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[Smokeye]

Is there any shame in simply renting forever? I earn good money and have paid off my mortgage. If I sell, I could invest the proceeds and use the interest to rent in my area of choice.

The system is flawed. By purchasing into strata, you are placing your asset into the hands of strangers – many of whom are illiterate, selfish, or just plain unhinged. They don’t want to spend money on repairs and maintenance, they are happy to under-insure the building, they don’t want to do anything about anti-social behaviour, and they certainly don’t espouse harmonious living or collaborative decision-making.

I want out of strata period. I wonder if anyone else has been thinking the same thing?

 

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[Jimmy-T]

Rough arithmetic here but if an apartment is worth $1million and you sell it and put the money in a high-earning account you will get about $55,000 a year.  An apartment of the same value as the one you just sold should cost you about $850 a week $44k over the year.  So you are $11k ahead … until your landlord asks for a 10 per cent increase every year (as they are perfectly entitled to do).  Two years in and you might need to be digging into that capital or just have the hassle of finding somewhere new to live

A smarter move might be to let your apartment and negatively gear it, then rent somewhere better.  Then you won’t have the hassle of living in a community you don’t like, you will still get capital gain but you still have the uncertainty of what happens when the lease expires.

The Australian system is simply not set up for long-term renters otherwise your plan would be pretty sound.

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[Smokeye]

Thanks Jimmy, I have considered that strategy, but being an investor would land me in exactly the same boat as owner-occupier and that is: having my asset devalued or, at worst, destroyed, because of the ignorance of the OC and the negligence of the committee.

Our building is under-insured, we have expensive capital works repairs to do, not enough money to do them, and a dysfunctional committee who spends more time bickering and sending nasty emails than it does actively problem-solving. I would go straight to s237 except I don’t have enough evidence. Yet.

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[Jimmy-T]

Smokeye wrote:

I would go straight to s237 except I don’t have enough evidence. Yet.

For the uninitiated, a section 237 is the “nuclear option” whereby a compulsory strata manager is appointed and the committee rendered obsolete for at least a year, usually two.  It is not recommended (by this writer) for anything less than a totally and profoundly corrupt or incompetent committee that is clearly working against the best interests of the owners rather than for them.

In this case a better and more likely successful option may be to pursue orders via a Section 232(2) “Failure to exercise a function”.

For instance, you might send a simple, non-accusatory, written request to the committee that it immediately initiates or formulates plans to:

1. Adequately insure the building as required under sections 160 and 161 of the Strata Schemes Management Act.
2. Identify capital works required to fulfil its obligations under Section 106 of the Act.
3. Take action to estimate and raise funds required to undertake essential maintenance and repairs, as well as capital works, either by a strata loan or a special levy.

Then you could add that failure to effect any or all of the above will lead to orders being sought at NCAT under section 232 of the Act to compel the committee to do so.

If they refuse or do nothing, and they are clearly shirking their responsibilities, that’s all the evidence you need to proceed to mediation and the pursuit of Section 232 orders. Meanwhile, find others in your block who share your view so that you aren’t carrying this alone.

 

S232(2) Failure to exercise a function 

For the purposes of this section, an owners corporation, strata committee or building management committee is taken not to have exercised a function if—

(a)  it decides not to exercise the function, or

(b)  application is made to it to exercise the function and it fails for 2 months after the making of the application to exercise the function in accordance with the application or to inform the applicant that it has decided not to exercise the function in accordance with the application.

If you want to be alerted when anyone replies to your posts or responds to this topic, please register and login, then you will be able to subscribe to the topic. The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers. NB: Longer threads may spill over to additional pages - look for the numbers on the bottom right, under the last post.

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