[JC]

Our faith in fire services companies has been severely diminished.

When our current Strata Committee took over from the previous SC we found the ‘essential services’ in an incredible mess. We found that in our 25 year old 27 level apartment block essential services were being managed (as they had been for many years) by an associate of the SC Chair/Sec/Treasurer at the time. The three positions were held by a couple from a local realestate company who didn’t own or live in the building (now illegal) – so you would have to ask why they held these positions?

We found Annual Fire Safety Statements, for the life of the building, had been fabricated. For example it was found that the fire stairs pressurization system had never complied – since the building was constructed, even though signed off each year that it did comply  The new SC (including 2 engineers) worked for 12 months and spent over $100K to have the system comply – this was no thanks to at least 3 fire services companies engaged during the process who were incapable fixing the problem.

In addition we found our local Council were using an ‘Essential Services requirement’ that that did not apply to our building.  Even though the SC presented the evidence to Council to prove their document was incorrect (due to an incorrect construction date) Council refused to accept our argument. A freedom of information search revealed Council had lost key original documents. We commissioned a reputable fire engineer who presented exactly the same information to Council and it was accepted, meaning additional work with costs in excess of $50K quoted by one of the fire companies to bring the building ‘up to standard’ was not required.

We now work with a fire company on the understanding that any work required may be performed by the company the SC chooses – although it is more work for the SC we choose the best company for the work required, eg emergency lighting is replaced from a stock of units we have purchased and we have our electrician install them. These stock lighting units have the longest life batteries available (as opposed to the cheapest shortest life units used by previous fire companies – this alone is ploy to maximize labour costs).

Many fire companies employ poorly trained technicians (simply forgetting to reset a jacking pump following maintenance has caused significant water damage and a damaged $10K main pump system in our  building).  This together with a lack of competition perpetuates gouging.  In many cases SCs don’t even know it’s happening.  Management and close scrutiny of ‘Essential Services’ providers should be a critical function of any SC.

[JC]

I think this is an under discussed and very important issue.  We have been through three Strata Management Companies in four years!  Considerable Committee time and effort is required to change SM companies and even when you think you have done your homework it still may not be a good move (grass being brown on both sides of the fence).

Our current SM company is part of a very large well known parent company with many Strata Management subsidiaries like ours. This parent company has protocols and procedures that they impose on their subsidiaries – sometime to the embarrassment of the individual strata manager.

To help others assess new strata management company proposals – some things to look out for include:

• not being able to use a long standing (good) contractor because they are not a company ‘approved’ by the parent company.
• being forced to pay a fee of $800pa for a service called ‘community health and safety pack’, in our case when the committee tried to access this to help with an OH&S issue we were told it wasn’t applicable. This ‘resource’ has never been used.
• work orders are copied to the Secretary with no identification of the work ordered in the subject line, so in a search for a particular (historical) work order every e-mail must be opened, wasting considerable time.
• ‘Trades compliance’ costs are billed to the Owners
• Owners having to pay late payment fees due to SM not paying on time
• Spurious costs appearing on SM monthly invoices – such as $70 for ‘Fire protection’

We have experienced efficient SM companies with good procedures, but terrible individuals in the SM role, and terrible SM companies with good individual strata managers, never both at the same time! In our last negotiation, the person we met and negotiated with disappeared the day after we signed up. 

What our Committee would like is a no frills Strata Management service which does what the Owners Corporation asks it to do.  Including basic services such as paying bills on time, transparent arrangement of work orders,  and doing what the Committee wants it to do (obviously flagging anything which may not be according to the law or the ACT).  Any additional frills will be added by negotiation and paid for as such.

If anyone knows of such a Strata Management company please post a clue to their whereabouts (in NSW)

.

[JC]

I have a question regarding the Annual Fire Safety Statement (AFSS) for a 25 level building with sprinkler and hydrant systems.  It appears we have a very detailed and extensive list of items on our Fire Statement (about 22 in total).  Our new fire services company has questioned why certain items are on this list as they were not expecting them to be there.

I have been unable to determine who generated the list and when it was generated (in a > 20 year old building).  How can I determine what items are necessary on our Statement – not just nice to have because they generate revenue for fire companies wanting to test them – but actually required by legislation?

If we start dropping things off the Statement because our new company doesn’t think they should be there I’m sure this will ring alarm bells with Council on submission.

Any help with this would be appreciated.

[JC]

Fire services companies, in general, are a real concern. Our fire services company of well over 5 years standing was recently sold to a larger company.  Even though compliance certificates had been issued every year, the final act of our original fire company (before the sale went through and probably to minimize risk in the event of a due diligence exposure) was to inform our new Strata Committee that a critical fire service component of our building did not comply with the appropriate legislation. 

They did this one week before the certificate was due to be sent to Council, and the subsequent ‘fix’ has been quoted at more than $100K. The current Committee suspect there was a ‘convenient’ relationship between the original fire company and the past Strata Committee. Engineers on the new Committee confirm the issue is real and that our current system does not comply, and probably never has (in a 20 year old building).

Committees have to be vigilant, ‘Rolls Royce’ solutions are one thing, but complete failure to perform the basic tasks required by law are another, and Owners need to be on the look out for collusion between vested interests to ignore major risks to the detriment of all owners.

I have no idea what the Owners Corporation legal standing is in this instance.

[JC]

What I really don’t understand is the determination of strata managers to not use e-mail delivery of notices when they are clearly able to.  Even when the costs are included in the management fee they still resist encouraging owners to nominate for electronic delivery.  We have had three strata managers in 4 years and all three made it extremely difficult for owners to nominate e-mail delivery.

The Act clearly states (the note to Clause 22(2) and in clause 261) that notices may be delivered by post or electronically.  Clearly this can only happen when an e-mail address is provided, and making it as easy as possible for owners to do this is my current challenge.

Jimmy’s suggestion of a discount for delivery by e-mail is good and our Committee will look at this.  We have a 90+ year old couple as well as a 95 year old owner in our building who are very computer savvy, but 30 year old IT professional who still refuses to provide e-mail addresses.  It don’t get it!!!

Thanks

[JC]

Thanks LP – very useful, the netstrata article was directly relevant. 

Have you ever heard of a court order forcing an OC to affix the Common Seal to a document against the wishes of the Owners, ie where the owners had voted not to approve the document. 

If there was a vote to approve the document (and so affix the Common Seal) would you expect this to be an Ordinary or Special Resolution, or would you expect the type of resolution to be determined by the subject matter of the document?

To be even more vague (I need to be careful) if the primary purpose of the document was to lead to a secondary activity that definitely required a Special Resolution, would the initial approval (where the Seal is required) need a Special Resolution at this stage, or would you expect a second vote (Special Resolution) after the primary (Ordinary vote) purpose has been completed.

Sorry to be so vague!!

[JC]

Thanks Jimmy. 

I was being sarcastic. Of course they don’t!!

Glad to say our insurer has come through with the goods and made a statement consistent with what you have said – and with what I thought would be the case.

If this wasn’t the case Strata Committees would need to spend considerable time checking on owners landlord insurance.

What do you think would be the effect on the OC insurance, or an owners landlord insurance, if an owner had not registered a lease (long term or short term) with the Strata Manager for the Strata Roll, which I gather is a legal requirement?

[JC]

Still on Insurance – would you expect Owners Corporation insurance to cover a claim for a common property event that involved a tenant in the same way it would cover a claim involving an owner.

I cannot get our insurer to say explicitly that they would. I don’t know yet but suspect they may expect that a claim involving a tenant should be covered by landlord insurance (which we know ALL owners who rent, particularly short term, possess).  What is the ‘normal’ situation regarding OC insurance and the coverage of personal injury or property damage involving a tenant on common property?

[JC]

It seems ridiculous that possible new legislation supporting the recent NSW Parliamentary inquiry into holiday letting, together with the new Strata Schemes Management Act,  would mean 75% of the entitlement vote of owners could result in selling your building – forcing you to leave your home, and yet 100% of the entitlement vote of owners will not be able to exclude short term letting from your building.

Like many others I find the recommendations of this report surprising and incredibly undemocratic.  My wife and I have ‘downsized’ to live in an apartment, as I’m sure many people will be doing in increasing numbers in the future.  If I had had any idea that I would be living in an hotel, not knowing who my neighbor might be tomorrow and having to clean up vomit and other things from my balcony on new years day,  I would have kept my 4 bedroom house – with three bedrooms unused, gone on the Pension, and enjoyed a quiet relaxing retirement, at the State’s expense.

Recent findings in research by NSW Dept of Planning and Environment have found that many suburbs in Sydney have over 60% of households headed by a person over 65 with 2 or more bedroom unoccupied (SMH 22/10/2016 p3). It appears the State Government is trying to encourage these ’empty nesters’ to downsize, assumedly to a smaller house or apartment, to free up housing stock for young families.  If there is anything the State Government might do to encourage this transition it would not be to implement the recommendation of the NSW Parliamentary inquiry into holiday letting.

I’m wondering if a ‘class action’ type approach could be used to tackle this issue. I’m assuming it might be feasible to have a very specific by-law drafted which challenges the basic principles of certain Parliamentary Inquiry recommendations.  If a large enough number of Owners Corporations implemented this by-law, then funded as a collective the defence when it was challenged, we might bring the fundamental unfairness of this report to a head.

I’m not a lawyer, and not sure that any result would survive the implementation of laws resulting from the report, but I do believe there is a significant number of strata schemes with systems (including by-laws) in place that currently exclude short term letting, and their Owners Corporations might be interested in pooling resources to protect their quality of life.

[JC]

Thanks again for the thoughtful analysis…

It just reinforces my view that so much of what the Act (old or new) states is just more of an opportunity for lawyers to become involved – at our considerable expense.

Why can’t legislation be drafted in a way that takes the ambiguity (or at least some of it) out of such statements?  I’m trying to deal with a number of issues relating to clauses from the current Act, and even though they appear to be clear to me (not a lawyer) Fair Trading cannot make a call one way or the other and advise me to seek a legal opinion…. then of course there is the opposite legal opinion and it all ends up in $$$$$.

An example of this is a post I made some time back – do all legal owners of a lot need to sign a proxy form (current Act Schedule 2, 10 (4)&(5)) – very simple I would have thought – Yes or No.  But I still can’t get a consistent answer (after two legal opinions).  Fair Trading says it’s a matter of interpretation!!!   Just think of the number of proxies tabled in NSW which may be invalid (or not!!).  The corresponding Clause in the new Act seems just as fluffy.

JimmyT, I wish I had access to your ‘powers that be’ any chance of an interpretation of the latter as well?

JC

[JC]

Thanks for the feedback. 

In light of the wording of the new Act I don’t understand Whale’s comment: ‘that person could remain a member until the next Annual General Meeting unless…‘ 

I also don’t understand JimmyT’s comment regarding the new Act: ‘It does not say they can’t be members – just that they can’t be elected.’ 

The new Act appears to state: ‘The following persons are not eligible for appointment or election to a strata committee or to act as members of a strata committee unless they are….’

Surely this means they cannot hold any Strata Committee membership at any time after the Bill becomes law?  If this is the case how do they ‘leave’ the Committee at that time?

[JC]

Hi Millie,

Great responses from Jimmy and you.

We will be putting a motion to an EGM for a by-law to limit the operation of serviced apartments – which is happening in our building without Council consent – and therefore is illegal.  What ‘proof’ should I provide, that this is a legitimate motion, to a Secretary (and Chairperson) who will most definitely argue it isn’t a ‘legal’ motion.  And what follow-up if they succeed in having it taken off the agenda?

Thanks jc

[JC]

Hi Jimmy,
Our Council has the following on its DA signature page:

If the property is a unit under
strata title or a lot in a
community title, then In
addition to the owners
signature the common seal of
the body corporate must be
stamped on this form over the
signature of the owner and
signed by the chairman
or secretary of the Body
Corporate or the appointed
managing agent.

The Act says the Seal can only be used with the authority of a delegation from the owners corporation.  Of course this is the EC.  The Council is not very specific on what the use of the seal means to them.

JC

[JC]

Thanks for the responses – good to know I’m not the only one recognizing what a significant change this would mean, and thinking this will require (at least) a special resolution of the OC. I can’t see how anyone could consider this wasn’t a change of use (otherwise a DA wouldn’t be required) and this did not mean a change to common property (referred to in the Act).

Aside from paying for legal advice, what would you take to an EGM to justify the claim that a special resolution is required?  Particularly given the motion will not be flagged by the Sec as requiring a special resolution (SR) when the agenda is circulated?

If two motions to submit a DA to Council (for consent to operate serviced apartments) were to appear on the agenda, one not a SR which was successful, and other (the same motion) – labeled requiring a SR, failed?  Where does the motion stand?

JC

[JC]

Hi Whale,

I have to say that’s the best news I’ve had in a long time – it’s comforting to think that legislators actually take into account the morality of individual’s actions. 

Do you know if there is a timetable for the bill becoming law? If it is mid 2016, given our AGM is May 2016 can they stand for election given they would need to resign within the following few months – what would be the mechanics?

Thanks again
JC

[Author]

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