There’s a minefield for new owners in Strataland that no one will warn you about – and the powers that be will do little or nothing to help you when you get caught out.
It starts at the first AGM when new owners are presented with contracts needed to run the building in its first few months. The developer can put anyone in any position they want, but only up to that first meeting when the owners get to choose – they’re going to be paying for these services, after all – and any contract or deal that isn’t approved then is invalid.
Unfortunately, at that first meeting, we are often too bamboozled by bulldust and bombarded with conflicting information to know what we are agreeing to and, as a result, often very bad and costly decisions are made.
What kind of contracts are we talking about? It could be for a residential building manager who may have paid millions of dollars to the developer (NB: not the owners) to get the rights to look after your building for the next 10 years.
Residential managers can be a good thing in some buildings, but not if the contracts have no performance guarantees, reasonable exit clauses or limit on their fees.
And it’s not just residential managers. Contracts for external building managers, strata managers, cleaning services, security and maintenance all need to be scrutinised before the first AGM. Does that happen? Rarely, if ever, and as a result new strata owners risk being ripped off with high fees and poor service – with no legal way out.
The Consumer, Trader and Tenancy Tribunal is supposed to protect uninformed, innocent people from the more craven abuses but it will almost always uphold the contract regardless of how dodgy it clearly is.
Common sense dictates there should be a two-year limit on initial contracts – then everyone could make informed choices and service providers could prove their worth. That’s not going to happen any time soon.
A group of new owners could share the cost of a lawyer to go through all the contracts before the initial AGM, but who’s going to bring them together? Until then, you are very much on your own.