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caj,
You ask “Who is responsible for the locksmith fees?” I would have thought it is the OC. Probably the lock and door are common property anyway but Section65 of the Strata Management Act provides at subsection (6) that:
An owners corporation is liable for any damage to a lot or any of its contents caused by or arising out of the carrying out of any work, or the exercise of a power of entry, referred to in this section unless the damage arose because the owners corporation was obstructed or hindered.
Frans,
Do you have your strata valued every 5 years as required by the Strata Act?
A few years ago we moved to self manage and hired an insurance broker. Best thing we ever did.
Insurance brokers provide cover even if you are late with your premium. We went with MGA insurance brokers and they have been great.
With Electronic access to our bank accounts, Bpay and email for noitices and agenda and minutes you would be suprised how easy self management is. We now can spend the $1,300 odd dollars we paid the SM on maintenance.
Totally agree, it is a pity that the web site doesn’t allow ‘thumbs up’ voting because I think Whale in particular would be pleased!!
In our Strata our EC has told the owners to look at enforcing bylaws as if they are nuisances. And how big a nuisance a breach causes is used as a guide to how strictly it will be enforced.
As an example, we have an issue about the standard bylaw about vehicles parking on common property. Because of the physical layout of our units we have a few owners who can park on common property (directly outside their garage). Them doing so does not cause any problems to anyone else (except access to their own garage). However we have a few units where parking outside their garage (on common property) is a distaster and blocks other owners from accessing their garages.
One of the owners that can’t park outside their garage wanted a strict enforcement of the ‘no parking on common property’ bylaw. This owner’s only argument was that “if I can’t do it no one should be able to”. The EC told the owner while they would enforce the bylaw against him, they would not enforce it against owners who can do so without a nuisance to anyone else.
Whale,
I own a rental and have thought about self managing but fear of getting bad tenants is the greatest reason I stay with a Rental Agent. As you would know a bad tenant can ruin a property. With the technology for contacting tenants and collecting rent I would say the ‘day to day’ management of a rental property is not difficult.
I realise that I can easily advertise in the local paper and ask prospective tenants for references, but, I am not confident about my ability to vet and select tenants. As you point out Rental Agents have access to a ‘banned tenants register’, how do you go selecting and vetting prospective tenants?
@scotlandx said:
I think Whale is right, it sounds like they have gone a bit overboard on the concept of “commercial”. Even if you are holiday letting, it is still residential, same as if it was a normal tenancy arrangement.Setting that aside, I don’t think the owners corporation can decide that two lots are liable for the cost of the inspection unless they pass a by-law, and in that case the owners responsible for the costs would have to agree to the by-law. I could be wrong, but l believe they are on shaky ground. If they billed you, I would just refuse to pay it.
I agree with scotlandx. For NSW what constitutes Residential Property should follow the definition in the CONVEYANCING ACT 1919 – SECT 66Q.
This states at 1) (c) “residential property” is: a lot or lots (including a proposed lot or lots) … comprising not more than one place of residence alone, whether constructed or in by CouponDropDown” href=”https://www.austlii.edu.au/au/legis/nsw/consol_act/ca1919141/s66q.html”>the course of construction, and including any place used or designed for use for a purpose ancillary to the place of residence.
The definition of ‘place of residence’ is at section 3) of the same section of the Act.
I think the wording rules out ‘boarding houses’ as residential property but not lots where there is a single tenancy such as a family or a few associates.
Where strata schemes may be in trouble is if they ’employ’ a caretaker or ‘on site manager’ or other workers eg cleaners directly (by directly I assume they mean not through a contractor).
Please be advised the above is my own research and conclusion and for discussion only.
Basil, this gets back to a pet dislike of mine about strata that some owners want things done and they think that if the OC pays for it they are getting it for free with no consequences. While it may not be relevant to you, I decided to use your post as an excuse to vent. Sorry!!
Whale is exactly correct, I think these responsibilities are outlined in the document “Defining Who is Responsible ….” Memorandum No AG520000 from the Land and Property Office.
Austman, is correct in that the specific contract with the cleaner will specify what is to be cleaned. Assuming the OC has contracted the cleaner, if the contract specifies that the front doors are to be done the contract would be more expensive than if they weren’t included.
In our strata scheme some owners regularly ask for work to be done, eg, cleaning, that is the individual owner’s responsibility. I point out to them that if they want this done, we have to arrange to have it done for every owner and levys will have to be increased.
Hi Jimmy, thanks for sharing this. You have obviously put a lot of time, effort and thought into your reply. It has inspired me to make comments just for consideration, the comments probably relate to my circumstances. To let you know where I am coming from: our scheme is small, with funds of less than $10,000 and we struggle to put together an EC.
Point 1. Should the law distinguish more between different schemes based on size, usage, type of construction or other reasons? If so, how?
First I like the idea of having three category sizes: small; medium; and large.
Point 4. To what extent should the Government prescribe rules for all schemes?
I agree that a standard set needs to be available or apply by default. A ‘Mission Statement’ could of course refer to other features but it should only be mandatory when it highlights bylaws and common property definitions that are not standard.
Point 6. Is there merit in the mission statement idea?
Yes. A ‘Mission Statement’ should be mandatory for a scheme where that scheme diverges from standard by laws or the standard definition of ‘common property’ does not apply.
Point 8. Are reforms needed to address the competing interests of stakeholders? If so, what should they be?
I don’t think non-resident owners should be prohibited from serving as many have much to offer. I think the 20% additional weighting for resident owners is good and should be enough.
Point 12 Calling for committee nominations in advance of AGMs.
Should be mandatory
Allowing payments to be made to committee members for attending Meetings.
Yes but payment should be limited by reference to levys eg for each attendance 5% of quarterly levy and ratified by AGM.
Point 14. requiring minutes of meetings to be made available within a specified time after the meeting (e.g. 14 days).
Must be mandatory. Currently at our scheme they read the minutes out at the next AGM, and no one even remembers what was said so no one objects. I would suggest ‘Draft’ minutes within 21 days. With the added provision that where anyone requests changes to the minutes that if the changes aren’t made, it must be noted in the final minutes that the request was made and by whom it was made.
Point 16. imposing a minimum number of committee members (e.g. three).
Good idea, agree. Two for a small scheme, and then as suggested prorating this up for the number of lot owners.
• limiting the period of time any individual can continually hold the same office (i.e. Chairperson, Secretary or Treasurer)
This provisions should not automatically apply to small (less than 29) schemes.
17. Do you have any other suggestions for improving transparency within strata and community schemes?
Draft minutes to be circulated within 21 days. If no requests for amendment/alteration these automatically become final. Final minutes with (with any unactioned requests for amendment/alteration noted) within 28 days.
38. Should more flexibility be given to schemes to determine levies other than on the basis of unit entitlements?
Yes but safeguards must apply. This must require a 100% yes vote in which all lot owners must vote (a lot owner could vote informal) but they must all vote (just for clarity including those affected).
41. Should the law require periodic levy notices to be issued?
Yes. However as is presently the case an owner must be liable even if no notice is issued as it would be a travesty is some avoided liability just because someone forgot to send out a notice.
54. Should sinking funds remain compulsory? Should schemes be able to carry forward budget surpluses instead?
Sinking funds should be compulsory as it is a good guide. Whether you have ‘carry forward’ or another it is all a planning tool.
55. Should the law dictate contributions to sinking funds? If so, how?
If the law is to dictate it must be by reference to the 10 years sinking fund plans. Levys and loans must be adequate to ensure that forecast expenditures over the next 5 years can be met. A scheme could still borrow too much and ‘go under’ but I don’t see viable alternatives.
56. Have the 10 year sinking fund plan reforms been successful?
As far as our small scheme is concerned an overwhelming yes!
64. How do the laws around accounting records need to be modernised (if at all)?
For small schemes the current ones are sufficient, increasing or changing requirements could detract and over complicate.
Steelpaper, In cases of criminal behaviour my experience is that you have to look at whose self interest is served by the missing extinguishers. In my view in your case it has to be either one of two bodies, either the company who subsequently tendered for the replacements or the EC by a ‘cosy’ (think Labor Party power brokers and headkickers*) arrangement.
[*Cosmo named names here but, since he hasn’t deposited $1m in the Flat Chat Defamation Defence Fund, I have edited it out]
Our units don’t have special fire requirements so NO I have never come across what you outline but in my view it is a straight out case of theft (taking the fire extinguishers) and damage (cutting the hoses).
The one exception is if the ‘theft’ and ‘damage’ was authorized but the OC and or the Strata Manager. If either or both bodies authorised this they need to explain themselves!
@Whale said:
The model By-Laws contained in Schedule 1 need to be formally adopted by Owners Corporations (O/C),I was always under the belief that under S42 the by-laws in Schedule appied to certain Strata without being adopted. The wording of the Act says:
STRATA SCHEMES MANAGEMENT ACT 1996 – SECT 42
What by-laws apply to old strata schemes?
42 What by-laws apply to old strata schemes?
(1) This section applies to strata schemes in existence before the commencement of this section.
@sassy72 said:
Hi everyone, I am not sure if this has been asked and answered in previous forum topics.I bought a flat in July, there is a driveway on the property at the side of the building, but no car spaces, there is always a car parked in the driveway belonging to a tenant in the downstairs flat. The car doesn’t block anything as the driveway doesn’t go anywhere.
On Sunday night I noticed the car wasn’t there so I parked in the driveway and went into my flat. About an hour later the tenant knocked on my door asking if I could move my car as he needed to park there. I apologised and said I thought it was common property. He said no that he paid extra rent to park in the driveway.
I didn’t think that sounded right, so I spoke to the strata manager yesterday who confirmed that the driveway is common property.
What can we do? I am wondering if we can force the landlord to pay all the extra rent they have received to the strata fund?
I feel badly for the tenant, but the landlord is in the wrong here.
Can anyone advise?
Thank you
Sassy
In my experience, often these sort of arrangements just grow over time and become a defacto agreement. Some common property can’t be used by anyone but the occupier/owner/tenant and its use has no impact on other owners use of common property. In our complex there are a couple of units where parking directly outside the occupiers garage on common property doesn’t impact anyone else and is tolerated, however, from time to time we get objections from other occupiers who can’t park outside their garage on the basis that “if I can’t do it no one can”.
“Force the Landlord to pay all the extra rent … to the strata fund” Do you know the EC? Could they have made an ‘informal’ agreement with the owner/landlord? Is the owner/landlord on the EC?
If there isn’t an formal agreement the owner is just spinning the tenant lies (or outlining a practice that has grown up over the years) to get more rent.
In my view, of course whether or not their is an agreement the occupier/tenant/owner can’t claim this as ‘their’ spot. So you are within your rights to say ‘everyone or no one’ has a right to park there.
I know this doesn’t advance your issue but perhaps the issue has a background to it take doesn’t make the issue so clear cut.
In reply to the topic of this thread “The buck stops … where” I couldn’t agree more with the sentiments expressed by Struggler in post 11. Surely the answer has got to be ‘it stops with the OC’.
Any SM engagement is a contract between the OC and a SM. If you don’t like the conditions of the contract – don’t sign it. Does the contract specify that the SM must do on site visits and report on them? From the contracts I have seen, the contracts never do!
If the OC has signed a contract and the SM is not doing their part as Struggler says put everything in writing and insist that the SM fulfill their part.
Well the above is all the theory … I know that it is never like that in practice. It is similar to how most owners just expect things to be done by ‘someone else’. I constantly have other owners ring me and say ‘so and so is doing this and we have to stop them, will you do something about it’. On a few occassions I have told them that they can do something just as easily as me but they don’t want to be ‘seen’ to be the one.
When our OC considered engaging a SM we decided that the two crucial items for our strata where:
– having insurance and making claims on it; and
– keeping the common property in good repair.
After looking and numerous SM contracts we decided the best option was to self manage with that following additions:
– hire an insurance broker; and
– make sure that every owner kept their eyes open re common property defects.
While we are not a large strata so I know this is not possible for every strata cetainly in response to the original question it is the correct answer.
@daphne diaphanous said:
Our friends in the neighbouring complex tell us their AGMs are usually held during work days, resulting in quickly concluding meetings through the use of proxies by their strata managers. I advised them to send a registered letter to the strata managers, asking whether the AGMs are held in that way to enable the use of proxies, then, depending on the reply, lodging a complaint with Fair Trading. Could anyone help with any thoughts or further advice please?I doubt the SM will reply with anything like “yes we hold them on weekdays to enable us to use proxies” or ‘for our convenience and to inhibit owners from having a say’.
When our OC considered engaging a SM the contracts stipulated that AGMs held outside weekday business hours attracted extra charges. So maybe it is done to save costs.
Why not list it as an agenda item for the next AGM to discuss the pros and cons. My view would be to test your views on other owners before listing the agenda item to see how much support such an item would have.
@Dudley said:
Good Morning All,I would appreciate some advice re our Strata Insurance.
At our last AGM I requested from the Strata Manager answers on why we had never received competitive quotes for insurance. His answer was quite evasive and not at all satisfactory. The Strata Manager decided, on his own initiative, to obtain competitive quotes for our strata insurance. The EC recently received the quotes all of which were less than our current insurance. We also received the offer that we could cancel the current insurance and re-insurance with a new company. I assumed that such a decision would leave us “out of pocket” as I don’t think a “pro-rata” refund of premium would include commissions and govt. fees and taxes. The main difference in premium amount was in Strata Manager’s commission – circa 10% verses 15% current insurance company.
My questions are,
a) Is there a designated commission level for strata managers.
b) Is is mandatory to obtain competitive quotes for insurance.
c) is it a requirement for PDS’s to be supplied with the quotes.
d) Any other pitfalls I should be aware of in reviewing strata insurance and possibly the Strata Manager.
Many thanks,
Dudley
Hi Dudley, our Owner’s Corporation (OC) made some changes to the way we are insured about three years ago. Prior to three years ago we arranged our own insurance and did our own claims. I am not sure if our experiences directly address the questions you ask but for what it is worth these were the things that we found:
Strata Mangers are required to inform of any commission they receive and that is usually done as an addendum to the management agreement they enter with the OC. From what we saw the ‘level’ of commission is negotiated between an Insurance Company and the Strata Manager, usually it is between 15% and 20%.
We didn’t find anything that required us to get competitive quotes but we did anyway.
All quotes we got did supply a PDS (Product Disclosure Statement) and companies are supposed to ‘make them available’ to you (whatever that means) before you sign. The PDS covers all the rights, responsibilities, ins and outs and clauses, conditions etc that apply to the insurance contract you are entering.
Our strata plan ended up going with an Insurance Broker. The amount we paid for our insurance policy was exactly the same whether we had an Insurance Broker or not, as the Broker takes their commission out of the premium paid to the Insurance Company. The commission to the Broker is probably exactly the same in nature as the commission paid to a Strata Manager if you insure through them.
The contract that the prospective Strata Manager wanted us to sign specified that if the Strata Manager handled any insurance claims they received additional fees from us. Whereas the contract we ended up entering with the Broker said they would do all our claims at no additional cost.