When hiring a good strata lawyer is a great idea

In this week’s Australian Financial Review I wrote about the value of good strata lawyers and the problems with bad ones. This was prompted by a chat with Amanda Farmer a well-known strata lawyer herself and host of the popular Your Strata Property podcast.

Amanda forwarded a document from the Australian College of Strata Lawyers about how its members see their place in the world.  But first we had a few questions of our own:

FC: At what point would you tell an enraged owner or committee that they had very little chance of prevailing in a Tribunal case?

AF: As soon as I know this to be true. The fact that they are ‘enraged’ might direct the method of my approach, but does not impact the fact that I must always properly advise a client on their prospects of success, and it is best that’s done as soon as possible.  

FC: How aware are committees that if they lose a case against an owner they must raise the expenses of the proceedings, including legal fees, via a special levy that excludes the winning owner? 

AF: In my experience, most committees are unaware of this until a lot owner who has been successful in proceedings demands that they engage in the exercise, or the Tribunal makes an order reminding the owners corporation that this is a legal obligation. 

FC: Are NCAT Members better equipped to deal with strata issues than the old CTTT adjudicators? Or worse?  Or pretty much the same?

AF: In my experience, pretty much the same, though in some cases the fact that parties are making an appearance before the Tribunal rather than having their case decided ‘on the papers’ has meant the Members are better informed about the issues in dispute and, in that way, the opportunity to make a better decision is more available. 

FC: If there was one thing you could change about strata law, what would it be?

AF: Just one?! Tough. I’d like to see strata law grow from the often-ignored ugly step-sister of property law into the status it deserves as the law regulating the management and control of over $1 trillion in assets.

The pandemic was such a tragic example of just how profoundly ignored or perhaps, putting it more kindly, misunderstood this area of the law is, with early versions of public health orders completely disregarding those living in strata buildings.

And if I can sneak in another one: I’d like to see a specialist accreditation programme in place for strata lawyers, so owners know they are dealing with a specialist practitioner who has been recognised as such by their peers. This is certainly on the agenda of the Australian College of Strata Lawyers. 

---

What makes a good strata lawyer? 

This document was submitted by the Australian College of Strata Lawyers (ACSL) to explain what they bring to the strata table and why they should be the first option rather than a last resort

“Going to see your strata lawyer only when you have a problem is like going to see your GP after your arm has fallen off,” ACSL spokesperson Michael Kleinschmidt said.

“Good strata lawyers will want to see you before there is a problem,  so they can help you avoid it or minimize the cost. Bad strata lawyers want to see you only after the the problem arises; because it almost always costs more to fix a problem, than to avoid it.

“Good strata lawyers try to resolve disputes in three stages; information, negotiation and only finally, litigation. Bad strata lawyers begin by starting the fight first.”

Also speaking for the Australian College of Strata Lawyers, Amanda Farmer, says that while strata law itself is a highly specialised subset of property law, there are various areas of specialisation within strata law.

“Some strata lawyers focus on building defects litigation, others on levy recovery, by-law drafting, scheme set-ups, building management contracts or caretaker disputes,” she explains. “Some do it all. It’s important to engage the right strata lawyer for the job and that means having ready access to a reliable stable of strata lawyers. 

“The College has an online service where you can search for experienced strata lawyers in your state, by area of expertise. That’s at: https://acsl.net.au/members-areas-of-expertise/

“A strata lawyer’s job can be a tough one, as often we’re acting for groups of owners and whilst the identity of our client as an “owners corporation” is static, its composition is fluid as new committees are elected and owners sell. If we’re representing the owners corporation of a large building, every owner in that building is contributing to our fees and may feel that gives them the right to issue instructions and have a say in how a case is run.

“In practice, we can only take instructions from an authorised source, which is usually the strata committee or strata manager. Even then, differences of opinion can result in delayed instructions and increased costs. 

“Lawyers are legally required to provide their clients with an accurate estimate of legal fees at the beginning of a case. If circumstances change and costs are going to increase, that estimate should be updated, as soon as possible. 

“Cost increases arise when the scope of a retainer changes, a dispute becomes more protracted than anticipated, advice is not accepted or followed, or those instructing the lawyer are replaced. For example, when a building changes its strata manager in the middle of a case, it often falls to the lawyer to bring the new manager up to speed. The same applies to strata committee members who may resign, sell, or not stand for re-election at the next AGM. 

“When a client is not informed of an anticipated increase to a cost estimate, or there is no explanation provided when the bill comes in larger than expected, clients are understandably surprised and frustrated. Lack of timely communication about costs erodes trust and reflects poorly on the lawyer as a professional. Fast, clear communication is key here.

“As strata lawyers, we have to remember that the strata manager or committee member we are communicating with is answerable to the larger group of owners comprising the owners corporation. Often, this person simply wants to be armed with the right answer when they are questioned about the lawyer’s unexpected bill.  

“This area of the law is challenging and ever-evolving. Often, our legislature is not able to keep up with social and cultural changes happening on the ground.

“The ‘pets’ issue in NSW is a good example of this, where an individual owner’s challenge to a perceived unfairness ultimately resulted in sweeping changes to the NSW law on pets in strata buildings. This makes strata law an exciting area in which to practise and the College encourages energetic lawyers interested in property to consider focussing on strata. 

“We recognise that the work we do has a significant impact on our clients’ lives: their strata property is the place where they live and one of their biggest and most important financial investments. 

“Good strata lawyers have a high degree of empathy, communicate well with all walks of life, have the ability to remain focussed in situations of high conflict and emotion, and have a flair for creative problem solving.”