Podcast: A simple (free) solution to strata strife

It’s been a tough few months for strata managers, especially the good ones – and there are many of them – who have been trying to do the best they can for their customers while the industry as a whole has been exposed to strident and mostly valid criticism.

The irony for the honest and decent players is that they have been copping the additional scrutiny and suspicions directed at the whole industry without reaping the financial benefits of their vertically integrated, conflicted and less scrupulous rivals.

Coincidentally, we recorded this week’s podcast with friend-of-the-Wrap Tim Sara, Associate Director of Strata Choice, our sponsors and one of the original strata management firms, on the morning that the NSW government announced it had passed the new laws on conflict of interest, insurance commissions and transparency in strata.

Strata Choice has turned its back of vertical integration in recent years, to concentrate on its core business – strata management.

So we had a chat about that, as well as the  the idea of split first AGMs, how to make strata communities better, and asked who would make a better strata manager – a former hotel concierge or an ex-cop?

Notwithstanding some technical audio difficulties (which we hope have been cleared up by our podcast platform Buzzsprout’s Magic Mastering), this message from the other side of the strata divide is well worth a listen. 

Talking of technical difficulties, the Buzzsprout player that usually sits here is on the blink but you can download or just play the episode HERE. Enjoy. 

Transcript in full

Jimmy

Hello, I’m on my own at the moment, but you’ll be glad to hear that Sue is joining me later in the podcast for a chat with Tim Sara, who’s Associate Director with strata managers and our sponsor Strata Choice, and he’ll be talking about the new changes in the law and the challenges that strata managers are facing and how strata communities can go from good to great, to use his phrase. So we’ll be talking about the strata laws that were announced earlier this year and have now passed Parliament, and the idea of split AGMs so that you elect your committee first and then go away, they go away, and look at all the contracts that have been dumped in your laps before you have to make a decision on them. We’re going to talk about his ideas for making communities better, we’re going to talk about who would make a better strata manager, a former concierge in a hotel or a former police officer, and finally an apology for the audio, this was recorded on Zoom and we had some technical issues at the beginning and in the process of resolving them kind of deteriorated the overall quality.

I’m hoping by the time you listen to it, it will have been cleaned up by the amazing Buzzsprout platform and its magic mastering. I’m Jimmy Thomson, I write the Flat Chat column for the Australian Financial Review, and this is the Flat Chat Wrap.

We’re joined this morning by Associate Director at Strata Choice Strata Management Company, Tim Sara, who’s going to talk about the positive things that you can do in your community.

Good morning, Tim.

Tim

Good morning, great to be back.

Sue

Good to hear from you.

Jimmy

I’ve got some bad news for you, Tim. Up until this week, you had the record for the highest number of downloads on our podcast for a thing that you did about three or four years ago. I think it was talking about people going into the spa, the communal spa in the nude or something like that.

Tim

Yeah, I remember.

Sue

Another X-rated one from us.

Jimmy

But you were overtaken by Linton Besser, and we had a chat with us about his Four Corners programme. But, you know, things have moved on even since then. That was only a week and a half ago.

Sue

So this is the challenge for you to make this one even more popular.

Tim

I’ll do my best.

Jimmy

The government has passed, now they announced laws in the wake of NetStrata scandal, I suppose, for want of a better word, that they were going to do something about transparency and conflict of interest and insurance commissions. And now last night, Parliament passed these laws.

They’re not actually laws yet, because they have to go through a process of gazetting. But the next stage is happening. How’s your feeling about that?

Tim

I mean, I suppose, you know, the wheels of government turn slowly. So that was in response to the story that came out back in March. And obviously, since then, we’ve had a more recent story come out through Four Corners.

So I think that the legislation that’s, you know, going through is probably the first step. I don’t doubt that we will see more of a response from government in the future, you know, in light of the more recent story that’s been told.

Sue

And is that something that you’d welcome, kind of the government getting more involved, or kind of passing more laws to make the strata industry perhaps a bit tighter?

Tim

Oh, look, I don’t see why not. I mean, one of the things that’s come out of a lot of these stories is that, I suppose, you know, the strata management industry, it’s relatively new. And so therefore, there hasn’t really been a massive amount of, you know, regulation or government intervention over the few decades that we’ve existed.

And that’s going to continue to increase over time. So, you know, I think it’s only natural that this is going to come as an industry becomes more and more professional, that’s going to put more of a spotlight on it. And, you know, that naturally leads to government interventions, which we’re seeing today.

Jimmy

Have you found, I mean, there’s been a lot of talk about the legislation, the need for legislation, the need for more transparency. I mean, your job is to keep your clients happy and keep them connected with Strata Choice. And are you getting a negative response generally?

Are people asking you difficult questions that they didn’t used to ask?

Tim

Oh, look, they’re certainly asking us, you know, difficult questions, and we embrace it. I think it’s important to recognise and respect the fact that people are going to have questions, and you need to be prepared for those and to be able to answer them with a level of confidence.

I think legislative change is fine. It’s, you know, it’s compliance. Compliance is the, what I would consider the minimum standard to which we all must abide. Really successful strata management is about going above and beyond just the minimum standard.

So, you know, you can just do what the legislation says. And then, you know, one of the things we’ll talk about today is how do you go above and beyond what the basic rules are. The basic rules are set there for, you know, governance, it’s for, you know, handling disputes, it’s to keep people on track.

But there’s a lot more that can be done in the strata management space to really go from what I’ll say today is going from good to great.

Jimmy

Right. I mean, it strikes me that one of the issues here is the vertical integration of some of these companies. And that’s something that I believe Strata Choice has moved away from.

Is that a fair assessment?

Tim

Yeah, look, I mean, you know, we’ve evolved and changed over the years. And we’re focused on, you know, really great strata management. That’s our goal. And our focus is really just being about strata management and how do we do that best for our clients. Right.

Jimmy

So what, sorry Sue?

Sue

You kind of specialize in strata management. So you don’t actually have loads of other companies that kind of cluster around you, really, you kind of you’re able to go to each of them independently.

Tim

That’s right. Yeah, we’re focused on what we consider advice and service. So strata management is about advice, ultimately, not dissimilar to other professions like, you know, lawyers, engineers, architects, you know, we are there to give advice to our clients.And that’s our focus.

Jimmy

Right. So tell us about how you or your strata manager and your strata committee and your strata community can actually build on those basic relationships.

Tim

Yeah, I think it’s fair to say that strata living comes with many different challenges. But in my opinion, dwelling on problems only gets you so far. The real success lies in finding solutions that actually foster community transparency and engagement.

So, you know, just like in business, a good enough strata community will leave potential on the table. But greatness comes when people actually care about more than just compliance. And building a successful strata community isn’t just about harsh enforcement of the rules.

It’s about fostering a culture where people feel proud to do the right thing. So it’s not dissimilar from business in that sense. If you have a wonderful culture as a business, you’re going to find people actually showing up wanting to do the right thing because they’re proud of that, as opposed to just, you know, doing the bare minimum, because that’s what they’ve been told to do.

Sue

And so how can owners corporations really foster those great values? What can we do to improve our experience of living in strata?

Tim

Yeah, so I guess, you know, one of the simple things that I like to recommend is catering for meetings, providing, you know, food or refreshments during whether it’s, you know, strata committee meetings. That’s a token of goodwill for the committee members, you know, cheese and crackers or a lasagne or something. I say avoid alcohol until after the meeting, don’t have it during the meeting.

I can really run things off track. Really bad idea. But committee members invest a lot of, you know, it’s unpaid time, and they put a lot of energy into the community.

So I think a simple meal is just a way of showing appreciation. It also puts people in a good mood. There was a study done in Israel, where they looked at judges and the decisions they made before and after lunch, and they were more likely to make harsher decisions before lunch when they were hangry.

So a good meal is going to make smarter decision. And it’s also going to encourage other owners to actually show up to the meetings as well. And by showing up to the meetings, they understand where their levels are going.

It builds trust, it builds transparency. So it’s a simpler way to get people together to have a bit more of a positive experience.

Sue

That’s interesting, because I think there are still a lot of buildings. I mean, I guess it’s a hangover from COVID, who are still having their strata committee meetings on Zoom. Would you see that as a bit of a bad idea?

I mean, lots of employers are getting people to come back into the offices and not work from home. But should we have strata committee members all in the same room and meeting face to face and enjoying some convivial food as well as the company?

Tim

I mean, it might be a hybrid approach like a lot of businesses take where, you know, some meetings are done by a video conference and some are done in person. You know, so it’s not necessarily one size fits all. I think it’s the question that committee needs to ask themselves.

Again, it’s going from good to great. So that extra bit of effort of actually getting together in a room is maybe something that’s great. You know, a video conference is easy.

And that might be considered good. You can do hybrid meetings as well. I mean, you know, we do hybrid meetings where some people come into our office and, you know, some people that maybe need to join remotely, they can do that.

They’re going to miss out on the meal, of course. But at least, you know, the people that are around that are, you know, local can actually show up and partake in a meal. And the people from home just have to be on their own, I suppose.

Jimmy

Do you think there’s enough education for people who are not in strata but are probably going to end up in strata? And I’m thinking of somebody who’s written to the FlatChat Forum and basically saying that they were being harassed by their neighbours about noise transmission, which we assumed wrongly was their flooring. And then she, he, they dropped into the next post that neighbours claim that they can hear her kids practicing their saxophone and piano.

I mean, to me, that sounds like somebody who should have been told at some point, I don’t think apartment living is right for you.

Tim

Maybe. I mean, I think that if you really chuck up to the highest level, the thing that really people could really focus on if they want to get better at being a communal resident is just simply their social skills. It’s showing up to a meeting and actually having, you know, a civil conversation with your neighbours.

Things like that actually contribute greatly towards strata living. If you had people in society, everyone’s sort of a bit more attuned to that, then you might see some better outcomes. But you can’t necessarily expect that you’ve got people from all walks of life, different upbringings, different, you know, areas of society that are, you know, some people aren’t as conscious of that sort of thing.

So you don’t get to choose. It’s not like company title where you get to choose the residents. That’s pretty rare.

You know, you have what you have. And so the question becomes, well, let’s focus on how do we work together? That for me is really the focus.

And even to that point, I mean, you can put on events for neighbours to actually get together beyond just, you know, passing each other in the hallway. You might even invite people to things like working bees or social gatherings, which, you know, foster those relationships and break down the social barriers. When residents and owners know each other and actually have a built relationship and maybe some shared interests, they’re more likely to have respectful and productive discussions with each other.

And it will reduce the conflicts and unnecessary, you know, legal costs that go into resolving the dispute between two people who might be able to just have a civil conversation and say, look, I do hear, you know, the barking dog or the child running. Would you maybe consider trying, you know, rugs or carpets? And oh, I guess, you know, I didn’t realise that.

Absolutely. You know, might be the outcome of that.

Jimmy

I wonder if the general rule for strata committee meetings is that owners can attend, but they have to be invited to speak. Do you think that puts up too much of a barrier or should strata committees occasionally have what they call a Town Hall meeting where the whole point of the meeting is to allow ordinary owners to ask questions beyond the AGM, which is a very stressful occasion anyway?

Tim

Yeah, well, the rule that owners can only speak when invited, that’s the minimum standard. And I see a lot of committees that at the beginning of the meeting will simply agree, look, you know, we know these people, we’re going to have a collegiate conversation. So let’s just have an open discussion.

You know, we don’t need to cast a vote every time. Let’s just take one vote, carry a motion that we’re just going to allow people to speak. So that rule is used when you’ve got maybe, you know, a very long agenda or you’ve got maybe some difficult personalities.

And so you can rely on that if you need to. But I totally agree. It’s something we do a lot is actually information sessions where, for example, you might have a major project or we actually do it when we’re involved in compulsory appointments where we don’t actually necessarily have to have meetings with owners for them to make decisions because we’re the administrator.

But we still do have these information sessions where it’s not a formal meeting per se. So you’re not bound by necessarily the strict requirements of the general meeting, for example. But you can still have, like you say, a Town Hall where you simply say, okay, look, we’re just going to talk about this project that we’re working on.

We’re going to get feedback from the owners. We’re going to allow them to ask questions. We’re not necessarily going to make decisions tonight, but it’s an important part of the process to actually have engaged owners who are informed about what is happening in their building.

And it’s also reducing the fear of the unknown. When people don’t have information, they will make up a story that sometimes isn’t congruent with what’s actually happening. And so you then have these wild conspiracy theories coming out.

So if you can alleviate that stress, particularly during a time of significant change, you’ll find that well-informed owners are less likely to resist those decisions being made. Again, it goes back to being in a business. If you have effective change management, you are likely to get the outcome that you are seeking.

If you try to just push things through without informing people, you’re likely to get a lot of resistance. People, you know, there’s two things that are guaranteed in life, change and resistance to change. It’s going to happen.

Jimmy

Yeah, that sounds reasonable.

Sue

So it sounds like you’re saying really, we should all be making a huge investment in good communications, really, whether that’s kind of Town Hall meetings or whether coming to meetings or social events as well. Because I guess, you know, with Jimmy’s example of a child playing a saxophone, a neighbour could, if they had good communications between them, could say, well, look, it’ll be fine if you play the saxophone between five and seven in the evening, but any later is no good. Or we’re happy for you to play between eight and nine or something like that.

And a friend of mine in Melbourne recently had a new neighbour who had extremely noisy sex until very early in the morning. And so she retaliated by hoovering, vacuum cleaning her apartment at 5am just to wake them up again as soon as they’d gone to sleep. So, I mean, that kind of thing really just makes the whole situation worse.

Jimmy

Yes, that’s a war. That’s a strife and war.

Sue

And if they actually had better communications with each other and had a forum where they could meet and talk about those kind of things, it would be much, much better.

Tim

Well, this is why the tribunal insists on mediation as a first step before going to the Tribunal. We can’t block up the courts with disputes. What they’re pushing for there is for people to just get together, sort it out amongst yourselves.

You know, if I have, you know, some kind of discussion I want to have with my neighbour, you know, rather than running off to court, let’s just sort it out amongst each other. So what it does is actually creates a bit more of an efficient strata scheme because the strata committee are not having to deal with a dispute between neighbours. They’re just sorting it out amongst themselves.

That obviously leads to, you know, not having to go to the cost of, you know, resolving those disputes. So, look, to go back to your original question, you don’t have to do any of this. If you want just a good strata scheme, then, you know, don’t bother.

But if you want a great strata scheme and you’re really interested in this, then going that extra mile is going to help. You know, it’s going to proactively deal with these situations before they arise in the same way that we have proactive repairs and maintenance that prevent catastrophic incidents that cost usually about four times more to fix than just the preventative maintenance itself.

Sue

Yeah. And who really doesn’t want to live in a great strata scheme?

Jimmy

So I’m curious to get your opinion. A while ago, I think it was last year, we were talking to John Minns, the Strata Commissioner, and he suggested that they were going to come up with the idea of a two-stage First AGM. And basically, everybody would get together, elect their committee, then go away for a month and the committee would scrutinise all the contracts that had been prepared for them.

And then they would come back and have the proper First AGM at which the committee would recommend acceptance or otherwise of the contracts. And it just seems like such a simple and effective idea, given that people who are new to strata, and there’s a lot, and there’s going to be a lot more, are coming into this First AGM and they don’t realise that this is their one shot to decide on contracts that they could be stuck with for years. I mean, how do you feel about that as the two-stage First AGM?

Tim

I think if you’re going to do it, you’d probably want to give it about three months. A new brand new strata committee is going to need time just to organise themselves. One month may not cut the mustard.

And I think it’s not a bad idea, right? So owners show up to the First AGM and you’ve got a hundred page booklet of an agenda and all the attachments. And digesting all of that information, it’s a substantial undertaking.

And one of the things that, again, good or great strata management does is actually engage with those owners in advance. And it’s fantastic when owners actually call us up and ask questions before the First AGM, they come informed, but that’s not always the case. So if you were to have a two-stage AGM, you’re more likely to have owners show up to the first event.

And bear in mind, a First AGM agenda has many more statutory motions on it. So it’s quite a long meeting. So there’s a lot to get through and you don’t necessarily have, I’ve seen some of these go for four, five hours and they’re still kind of rushing through some of the content because there’s just so much to get through.

So to me, it seems more prudent to have a two-stage process where certain things like electing the strata committee, very important. But then let’s reconvene at another time to deal with some of the other issues. And it’s not dissimilar from when you have a meeting with a long agenda where you do adjourn it.

It’s 10 o’clock at night, everyone’s tired and frustrated. Let’s reconvene and come back when everyone’s in a better headspace. The two-stage AGM idea means that owners can go away with some information and then come back and in between can ask questions, investigate, et cetera, and come and have an informed discussion.

As far as I’m concerned, that’s not a bad idea.

Jimmy

And do you think there’s enough information? I mean, look, different strata managers are going to provide different kinds of information or in different forms for their owners corporations. I mean, the last First AGM we were at, there was a beautifully printed booklet where the contracts were in like five-point type and pale blue letters.

And some of them you had to scan a QR code to read the contracts, whereas others I’m sure are much more accessible. But I wonder if there could be more done to explain to first-time strata residents and owners, this is how things work and this is what you should expect. Do you think that’s a fair criticism?

Tim

Oh, absolutely. I think it’s something that I know that we do is information packs that we just explain the basics of strata to those. I always like to start a First AGM with a quick show of hands, who’s new to strata?

And it gives me a real sense for how that meeting should be run. Because if you’ve got a room full of people that are educated on strata living, then you can really cut through the meeting in a different way. But if you’re dealing with a brand new set of owners that are new to strata, you’ve got to really take a bit of extra time to go through that process.

And that may involve adjourning and reconvening. So you can provide a plethora of information. I think we’ve got to be careful with overdoing it.

If you’re sending out a 200-page document that’s got information about strata living, the agenda, all of the contracts, do you really think every single owner is going to read through every single page with a fine tooth comb? And that’s where breaking it down can actually help. If you break that down into two smaller kind of meetings, you can deal with some issues here and other issues over there.

Education for strata owners, it’s going to be crucial because more and more people are moving into strata living. And that’s been something that I’ve seen over the past decade and a half in strata management is more and more people moving from the typical house to strata scheme. So our roles really become one of education.

Sue

Absolutely. And does that education, I mean, as a strata manager at the First AGM, would you warn people about embedded services contracts and things like that? Or is that not really your role?

Tim

Well, you have to, you’ve got to be able to articulate to everybody what it is that they’re really getting themselves into. Again, without droning on and taking up too much time. You need to be able to answer questions to take people through that journey.

And one of the things that I like doing, it’s not necessarily for a First AGM, but things like sending out regular newsletters to strata owners, which actually explains what’s happening in their community in a bit more of a friendly and engaging way. It gives them insight into the unseen work that committee members and strata managers or building managers are doing so that they understand the reason behind what’s going on. For example, enforcing bylaws for community harmony rather than punishment.

And so people are more likely to get involved. So if you can do that for an existing strata scheme, you’ll find more owners are engaged. And therefore, if they do buy into a brand new strata scheme, because when I asked for that show of hands, who’s been in strata before, that’s not necessarily an indicator that they paid attention to their strata scheme.

They might’ve just lived in one and thrown the AGM notice in the bin every year. So what I think we need to do is to educate the people that are existing in strata. So they’ve got a lived experience.

In my view, a practical understanding of something really does trump the theoretical knowledge. And so if you can take existing strata owners through that journey, they’re going to then take that experience into the brand new strata schemes. They’ll take it into their First AGMs. And what you find is that an engaged group of owners actually educate one another. I love seeing it at meetings, for example, where one owner asks a question and another owner answers it. And then the person that asked the question looks to me and says, is that right? And I say, yes, that’s exactly right.

So it’s not all hinging on me to educate people. People are sharing their knowledge with one another.

Jimmy

One of the things that’s come out, it came out in the Linton Besser report, he said that he met a strata manager who had 100 buildings that he had to look after, not just 100 apartments, 100 buildings. And that meant two AGMs every week. And obviously, there is a need and it will be an increasing need for more strata managers.

Now, given the current negative focus on your profession, would you encourage people to become strata managers?

Tim

Yeah, I would. I personally, I find it to be enriching. And it’s something that I’ve, like I said, I’ve done for 15 years.

I greatly enjoy overcoming the challenges that we’re faced with. It’s not for everyone. It’s a really tough job.

I speak to some strata lawyers that tell me that we’ve got it harder than them. I was in a meeting just yesterday with a client, with a group of committee members where we were talking about this topic, about the number of strata schemes that have to be managed. I think that for me, strata management was an interesting crossroads between the legal profession and real estate.

It’s certainly not something that you learn about in high school and is introduced to you as a career pathway. But if you’re somebody that’s interested in dealing with complex issues that involve human beings, then it’s for you. It’s not for everybody.

It is hard work. It is absolutely a challenging job to be in. But for some people, that’s what they’re going to pursue in life.

Jimmy

Right. Well, we’re rapidly running out of time, but I have one last question for you on that topic. If you were looking at candidates to join Strata Choice, and they were equally able and equally impressive, but one of them used to be a hotel concierge and the other one used to be a cop, which one would you go with?

Tim

I guess it depends on the role. But as an example, when we recruit for assistant strata managers, we tend to prioritize customer service experience. We can teach people strata.

We have an academy for that. We can teach people strata. But if they have the right mindset and attitude towards strata living, towards problem solving, and to do so in a professional manner, that’s what I’m going for.

Nothing against cops, but I think strata living, like I said earlier, it has to be about more than just complying and following the rules. It’s got to be, okay, the rules are the minimum. How do we go above and beyond that?

So for us, it’s about professionalism. If someone can demonstrate that they are a true professional, that they can maintain composure in the face of a challenging situation, which they will inevitably face, then that person, in my view, is going to have a successful career in strata management.

Jimmy

Great. Now, we are running out of time. Tim, thank you so much for your time, and apologies for my technical ineptitude at the beginning of this.

But hopefully the recording is nice and clear for people listening to this at home.

Sue

Oh, thanks a lot, Tim. That was really interesting. That was fantastic.

Tim

My pleasure. My pleasure. And thank you again for having me on.

And hopefully we can start to see more strata living that goes from good to great.

Jimmy

Okay.

Sue

Absolutely.

Jimmy

Great.

Sue

Drink to that.

Jimmy

But only after the meeting.

Tim

That’s right.

Jimmy

Interesting that Tim would put customer service above compliance in his choice of a new strata manager or someone who’s new to the industry.

That was a great little chat. I hope you enjoyed it. We’ll be back next week with even more from the world of strata, which just keeps giving us more things to talk about every week.

Thanks for listening. Talk to you again soon. Bye.