Podcast: Are we heading back to the bad old days?

We are in a state of shock here at Flat Chat, wondering if, when David Chandler and Victor Dominello both go, and with dodgy developers already circling the bleeding carcass of Fair Trading like vultures, are we going to be back to the bad old days of seriously defective apartment blocks being the norm?

We had no idea when we recorded this podcast that Victor Dominello was about to announce his resignation.

NSW Fair Trading is obviously spying on us. We reached this conclusion after weeks of recording the podcast only to find out that, as soon as it was in the can, yet another high-profile departure would be announced.

But we were pretty sure that this week we had it covered. A trip to Canberra for the writers festival, plus the resumption of my teaching gig, meant we didn’t get this podcast done and dusted until Tuesday morning. No last minute resignations – hurrah!

Then, on Wednesday, Sue stepped on a plane for South Africa, rendering her uncontactable and therefore unrecordable for 18 hours.  Minutes later, the news dropped that former, and currently caretaker Fair Trading Minister Victor Dominello is pulling the plug on his political career.

It’s due to health reasons and very sad; you can read about it here. He was an innovator and hard worker and one of the best Fair Trading ministers this state has ever had

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LISTEN HERE

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However, we still found a lot to discuss about the latest Fair Trading and NSW cabinet schemozzles on this week’s podcast and Sue took a punt on who the latest cabinet minister to walk the plank would be. And no, it wasn’t Victor.

Also, we look at another collapsing (or maybe not) building in Sydney’s inner west and Sue becomes strataguru for a day when I fire your questions from the Forum at her.

While you consider that, I’m off to get my office swept for Fair Trading bugs. I’m not really worried – they’ll probably stop working as soon as the warranty runs out.  

TRANSCRIPT IN FULL

Jimmy  00:00

David Chandler is going, John Minns has gone. Eleni Petinos has gone, Stuart Ayres is gone; who’s next?

Sue  00:07

Yes! Maybe, Dominic Perrottet?

Jimmy  00:10

Well, we’ll see. We’ll be talking about that and other much more interesting (and less important things), from the forum, later on. I’m Jimmy Thomson, I write the Flat Chat column for the Australian Financial Review.

Sue  00:22

And I’m Sue Williams and I write about property for Domain.

Jimmy  00:25

And this is the Flat Chat Wrap.

[MUSIC]

Jimmy

So, you think Dominic Perrottet is in danger of losing his job?

Sue  00:45

Well, all these things are happening under his reign, aren’t they, really? And I mean, obviously, he wasn’t… Well, we don’t know, but we must assume that he probably wasn’t a part of it, because the origins of all these scandals started a long time ago. But, he was obviously a power broker within the party.

Jimmy  01:00

Well, you know, they say that it’s not the crime that gets you, it’s the cover-up.  I’m not suggesting for a moment, that any crime has occurred.

Sue  01:08

Of course not. Or, any cover-up!

Jimmy  01:13

Perrottet sacked Petinos, within a day of coming back from an overseas trip, on the (I was going to say pretext), grounds that she had been bullying (or she had been accused of bullying), in her office. And this was kind of backed-up by quite a lot of turnover of staff.

Sue  01:38

But then he denied it was anything to do with David Chandler, didn’t he?

Jimmy  01:42

He did. And then we saw David Chandler’s letter, where he detailed; well it sort of suggested that pressure had been brought to bear by first of all, Petinos and then John Barilaro, who has got his own set of scandals to deal with. And then in that letter, David Chandler said his position was untenable.

Sue  02:08

It was a pretty explosive letter, wasn’t it, really?

Jimmy  02:10

Yes and he said ‘this is not negotiable.’ He said ‘I’m leaving, it’s not negotiable.’ They’ve obviously negotiated a later date, for his departure.

Sue  02:20

Presumably, when someone says it’s not negotiable, that’s under the present reign and with Elino Petinos gone, you’d kind of think suddenly, it becomes negotiable again, perhaps.

Jimmy  02:31

People keep asking me, do you think he’ll come back?

Sue  02:35

Do you think you’ll come back?

Jimmy  02:36

I think he could have, until that letter was published.

Sue  02:40

Well, because John Barilaro is gone and Eleni Petinos is gone, I think it’s quite possible that he could be brought back, because really, he was a great ambassador for the New South Wales government. They were actually doing an awful lot and I think he became this really popular figure. If they did bring him back, I think it would be a bit of a coup for them, really. It would be a plus amongst all these many minuses and they probably don’t want to wait until the next election; if a Labor government gets in and brings him back, that’s an even more kind of triumphant move, really, so they could try and get in earlier.

Jimmy  03:18

I guess the Premier has left himself a bit of wriggle room, in that he said ‘well, I didn’t sack her because of his letter, anyway. I sacked her because of another explosive report about sexual harassment and bullying in Parliament House.’ Quick to judgement, you think; you know, somebody shows him the report… Somebody says ‘one of your ministers has been guilty of this,’ and he goes right, on your way.

Sue  03:43

That’s a good thing. I mean, he wants to look strong, and he wants to look powerful and he wants to look as if he won’t brook any suggestion of sexual impropriety, or bullying or treating people badly. So I think that was probably quite a good move for him. I mean, we haven’t seen the evidence on which he sacked Pertinos. To sack her, rather than persuade her to resign; that’s a pretty big move.

Jimmy  04:08

Yes. And then over on the other side, we’ve got the punch-up between Matt Kean and David Elliot. My money’s on Matt Kean. He’s a really smart guy. David Elliot must be; why he has chosen to go for the jugular in that way… What was the phrase he used; ‘sending a boy to do a man’s job?’

Sue  04:33

Yes. It’s not good for the party, is it, either?

Jimmy  04:37

Doesn’t look great. I mean, I think that’s the worst thing for Perrottet at the moment; he looks like his party is totally out of control.

Sue  04:44

It’s kind of disintegrating, really. You kind of think, you know, is there an option for him to call a snap election?

Jimmy  04:50

I don’t think they can.

Sue  04:52

I think maybe, it will bring Gladys back. They haven’t had the full report on Gladys yet though, have they?

Jimmy  04:57

They probably were hoping to keep the lid on that, until after the election. But I think in New South Wales, there are set election terms. They could only have an early election if the opposition agreed and the whole of parliament voted.

Sue  05:15

But it’s interesting; Minns, the opposition leader in New South Wales…

Jimmy  05:19

Chris, not John.

Sue  05:19

Yes. He seems to be coming out of this quite well, doesn’t he?  I mean, I hadn’t really seen him much before, but he’s been appearing regularly now, and he speaks with real authority. He’s very clear and decisive and I must say, I’m quite impressed by him.

Jimmy  05:36

It’s funny though; we were watching TV and it came up with the name thing ‘Chris Minns, leader of the….’ We went “oh, that’s what he looks like!”

Sue  05:44

Yes. I wasn’t aware of him at all before.

Jimmy  05:48

You’re right. So, let’s assume that David Chandler leaves in November, the end of November… Are we going to be back to square one with defects?

Sue  05:59

Oh, let’s hope not. But those extreme powers that he was given, they still belong to the office and he does have a deputy, who he’s been kind of mentoring, in lots of ways. I mean, the deputy is a lot less high -profile, a lot less experience, so he might not have the same authority that David has always commanded. But you know, the powers are still there, so maybe, they will still be used. I don’t think we can get back to the situation before.

Jimmy  06:27

I don’t know, when you look at Chandler’s letter… Politicians being pressured by developers into interceding. That’s what it’s all been about in the past. I think there’s a suggestion with David Chandler, that the politicians are thinking ‘we will never let anyone else become more powerful than us,’ because that’s what happened with him. He was going in and doing basically what he’d been asked to do, which was to kick ass and take names and he was so effective, that he was becoming a political force in his own right.

Sue  07:08

Yes. He didn’t see the danger coming from the right flank, really.

Jimmy  07:11

I think he did, because we wrote about this and said that we could see him pulling back a bit and saying ‘it’s not me, it’s my team; it’s not me, it’s my office.’ But I think the damage had been done in that respect. The politicians are going ‘you are more popular than us; we have to do something about that.’

Sue  07:31

And that’s the media, really. I mean, we tend to kind of go for personalities, rather than offices, obviously. Because that’s what we want to hear about. We want to hear about colourful David Chandler, we don’t want to hear about the bureaucracy, really. And so we kind of tend to personify politics a lot and that was obviously to his detriment.

Jimmy  07:51

Yes, I think so. When we come back, we’re going to talk about another ‘allegedly’ crumbling building in Sydney. That’s after this.

[MUSIC]

Jimmy

So, there’s another building we heard last week, that is; well, some people say it’s in danger of falling down and the developer say it isn’t.

Sue  08:16

And I think they’ve got competing claims from different engineers, haven’t they, saying different things?

Jimmy  08:20

Yes. So the Vicinity building, which has been in the news before.

Sue  08:25

In Canterbury I think, in southwest Sydney.

Jimmy  08:28

It was in the news before, because their structural engineer that they’d hired because of defects, came in and said; I think there’d been an earthquake somewhere in Australia, and this guy said ‘oh, if there was an earthquake here, this whole building would fall down.’

Sue  08:47

Oh, my God!

Jimmy  08:48

And so there was fears that they would be in a Mascot Tower situation, with everybody being thrown out of the building and people not wanting to stay in the building, in case it was dangerous. But then there wasn’t an earthquake, and it didn’t fall down, but now they’ve got these giant lifting machines… They’re big giant props, that look like the size of a commercial fridge, almost, and they are pushing up the building in a couple of points, which the engineers say; they talk about ‘load transfer…’ If you look at the structure of the building, basically, it sits on pillars, but it’s not a case of all the load going on to where the pillars are. It’s designed in a way that the load is spread across, almost like a bridge.

Sue  09:44

So is it a temporary solution, or is it a permanent solution?

Jimmy  09:46

Well, it looks like a temporary solution, but I mean, what are they going to do? Are they going to build more pillars in their car park? You know, that’s up to the engineer, but the developers came along and x -rayed the foundations and whatever, and came back and said ‘look, there’s no problem here; this is an overreaction.’ Who do you believe?

Sue  10:10

It’s very hard, isn’t it?

Jimmy  10:11

I mean, you’re an owner in a building like that; you’ve got the engineers saying ‘this building is in danger,’ and you’ve got the developer saying, ‘no, it’s not; it’s fine.’ Who would you put your money on?

Sue  10:23

I think always the engineer, wouldn’t you really? But then, if you’ve got your engineer and they’ve got their engineer, I guess then you have to go to another engineer. It’s like having two watches; you never know what the right time is.

Jimmy  10:37

Ah, the old saying. I think the the owners corporation is basically going to say ‘we’ve got our engineer in, and we got them in for a reason.’ Presumably, they’ve got somebody who’s highly reputable, who is going to say what they believe is true. Whereas, the developers, are they going to be slightly biased? Are they going to say to the engineer; rather than saying to them ‘discover if there’s any faults here,’ are they going to say ‘discover this, if there’s a way that we can’t be held liable for any faults?’

Sue  11:11

It’s hard, because I don’t know if it’s going to go to court. It could well end up in court…

Jimmy  11:15

I’d put money on it.

Sue  11:16

And then the court will end up deciding I guess, so they’ll get in a number of engineers to present their reports.

Jimmy  11:22

Happy days for engineers.

Sue  11:25

And at the same time, I don’t think we’ve mentioned before about Mascot Towers having settled. It’s kind of good that they’ve reached a settlement, which is confidential, but we don’t believe that the settlement is a particularly generous one to the owners, I don’t think. I think that’s been a really sad, sorry saga, which has now reached a conclusion, but a very sad conclusion for those owners.

Jimmy  11:50

As we said last week, if you’re going to buy do a buyback for houses that were wiped out in the flood, why are you not doing one for houses that fell down? People bought them in good faith, believing they would be protected by the law and discovering thqt no such thing happens.

Sue  12:09

Absolutely.

Jimmy  12:11

When we come back, I am going to be putting Sue Williams on the spot. She’s going to be strata guru of the week, and we’re going to have a look at some questions that came up in the forum (and she’s now looking at me in horror).

Sue  12:24

I am!

Jimmy  12:27

That’s after this.

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Jimmy

Alright Sue, we’ve had a few questions on the forum and you’ve been around strata schemes for a while. I’d be interested to hear your opinion, on these questions that were raised.

Sue  13:17

Is this where I give an opinion and you immediately shoot me down?

Jimmy  13:21

Of course not! But that was just shooting you down. Question number one, somebody’s been putting pot plants on the wall of their balcony and at least one of them has fallen down, onto a pathway below. The person who owns the pot plants, denies that that was their pot plant. The owners corporation want to get the person to take the pot plants down and the person who owns the pot plants is saying ‘you can’t make me.’ What does the owners corporation do?

Sue  13:56

Well, they first look into seeing whether the balcony is common property, or whether it’s private property. If it’s common property, they can easily order that the plants be taken down. And you know, in this situation, of course it’s nice to have pot plants there, but really, inside the balcony, it’s very easy to buy one of those little structures and you can put your pot plants on the top of that structure, which is just behind the balcony railing.

Jimmy  14:21

So it’s not going to tumble; they’re not going to topple off.

Sue  14:24

 The plants will kind of grow up and grow down and sort of trail nicely over the balcony, so it will create a similar kind of effect, but it won’t be any danger to people below, because it could kill somebody.

Jimmy  14:35

Well, I mean, last year I think it was; earlier this year, there was some really high winds in Sydney and there was a man killed by a flying gas canister. I don’t know what the circumstances of that were, but you know, obviously the gas canister was sitting on the balcony, and the wind just picked it up.

Sue  14:57

It was presumably empty, because otherwise a full gas canister would be quite heavy. But you know, lots of people that have an empty gas canister, put it on the balcony to create a bit more room and think ‘I’ll go and get that filled later on,’ and wouldn’t actually see anything like that happen. If the balcony was private property, I think the owners corporation could still make a very strong case, that it was a danger to other residents and other people outside.

Jimmy  15:24

Would they have to pass a bylaw?

Sue  15:25

I think they would then. If it is private property, they would have to pass a bylaw.

Jimmy  15:30

If it’s common property (which we think it is), they can say ‘that’s common property; you cannot leave those things there.’

Sue  15:36

In my opinion.

Jimmy  15:37

Yes, in your opinion.

Sue  15:39

That’s right, they wouldn’t need to make a bylaw. And now, you can tell me whether that’s right or not, Jimmy.

Jimmy  15:43

I think you’re right. That’s what I’ve said in the forum, in my response and pointing out that we seem to be living in times when there are a lot of extreme winds. Anybody who puts pot plants on their balcony; on the wall, on the top of the wall on their balcony, is nuts. It’s a nice thing to do, but you know, when plants start flying around in high winds… Question number two… Somebody’s written that she lives overseas and she rents out her apartment here and the whole building has just had fire safety checks. You know, where they come around and they spray the smoke alarms.

Sue  16:30

To check that they’re working.

Jimmy  16:31

So the whole buildings’ had that and everything’s passed muster. But now, her real estate agent has said ‘you have to have a separate fire safety check for your apartment.’

Sue  16:42

Why?

Jimmy  16:44

They’re saying (and it’s true), in the Residential Tenancies Act, you’ve got to have a certain number of smoke alarms. They’re saying ‘well, the whole building thing, doesn’t cover that and by the way, here’s the name of the fire safety inspector that we will be employing to go to your apartment and check that the smoke alarms are there and working.’ Are you a bit suspicious?

Sue  17:09

I don’t know. Quite a lot of money. Some of it you can assume, is going to end up in the rental agents’ pocket. Absolutely. Because I mean, how much is it going to cost to get a fire inspector into that apartment? Presumably, I don’t know; $400 at least? And so if the buildings’ fire person has gone and checked all the fire alarms and checked they’re all working (so we know they’re all working)…We just don’t know if there are enough. The real estate agent, when he goes in for his six-monthly inspection, or quarterly inspection, should be able to just look at the ceiling and say ‘oh, you’ve got four, or you’ve got five, or you’ve got six,’ and they will be able to judge whether there are enough.

Jimmy  17:51

And they know that they work.

Sue  17:52

 They do, because they’ve already been checked.

Jimmy  17:58

I think this rental agent is ‘on the fiddle.’ A bit overzealous.

Sue  18:05

Maybe so, yes. Maybe they’re inexperienced, or they don’t know better. I mean, I think it’s wrong to attribute to malice, what could be just ignorance.

Jimmy  18:22

It reminds me of the the people who’d get statutory managers on the building, and the tradies, who are friends with their statutory managers who say ‘it’s like a licence to print money,’ because the statutory manager can just organise any work that they feel needs to be done.

Sue  18:41

That’s right and the owners have absolutely no say.

Jimmy  18:43

And they can choose the tradies. So I wonder if this rental agent has lined up a few places for his fire safety inspector, who doesn’t actually need to go in there (we think).

Sue  18:57

Yes. I think there’s a much cheaper option to that.

Jimmy  19:00

And finally…

Sue  19:03

This is quite good, being a strata guru!

Jimmy  19:07

Finally, there’s a question that has come up… There’s a building that has a lot of money in its sinking fund, in its maintenance fund, but they’re short of cash in their admin fund and the strata manager has recommended they raise a special one-off levy, to fill up the admin -fund coffers.

Sue  19:33

Wow, that’s a bit odd. Can they not just transfer money from one fund to the other?

Jimmy  19:39

Well, the law says that the maintenance fund can lend money to the admin fund.

Sue  19:48

Oh, well why don’t they just do that?

Jimmy  19:49

 And the Act says that the owners corporation must make arrangements within three months, to repay the money.

Sue  19:59

Okay, well when are levies due?

Jimmy  20:02

 Every year.

Sue  20:04

 Every quarter. So therefore, you could lend money from one account to the other and repay it within a quarter, with the next lot of levies.

Jimmy  20:14

And then pay it back. And then lend it again, if need be, or lend a slightly smaller amount, or whatever. This strata manager has taken a very hard line on it. He says he’s been to lots of conferences, and it’s been made clear, that the money must be paid back in the three months. Even though the law says arrangements must be made, it doesn’t say the money must be repaid. This strata manager is saying ‘no, I’ve been at conferences where they’ve said, the money has to be repaid in three months.’ I’m going to go out on a limb here, and say I think that’s bullshit.

Sue  20:49

I mean, special levies should only happen in really extreme circumstances, especially when you’ve got a big healthy sinking fund. You know, it’s ridiculous to ask owners then to pay extra, when there’s no real reason.

Jimmy  21:05

I agree. I mean, it’s quite interesting, the debate on the forum, because people are saying ‘look, you don’t want to get the wrong side of the law, because you will get disgruntled owners, who will come along and say ‘ah, you fiddled the money, therefore, we should have a statutory manager employed,’ which I think would be a very extreme outcome. I can’t see that happening in this case. But I think responsibly using your finances, so that; it’s all very well for the strata manager to say ‘oh, we need a special levy, to fill up the funds,’ but not everybody is able, especially these days. You know, people are getting hit by higher mortgages, a higher cost of living and then to just sort of casually say ‘oh, yeah, we’re going to hit you with a special levy,’ when they don’t need to.

Sue  22:00

It just seems administratively, that’s a really simple, clear solution, but with a bit of extra work and effort, it could be avoided. I mean, even if you got out a strata loan for a month, to pay into the administrative fund, so that you’ve got enough cash and then you could repay it with the sinking fund, in a month’s time, or something. You could probably take money out of the sinking fund, to repay a strata loan, couldn’t you?

Jimmy  22:27

Not really. The maintenance funds’ supposed to be used just for maintenance. I think the problem is, in the past, some strata managers have said ‘look, you’ve got the maintenance fund here; we’re going to move the money over and we’ll just keep borrowing. We’ll pay it back and then borrow it again, pay it back and then borrow it again.’ And that has led, in some occasions, to maintenance being required, and no money being in the maintenance fund to do it. Which I think is quite a rare occurrence. So I think, as I say, a bit of creative accounting, and these people would be spared the special levy and special levies are just… Okay, some people can pay, no problem at all; for other people, it’s a real imposte on their…

Sue  23:17

Especially as you say, with people; their budgets are so squeezed at the moment, and people budget for the next year and to suddenly spring an extra bill on them, that there hadn’t been expecting…It’s not fair.

Jimmy  23:28

It’s a good illustration of the kind of range of strata managers that you can get. There are some who are totally by the book, and won’t do anything that they think might be a little bit of stretching the boundaries, but do that out of the best intentions; looking after their buildings. And then you get some, as we know, who just aren’t even aware that there are rules. They make it up as they go along. You don’t want to be dealing with them, either. Alright Sue, well done. You’re strata guru for a week.

Sue  24:03

Excellent. Do I get a badge, or something?

Jimmy  24:05

I was just going to say, we’ll get a badge made for you. We’ll get something you can sew onto your jacket. And you’re off to South Africa?

Sue  24:17

Yes, tomorrow. I’m doing a travel job, so I’ll be going on a few Wildlife Safaris. Such a hard life, isn’t it really? I’m going to Joburg but travelling to a few wildlife parks, about three hours north, just past Pretoria.

Jimmy  24:37

Right. And we’ve just been to Canberra, the Writers Festival there, where you appeared.

Sue  24:43

I was presenting on a book called ‘Daughter of the River Country,’ with a fabulous Aboriginal woman called Aunty Di O’Brien. It was terribly nerve-wracking, but it seemed to go well. There was lots of famous people there and I had a terrible case of impostor syndrome when I was there, but we got through it.

Jimmy  25:01

I was in the greenroom with Dr. Norman Swan. He was reading and somebody walked up to him and said ‘oh, Norman, are we ever going to get rid of COVID,’ and he just said ‘no,’ and went back to his book.

Sue  25:19

Well, I was in the breakfast queue with Stan Grant, Tracy Holmes and Richard Fidler. It was quite amazing, wasn’t it really, to be in that kind of company?

Jimmy  25:31

A couple of years ago, we bumped into Brian Brown and Rachel Ward and Rachel Ward starred in ‘Rain Shadow,’ a TV show that I co-wrote with Tony Morphett. I went up to them and said ‘oh, hi, Rachel.’ She didn’t remember me, I don’t think, but Brian Brown said ‘you’re that guy who does the radio stuff about apartments.’ There you go. Okay, off you go; go and get packed for South Africa, and we’ll talk to you when you get back.

Sue  26:05

Okay, fantastic. Thanks, Jimmy.

Jimmy  26:07

Thank you, Sue. And thank you all for listening.

[MUSIC]

Jimmy

Thanks for listening to the Flat Chat Wrap podcast. You’ll find links to the stories and other references on our website, flatchat.com.au And if you haven’t already done so, you can subscribe to this podcast completely free on Apple podcasts, Google podcasts, Spotify, Stitcher, or your favourite pod -catcher. Just search for Flat Chat Wrap with a W, click on subscribe, and you’ll get this podcast every week, without even trying. Thanks again. Talk to you again next week.