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It’s a pity you are not a tenant because tenants can have their rent reduced or break their lease if the property they rent becomes unit for habitation because of mould.
This is because section 52(1) of the Residential Tenancies Act2010 (NSW) reads: (1) A landlord must provide the residential premises in a reasonable state of cleanliness and fit for habitation by the tenant. Each state has a comparable law.
The reason I set this out is that Section 106(1) of the Strata Schemes Management Act 2015 (NSW) is not fit for purpose because unlike the tenancy law, it does not specifically impose a duty to keep the home unit habitable. It reads: (1) An owners corporation for a strata scheme 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.
As a result, owners of strata properties are on their own. They need to find their own solutions. My suggestion is to buy a large humidifier – 20L and improve ventilation – strong fans in the bathroom and kitchen, because mould is caused by high levels of humidity, caused by lack of ventilation.
Try it. It works.
It’s a beautiful rabbit, but not if you are an investor. Investors are being treated as second-class citizens. I know of one investor who has received a sales contract from the NSW Government to sell for the price of … $158,000. She owes $700,000 on her mortgage, and regrettably, will not be able to accept the offer. Not unnaturally, the mortgagee will not agree to the sale. Nor will the investor, who would be heading for bankruptcy if she did. I hear on the grapevine that owner occupiers with similar apartments are being offered $650,000. If investors were treated the same as owner occupiers, it would indeed be a beautiful rabbit for them.
What I would like to know is whether the couple had a professional building inspection report carried out. If, as I suspect, they didn’t then they lost the opportunity to refuse to complete the purchase contract until the defect was rectified. of walking away from the purchase.
Here I make a second assumption that the law in Victoria is the same as the law in NSW when it comes to building defects. That is, waterproofing (or lack thereof) is a major defect entitling a purchaser to refuse to complete until the defect is rectified.
The moral of the story is that when purchasing a new apartment, obtain a building inspection report before settlement.
To put some numbers around it, many currently “Caretakers Agreements” in Queensland have a caretaking fee of $1,000 per annum + GST per home unit or villa. The fee increases annually by CPI. In some community schemes, the fee is higher – buyers are looking at $1,500 per annum + GST per home unit for a new home unit development in an inner-city suburb in Brisbane.
In a development of 20 home units or villas (which I commonly see), the caretaker receives $20,000 per annum (+ GST) for cleaning the foyers, paths and driveways, keeping the bins area neat and tidy, garbage and rubbish removal, replacing lights, reporting defects, mowing the lawn and gardening. Cleaning materials are extra. Without including the CPI increase, that’s of $500,00 (no GST) over 25 years.
As you might guess, these Caretaking Agreements are very difficult for a body corporate to terminate, although many have tried, mainly because the ‘caretaking’ is so loosely described.
The developer can sell these Caretaking Agreements, but just as often, keeps them as an annuity-style income, and employs a caretaker for much less to look after the caretakers duties.
It’s nice work if you can get it!
After Fire Safety, Water penetration is the most significant issue that Strata Schemes must deal with.
Fire Safety Certificates are signed off by an accredited practitioner.
The new B & D Act requires an accredited practitioner to sign off on waterproofing work.
Where’s the problem?
Hi Jimmy, interesting information. I honestly thought you were going to segue into the latest news on pets in apartments. Well, let me fill you in.
On page 39 of the NCAT Annual Report 2021-2022 released last week, you will find a summary of what NCAT calls a Significant Decision – Bruce v Owners – Strata Plan No. 98803. It’s a decision for pet lovers in strata. It’s so significant that it’s the only strata decision that NCAT highlights out of 1,438 strata [attachment file=”Cute dog photo.jpg”]
decisions.
The owners were refused permission to keep a second French Bulldog, Peaches, in addition to their current French Bulldog, Zodiac, because the Strata Scheme had a “one dog” policy. They thought they were on safe ground because they allowed pets (as they must under the revised laws which prohibit blanket refusals).
But NCAT (the Tribunal) flipped the script. The Tribunal not only permitted Peaches to join Zodiac but said that no blanket rules are valid against numbers of animals. The correct approach is to look at the particular animal and decide if giving permission “would unreasonably interfere with another occupant’s use or enjoyment of the lot or common property”.
The decision is particularly interesting for the conditions for permission the Tribunal ordered.
If I can add to the excellent discussion, forcing the sale of the property through any means (Bankruptcy being the simplest for an individual, Liquidation for a company) is an effective way to recover an outstanding Strata levy / Strata debt because it is conveyancing practice that all property outgoings which are outstanding are cleared on settlement.
In NSW the requirement is found in clause 14.1 of the standard Contract for Sale which states:
“Normally, the vendor is entitled to the rents and profits and will be liable for all rates, water, sewerage and drainage service and usage charges, land tax, levies and other periodic outgoings up to and including the adjustment date after which the purchaser will be entitled and liable.”
Notes: Even though it says Normally, it is rare that this clause does not apply. The adjustment date is on completion / settlement, unless early possession is given (if so, it is the possession date).
Comparable provisions exist in the Contracts for Sale in the other States and in the Territories.
It is the practice of Trustees in Bankruptcy and Liquidators to pay sale expenses such as agent’s commission, conveyancing fees and outstanding outgoings (such as strata levies) on settlement, and treat them as sale expenses. The same practice is adopted by Mortgagees who sell the property under power of sale.
So, the procedure is that the property is sold at auction, let’s say for $820,000. That is the Contract price. If there are for example $20,000 in unpaid outgoings, then on settlement, the purchaser still pays $820,000 for the property but $20,000 will be applied to pay the unpaid outgoings directly.
The bottom line is that the outstanding strata levies / strata debt will be paid when the property is sold. And the best way to force a sale is to have a Trustee in Bankruptcy appointed if the owner is an individual, and a Liquidator appointed if the owner is a company. If the property is mortgaged, the mortgagee will take over when a Trustee in Bankruptcy or a Liquidator is appointed.
True, you can’t make it a condition of entry for residents to wear a mask.
But that does not excuse the OC from complying with the Public Heath Order by putting up signs at entrances and in common areas that wearing a mask is required. It goes further – the OC has a legal duty of care for health and safety. In just the same way as they must repair unsafe paths, they must request all-comers to wear masks to prevent the spread of COVID-19 to comply with their duty of care (and protect themselves against a lawsuit).
If your signs are not up yet, you should print them out from the NSW Government / Far Trading website and put them up.
Great analysis. There’s many issues, so I will confine myself to two.
1) Under the Australian Consumer Law, the ACCC is able to obtain compensation orders for consumers and fine company directors personally if they are ‘knowingly concerned’ in breaches of the consumer law. A good recent example is the car rental company, Australian 4WD – this is the ACCC Media Release https://www.accc.gov.au/media-release/penalties-of-1223m-against-australian-4wd-hire-and-ex-directors-vitali-roesch-and-maryna-kosukhina
Why isn’t this made to apply to consumers who purchase apartments under state Fair Trading Laws?
2) The NSW Government should definitely be providing financial assistance to the OC of Mascot Towers to pursue the owner and developer of the adjoining property through the Courts. It should be a no strings attached undertaking to contribute towards the legal fees, not a loan.With hedge disputes, Sunlight trumps Privacy.
The ‘legal leg to stand on’ is found in the Trees (Disputes Between Neighbours) Act 2006 (NSW). It states that if sunlight (or views) are severely obstructed by a hedge (2 or more plantings, including bamboo) then the Court will usually order they be kept trimmed to 2.5 metres (in some cases, the Court will order removal).
In this case, the OC owns adjoining land on which the Golden canes are growing, and is therefore a neighbour bringing it within the realm of the Trees Act.
The best approach is the mediation route, not the Court route, as Jimmy suggests, with the threat of taking action under the Trees Act if mediation does not succeed.
Yesterday, I completed the on-line survey about strata data hubs. It’s easy and well worth doing.
I was surprised to find there was no reference to the short-term rental accommodation premises register where hosts will be required to register their premises. Strata units on that register should be listed in the strata data hub.
I made this suggestion at the end of the survey. I recommend readers do likewise.The best place to start is clause 23.6 of the standard form Contract for Sale (NSW) (2019 edition) which reads as follows:
23.6 If a contribution [i.e. strata levy] is not a regular periodic contribution [e.g. a special levy] and is not disclosed in this contract –
- 23.6.1 the vendor is liable for it if it was determined [struck at a General Meeting held] on or before the contract date, even if it is payable by instalments; and
- 23.6.2 the purchaser is liable for all contributions determined after the contract date.
So, to answer the question, the purchaser is liable to pay the special levy because it was struck after the Contract Date and is payable on settlement when title transfers into their name even if the due day for payment was before settlement.
This is one reason why strata inspection reports are highly recommended when buying strata (before exchange of contracts) because the report will contain information about likely building work and the minutes of meeting will provide a warning that a special levy is around the corner.
The Court of Appeal is clearly a devotee of the movie “The Castle”. In the movie, Darryl Kerrigan successfully defended his home from compulsory acquisition. In this case, the Cooper family successfully defended their rights as ‘freehold owners’ to keep their dog in a strata scheme.
Effectively, the Court of Appeal is giving strata owners the same rights as home owners – which is the freedom to do what they like inside their strata units so long as they don’t disturb the neighbours.In doing so, the Court has put a very powerful weapon into the hands of strata owners to sweep aside (invalidate or ignore) by-laws which restrict what they can do inside their unit (so long as they don’t disturb the neighbours).
The Court of Appeal is clearly a devotee of the movie “The Castle”. In the movie, Darryl Kerrigan successfully defended his home from compulsory acquisition. In this case, the Cooper family successfully defended their rights as ‘freehold owners’ to keep their dog in a strata scheme.
Effectively, the Court of Appeal is giving strata owners the same rights as home owners – which is the freedom to do what they like inside their strata units so long as they don’t disturb the neighbours. In doing so, the Court has put a very powerful weapon into the hands of strata owners to sweep aside (invalidate or ignore) by-laws which restrict what they can do inside their unit (so long as they don’t disturb the neighbours).Jimmy, true it is that in Queensland 25 year caretakers agreements are standard for strata schemes. I see a lot of them.
If I can share this information.
The developers sell them. Buyers are willing to pay big money for a 25 year cash flow with CPI increases annually. Typically, the fee is $1,000 to $1,200 + GST per lot per annum. That’s $275 to $330 per quarter in terms of a component of strata levies. This is for residential strata schemes. It covers cleaning the common areas including the garbage bin areas, the gardening, and minor maintenance.
But the flipside is that the strata management agreements in Queensland are three year agreements for strata schemes. Strata management fees are modest. Typically the fee is $120 + GST per annum. That’s $33 per quarter. This is for issuing levy notices, collecting levies, holding AGMs and EGMs and preparing financial accounts.
In NSW, strata managers charge a lot more than strata managers in Queensland, and do more.. In contrast, caretakers are cheaper – they are usually engaged annually (or are on continuing contracts terminable by one year or less notice). Their fees are about $700 per annum per lot which is less than in Queensland.
My analysis leads me to conclude that the caretaker’s fees in Queensland are about 35% higher than they would be if the caretakers agreements were 3 years renewable instead of 25 years. That’s about $400 per annum.