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Strataman – clearly the insurance and strata industries are peddling the same line that you’re espousing.
I like to consider myself to be a reasonable and logical person (some may question my success), and frankly I’m insulted by the claims of large and profitable insurers that they are currently discounting the real value of premiums by in excess of 20% in order to magnanimously pay an equivalent commission to a Strata Manager who acts as their Agent.
I’m equally insulted, although less surprised about complementary claims by the strata industry, including the one about them currently reducing their management fee by the amount of the insurance companies’ commission. Claims of closures, lack of competition, and job losses in the strata industry are the standard lines of those with a poor argument, and people like me (and government advisors) regard those as just so much claptrap, that the industry wouldn’t trot-out if they had a real argument.
Presumably the State Government has done its homework and its planned amendments to the Legislation are soundly based, and it, together with vigilant Executive Committees like ours will ensure that any unjustified continuance of current insurance premiums and increases to management fees are stomped upon quickly and from a great height.
You’re entitled to your opinions on this, and the post is mine and my final comments until such time as I find a broker and/or an insurer who will do the fair and reasonable thing; at which time I’ll share their details via this Forum.
ccbaxter – firstly, it’s customary for the owners who pay for (and own) the solar systems to also pay for the infrastructure (wiring, inverters, meters etc) and to be required to maintain that in accordance with the provisions of a Special By-Law, which they collectively pay for with regard drafting/preparation and registration.
Even though you “don’t want to get into it right now”, I should briefly advise that it’s also customary for those owners who benefit from the exclusive use of an area of common property to also be responsible for the maintenance of that area; either directly or by a reimbursement of the Owners Corporation’s maintenance costs . Does your Plan have an Exclusive Use By-Law in place?
With regard to the Agenda and Minutes, I agree with you that the former is extremely “wooly” and it follows that the latter is similarly so! Like what happens if the majority of those owners who view the plans on display don’t like what they see, and if the $40K “spend level” that’s probably intended to be an upper limit on spending is exceeded?
When you confirm your recollections of what was agreed with your confidents (sic), I strongly urge you to collectively write to whoever it was who took the minutes of the AGM, setting out what you all expect that the review process to be (e.g. an EGM), and request him/her to respond in writing if those expectations are incorrect; that is no response = confirmation of your recollections.
Good information as always Jimmy!
To reiterate though, I wasn’t in any way suggesting that our Plan’s last Strata Managers didn’t disclose their commission from our insurers; the percentage was clearly shown in the schedule attached to our Agency Agreement.
I don’t accept however that any Strata Manager (large or small) who now receives such a commission would be would reducing their current management fee by an equivalent amount. Although I can foresee the management fee increasing by that equivalent amount should the managers’ commission at some time be removed.
When I find a broker who will do the right thing by at least sharing their insurance commission 50:50 with our Owners Corporation, I’ll happily provide the details to Jimmy (I have until 12/12/13).
Boronia et al – It’s actually worse than that.
In order to keep muddy water out of the stormwater system, the all so practical EPA (NSW) has in the past advised Councils to require the wash water from residential carwash bays to be directed to the sewerage system via a coalescing plate oil/water separator set below-ground.
All that does of course is to load-up the sewerage system with even more stormwater during rain events (that dump rainwater on the carwash bay), so the Sewerage Authorities then required carwash bays to be bunded and covered by a roof with a 20° overhang, and for that separator to be totally emptied every 3 months.
For what purpose I ask? When society has resolved all of its real pollution problems, maybe then it can focus on the muddy water generated by people washing their cars; as if Owners Corporations don’t have enough maintenance responsibilities already!
My advice, don’t have a carwash bay and either wash cars on the grass, or spend $10 on the high-pressure washer at the local servo.
Gees….. I feel better now!
I can understand the commission relationship between strata managers and insurers, but as I’ve said before in other posts it can’t be justified in my opinion.
I’ve heard the stories about the “better” relationship that strata managers have with strata insurers, how the strata managers understand the “system”, and how all that benefits the Owners Corporation (O/C); how does it exactly?
Answer: it doesn’t. If anything, it creates the potential for strata managers to simply steer O/Cs in the direction of the insurer that pays the highest commission. Many years ago when our O/C engaged a strata manager (who was not one of the small ones who would go to the wall if those commission/s were removed) and we had a claim, they didn’t know any more than I did about the “system”, and in fact it was me who had to continually contact our insurers to hurry things along so that we could commence quite critical repairs.
In my opinion it’s completely unjustifiable for those big strata insurers to load-up their premium by 20%+ for self managed Plans like ours, and if it’s the last thing that I do I’ll be finding a broker or an insurer that will at least share that commission that they would otherwise pay to a strata manager with us.
That is fair!!
Minty – I think that your Strata Manager is going down precisely the right track by perusing the unpaid levies via a Collection Agency who will use the established procedures of the Local Court (Small Claims Div for amounts < $10K in NSW). If the Court finds entirely in favour of the Owners Corporation (O/C), and that’s likely provided the fees of the Agency and the Strata Manager for chasing the debt (as opposed to for the unpaid levies) can be substantiated, then even if the Owner has insufficient funds to pay they’ll be required by the Court to enter into a payment plan. Other posts about the debt attaching to the Lot are correct, so even in the unlikely event that the Court process fails or is abandoned by the Agency, when the Lot is eventually sold the S109 Certificate that the Strata Manager will provide to a purchaser’s solicitor after exchange of contracts must list the levy and other amounts in arrears, and those will be paid in full to the O/C via an adjustment between the vendor and the purchaser at settlement.
Paula – amongst other things a Special By-Law (SBL) would address the issues of fire safety compliance and the responsibilities for the on-going maintenance, repairs, and replacements of the air conditioning system’s components that I raised in response to your other post.
Provided a SBL is properly worded, properly voted upon at a General Meeting (with ≥75% in favour), registered on the Strata Title for your Plan, and followed by all owners who then wish to install air conditioning systems, then there should be no flaws; they only arise if there’s no SBL.
Hmmmm… I thought that there may have been more to your original questions.
There are a couple of possibilities, but the usual one is that the Executive Committee would have to hold a meeting of all members in order to vote on whether or not to issue you with an official warning letter called a Notice to Comply, and only if you do not comply can the matter then go to the CTTT.
If you are being visited by family and/or friends then you are responsible for ensuring that they comply with your Plan’s By-Laws, and those would include using only the visitors’ carspaces to park their vehicles, and them not making any noise that would disturb other residents.
Hi Heather – If there were originally ten (10) residents written to by the Strata Manager about removing their potted plants etc, and half of those (including you) haven’t complied, then you could hardly claim that the Strata Manager is forcing only you to comply!
Just do the right thing yourself, and keep in contact with your Strata Manager (who works for you by the way) to make sure that he follows-up to ensure that the other four (4) owners do likewise.
Andrew – I’m not a Strata Lawyer, but can offer some advice.
Firstly, a strict application of the NSW Strata Schemes Management Act (SCMA) would be that residents cannot use a visitors’ car parking space at any time; they’re strictly for use by visitors, and the Executive Committee Member’s advice was therefore was legally correct (albeit poorly expressed).
That said, even a “black-and-white” person like me wouldn’t be concerned about the use of one visitors’ carspace in the manner that you and your fellow owners have informally arranged.
Clearly though, your Executive Committee takes a different view, so perhaps attempt to legitimise the use of that area by you and the other owners placing a Motion on the Agenda for the next General Meeting requesting the Owners Corporation to grant a “licence to use common property” under the provisions of Cl 65B of the SCMA.
That said (and before someone else does) there are other impediments to the use of designated visitors’ carspaces for other purposes (including those related to the terms of the original Development Consent for your Plan), but in my opinion all those could be overcome by way of the terms and conditions that may be imposed under Cl 65B.
I think that you may be confusing the requirements for an ECM (executive committee meeting) with those for an EGM (extraordinary general meeting).
With regard to an EGM, there’s nothing in the NSW Strata Schemes Management Act (SCMA) about the date shown on a Notice of Meeting, but it does prescribe that Notice must be served on each owner at least seven (7) days before the meeting date.
Nothing is prescribed about that Notice being placed on the Owners Corporation’s Notice Board, although Notices of an ECM and the consequent Minutes may be.
In response to your point #3, Schedule 2 Clause 10(8) of the SCMA states:
(8) Voting rights may not be exercised if contributions not paid A vote at a general meeting (other than a vote on a motion requiring a unanimous resolution) by an owner of a lot or a person with a priority vote in respect of the lot does not count unless payment has been made before the meeting of all contributions levied on the owner, and any other amounts recoverable from the owner, in relation to the lot that are owing at the date of the notice for the meeting.
Good advice.
You’re after AS/NZS 1668:1:1998/amendment 1 of 2002 – which deals with fire and smoke control in multi-unit developments.
Bewildered – under the NSW Work Health and Safety Act 2012 (WH&S) Strata Plans that are entirely residential are not classified as a “person conducting a business or undertaking” (PCBU) and are therefore exempt from the significant requirements of that Legislation; yours is, and that’s why I asked.
But.. that exemption only applies provided Owners Corporations (O/C) of those entirely residential Plans do not directly engage workers as employees, so if yours does proceed to itself contract an owner to provide a building management service it’s important to ensure that that person is not directly engaged, because as the O/C would be their only client, they’d be regarded as an employee under the WH&S Act (sole trader or not), and your O/C would consequently be lumbered with all the necessarily significant requirements of that Act.
In addition, a direct engagement by the O/C would mean that the owner would be classified as a “caretaker” under the provisions of Pt 4A of the NSW Strata Schemes Management Act (1996), so it would also need to ensure that any “contract” with the owner complies with that Act.
If your O/C is determined to proceed, I’d recommend that they have the owner engaged and paid by the Plan’s Strata Manager in exactly the same way as other “contractors” like electricians, plumbers, cleaners etc. The owner would need an Australian Business Number (ABN), if your Plan’s registered for GST the owner would need to be also, and they’d need to properly invoice the O/C on the terms agreed in the contract; just as they would if the O/C directly engaged them.
As for insurance cover, I again strongly recommend that your O/C discusses its proposal with its Insurers, because I remain of the opinion that as a shared responsibility still exists, the owner performing building management / caretaker duties, whether directly engaged by the O/C or via the Strata Manager, needs to hold the same cover as the O/C where that’s relevant; and I’d include workers compensation and legal liability in those (not professional indemnity).
Finally and as Cosmo observed, there are distinct advantages to having a caretaker and I believe that these would be actually enhanced if that person was in a position to more directly liaise with the Strata Manager with regard to maintenance and repairs, particularly with doing those things that most Strata Managers don’t have time to – like coordinating activities with contractors on-site, advising the contractor of any known risks in the workplace, ensuring that the work is satisfactory and there are no safety concerns, and discussing and resolving safety issues that may arise on-site; there’s less chance for overlaps that way and only the Strata Manager issues work orders.
Good luck with it all, and don’t allow my response to deter, but instead to allow your O/C to make some better choices and to do things a better way; hope your not Still Bewildered.
After the spate of roof-space fires that were reported as being related to insulation materials and un-shielded downlights, the various State/Territory Fire Authorities produced some guidelines; HERE is the NSW one.
The only requirement linking air conditioning ducting with fire safety that I’m aware of relates to the control of smoke; that is to prevent it from being distributed from the fire source to other areas within a building via the fan-forced ducting. Have a look as Australian Standard 16681.
Slightly off-topic, but take into consideration that some air-conditioning components and part of downlight fittings are often within the common property (roof-space), and unless O/Cs have a Special By-Law covering the responsibility for maintenance, repairs, and replacements of those components, then they’re responsible for that by default – even if those components service an individual Lot.
I think that your Owners Corporation (O/C) may be heading towards a mine field if it expects that any act or omission by its employee (whose role would be defined as a “caretaker ” in NSW) would absolve it of responsibility under any Legislation.
The caretaker and the O/C are separate entities, so, the former gets no benefit from the latter’s insurance cover. Consequently I believe that each entity must have its own insurance cover.
As to the nature and extent of that cover, even though the O/C may have effectively delegated some of its responsibilities (e.g. to properly maintain the common property) to its caretaker, both entities remain jointly responsible and should I believe hold identical coverage for all nominated activities where that joint / shared responsibility exists, including for workers compensation and legal liability (incl. personal injury, property damage, legal costs etc), and ideally with the same insurer to avoid conflicts should a claim arise.
The O/C should seek the advice of its current insurers re. the above, but before commenting further, could you please advise what State you’re in, whether the part-time building manager is also a resident (owner or tenant), and whether your Strata Plan is entirely residential or mixed-use?