Forum Replies Created
-
Replies
-
Jimmy, you don’t deserve that rudeness. This is an excellent web site. People can learn so much about strata if they take the time to read the content.
I enjoy having an occasional vent about strata managers … I probably enjoy this too much.
My only wish is that the “Your latest questions & answers” would show who made the last post and when. I have to click on every link to see if someone has posted after me.
I used to run a forum on a platform called Simple Machines Forum which showed that kind of data. WordPress might not be so advanced yet.
My question is really how concerned should we be about the current balance of the Capital Works Fund and any other useful comments people may have
Thank you
Yes, you should be concerned.
Some ten-year plans are not worth the paper they are written on. My owners corporation had a ten-year capital works plan. It was written by consultants, who walked up and down the driveway and made a list of jobs to do. e.g. repaint the garage doors, replace window fittings, maintenance pipework … Then they assigned a cost to each job. They determined a date for doing each job. They added inflation if it is going to be done in a future year. Then they calculated how much money we need to save each year to pay for these jobs in the future. That amount became the capital works component of our strata levy.
This is a reasonable approach. The biggest problem was that the money was NEVER spent on these planned jobs. The money was spent whenever a disgruntled owner demanded a repair (which was not always common property).
An owners corporation must have the discipline to keep the capital works money SEPARATE from the day to day administrative (maintenance) money.
There are two components of your strata levy:
Administrative fund: At the start of the year, you work out how much you need to cover things like insurance, electricity, water, building manager, pool maintenance, gardening, insurance excess for claims, elevator maintenance, “general repairs” etc.
Capital works fund: is only for the big jobs listed in your capital works plan. This is the money you don’t spend until it is time to do the big jobs in the capital works plan.
About “general repairs”
One of these funds should also allocate money for “general repairs” for when someone calls to fix something. You should not be dipping in to the money set aside for the capital works plan.
At the end of they year, you can look back on what you spent on “general repairs” and determine if that figure should be changed for the next year’s budget.
At a guess, almost every strata plan is dipping into its capital works fund money for “general repairs” or to pay for shortfalls in its administrative fund budget. That is why they will never have the money to do the big jobs in their capital works plan.
@guestguest, Ask your strata manager for a copy of the registered strata plan. The registered strata plan should show the unit entitlement for each lot in the strata plan. The unit entitlement is a number. In my plan, there are eight lots. The entitlements are:
128, 128, 128, 125, 125, 122, 122, 122
If the three lots with 128 unit entitlements get together, they can block any motion which requires a special resolution.
Here is a copy/paste of what the Strata Schemes Management Act 2015 (Schedule 1, Part 3 General Meeting Procedure, Section 14 Decisions at meetings) says about poll votes.
14 Decisions at meetings(1) Simple majority vote to generally apply A motion put to a meeting, or an election of officers of the owners corporation or members of the strata committee, is to be decided according to a majority in number of the votes cast for and against the motion with each person having one vote for each lot in respect of which the person is entitled to vote.
(2) Vote of original owner who owns more than half of lots to be reduced For the purposes of determining an election for officers of the owners corporation or members of the strata committee or appointing a strata managing agent (other than in the case of a poll), the value of a vote cast by an original owner must be calculated in the same way as for a special resolution.
(3) Value of votes to apply for poll If a poll is demanded by a person present and entitled to vote on a motion or for the election of officers of the owners corporation or members of the strata committee at the meeting, the motion is to be decided according to the value of the votes cast for and against the motion and the value of a vote cast by a person entitled to vote in respect of a lot is equal to the unit entitlement of that lot. However, the value of the vote of an original owner is to be calculated in the same way as for a special resolution.Note.Section 5 sets out the manner in which a special resolution is determined.(4) Polls A poll may be demanded immediately before or after a vote decided by a majority in number has been taken. The demand for a poll may be withdrawn by the person who made it.
No, I have had no success in changing the strata manager’s terms. My owners corp held a meeting and passed motions to change the strata manager’s terms were passed. The consequence was that the strata manager resigned and we had to seek another strata manager.
When we sought other strata managers, their contracts appeared to be made from the same template. It was the template from the Strata Community Association. Again, we requested changes such as don’t give yourself a $500 spending limit on repairs without consulting the owners corporation.
Reason: Tradies were charging $490 or $495 for work. We did not know about it until we read them in our periodical financial statements.
The strata managers concerned were not willing to give us that concession. They said it was too much trouble to call the owners for small jobs.
I don’t think options (a) and (b) are legally valid. It is another way of expressing (c) Take it or leave it.
I suggest you google “Property and Stock Agents Act 2002” and “Residential Tenancies Act 2010” and see if what it says about relationships between landlord and managing agent.
When the tenant pays more rent, the manager’s commission increases with it. Have you instructed your property manager to restore the original rent?
I posted a response and it did not go into that “pending” status.
It is easy to call insurance companies yourself and get a quote for strata insurance. It is just like organising your own car insurance, health insurance etc.
In fact, owners have more knowledge of the property being insured. For years, my owners corp was insured for “personal property”. When I called the insurance company, they asked me if we had “personal property”. I said “yes, we have letterboxes”. The insurance company said “that’s not personal property”. It turned out that we did NOT own any personal property.
The resulting insurance premium was cheaper than any premium we paid in the previous five years.
I have called multiple insurance companies and arranged my own strata insurance. I can’t see the benefit of paying somebody 20% of the premium to do the same job for me.
With my personal knowledge of the property, I may have negotiated better terms: One of the questions the insurance company asked was whether we owned personal property. I said “yes, we have letter boxes”. The insurance company rep said “no, that’s part of the building”. It turned out that we did not own any personal property. i.e. we don’t even have a lawn mower.
Once that question was correctly answered, we were offered our lowest premium for the past five years.
I understand that strata managers rely on that 20%+ insurance commission for their income. It would be more honest to factor that amount into their monthly management fee.
Charges like insurance commission, “postage, copying, phone calls, stationery”, insurance valuation, income tax returns are strata management fees by stealth. Instead of putting them in the strata management contract, they put it in the budget and get the owners corporation to approve the budget.
We had roughly $1,400 of budget expenses added on to the $3,600 management contract. Hence, the real cost of the strata manager was $5,000 per annum.
I was just listening to your podcast. At the point where you and Sue discussed this topic, you said solar PANELS. The rebate is for BATTERIES only (as stated in your post here). Yes, strata schemes are excluded.
However, there is a programme for solar panels. Earlier this year, NSW Government launched a programme called Solar for Apartment Residents Grants programme (SoAR) SoAR pays up to 50% of the cost of a solar energy installation (batteries NOT included).
So it is not entirely correct to say that apartment residents get no assistance for solar panels. It is the batteries, for which they are excluded.
If you don’t have a battery: solar panels and an inverter will receive energy from the sun and convert it into energy for the home. Any unused solar energy is sold to the grid (at a very cheap rate). When the sun goes down, the householder will be drawing energy from the grid.
A battery can be added at a later date. This might be a better idea because you might find there is very little unused solar energy to store in a battery.
If you do have a battery: any unused solar energy will be stored in the battery. The householder can use that energy after the sun goes down.
Villas and townhouses are not eligible for SoAR
There is a catch to the SoAR programme. NSW government’s eligibility rules state that you have to be a class 2 building. My strata plan is a class 1a (rowhouse, townhouse, villa etc.) I wrote to the SoAR people and asked if this was a mistake on their part. They said that if two or more homes share the same underground carpark area, then it would be a class 2 building. Most villa and townhouse developments are not built like this. The only things we share are the outdoor parking, gardens and letterboxes … and a roof. We’re going to miss out on both SoAR and the battery rebate.
Hello CupOfTea, google “strata schemes management act 2015” and scroll down to section 109 “Cosmetic work by owners”. There is a list of examples of “cosmetic work” which does not require approval of the owners corporation.
Paragraph 5 lists work that is not included as “cosmetic work”. Here is your problem:
“(c) work that changes the external appearance of a lot, including the installation of an external access ramp,”
A hook on a balcony ceiling does change the external appearance of a lot.
You would have to seek permission from the owners corporation. This would require a vote of all the owners at a general meeting. If they decline, they could order you to remove the hooks. If you refuse to remove the hooks, I wonder if the owners corporation would go as far as applying to NCAT to have your pot plant hooks removed. It seems so trivial.
You could explain to the NCAT member that they’ve been there for years and nobody keeps records for that long. You could also apply to NCAT yourself to have the hooks approved. I think the NCAT member would think why is everyone wasting their time on this.
If your strata manager issues a “cash management statement”, every owner should study every transaction. This is where the money is going.
I suggest you look for these two items:
1. Income tax return: For most strata plans, it is NOT necessary to submit an income tax return. ATO has a tax ruling to decide whether it is necessary to submit an income tax return. See TR2015/3 (tax ruling)
In short, if your only income is levy income, you do NOT need to submit an income tax return. This is because levy income is considered mutual income. On the other hand, if you are receiving income such bank account interest or advertising space on your building, that is taxable income.
2. Postage, copying and calls. Ask for a breakdown of these.
We consulted a lawyer who said we had a good case and that the problem would be fixed. Unfortunately he has said it might cost up to $30,000. Is this about what it costs in others experience.
I recall being quoted $10-15,000 about 6 years ago. We ended up representing ourselves and were successful.
If your application is successful, you can ask NCAT to award costs to you. That should be part of your application. This is not guaranteed to happen. I don’t know what happens if the other side agree to fix the mould after you hired the lawyer.
You need to establish that Section 106 of SSMA 2015 has been breached. You need to prove the waterproofing problems are causing the mould in your lot. Your engineer’s report is needed. You need to show that you requested the repair and that the owners corporation declined your request.
As everyone else said, “it costs too much to fix” is not a valid reason for ignoring the problem. It could cost more money for the owners corporation if there is an order to pay your legal costs.
If you decide to pursue this yourself, you could ask the strata lawyer what other kinds of info they would gather when they put your case together. Then you could seek that information yourself.
At my Directions hearing, I was told to write a response in a document. There should be a table of contents, page numbers and an index. I think the index was overkill.
Congratulations @Sage-grouse. Thanks for letting us know the outcome. I did not know that a matter should be settled in a directions hearing. Saves time and money. I would love to know the cost of that lawyer.
Hi Sammy
You must get everything in writing. The executive committee is not giving you a consistent story. Please put together all emails, text messages and paper correspondence to confirm what you are saying. I hope you have a written statement from your workman from five years ago.
From my own experience in NSW, you cannot claim that the owners corp “refused to fix something” unless you first ask them to do it. If you have not done so already, put your request in writing. Then get their response in writing.
Then ask a strata lawyer how you should proceed. I don’t know why you would be liable. A strata lawyer can advise you.
The insurance company insures “building” and “contents” according to their definitions of “building” and “contents”.
However, you never know your luck. Just ask the insurance company if they will pay a claim for that hot water tank. If the insurance company considers the hot water tank to be a “permanent fixture”, you might have a claim.
In a nutshell, the strata manager was free to spend the owners corp money without consulting the owners corp beforehand.
So how did you fix it?
One quarter of the owners corp called an extraordinary general meeting to vote on several changes to the strata management contract. These motions were to:
- Revoke the strata manager’s authority to spend up to $500 on anything
- Instruct the strata manager to contact the strata committee for any matter (including emergencies) before they spend money.
- Instruct the strata manager to stop submitting income tax returns on our behalf (because they were unnecessary and costing us money).
After these motions were passed, the strata manager resigned from our service. We tried to find another strata manager who would not use “emergency” as the catch-all excuse to spend money. It did not happen. Now we’re self managed.