Podcast: Knives out for Commissioner Chandler

This week’s Flat Chat Wrap has a look at something we predicted a few weeks ago – that the knives would soon be out for Building Commissioner David Chandler, just as they were all those years ago for Police Commissioner Peter Ryan.

Why? Maybe because he’s been a bit too successful at doing exactly what he was asked to do – get rid of of a crooks and shonks in the property development industry.

Those crooks and shonks didn’t get where they are today without having friends in high places … and the media.

We also take a quick squiz at some new statistics that show that more and more Australians are moving into apartment blocks.

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And Jimmy has a bit of a rant about Airbnb (what, again???) and passes on a brilliant suggestion from a reader that could fix the issue of residential properties being switched to holiday rentals when there’s a dire housing shortage.

And then we look at the block where someone got themselves elected to their strata committee than promptly gave their vote to a mate and took off for a year’s holiday. 

There’s all that and more on the Flat Chat Wrap this week.

TRANSCRIPTION IN FULL

Jimmy  00:00

You got over your post-COVID brain fog?

Sue  00:03

I don’t think I ever had any.

Jimmy  00:04

Well, I had it.

Sue  00:05

Did you?

Jimmy  00:05

Yes, last week.  I did the newsletter and got it all ready and then decided at the last minute to change just one line. I went back in, edited it and then forgot to resend. It was only that I got an email on Friday morning from a reader saying “oh, have you stopped doing your newsletter, because I really look forward to it,” that I thought “oh god, it hasn’t gone out!”

Sue  00:29

Wow, because I actually got the newsletter the other day, and I thought “oh, this is a bit weird. Why am I getting it today?”

Jimmy  00:35

Because of brain fog! Okay, right. We’d better crack on. I’m Jimmy Thomson. I write the Flat Chat column for the Australian Financial Review.

Sue  00:44

And I’m Sue Williams and I write about property for Domain.

Jimmy  00:47

This is the Flat Chat Wrap. Remember a few weeks ago, we were talking about David Chandler, and how he was in danger of moving into Peter Ryan territory?

Sue  01:12

Oh right; being white-anted?

Jimmy  01:13

Yes, and it’s started. There’s an article you pointed out in The Australian newspaper, that he is being investigated by the Fair Trading Department; his boss, Eleni Petinos, the Fair Trading and Small Business… Sorry, I should correct myself… She’s Small Business first and then a bit of Fair Trading, added on. Yes, because of a speech that he made, where he said he’d provided a list to the banks of all the dodgy certifiers…

Sue  01:49

Right. It’s probably beyond his remit, is it?

Jimmy  01:53

Well, he was saying at the time, that these are people who will probably never work again, because they’ve been shown to be dodgy. And of course, this has set off alarms, because it’s much more important for dodgy certifiers to be protected, than it is for people who buy apartments to be protected from dodgy certifiers.

Sue  02:18

Well, dodgy certifiers have more access to the funds that you need to go to court…

Jimmy  02:24

Dodgy certifiers are employed by dodgy developers. And so this is where somebody (I don’t even know who it was in Parliament. I don’t know which party they were members of; I don’t really care, to be honest). It’s just so typical of “oh, he said this thing!” The thing is, he has said this, and there’s no doubt that he said it. He was recorded saying it and I think we might have spoken about it before, at a meeting that journalists were not invited to. He said this thing, but has he actually done it? Is there any evidence? Has anybody seen the list? Has anybody from the banks come up and said “oh, yeah, here’s the list of dodgy developers.” Do you think he was maybe, just firing a shot across the certifiers (it’s not the developers; it’s the certifiers). Do you think he might just be firing a shot across the bow saying “look, I’m coming for you?”

Sue  03:19

Well, that would be a wise thing to do, wouldn’t it, really?

Jimmy  03:21

Well, I think it’s absolutely valid. But unless somebody can come up with this list that he spoke of, all he’s been guilty of is a bit of exaggeration, and telling a couple of fibs. Which as we know, politicians never do.

Sue  03:36

There was an interesting interview in the Sydney Morning Herald this week, with Nicholas Cowdery, the former Deputy Director of Public Prosecutions, saying how corrupt politicians have become, and you know, pork-barreling and that kind of stuff.

Jimmy  03:55

And nice jobs in New York.

Sue  03:58

Well, yes, except it didn’t quite come off, did it?

Jimmy  04:01

No. The Fair Trading Minister, Ms. Petinos, was previously notorious for having vomited in the back of John Barilaro’s car.

Sue  04:11

Oh yes! There was a link between them, wasn’t there?

Jimmy  04:16

Do you think this nonsense about pursuing him over something he said in the speech; could he just turn around and say, stuff it?

Sue  04:27

Oh gosh, you’d really hope not, because he’s got another year to go on his contract, hasn’t he, because he’s extended it. And he’s really cleaned up the industry and it’s brought back a lot of more confidence in the apartment industry. I mean, in Victoria, they’ve never had the kind of problems that we’ve had in New South Wales, because they don’t have self-certification. So in Victoria, confidence hasn’t been a problem, but in New South Wales, it really has. We’ve had all those scandals about buildings cracking…

Jimmy  04:58

One of the other things in Victoria, is that they have had for a long time, a 10-year warranty on the builder. So, whatever happened with the developer or phoenixing (which also doesn’t happen to the same extent there);  the builder would have to come up and fix, or pay for problems to be fixed. Of course, New South Wales being fundamentally corrupt, that has always been avoided. But now, David Chandler’s come in, and the laws have been changed at his behest. And now, builders and developers are being held accountable for the work that they do. It would be an absolute tragedy if he was driven out. I mean, this story about him having said this thing; the politicians need to get behind him and just say ‘look, whatever he said, unless there’s evidence that he has acted wrongly, then just let the guy get on with his job.’

[MUSIC]

Sue  06:00

Absolutely, and it was interesting; in the news this week, was also the results of the census and they’re showing the apartment dwellers are becoming much more numerous.

Jimmy  06:15

Yes. This is good news for us; this is more fodder for us.

Sue  06:20

Absolutely. They were saying that more than half of the dwellings in the inner-city of Sydney these days, are now flats or apartments, compared with 31% across Greater Sydney, and 14%. nationally, so the figure has really gone up. In the area of city and inner-south (which is from the CBD in Sydney, to Alexandria and Mascot), around 70% of the dwellings are now flats and apartments. It’s a lot, isn’t it?

Jimmy  06:47

It’s a lot. It’s not really a surprise, though, because you drive out to the airport, or drive down through that area, you don’t see an awful lot of houses and you do see an awful lot of apartment blocks.

Sue  06:58

Yes, but I tend to think ‘oh, maybe it’s the apartments are just built next to the roads and the houses are hiding way behind them,’ but obviously, not. In the Eastern Suburbs of Sydney, 58% are now apartments and flats. In Sydney’s North Shore, it’s now 46%.

Jimmy  07:15

Right. Didn’t it say that half the high-rise residents in Australia are in Sydney?

Sue  07:24

No. Half of the residents in Sydney who live in apartments, live in buildings that are nine storeys, or higher.

Jimmy  07:32

Right. So we’re moving away from the little walk-up two storey.

Sue  07:38

Yes, exactly. We’re becoming much more high-rise, densely-populated cities. I guess a lot of those smaller blocks from the 50s and 60s are now being demolished and being replaced by bigger blocks. Or, they’re being extended, or they’re being added to, which is the same thing really.

Jimmy  08:00

What we used to call the ‘forced evacuation;’ the ‘forced sale’ of blocks, hasn’t really happened to the extent we all imagined it would.

Sue  08:11

Maybe COVID slowed everything down, because I think it was building up momentum before that and maybe it will start again. I mean, it’s hard, because when housing prices were really on the up, then it became really worthwhile doing, but now housing prices are dropping a little bit and softening, maybe it’s not such a viable proposition for a lot of buildings.

Jimmy  08:34

When we come back, we’re going to talk about a story we’ve both been looking at to write this week, which is about Telcos, bullying their way into apartment blocks.

[MUSIC]

Jimmy

So we got an email from our friends at the Owners Corporation Network, about Telcos writing to apartment blocks and saying ‘we want to come and instal our broadband service into your building, and you can’t stop us.’ A lot of buildings; well, it depends on how savvy the strata committee members are. Some of them are just going ‘oh, my goodness, the law says we’ve got to let these people in.’

Sue  09:25

It was some kind of glitch in the law, wasn’t it? It wasn’t foreseen that this was ever going to happen. There’s this gap in the law, which means that Telcos can kind of insist on coming in and use the common property to improve communication within a building. Politicians haven’t moved to close that gap, I don’t think.

Jimmy  09:46

Because they don’t care.

Sue  09:48

Well, maybe they’re not aware, perhaps? Maybe it would be worth us  letting some of them know.

Jimmy  09:53

Well, they’ve known about it for three years, apparently, because they’ve been looking at it. You heard about three buildings in the same area that had a very different response to this bullying letter from a Telco?

Sue  10:07

That’s right. It’s a big complex and they’ve got three stratas within the complex. One strata engaged with the Telco and said “what do you want to do? What are you talking about?” And because they started talking to the Telco, the Telco took that on board and then started saying “well, we’re going to come in next week, and we’re going to instal our internet system.” The building said “is this right?” And they said “yes, we will refer it to the Telecommunications Ombudsman, which is very much on the side of the telecommunications industry. The Ombudsman said ‘yes, they can come in.’ So now they’re in a situation where the Telco plans to come in and do this work and they’re really upset. They just don’t want the work done. They’ve got certain architectural guidelines on their buildings, and they don’t want all this junk on their roof.

Jimmy  11:01

Haven’t they just put down a new membrane on the roof, and they’re worried…

Sue  11:04

That it’s going to get damaged as well. So they’re kind of wondering what to do. Whereas, the second strata just told them to nick off and they never heard another thing. The third strata just ripped up the letter and have had nothing to do with them; haven’t returned any calls or anything and it seems that the Telco has backed off from them. So it’s just real bullying tactics from these Telcos and if they can engage a strata… It’s really hard for strata… If you get a letter, saying ‘we’re entitled to do something…’

Jimmy  11:34

Quoting the law.

Sue  11:36

You obviously start thinking that they must be right. And then you have to start engaging lawyers, perhaps. The bills can be huge, and it can be really complex and exhausting.

Jimmy  11:50

I remember when this came up a couple of years ago…NBN was putting cable in everywhere and Telcos were turning up and saying “you’ve got to let us into your building.” One of the problems was, that they were installing their own equipment, and it was stopping other people’s equipment coming in. I remember specifically, Telstra had a special system that actually did a noise reduction (talking electronic noise reduction), on their cabling, to make their cables faster, but then other Telcos were coming in and adding a signal to the same cable, that was destroying the Telstra one.

Sue  12:31

And it also means everybody else can’t choose their own provider, doesn’t it? They just have to go with that one provider. So it’s kind of like a form of embedded networks almost, isn’t it really?

Jimmy  12:40

Very much so.

Sue  12:40

Because it drives out all competitors and that means that when they actually have to pay for the contracts; I mean, the contracts could go up and up and up and they can’t get a competitor into tender.

Jimmy  12:52

Looking at what strata schemes can do (apart from ripping up the letter)… I mean, the first thing is that these Telcos cannot come and bash down your front door, and put their tradies in. They would have to take you to court and get court orders, allowing them in there. On what grounds could you say “you’re not allowed in?” Well, every building has its own responsibility to protect common property. So you could be able to say to them “well, if you insist on coming in here, we need a detailed plan of what you plan to do with common property. We need to know who the tradies are that you’re going to use; we need to know that they have experience in strata buildings. We need to know what they’re going to do about our existing infrastructure. We need guarantees that it will not interfere with any other Telco system.” I think once you put down those six or seven different demands…

Sue  13:48

It will start frightening them off.

Jimmy  13:49

Absolutely. They’ll go for the low-hanging fruit. They will go for the smaller buildings, where they don’t have knowledgeable strata committees, and just bully them into allowing them to do it. Then the strata committee has to deal with the consequences of people who are saying “well, I’m on such and such a Telco, or my ISP is such and such a company,” and now, this other company has come in and ripped out their equipment and that comes back to the committee. “Well, what are we going to do?” Try chasing a multinational telecommunications company for damage that they’ve done to your building, and see how far you get. So I would say, by all means, talk to your lawyers, but when they come a’knockin, tell them to get stuffed, and wait until they come back with a court order and then start talking about the detail of what they plan to do.

Sue  14:43

Good idea.

Jimmy  14:43

That’s my non-legal advice.

[MUSIC]

Jimmy

I just want to take a moment to talk about something that I wrote about in the Australian Financial Review (and which is also in the Flat Chat website this week), and that’s about how short-term holiday rentals have affected the affordable housing market.

Now, there’s a couple of reports that have been done, that we refer to, that show quite conclusively, that putting apartments into holiday rentals, actually takes them out of the residential rental market. As if anybody needed to prove that; I mean, it’s simple logic.

These apartments, if they’re no longer being used for residential rents, then they’re no longer available. They push rents up, and they force people out of the popular areas, where holidaymakers also go, and into wherever they can find housing, and even to the extent of people living in cars and tents.

I got an email from someone (I’m not going to name names, because we don’t), but this person has come up with what I think is an intriguing and really interesting solution to this problem. Now, according to Inside Airbnb (and I refer to this in the story), there are approximately 36,000 entire homes in Sydney and Melbourne alone, that are currently available for short-term holiday rentals.

Those places could be available for residential rents. So when you’re looking at a shortage of 150,000 homes in the whole of Australia, a big chunk of those holiday rentals could be back in the market and would certainly make things easier for people who are struggling to find a home.

Now, this person who wrote to me has come up with a brilliant solution, I think, which is, if you don’t allow people who have put their homes (or their properties, or their investments), into Airbnb, or Stayz, or any of the other short-term holiday rentals… If you don’t allow them to claim negative gearing, then you balance the playing field.

You make it a fairer system for everybody and then the government is not subsidising taking properties out of the residential rental market. The genius of this idea is that it would be a federal government decision. I mean, you’re not going to get the states to make any radical decisions on short-term holiday rents at any point in the immediate future. They all want tourists to come back and they don’t care basically, who suffers as a consequence.

But the federal government, which has been tasked with helping to ease the housing crisis (and they’re offering grants and whatnot to do that); they can say “well, hey, you put your property on short-term renting, you don’t get your negative gearing. We are not going to subsidise taking residential properties out of the market, so that you can make a bit of extra money.”

We’re not talking about ‘mums and dads,’ as the short-term holiday renting platforms love to do; this whole myth about people sharing their homes. If you’re sharing your home; if you’re letting somebody rent a room in your house, that’s one thing (and that’s a completely different thing), but putting your whole rented or invested home on the market, as a short-term holiday rental, is taking it out of the residential market. That should not be being subsidised by negative gearing.

When we come back, we’re going to talk about a couple of relatively minor issues in strata schemes (but are kind of annoying).

[MUSIC]

Jimmy

I got a curious post on the forum this week. It took me a while to get to the bottom of it, but it turned out that this committee member had got himself elected at the AGM and then promptly announced that he was going on holiday for a year (I say ‘he;’ ‘they’ were going on holiday for a year), and asked the committee to approve another committee member carrying his vote for the year. Two votes for one person; one person who’s got himself elected, and then immediately headed overseas on an extended holiday.

Sue  19:22

That’s awful, because presumably, he would have known (or she; whoever)… They would have known that they were going overseas for a year. That takes a bit of planning, doesn’t it? So why on earth would they get themselves elected?

Jimmy  19:35

So they could give their mate an extra vote.

Sue  19:38

Maybe it was because they wanted to push a certain topic, or an issue, or something.

Jimmy  19:44

Or more likely that they just wanted to make sure that nobody else could come in and vote for things that they didn’t want.

Sue  19:51

And that’s terrible for the rest of the committee. They’re having to do the work of maybe, nine or seven people, but with fewer people.

Jimmy  19:58

The committee could always say ‘no.’

Sue  20:00

Can they?

Jimmy  20:02

Any substitution has to be approved by the committee. So you’d think that the committee had a majority (this person had a majority of supporters on the committee anyway, and they just wanted to hold their majority). So they said “well, we will approve this and that gives us a majority vote and then we can’t have these annoying people with alternative views, having any sway in the building, whatsoever.” It’s hugely anti-democratic and slightly corrupt (even though there’s probably no money involved).

There’s a section of the Act; Section 238, that allows you to apply to the Tribunal to have somebody kicked off the committee. Now, you can get them kicked off the committee for… It specifies certain things, like for breaking bylaws, and not acting with integrity, or within the best interests of the building; blah, blah, blah.

So, it’s all a bit woolly, but they’re not the only reasons that people can be kicked off. I think our correspondent should go to the Tribunal, or at least start mediation and say “I want this person removed from the committee, because they never intended to serve on the committee. They misled the people who voted for them. Get them off the committee; they can always stand again, when they come back next year. I think that would be the way.

Sue  21:27

I think so; that sounds a good idea, because at the vote of the committee, to decide whether or not they’d allow the person to do it, presumably, that person can still vote and would still have a majority. So, that’s the only half they can go.

Jimmy  21:38

Yes, and they and the other thing is, I think if they go to mediation, the committee might think “this is a bit embarrassing. Let’s just rescind that permission,” and then that means that they don’t have to fill that position with another person, if they do that. If they’re smart, they’ll just go “we’re rescinding that permission, to have the substitute member.”

If they’re not very smart, they’ll probably try and fight it at the Tribunal… Spend money on lawyers and I would think there’s a very good chance they’ll lose. That would have to be a really dumb course of action, I think, but then, strata committees are not immune to dumbness.

And the other piece of news this week, is that everybody was getting a bit upset about the Hub; this New South Wales Strata Data Hub, because they said that chairs and secretaries had to provide a personal phone number that they could be contacted on, as well as their email addresses. Now, they’ve stepped back from that, because those numbers and those contact details were going to be available to the public…

Everybody in the building; residents, tenants and owners in the building. They’ve now come back and said “okay, we still need your contact number, but we won’t be making that available to everybody. That’s for us to be able to contact you, rather than everybody in the building.” They still have their email addresses, which is a bit less intrusive, I think.

That’s a bit of news from this week, but the Hub has started. SCA New South Wales are providing a kind of kit for people, to  help them load up their information. You have until December to get it done, before they start issuing fines and things like that. There was a bit of a rumour that their IT systems weren’t up to the job, but that has not yet been confirmed.

But, we shall see. I mean, you’ve got six months; should be able to fix it all… Switch it off, switch it back on again. It’ll all be fine. Okay, I think that’s us for this week. Thanks for coming in and bringing all those statistics, which I’m still confused about. Good luck to David Chandler. I hope he gets some support from the people who appreciate the terrific job he’s done. And, get your info to the Hub.

Sue  24:21

Fantastic!

Jimmy  24:22

By December! Thanks, Sue.

Sue  24:25

Cheers Jimmy, thank you!

Jimmy  24:26

Thanks for listening. Bye.

[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, Stitcher, 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.