Podcast: Email crazy – how a few clicks cost $17k

We’ve lifted a post from the Flat Chat Forum for the podcast this week to illustrate two issues – one is basic good practise, the other highly contentious.

The post explains how a strata manager managed to legitimately charge $17,000 for sending out five emails. 

Obviously, our advice would be to always read the small print in your strata management contract through a lens of what the worst-case scenario might be.

The other is the issue of whether the strata committee should have every owner’s email address – something way too many strata managers are not prepared to allow, regardless of what the law says.

And this is a case in point. Had the strata committee sent these five emails out themselves, it would have cost them nothing apart from the time it took to click on “forward”, “group” and “send.”

But you have to have the email addresses first.  You can read the detail on how five emails cost $17,000 HERE.

Also in the pod, we look at the measure spreading across Australia to curb Airbnb and other short-term holiday lets to get homes back into the residential rental market.

We examine, the improved but still “least-worst” deal that will probably be accepted by enough Mascot Towers owners to make it happen.

And there’s a terrific 70 per cent off deal for a posh hotel near marvellous Maloolaba.

That’s all in this week’s packed podcast.

TRANSCRIPT IN FULL

Jimmy Thomson  00:00

We’ve got a mixed bag of stuff for the podcast today. We have a report we’ve lifted straight off the Flat Chat forum, about somebody who got charged $17,000 for five emails.

Sue Williams  00:16

What?! That’s incredible!

Jimmy Thomson  00:19

Yes, but apparently perfectly legal.

Sue Williams  00:22

Wow!

Jimmy Thomson  00:22

We also have…

Sue Williams  00:24

An update on Mascot Towers.

Jimmy Thomson  00:26

Yes. That’s pretty exciting news; everybody feels that that’s dragged on a bit. We’ve got a roundup of what’s happening in the Airbnb area; there’s a lot happening all over Australia. And we have a special deal for Flat-Chatters, to go to a really nice hotel for 70% off.

Sue Williams  00:50

We could go too.

Jimmy Thomson  00:52

But then it’d be full of people going “oh, it’s that Sue Williams.” It might be nice, if all the Flat-Chatters  turned up in the same hotel, at the same time.

Sue Williams  01:03

It would be scary, wouldn’t it?

Jimmy Thomson  01:06

That’s  a lot to get through; we’d better get on with it. I’m Jimmy Thomson, I write the Flat Chat column for the Australian Financial Review.

Sue Williams  01:12

And I’m Sue Williams and I write about property for the Sydney Morning Herald, The Age, the AFR and Domain.

Jimmy Thomson  01:18

And this is the Flat Chat Wrap.

[MUSIC]

Jimmy

Right, $17,000 for sending five emails…

Sue Williams  01:38

How on earth can that be justified?

Jimmy Thomson  01:40

Well, this owners corporation (or body corporate, because it’s in Queensland),  they have a contract with their strata manager. The strata manager charges them per page, per email.

Sue Williams  01:54

That’s ridiculous, charging per page, per email. I mean, it’s okay, if they have to write a whole email that lasts five pages, but normally, it’s just forwarding on stuff that’s already there.

Jimmy Thomson  02:06

Well, the thing is that they’ve been in a few disputes in this body corporate, and they’ve had lengthy rulings from the Body Corporate Commissioner, and they are legally obliged to send them out to owners. So in one case, they had a 78-page document sent out to 66 owners. I mean, it’s not like it’s a huge scheme. The strata manager charged $1,965,  just for passing on the email.

Sue Williams  02:43

Oh, my god! I mean, they would have one block of email addresses, wouldn’t they? It would just be two clicks of a finger.

Jimmy Thomson  02:50

Literally.

Sue Williams  02:53

That’s good money; how can we get a job doing that?

Jimmy Thomson  02:55

It gets better… They then got another dispute resolution, a 268-page PDF attachment, which cost them $7,075. Just for going ‘click on this group, click on forward’ and off it goes.  I don’t know. I think they’d be complaining about it. They held an EGM, to appoint a painting contractor that cost $2,586 to email 110 pages of quotes, because EGMs and not part of the fixed fee. They cover AGM’s, but extraordinary general meetings are not part of the fixed fee.

Sue Williams  03:14

Have they challenged this? Have they said “look, this is unfair; this can’t be possibly justified.” And the trouble is that with strata management contracts, you very rarely look at them, do you really?

Jimmy Thomson  03:50

No. Certainly not in that detail.

Sue Williams  03:53

And they vary massively from company to company.

Jimmy Thomson  03:56

Yes. And they said they had another email from the Commisioner’s office last week. a 298-page PDF and at this point, they said to the strata manager “don’t send it, because we can send it.”

Sue Williams  04:11

Of course, because their secretary could send it. They’ve probably got the email addresses, if they don’t have a difficult strata manager, who doesn’t give them the email addresses…

Jimmy Thomson  04:20

Like ours used to do. But you know, that’s a very good argument for why strata managers must give you the email addresses of your owners, because otherwise they can charge like wounded bulls.

Sue Williams  04:34

That surely can’t be okay. Just on on a pub test, it’s obviously ridiculous. I suppose legally, if it says that on the contract and they’ve signed the contract…

Jimmy Thomson  04:45

That’s the problem; it’s a contract. But I don’t know if Queensland strata comes under consumer protections, as they’re talking about doing here in New South Wales. Which  would mean that it could be seen as an unfair contract. I mean, it’s ridiculous. It does not cost a millionth of a cent more to send 100 emails, than it does to send one.

Sue Williams  05:12

Oh, those poor people.

Jimmy Thomson  05:15

At least they found it and they’ve stopped it. I would think they might be looking for a new strata manager.

Sue Williams  05:20

Yes, I would think so too.

Jimmy Thomson  05:21

This strata manager happens to be one of the biggest in Queensland and also operates in New South Wales and Victoria. And I’m guessing they’ve got a standard contract.

Sue Williams  05:34

So other people should have a closer look at their contract and the fees they are being charged.

Jimmy Thomson  05:38

And the only way they found this out was when it came up in the financial report. “What are these thousands of dollars here, for emails?”

Sue Williams  05:49

Wow!

Jimmy Thomson  05:50

So check your strata management contract, folks. I’ll bet you’ll find there are other little wrinkles and loopholes that you hadn’t even realised. Like we did in our new place, when we discovered the stormwater drain people could increase the fee by 10% every year, if they wanted. Small print… When we come back, we’re going to talk about Mascot Towers and what’s been happening there. The answer to that is quite a lot, really. That’s after this.

[MUSIC]

Sue Williams  06:26

You’ll probably recall, a few weeks ago, David Chandler, the New South Wales Building Commisioner, came up with a rescue plan for Mascot Towers. It was quite a complex plan, but quite ingenious really. It was for owner/occupiers. You may remember in 2019, all residents were evacuated from Mascot Towers, because they discovered giant cracks in the building. This is a building just near Sydney Airport airport; it’s only 11-years old, it’s not very old at all. But since then, all the owners have been living elsewhere; they had rent assistance from the New South Wales government. But they’ve built up huge debts from strata loans that they had to pay for some remediation work and then also their legal costs, because they sued various developers. They were trying to prove that the regulatory and legal framework really wasn’t helpful to them. David Chandler came up with this rescue package; various different levels of support for different people, investors were missing out completely on help, but owner/occupiers were able to get their debts cancelled, their strata levies cancelled; outstanding strata levies and their mortgage repayments finished. And then they would get a percentage of the value of their unit by a consortium. It hasn’t really been revealed who they are really. But then other groups of people, like investors, were going to miss out. Older people and people suffering hardship were going to get a particular means-tested package as well. For older people, the idea was that they couldn’t go on and get out another mortgage and start their lives again, whereas younger people could do that.

Jimmy Thomson  08:07

So they’ve tweaked all this now?

Sue Williams  08:08

They tweaked it and now they’ve included…  A lot of investors said “look, this really isn’t fair.” David Chandler at that point said “investing in properties is just the same as investing in shares. It can go wrong, just the same as it can with shares.” You could have Woolworths shares and they plunged this week…

Jimmy Thomson  08:23

That went down like a lead balloon.

Sue Williams  08:25

That’s right. So now there’s a different provision for investors who had been resident in the building before, but perhaps weren’t resident that fateful night, when they were all evacuated. So they had lived there at some point. There’s a rescue package for them now as well; they’re included and the hardship and the package for older people has been improved; it’s a bit more generous.

Jimmy Thomson  08:49

Much more generous than anyone thought, I think.

Sue Williams  08:52

Yes, that’s right.

Jimmy Thomson  08:53

But I mean they’re not exactly rolling in money.  Because it was ironic that the people who had not paid their levies and who had a lot of mortgage debt, were coming out much better off than the people who had religiously paid their levies on time and had tried to cut down their mortgages as much as they could, as most people would do.

Sue Williams  08:56

No, absolutely not. If they had a really expensive apartment; one of the best apartments in Mascot Towers, they’ll probably get out, and they’d be able to buy a very cheap one in a much more affordable building. It’s not going to be like-for-like at all. I mean, everybody’s been saying it’s the best of the Plan B’s, C’s and D’s; nobody’s going to get rich. It’s just an opportunity for people to recoup some of their losses, and get out and move on with their lives. It is hard, because I guess in any deal like this, there’s always going to be winners and losers. I guess they’ve just tried to keep them to a minimum; they’ve tried to make sure everybody’s winning at some point. But nobody’s going to be delighted with this deal; many people will be relieved that it gives them a chance to get out and get on. There’s  so many mental health problems there, from people suffering the stress of five-years of not knowing what’s going to happen.

Jimmy Thomson  09:45

And you’ve got a story about this in the Sydney Morning Herald?

Sue Williams  10:06

 That’s right. They had a meeting the other day, and they voted that this deal would go ahead if more than 75% of owners by unit entitlements, agreed to it. If they wanted to leave and decided to take the packages, and it wouldn’t go ahead if more than 25% of people disagreed and wanted to stay.

Jimmy Thomson  10:35

That’s the threshold for collective sales.

Sue Williams  10:39

That’s right. So over 75% of people have agreed that they want to be leavers, rather than stayers, so the deal is now going ahead. And this week, they’re due to receive their contracts from the consortium and they will finally know what the sale price of their apartment will be, so they’ll know exactly how well off they’ll be.

Jimmy Thomson  11:02

Or how less badly-off they’ll be.

Sue Williams  11:04

That’s right, exactly. They’ll be given algorithms and calculations, but nobody really quite knows until they actually get those contracts in their hands. So it looks like this whole mess will soon be over. I mean, there will be many people who decide to stay. But for some people, that just wasn’t really an option, because if you stay, the consortium will probably remediate the building, but that will involve huge strata levies and it will take years and years, because of the DA’s and the permissions. You’ve got to get the contracts and then you’ve got to actually do the work.

Jimmy Thomson  11:36

It would be a brave person who said “I’m going to put my money into this building being fixed and my apartment being then worth it’s true worth, minus all the stuff I’ve got to pay in the interim.”

Sue Williams  11:51

It’s a gamble; you might end up much better off, but that might be another five-years of pain and worry and anxiety in the meantime. You kind of think, maybe it’s just not much of a choice at all, for many people in Mascot Towers.

Jimmy Thomson  12:08

And can people still stay if they want?

Sue Williams  12:11

Yes, they can. I mean, they can’t obviously live in the building, but they keep ownership.

Jimmy Thomson  12:15

They can hold ownership, and they just don’t get any of the benefits…

Sue Williams  12:19

That’s right. And they also lose their rental assistance. The government’s been paying rent assistance, but that’s due to finish in June.

Jimmy Thomson  12:29

The word I’m hearing from the Building Commissioner’s office is they want to make sure this is a one-off.

Sue Williams  12:41

It’s not a precedent. This is a one-off deal and anybody else who has a cracking building and stuff, they’re not going to get anything like this. There’s no deals on the table for anybody else, really. But you know, it’s hard. John Engler, who’s the CEO of Shelter New South Wales, he’s been working very closely with the owners and talking to them about the deals.

Jimmy Thomson  13:10

Kind of mediating, I suppose.

Sue Williams  13:12

He basically said that these people, they’re not going to be particularly well- off. But if it’s any solace at all, they will know that their building was a catalyst behind the appointment of the Building Commissioner, and getting these unprecedented powers to make sure this situation could never happen again. I mean, that’s not much comfort is it really, when people are facing losing so much of their life savings?

Jimmy Thomson  13:35

But any comfort at all is probably welcome.

Sue Williams  13:39

John told me that he felt that David Chandler had pulled a very large rabbit out of a very small hat. And you know, it’s great that they’ve actually done this. I mean, people aren’t going to be completely happy ever.

Jimmy Thomson  13:52

What’s that phrase; compassion fatigue? Everybody has been feeling really sorry for Mascot people, but now people are going “please, can we just finish it and move on?” When we come back, we’re going to talk about the various ways that Airbnb is kind of being curbed- I think that would be the correct phrase- in different states.

[MUSIC]

Sue Williams  14:27

So what’s happening with Airbnb around the country, Jimmy?

Jimmy Thomson  14:30

The most immediate thing that’s happening here in New South Wales is that they are looking at ways of kind of putting a lid on it, to get more homes back into the residential rental market.

Sue Williams  14:46

There’s such a shortage of rental homes.

Jimmy Thomson  14:48

Absolutely and you know, people are doing calculations and saying “we know that there are X number-well tens-of-thousands- of what were previously residential rentals, that are now on Airbnb. But we also know that there are tens-of-thousands-of (not quite so many, but there are other homes that are just being left empty).” And this is something that has been tackled elsewhere. I mean, as usual, Australia is the first country in the world to go “come on! We love it! We love your Airbnb!”

Sue Williams  15:25

Well, it was great at the beginning, wasn’t it? When it was people who had spare rooms in their homes and you could go and stay there; it was fantastic.

Jimmy Thomson  15:32

And find out about what was happening in the area…

Sue Williams  15:35

Get an insider’s view of the area. 

Jimmy Thomson  15:37

And then we got to the point where all the local people were being driven out, because they couldn’t afford the rentals. In different places around the world, they’ve put taxes on Airbnb. Some cities have banned them. Some of them have put extra rates charges on empty homes. You want to just leave your home empty, that’s fine, but you’ve got to pay extra, because you’re taking housing out of the market. Now, I don’t know if they’re going to do that here; I suspect they won’t. But the one thing they are talking about is a figure of a 7.5% tax in New South Wales, on top of your Airbnb or Stayz, or whatever platform you use. It’s funny because of course, Airbnb immediately go “this is a tax on the hosts.” Well no, it’s not really; it’s a tax on the guests. They’ll have to pay whatever… They will lift their rates to accommodate it.  Absolutely and it will bring into sharp focus what the value of these properties actually is, in terms of a holiday let.

Sue Williams  16:53

Because maybe sometimes, the hotel room is cheaper.

Jimmy Thomson  16:57

Absolutely. And people are finding that they’re getting charged top dollar for really crap accommodation. And of course, you don’t know how crappy it is until you get there and nobody wants to leave a bad review on Airbnb, because then the guest gets a bad review.

Sue Williams  17:15

That’s a good point, really.

Jimmy Thomson  17:16

If you’re the kind of person who travels around a lot and likes to use Airbnb because of the advantages that there are (and it’s not just Airbnb, short-term holiday letting)…if you’ve got a bad review from a couple of people, saying “this is a terrible person; they destroyed my kitchen, blah, blah, blah,” then the next place you apply to is not going to sign you up, they’re not going to allow you in. So there’s, that thing of the intrinsic value of the property being very flexible. So I don’t know; I really wonder if this tax is going to make much difference. Is it going to reduce the number of Airbnb properties or short-term lets by 7.5%? It might be more actually; there might be a sweet spot there, at which people go, it’s not worth it.

Sue Williams  18:11

What else have they done around Australia?

Jimmy Thomson  18:13

Next year in Victoria, they’re bringing in a similar tax, so we won’t know how effective, or otherwise, that’s going to be until it comes in.

Sue Williams  18:23

It’s interesting, because obviously, they’re going to raise a fair bit of money from that tax.

Jimmy Thomson  18:27

Well, they’re talking about $70 million, that’s going to go into building new homes.

Sue Williams  18:32

Oh, that’s worthwhile, isn’t it, really?

Jimmy Thomson  18:33

It is, but it’s a bit of a slow burn, isn’t it?

Sue Williams  18:36

It’s not very much, is it?

Jimmy Thomson  18:36

It’s not going to make a big difference for the next five years. I know that Hobart City Council have imposed extra rates on holiday lets, because when I was there last year, they were talking (and it was a very big news story)… They discovered that 10% of the accommodation in Hobart was given over to short- term holiday lets. And of course, the knock-on effect for their residential rentals has been massive, as well. We did have stories coming out of Hobart a couple of years ago, that people were sleeping in tents in the parks, because they couldn’t afford to rent a home. So I’d imagine that might have had an effect. It’s something we should look into and see what is happening.

Sue Williams  18:38

And Western Australia are a bit different, aren’t they?

Jimmy Thomson  19:34

They’ve offered short-term let hosts $10,000 to put their properties back into the residential rental market. You  think “woah, that’s generous,” but if you are in a state where (every state in Australia is in this position), there’s a serious housing accommodation shortage, and you can put another property on the residential rental market for only $10,000….

Sue Williams  20:05

And immediately. You could do that transition straightaway.

Jimmy Thomson  20:11

So that’s going to be interesting. I wonder if people in WA are quickly putting their properties on short-term lets, so they can get the $10,000 to take it back off again.

Sue Williams  20:22

So cynical, Jimmy!

Jimmy Thomson  20:23

I’m sure there’s a use-by-date on that one.

Sue Williams  20:27

I guess in places like Byron Bay, there’s been a lot of publicity, because they’ve had a huge number of Airbnbs and local businesses can’t get any staff, because nobody can afford to live there. All  the properties are out on Airbnb.

Jimmy Thomson  20:43

You go up there for a week’s holiday and it takes you three days to get a cappuccino.

Sue Williams  20:49

That’s right. So they’ve got a cap on short-term rentals, haven’t they?

Jimmy Thomson  20:54

In the areas around the Byron Bay town centre, I think they’re reducing it to 60-nights a year.

Sue Williams  21:02

That’s right, in the Byron Shire.

Jimmy Thomson  21:04

But the town centre itself is still on 180-nights, or something like that. They’re treating the town centre differently from the areas around it. So the prime holiday lets will still be able to operate, but in the surrounding areas, it’s just not going to be worth them putting them on. And while we’re on the topic of holidays,  we have dug out a really special deal for Flat-Chatters.

Sue Williams  21:38

Great! Where is it?

Jimmy Thomson  21:39

It is in Mooloolaba, which is on the Sunshine Coast. It is at the Novotel. It’s 70% off the normal fee. You get breakfast every day, you get drinks in the evening. There’s a saltwater pool. You’re right on the beach.

Sue Williams  22:00

It sounds fantastic!

Jimmy Thomson  22:04

While we’ve been doing ‘Lock up and Leave’ as we call it, the ones that really connect with Flat-Chatters are the hotel deals. So check that out; it’s on the Flat Chat website. It’s a terrific deal. Packing my boardies as we speak.

Sue Williams  22:18

And  Mooloolaba…I mean people talk about that as a great substitute for Noosa. Noosa is fabulous; one of my favourite places in Australia, but it iis incredibly busy. It’s quite built-up. It’s incredibly expensive. Mooloolaba is still quite lively.  Absolutely. It’s kind of like Noosa was maybe 20-years ago.

Jimmy Thomson  22:41

But with more coffee bars and  shops.  So get your sunnies out, go and look at the Flat Chat website and book your holiday in Mooloolaba Novatel. And when you get to the bar, if you see somebody who looks happy and relaxed, say “hey, are you a flatchatter?”  You never know. Thanks, Sue. That’s terrific; we’ve cracked another one.

Sue Williams  23:13

Thank you, Jimmy.

Jimmy Thomson  23:14

And thank you all for listening. We’ll talk to you again soon.

[MUSIC]

Jimmy

Thanks for listening to the Flat Chat Wrap podcast. You’ll find links to the stories and other references on our website flatchat.com.au. And if you haven’t already done so, you can subscribe to this podcast completely free on Apple podcasts, Google podcasts, Spotify, or your favourite pod-catcher. Just search for Flat Chat Wrap with a W, click on subscribe, and you’ll get this podcast every week, without even trying. Thanks again. Talk to you again next week.