[Jimmy-T]

For me, if there was no alternative to sacking the manager, the process would be:

1. Sit with the committee and identify areas in the SM contract where they have failed. Make a written note but don’t minute them in detail
2. Find a new strata manager with good references who is prepared to take over.
3. Confront the existing manager and invite them to resign rather than face a motion at a general meeting seeking their removal, at which all their alleged failures will be read into a permanent strata record.
4. If they refuse, call the meeting, explain the problem and vote.  Have a representative of the new strata manager there ready to take over.

As far as what happens in the interim, the law requires seven days’ notice (which is really 10 days to take into account postage and weekends).  That is plenty of time for the strata manager to rethink their position but not enough to do any serious harm to the strata scheme.

The new strata manager can’t really take up the role until the previous one has been removed.  Then it becomes an issue of getting the scheme’s records handed over which the previous incumbent can delay, despite the law saying they mustn’t, because Fair Trading doesn’t do anything to sanction strata managers who break strata law.

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[Jimmy-T]

Yes, they are a form of embedded networks but the most benign. There are protections under the law that allow individual owners the freedom to choose who their energy suppliers are. So if the “bulk bought” energy isn’t onsold at a competitive price, the consumers can go elsewhere, even in apartments.

The reality is that a good deal will see all the energy used in running the building be bought at a discount and consumers benefitting from reduced domestic charges too.

Some strata managers are even bundling different buildings together to get even greater reductions.  For once, there are deals that aren’t too good to be true.

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[Jimmy-T]

Listohan wrote:

There must be a reason they aren’t bigger players. Are they myopic about good deals? Is land tax the problem? I understood Mirvac’s offerings were more like resorts, hardly a major need presently.

Historically there has been a reluctance to encourage build-to-rent due to a perception that they would be cheap and nasty and targetted at the lower end of the demographics.  But states and LGAs are now realising that they can be very nice places indeed and  significant players in the market.

As for them being resorts, I’ve been in a Mirvac development and it was clean, well-appointed and had plenty of facilities. Renters were able to chose their own colour schemes and the basic lease was for one year with rent increases locked to the CPI. On the other hand, tenants couldn’t park their cars in their apartments.

The residents i spoke to were very happy, not least because there was no strata committee faffing around getting involved in stuff they didn’t need to, or ignoring issues where their attention was required.

Build-to-rent is one of the fastest-growing sectors in the accommodation market and it will become increasingly significant (though not dominant, because the rents are higher).

 

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[Jimmy-T]

Ziggy wrote:

From what I’ve heard, most owners wait till the AGM and just not renew the SM’s agreement.

Most SMs in NSW are on three-year contracts.  If they have turned out to be a dud, you don’t want to wait three years to get rid of them.

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[Jimmy-T]

optusJo wrote:

Has this happened yet?

Yes, but it only applies to SCA-NSW.

Regarding the proxies, what is your question?

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[Jimmy-T]

I can see tenants trying to challenge “excessive” increases in rentals, but since the yardstick is generally the level of rents for similar properties in that area – not the amount of the increase, or whether or not they can afford it – and they have to do it within 30 days, the only advantage may be that they delay eviction until they’ve had a hearing at the Tribunal.

The risk of them then getting no positive recommendation or even being named on a tenancy “blacklist” may be too severe for most tenants to contemplate.  This is what a Tenants Union factsheet says on the issue:

If the Tribunal finds that a rent increase excessive, it will make an excessive rent order. The order will specify:

• the amount that the rent must not exceed
• the day from which this maximum rent applies – for a period of up to 12 months

When deciding if a rent increase is excessive, the Tribunal will consider:

• rents for similar premises in the same or a similar area (‘general market level of rents’)
• the landlord’s outgoings under the tenancy agreement
• any fittings, appliances or other goods, services or facilities provided with the premises
• the state of repair of the premises
• the accommodation and amenities provided in the premises
• when the last increase was
• any work you have done to the premises
• any other matter it considers relevant

The Tribunal will not consider your income or whether you can afford the increase.

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[Jimmy-T]

A couple of real estate web pages carry the following:

Stratum title is a combination of stratum and company titles. An owner will hold the strata title for the portion of the land that is theirs, while a company title would cover any land that is shared, which would be part-owned by each individual in the group.

I have to say I am none the wiser.  If there is a portion of the property that is considered strata, then you would think the default rules of strata would apply.  But that is a guess. Stratum in Victoria feels like a different planet to me, so I hope another reader can offer better advice than I can.

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[Jimmy-T]

Listohan wrote:

attempt to keep private landlords (are there any others?) in the market

There are corporate landlords.  A few years ago, during the Global Financial Crisis, Meriton started letting apartments that they found difficult to sell.  And Mirvac, among others, are major players in the build-to-rent sector.

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[Jimmy-T]

Firstly, there is no breach of privacy involved in someone taking pictures of the inside of a property from outside the property (unless it is for some salacious intent, like catching people in an intimate moment).

Secondly, is this strata manager the same buffoon who said you needed an EGM to approve timber floors?

Of course the strata manager can send out notices to comply on the committee’s say-so.  As long as you have had a properly constituted committee meeting to approve the Notice To Comply (NTC).  The strata manager can even send  NTCs on their own volition (provided they have the standard delegated powers).

I would be seriously questioning the strata manager’s competence here.  They seem to have no idea what they’re doing.  If they are part of a larger company, ask for a new agent.  If they are a small, one-person operation, invite them to tender their resignation or face a complaint to Fair Trading.

I have a feeling the next thing you will hear is that they have to send out three warnings first.  That’s nonsense, of course, but it’s the standard excuse for agents who are too timid to take decisive action.

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[Jimmy-T]

Listohan wrote:

But measures designed to prefer one class of constituent to another usually backfire over time.

The evidence would support this assertion, at least thus far, but I don’t think doing nothing is an option. Saying “it is what it is” isn’t an answer, it’s a form of surrender.

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[Jimmy-T]

How about if, at the beginning of every financial year, landlords who wanted to take advantage of negative gearing agreed not to raise their rent in the next 12-month period?  And if they didn’t sign up for that, then “market forces” would determine their rents (provided they took Airbnb out of the equation).

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[Jimmy-T]

Listohan wrote:

The market is the best controller of rents. When the legislature intervenes, it is favouring one party or class of people over another.

I see your point but isn’t allowing market forces to dictate rents favouring the fortunate over the unfortunate?

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[Jimmy-T]

This is what the Act says:

OWNERS CORPORATIONS ACT 2006 – SECT 47A

Lot owners must not repair, alter or maintain common property or services

(1)     This section is subject to section 56 of the Equal Opportunity Act 2010 .

(2)     A lot owner must not repair, alter or maintain—

(a)     the common property of the owners corporation; or

(b)     a service in or relating to a lot that is for the benefit of more than one lot or the common property.

(3)     Subsection (2) does not apply if a lot owner has been expressly authorised by the owners corporation to carry out the repairs and maintenance in accordance with section 46 or 47 as an agent of the owners corporation.

Now, unless the strata manager has total control of the scheme through delegated powers, I would say they had no right to authorise the initial “precedent” window replacement or the additional work.

If I were you, I would write your motion to the owners to include a clause that you seek restitution from the strata manager for permitting the “precedent” work to go ahead, but you might find that too inflammatory.

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[Jimmy-T]

I’m no expert on Victorian law, but if the strata manager says the committee alone can’t make decisions about common property, then the strata manager certainly can’t, regardless of any delegated powers they may hold.

The strata manager’s boss must know they have screwed up and is now basically ass-covering.  It’s time to tell them who’s boss.  Get your secretary to rewrite the motion the way you want it and instruct the strata manager to send it out, unedited.

Remember, the owners are in charge – not the strata manager! If the strata manager doesn’t like that, they can take their business elswhere and wait for the bills for fixing this to come in.

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[Jimmy-T]

UPDATE:

I have just been informed that “Toxic” strata managers were appointed because the strata scheme seeking to get rid of their previous strata managers requested their appointment.  As alluded to in our podcast this week, that’s standard practice; when you want a statutory appointment, you have to go along with a strata manager who is prepared to take on the job.

Why did the scheme choose Toxic? That’s a whole other question – obviously somebody loves them.

As for the apparent lack of communication within NCAT, it seems it is even crazier than we thought.  The Member who removed Toxic from their previous contract was the same one who appointed them to the new building.

Yeah … I know (sigh).

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