Strata Schemes Management Act 1996

k)    Legislative direction as to the standards that are required for budgets and their preparation in strata buildings and in BMCs.

l)      There needs to be a remedy if there is a refusal to comply with standards and other requirements.  Apart from offences being committed, the developer should be prohibited from collecting levies from residential strata unless there is compliance with proper accounting standards.

m)  There needs to be a legislative prohibition against oppression of the minority, undue influence, unconscionable conduct and misuse of power by the developer and other majority strata owner groups.

n)    There needs to be a statutory formula for shared costs to prohibit residential strata subsidising commercial and retail stratum lots.

o)    There needs to be a legislative prohibition on developers influencing the insurance decisions of the residential strata owners and office bearers insurance should be compulsory and affordable.

p)    There needs to be legislative prohibitions for misuse of funds should developers fail to prepare appropriate budgets and reports and continue to collect levies without any justification. This should include offences, fines and other penalties which stop a developer from continuing to draw levies from the residential stratum whilst their practices are in contravention of the legislation.

q)    There needs to be legislation preventing developers from exercising their influence in the running of residential buildings beyond the First AGM. All developer proxy power must cease immediately.

r)     The Common Property of a Strata Scheme has a net value in the price which is reciprocal to the net loss incurred by every residential lot owner. When the value of a lot owners residential lots fall so does the value of common property. Wider powers need to be included into S111 of the Strata Schemes Management Act 1996 which should be expanded to include rights of owners corporation beyond the management of Common Property and to include matters with respect to loss of amenity

s)    The Voting Powers of Owners Corporation within a Shared Facility Strata should be directly proportional to the amount of the money they contribute to the Shared Facility

t)     Where possible the Plant Machinery and Equipment within the separate entities (lots) within a Shared Facility should be separated as far as possible. When New Buildings are integrated into a shared facility by way of inclusion of a new residential building, the Owners are burdened by paying for Plant Machinery and Equipment in Buildings which have adage equipment adjoining the Residential Building for which they have no use and pay the Developer large sums of money to subsidise the running of buildings within the developer owned lots

u)    The power to amend By-Laws should be given to the Residential Owners and not the Developer.  

How could the management of Strata and Community Schemes be improved

a)    We encourage the Government to introduce regulations to protect owners in the near term

b)    Legislation must ensure that Developers and Strata Managers do not engage in activity which burdens owners.

c)    Legislation must ensure that the Institute of Strata Titles Management is run by an independent body then the Directors of Strata Management Agencies as they are conflicted through their relationships with the Developers, Property Councils and Urban Task Force Groups. They place undue burden on owners of residential lots

d)    Legislation must ensure that Lawyers make a full disclosure as per their obligations under a statute when dealing with owners corporations that they are not associated with Developers, Strata Managers and the Building Managers

e)    Legislation must ensure that Building Managers make a full disclosure as per their obligations under a statute  when dealing with owners corporations that they are not associated with Developers and their Strata Managers

f)     Powers of Developers within a Scheme should bar them from allowing them to delegate authority to their Strata Managers from the time of the inaugural meeting to use Common Seals on any application, certificate or document being submitted to the Land Titles Office, the Council

Are there any changes needed to the way disputes in strata and communities are resolved

Retrospective Compensation should be allowed by Law where there has been coercive activity, misrepresentation, undue influence to the extent that financial records have not been provided to the residential owners and when it is determined that the owners have been excessively paying contributions for the past years.  

The simple answer is that the CTTT must be given major powers where a Tribunal can appreciate all the vast financial assessments provided by Forensic Experts, the technical reports provided by Quantity Surveyors and Services Experts, Planning Experts, Structural and other Engineers and Consultants Reports, Reports from Valuers, Social Impacts Reports, submissions made by Lawyers and Legal Counsels, where such expert advice and reports can be clearly understood to reach a decision. The decision of the Tribunal should be like any minor court. Owners should have the right to take the matter to a Supreme Court, the Court of Appeals and the High Court. Developers should not burden owners by limiting their rights to the decisions brought down by adjudicators and tribunals where they say in the SMS that the adjudicator’s decision is final. This si a mandatory change request and should be considered retrospectively.

Where this matter is too complex for the Tribunal, the Owners should be able to exercise their rights to take these matters to a Supreme Court.

 

 

 

 

Expenditure, Public Safety, Monopoly,

Government requirements necessitating unexpected capital expenditure from a sinking fund by the body corporate.

Such a requirement e.g. instalation of smoke alarms in common property areas being a recent example, is within the ambit of the Act. But it is submitted that such a change, justified as reform, should provide for in legislation, first, time for the physical work to be done and, secondly, time for the securing of finance for the necessary work, without disruption to the operation of the sinking fund on an unmanageable scale. This is not a clause in the Act.

The second of these effects is an unintended consequence of reform. This technically is a case of sovereign risk. Owner’s cost will generally rise with changing policy enhancing safety.  That a sinking fund cannot be devised on the basis of providing for changes in government policy is the basis argument. The remedy is legislation requiring that extra time be allowed for the body corporate to find the finance. For example, time equal to that allowed for physical completion could be allowed. This would reduce for owners the unanticipated burden of financing work, by creating a grace period in  which special levies, raised sinking fund fees or borrowing could take place..

As a corollary, in the event of any tribunal hearing, it should be mandatory for an adjudicator to take into account the financial consequences of “reform” on a sinking fund, if an owner alleges that the common property has not been maintained.

Public Safety

Some, but not all, works conducted by a strata body may cause injury and/or damage to a third party. An example known to me is the case of a chipping machine flinging a wood chip approximately 40 m across a road, striking then, at first floor level, a window, and penetrating successively, fly screen, window glass, and curtain. This event occurred when the owner was absent.

If the body corporate has employed a contractor required to be licensed in NSW, then the body corporate should be obliged to disclose all relevant information to the third party.

This not now the case. The effect is to prohibit the third party reporting the licensed contractor to the appropriate licensing authority. Hence suitability and competence of the contactor (or his worker) in terms of health and safety, cannot be examined, after the receipt of a complaint made by the third party.

Lack of information rules out third party action. A claim for damages against the body corporate by means of bringing a civil case is made virtually impossible by lack of information if the body corporate or its agent decline to provide that information.  The same holds for injury. The latter is the most important, as contents insurance may cover the damage, subject to any excess in the policy.

Hence the submission is made that a body corporate be required to make public to a third party information as to who was responsible for injury and/or injury, enabling a complaint to be made to a relevant licensing authority.

Monopoly

The current Act is neutral in regard to the issue of the whether managerial fees are set competitively or otherwise. 

Can this neutrality continue? Specifically, could and should the Act intervene if it could be shown the pricing of managerial services differed from a competitive outcome.  The relevance of this is current choice of owners to strata title tenure may decline in future if owners switch to non-strata tenure forms. This would be disconcerting to the current government policy off increasing urban population densities. Also that would be injurious to housing ownership and rental affordability.

The analytical issue here is whether or not the concentration of ownership of strata title management  (STM) firms is rising.  To untangle all the issues affecting the cost of providing managerial services could be difficult. How profits arise and accrue to STM is complex, may border on the fringe of legality, but in the end may also reduce fees to a second order of magnitude.

Nevertheless, the background feeling of some is that the take-over of STM firms by others has been occurring. If the prices paid have been too high then the recovery of the excess paid may trigger increasing fees and /or lower service standards for body corporates. For example, how many body corporates can a single employee manage?

Is it too sensational to speak of a degree of market power emerging? The topic of monopoly profit would be the bluntest way of putting this concern. Alternatively we can note fear of the possibility that business men will seek reductions in competition to profit themselves dates from the earliest writers on economics.

To conclude, the review of the Act under way may gain from a study of industry concentration. Establishing what % of the industry is controlled by the top firms, and also the % of overseas ownership, would interest most. This study might extend to an index of service fees over time in order to complement the concentration ratios.

Only with this knowledge might fears on the ownership of strata tile management firms becoming less competitive be able to enter into forging a better Act

 

Open forum, strata and community association legislation

1.        Our problems with the tribunal are well documented over the last seven years since [edited by moderator] an owner of a one bedroom unit, set out to deliberately sabotage the contractual rights of this company in an attempt to cause malicious financial hardship by removal of capital gains by-laws entitlements for income in the community management statement and leaving this company liable for all of the obligations with no compensating income.


2.        As the attached letters indicate we were severely prejudiced by incompetent determinations by [edited by moderator]causing the community association (CMS) to be compulsory managed from the 14.01.2008.

 

3.        On 07.01.2008 the same applicant [edited by moderator]) submitted an application to have by-laws 1.8 and 38 of the CMS revoked by manipulating the compulsory appointment of Strata Professionals to act for the community association notwithstanding they were not privy to the contractual agreements in 1998 that caused the community title in conjunction with the strata title to be registered in June 2000.

 

4.        [edited by moderator] was not a party or privy to the contractual arrangements as he did not purchase a unit until early 2003 and immediately set about finding a way to destroy this company’s rights and interests with no other reason but extreme malice which was facilitated by [edited by moderator] who indulged his opinions without any basis as to fact.

 

5.        [edited by moderator] revoked the by-laws without any consideration of the evidence relating to the CMS which was primarily caused by allowing [edited by moderator]to represent the community association which effectively meant it was undefended and the by-laws were dismissed on face value without any consideration for the contractual arrangements by this company. Worse still, this company was not even nominated as an interested party on the evidence that I provided which was ignored by [edited by moderator].

 

6.        This company was forced to appeal to the District Court by application 12.11.2008 which was eventually heard on 23.02.2010 by [edited by moderator]who set aside the decision by [edited by moderator]ll on 14.10.2008 and ordered a rehearing by the tribunal. The District Court judgement was 41 pages and the judge referred to numerous errors at law before setting aside the determination by [edited by moderator]. It should be noted that the most fundamental error was that [edited by moderator]ignored the evidence from this company of the contractual basis behind the formation of the CMS as well as ignoring the fact that by-law 1.1 of the CMS confirms the status of a retirement village including the fact that the judge declared the CMS was a statutory contract.

 

7.        The rehearing did not occur until June & September 2011 in which [edited by moderator]comprehensively dismissed the original application by [edited by moderator] 07.01.2008. [edited by moderator] upheld the judgement by [edited by moderator]19.03.2010 causing a major contradiction with the determination by [edited by moderator]14.10.2008 which there was no basis to make.

 

8.        In relation to (7) above I made numerous urgent representations to the Minister for Fair Trading for intervention by the chairperson of the tribunal and was repeatedly told that the current procedures could not be changed leaving the rehearing to occur 19 months after the District Court judgement which only served to compound our losses and the stigma caused within the broader community because of the continuing litigation which caused catastrophic falls in the value of existing units in the strata plan causing a knock on effect where further development by this company remains unviable.  The fact is that new units sold nine years ago in the strata plan between $200K to $220K have resold in the last year for as little as $151K directly as a result of the incompetent determination by tribunal [edited by moderator]14.10.2008.

 

9.        The effect of all the above has also caused this company to spend more than $60K on legal costs and approximately $360K of representatives of this company’s time apart from an estimated collapse in value of the development land of a minimum of $4M with the direct responsibility attaching to [edited by moderator] and the tribunal causing more financial hardship for recovery. The Minister for Fair Trading has been placed on notice of our potential claim.

 

10.    Immediately after the decision by [edited by moderator]improperly prevailed on Strata Professionals to remove the by-laws revoked by [edited by moderator] notwithstanding they were aware of our appeal filed in November 2008, the effect being to exacerbate damages.

 

11.    In relation to (10) above the removal of the by-laws from the CMS caused units to be sold without paying any capital gain fees to this company causing financial hardship and consequently an extreme fall in market value of strata units compounding the problem by continuing litigation to protect our rights under the CMS. All of these factors created a stigma with prospective purchasers wanting to purchase property in the strata plan which clearly defines it as a retirement village under by-law 1.1 of the CMS. Obviously anyone wanting to retire was not interested an ongoing war and litigation caused by Mr Rannard contrary to the purpose of a retirement village.

 

12.    As a result of the above we have had to reinstate the by-laws, enter into litigation to recover capital gains fees avoided during the time the CMS was unlawfully amended and commence legal action against Mr Rannard, Strata Professionals and the strata plan for damages they caused.

 

13.    In addition to (12) above this company had an obligation to complete the community centre at an estimated cost exceeding $1M prior to further development of 213 units approved on lots exclusively owned by this company. The community centre is almost complete, unfortunately further development of units is now financially unviable as the values are approximately $100K below comparative units in the local area with construction costs about the value of units recently sold in the strata with no allowance for the recovery for the value of land or development profit.

 

14.    In relation to the above this company is now left in a worse position with continuing obligations under the CMS and no opportunity of making any profit by the indulgence of tribunal members [edited by moderator] and to a lesser degree [edited by moderator] who indulged [edited by moderator] applications contrary to fact in December 2008 and early 2009 allowing the compulsory appointment of [edited by moderator] to continue on the basis of false evidence by both [edited by moderator], all members demonstrated utter contempt for this company’s rights and interests under the CMS.

 

15.    In relation to (14) I was personally served with a false AVO by [edited by moderator] in 2008 which was comprehensively dismissed by the Taree Local Court 25.08.2008. The motives by [edited by moderator]was to cause me as much stress as possible and compromise my appearance at the hearing where he had the CTTT organise security for his protection. The member seemed to be influenced by [edited by moderator] false claims to indulge his vexatious application. The additional security demanded by [edited by moderator] had no basis whatsoever causing the tribunal’s costs to escalate and painted him as a victim and myself as bully to gain sympathy from tribunal members. 

 

16.    On several occasions subpoenas were served on [edited by moderator]to produce documents that were important evidence in relation to the vexatious application by [edited by moderator]. In every instance [edited by moderator] refused to comply to produce records using pathetic excuses without any reasonable basis to do so. Ultimately several tribunal members admitted the tribunal has never punished anyone for not complying notwithstanding severe penalties apply. The end result was that [edited by moderator]was encouraged to demonstrate utter contempt of his legal obligation of appliance. 

 

17.    My observations of the appalling conduct by the CTTT has been caused by the tribunal being a law until itself primarily making decisions without any care or concern as to the facts on the basis that the tribunal conducts hearings with a minimum of formality by disregarding proper rules of evidence that would apply in the District Court and Supreme Court jurisdictions.

 

In relation to the questions 1 to 4 of your invitation and given the evidence and the circumstances caused by the tribunal we strenuously recommend urgent changes to the status quo under which the tribunal operates as follows. (Your question numbers are indexed at the bottom of each suggestion.)

 

a)        It is clear there needs to be a higher degree of accountability by the tribunal and its members with flexibility to revise complaints that, for whatever reason, become complex and exceed the competence of the tribunal members who are in effect hearing matters that should be referred to a higher jurisdiction – I instance the fact on 15.05.2008 I made submissions to Member Balding that Mr Rannard’s application should be referred to the Supreme Court in which proper rules of evidence would have applied, causing Mr Rannard be liable for security of costs, if [edited by moderator] had listened to what I said [edited by moderator] application would have failed with no recourse as to a rehearing by the tribunal, minimising the enormous financial damage caused to this company and unwarranted costs of the neverending hearings by the tribunal. (Questions 1, 2, 3)

 

b)        In support of (a) above there should be changes to the Act where someone like [edited by moderator]cannot rely on sections 80 & 81 of the CMLA to take out an application to change by-laws in a community association without it being incumbent upon the applicant to be aware of the all of the facts creating the CMS which is exactly what occurred – a severe penalty should apply to anyone making a vexatious application without any care or concern of the facts on the basis it is incumbent on the applicant to be fully aware of the facts, which were public record, and obviously did not apply to the application of [edited by moderator]. (Questions 1, 2, 3, 4)

c)       [edited by moderator] applications werre nothing more than an opportunist manipulation the  Act by paying a pensioner concessional fee causing catastrophic costs to this company and the tribunal on the basis that he had everything to gain and little to lose ultimately leaving this company with an enormous problem of recovering costs apart from the destruction of the financial viability of completing further development of 213 units under the current DA consent – [edited by moderator] application also caused huge unwarranted costs to the tribunal primarily because he ignored the public records and contractual agreements notwithstanding it was incumbent on him to be certain of the facts as opposed to his self serving, incorrect statements. (Questions 1, 2, 3, 4)

 d)       In relation to (a) to (c) above there needs to be a clear distinction in the CLMA to avoid a repetition of the absolute abuse of the Act by anyone with severe penalties applying for abuse in the future. (Questions 1, 2, 3, 4)

e)        In relation to (a) to (d) above we accept the tribunal has a role to protect applicants in the community however it is obvious there needs to be a limit of the jurisdiction of the tribunal by excluding itself from matters that are or become legally complex with a facility so that the tribunal can terminate its involvement with a recommendation that the parties are referred to a higher jurisdiction with appropriate levels of expertise and protection from vexatious applications as clearly is the case involving [edited by moderator] The facts are we made an application to [edited by moderator] on 15.05.2008 and in her written determination she dismissed the application to transfer the matter to the Supreme Court which was the appropriate jurisdiction at that time. The tribunal is accountable for the failure of [edited by moderator] to mitigate the enormous consequences by her refusal to act competently which is precisely why the CMLA needs to be changed urgently. (Questions 1, 2, 3, 4)

f)         In relation to (e) above there needs be a stricter and more effective disincentive for anyone making a vexatious application with appropriate financial penalties to protect any respondent who is affected by such applications, it should be accepted that an applicant may have minimal assets and have little to lose by making an application that can cause huge costs and financial ruin to a respondent and this is an argument why the tribunal should refer the applicant to a different jurisdiction such as the District or Supreme Court by a preliminary review either at the outset or during the process of the application when the complexity of the application becomes such that it is beyond the normal competence of the tribunal members to resolve. (Questions 1, 2, 3, 4)

 

g)        Whilst we accept tribunal members require a degree of independence there must be checks and balances put into place within the Act to ensure the tribunal and its members are properly accountable and held liable for gross negligence by financial and disciplinary penalties as occurred with members Bordon, Paull and Balding otherwise the problems I have experienced will never end. (Questions 1, 2, 3, 4)

h)        Referring to item (16) above the tribunal needs to change the act in relation to the compliance of subpoenas with severe financial penalties applying against anyone who does not reasonably comply to overcome the perception the tribunal is, in effect, a toothless tiger. (Questions 1, 2, 3, 4)

i)          The tribunal members consistently unreasonably indulged [edited by moderator] applications without any security for costs by the respondents, contrary to what would apply in a higher jurisdiction encouraging what proved to be a consistency of wildly speculative, vexatious / ill conceived applications that required enormous expense and time to refute without any penalty against the applicant. The Acts need to be changed to financially penalise any applicant who makes seriously / maliciously false applications. (Questions 1, 2, 3, 4)

j)          Stricter compliance needs to be enforced by the tribunal in relation to underperforming / dysfunctional management of strata and community associations as the instances we have referred to were encouraged by [edited by moderator] who acted on behalf of both associations by their unreasonable / biased indulgence towards [edited by moderator] by their  utter contempt of the rights and obligations of this company as the majority lot owner in the community association and a lot in the strata plan. If appropriate accountability was in place the enormous financial damage to this company would have been mitigated. Severe financial penalties and loss of licence needs to be imposed as a disincentive for this situation to occur again. (Questions 1, 2, 3, 4)

Submission from Regis Towers SP56443

1. Short history

Regis Towers is the largest strata plan in Australia consisting of 653 lots of mixed residential, commercial, retail and serviced apartments. It has been beset with financial irregularities and administration problems since its inception. Some of these problems include:

1)      The appointment of an administrator.

2)      Over three million dollars paid to one contractor for work, which is suspicious

3)      Constant litigation including High Court, Supreme Court and CTTT hearings.

4)      Neglect of building maintenance.

5)      Regular special levies

6)      An Executive Committee, which at times was either ineffective or made decisions that were in no way in the owners’ interest.

7)      The previous Executive Committee did not conclude any meeting for a period of nine months.

8)      The previous Executive Committee did not have a treasurer. The consequence of this was there was no control of spending and by mid-2011, it was demonstrably dysfunctional.  That executive committee consisted of the main proxy holders who elected themselves and limited the number of committee members to the 5 in order to maintain control of the EC meetings.

This is a sample of the continuous difficulties experienced by the strata. It should be noted that the Executive Committees have been controlled by proxies held by real estate agents, some of whom were associated with the developer, people associated with the strata manager and other non lot-owners.    

2. Why SP56443 has had so many difficulties

Three reasons are immediately apparent.

Firstly, Regis Towers represents the outcomes from a development which was not fully assessed before planning permission was granted. It is apparent that for a residential, commercial, retail and serviced apartments scheme to function as well as possible there needs to be a common purpose amongst the lot owners. However, the interests of lot owners from residential, commercial, retail and serviced apartments are different and are often in conflict. This could have been avoided by having separate strata plans inside the complex. This has been achieved at a similar development, World Square.

The second but more important than the first is proxy-farming. This practise has become common in large strata schemes. Persons who wish to gain owners votes to use in the election of committee members and make important decisions at owner’s meetings. It is often difficult to discern the authenticity of the proxies.

The fact that only some 10% of lot-owners attend owners’ meetings allows proxy holders to control these very large stratas.

4. How can Regis Towers and other strata plans achieve good management?

The difficulty lies in the present Strata Schemes Management Act and in planning permission.

It is clear that a decade of problems have at their root, the attraction to interested parties of controlling over $4,000,000 annual levies. This can be addressed in these ways:

1)      Individual proxies be done away with. A strata schemes authority be set up as a proxy nominee. Where lot-owners cannot vote, they can lodge their votes through the authority, which informs the owners meeting of the outcome. Meeting agendas are submitted to the authority. What about banning proxies altogether.  Any member wishing to vote on any matter on the agenda at a general meeting (apart from electing the EC) who cannot attend can send their vote in to the secretary prior to the meeting [as with absentee voting in government elections).  If any new matter arises at the meeting, they don’t get to vote. 

2)      Proxies may not be used to elect the executive committee. It should be elected on a show-of-hands, as is the case in Queensland.

3)      A ban on the soliciting of proxies or proxy-outcomes.

4)      Managing agents may not hold proxies as these would now reside with the authority.

It is apparent that disputes are liable to occur between owners who rent beds and apartments by the night and resident owners and owners of commercial suites. By having these in separate stratas many of the present conflicts will cease. 

Further, by having smaller budgets, it would make control of these finances less attractive. 

 

The Owners Corporation of Regis Towers believes that the forgoing will assist in dealing with the problems of very large strata schemes. We request The Minister to give consideration to our submission to allow the present most unsatisfactory situation to be resolved.

Replies to questions

Q1. What are the main areas of the existing strata and community scheme laws you would like to see changed

The end to proxy-harvesting and multi-proxy holders dominating strata plans. Large stratas be in different strata plans for different groups.

Q2. Can you see any future issues that need to be addressed in the legislation?

That planning bodies realise the difficulties of large stratas having competing owners for resources. Each community should have its own strata plan.

Q3. How could the management of strata and community schemes be improved?

By creating an authority to hold proxies and to inspect the finances of strata schemes. This would add to the cost and hence increase levies I think

Q4. Are there any changes needed to the way disputes in strata and community schemes are resolved?

Regis Towers has expended large sums defending maters bought before the CTTT. Many of these have no substance and are continually originated by the same people. Where these claims are vexatious and frivolous, it should be easier for the owners’ corporation to recover costs.

The warranty period for the developer should be ten years. Problems arising from sub-standard works do not become apparent in the first years. An example of this is the use of sub-standard copper water pipes which are now breaking down after 8/9 years.    

EXECUTIVE COMMITTEES/STRATA MANAGERS

As some, if not many,  ECs are, or can be, the source of the problems and dissatisfaction in strata complexes, nominees for election to ECs should be required to

provide in writing at least 7 days before the EC election/AGM etc details of:-

1.         their name;

2.         their capacity (proprietor, resident or non resident proprietor, other);

3.         who nominated them and their relationship if any;

4.         if seeking re-election:-

4.1   how many years they have served on the EC;

4.2        the number of times EC meetings were held in the preceding 12 months: and

4.3        the number of times they were absent;

5.         any qualifications they may have which they consider to be beneficial for an EC;

6.         why they seek election to the EC;

7.         why they should be selected for the EC;

8.         any matters they would address, improve or initiate in the interests of the Owners Corporation;

9.     if seeking re-election, any matter(s) or decision(s) they may have personally initiated in the interests of, or for the benefit of, their Owners Corporation; 

10.       any direct or indirect financial interest in the building, or any potential conflicts of interest; and

11.       any other relevant matter in support.

EC members and strata managers who can be shown to have, or have had, conflicts of interest should be removed or barred from their role.

A simpler, clearer, more

A simpler, clearer, more transparent process to facilitate the assessment of excessive legal costs for owners, OCs and ECs.

They are all currently vulnerable to overcharging/overservicing abuses by lawyers, lawyers relying on the ignorance of strata owners, OC and EC about the whole legal costs challenging/assessment process.  Some lawyers are taking advantage of the high level of hostility within litigating strata schemes, which are unable to unite against a common enemy - the legal advisers engaged to advise and assist - but are charging maybe 4-5 times a reasonable amount.

Some lawyers are NOT explaining to the clients they are supposed to be acting for exactly what they are proposing to do, failing to comply with s.309 LPA 2004 and ss.80D and 230A SSMA 1996.

Some lawyers are acting without proper OC instructions/without Special Resolutions, etc.

Commercial - Dammed If you, Do Dammed if you don't

For six commercial units, the body corporate has spent over a half a million dollars since 2005 and the matter still not resolved.

We have been to the Land & Environment Court, Land & Environment Court for Contempt. CTTT, and Supreme Court to appeal the CTTT decision.

History

From the time our complex opened we were plagued with illegal activity from the car industry, drugs were a part of that activity.  We made headlines throughout the state with the issues; even the Immigration department became involved.  **This has been at an enormous cost to the body corporate and the community when you add the cost of Council, Police, Courts, Work cover, Tenants relocating, unable to lease units nor sell, Job loss due to businesses relocating, Loss of business, Assaults, Insurance for vandalism, health, Superannuation, Employee’s not declared. 

To make it clear to all, the Body Corporate Never approved a Development Application for the Smash Repair Industry meaning Spray Painting and panel beating.  We never received a DA until CTTT. The building is unsuitable for this industry.  There are reports on the subject commissioned by Government Departments.

Why did this happen:

1.     Since the opening of the complex Council who are the EPA regulators had received complaints regarding tenants spraying painting carcinogenic paints and working on the common property, obstruction to common property and parking etc.  impacting on other lot owners (**causing the above).  Council culture, Unbeknown to the body corporation, calls for a Development Application to be lodged, from the very people who they received complaints against and approves the DA.  These tenants, either or both, were not registered as a businesses, nor had qualifications in the trade, and no leases in place.  The owner was being pursued through the courts for failing to pay his strata fees from time of purchase.  It had taken seven years before we received the money.

2.     Nine years ago the body corporate found the tenant from a unit had cut a hole 9 x 5 metres in the floor of a unit (common property).  Council was notified by Strata Management for the purpose to stop further destruction.  Council inspected the premises.  Unbeknown to the Body Corporate Council called for a Development Application to be lodged and approved the DA.  Third time this has happened to us.  The beginning of Solicitors.  Council was forced to revoke the DA, because they did not have the approval from the Body Corporate, later they changed their mind and reinstated the DA.  As you all know common property is the responsibility of Body Corporate, we had no idea of the damage to the unit, though later it was confirmed by Councils own engineer ‘declared the floor to be unsafe’.  Courts: Land and Environment Court we were successful, The owner had to reinstate the common property to original state.  CTTT. Owner lodged at the CTTT for approval of a new DA.  The body corporate lodge their argument.    CTTT refused to listen to the B/C’s argument.  The Member comments were ‘I do not have time to listen to the B/C’s argument because I am going on holidays, therefore I will book a September hearing to hear your case.  In the meantime I order the B/C to put their seal on the DA and Council can sought out the complaints’!!!!!!!!! After the hearing the B/C became aware The Member who heard our case attended the Land and Environment Court hearing.  When discovered the member made a very quick exit.  It has to be questioned “Was CTTT in collusion with the council”?  Originally there were to be three members to listen to our case, apparently the others could not make it!!!!!!!!!.   The B/C appealed the CTTT decision in the Supreme Court, we were successful.   The matter is still on going.  Why do you ask?

3.     We believe the CTTT was put in place to relieve the Courts of an overload.   Also for the costs to be kept to a minimal.  This is not the case.  It has been a very expensive and unfair exercise. 

4.     Laws:  

a)    The Body Corporate should have the power to evict a tenant.

·    If a tenant continues to violate the Strata Law.

·    If a tenant is found guilty of assault on B/C members and their tenants.

·    Destruction of common property

·    Illegal Activity

b)    Development Applications:

·    Councils should not be allowed to accept a Development Application unless it has the approval of the Body Corporate. 

·    Owners should not be allowed to lodge a DA if they are not financial

·    Body Corporate should have the power to cancel Development Applications if a tenant and owner is in breach of Strata and By-Laws.

·    Development Application should only refer to the Business for a maximum of three years.  After the three year period the owner is to apply for an extension of the DA. To the B/C and B/C to notify the Council.

·    If there is change of ownership of the business a new DA is to be lodged

·    Development Applications must show Business Registration,

·    Development Applications must show a Work Cover Licence No. if business employs

·    Businesses must notify Strata of changes to DA eg employees.

·    Councils must cancel the Development Application if they council receives notification from the Body Corporate of Development Applications being cancelled by the B/C.

To this day, Council is informing the public the Development Application the Land and Environment Court declared invalid is valid.  The floor has not been reinstated.  We are seeking answers.

 

Strata schemes management

# All EC members should disclose in the agenda of the AGM all monies; gifts; work contracts etc received from the OC throughout the year. I believe that Committee members of Clubs are made to disclose this. I have never seen any indication of this ever in strata schemes. Everything is hidden under, eg electrical repairs; plumbing; doors; etc.

# In one instance recently an EC members was given the contract worth $144000 to replace doors and locks on 90 Common property doors. This was done at an EGM but it was not stated that the person was a member of the EC and the owners were not given details of any insurance (if any) held by the contractor. A licensed locksmith was not used either.

# In the same ST scheme, another EC member was given priority to do all repairs on common property. He has license as a tiler, wall and floor but nothing else. He was able to contract out the work but his name never appeared on financial statements.

# All cheques paid out from OC funds should  have identification as to whom the cheque was paid to and in what unit or area.

I think that there should be the highest possible investigation into Executive committee and strata manager who do nothing to protect the interests of all owners but allow corrupt behaviour and thereby cement their contract with no fear of the EC seeking to replace them.

Thanks you for holding this investigation and I hope that real improvements are made to help weed out the rot.It might be a good idea also to limit EC members to those who have been an owner for at least 12 months. In the case above, 3 of the present 5 EC members south to be on the EC “five minutes” after becoming owners. They succeeded and gave themselves preferential treatment. Complain, as I did, and you do not get repairs done to common property inside your unit; your tenants are harassed and leave, etc, etc.  

Parking

My submission is mainly in regard to the allocation of Common Property for exclusive parking use through a change in By-laws.

My daughter owns a unit in a block of twelve which was built in the late sixties. At the time the development included four garages, which I assume was in line with the council requirements for car parking provision at the time. About the mid-seventies a by-law was passed whereby another six car spaces were allocated on common property to six units. As the space was not available two of the units missed out on an allocated car space in the drawing up of the by-law.

In the intervening years car ownership has multiplied, and with adjacent streets having restricted or no parking this state of affairs means that my daughter and one other of the owners in the block have their equal rights to the use of common property diminished in a very inequitable way.

If one wanted to change the by-law to make it more equitable for all the eight people who do not have a car space on title there is little chance that the six already benefiting from the arrangement would want to do so. There should be some remedy where the self-interest of the majority should not be allowed to defeat the common property rights of a minority. I hope you can address such a situation in your review of the legislation.

My second submission is in regard to the allocation of Strata Managers by developers/builders.

In the initial period when new owners are settling in there is a suspicion that a conflict of interest exists on the part of the Strata Manager between his loyalty to the builder who appointed him and his duty to the owners who pay his fees. From personal experience I can say that our Strata Manager erred on the side of the builder by procrastinating in dealing with initial defects for which the Owners Corporation had to then bear the cost. Advice in relation to landscaping defects was that this could be dealt with at any time before a seven year period. This was shown to be incorrect. General advice in relation to the issue of defects was that we should wait until a sufficient time had elapsed for a number of defects to become apparent and deal with these at one time. This was also flawed as the builder could then claim that we had not informed him of problems promptly.

When units in new blocks of  have been finally sold off by the builder there should be a mandatory process whereby the management contract is reviewed annually by the new owners and the terms and conditions and ancillary costs of the management contract clearly laid out. Strata Managers should not be in a position to continue their management contract from year to year by stealth without the issue being discussed at the AGM.

I look forward to the inclusion of safeguards for the Owners Corporation where a conflict of interest on the part of their Strata Manager might exist.