Renters are people too

There’s absolutely nothing wrong with living side-by-side with renters in an apartment building – as long as they’re good neighbours, who cares? But you would be wise to avoid buildings where renters outnumber owner-occupiers by two to one or more.

The problem isn’t the renters per se; it’s the fact that the owners of the apartments in which they live don’t have the same kind of day-to-day stake in the building as owner occupiers, and may not be as committed to the place.

Absentee landlords may simply have different priorities. If they allow their own unit to deteriorate, the renters it attracts won’t respect the rest of the building either. Investors may not care so much if the building is getting rundown, partly because they don’t see it, and they may be deadset against any rise in levies, or any special levy, that would pay for the place to be fixed up and maintained well.

That’s when, as an owner occupier, you have problems. Absentee owners may refuse to come along to AGMs, so you can’t get anything done, and sometimes they may even be impossible to contact, particularly if they live overseas. Even worse, they may blithely sign over their proxies to your building manager – an all-too common practice than can lead to disaster if the BM is inefficient or has other priorities.

So before you buy an apartment, check the building carefully to see how rundown it’s looking, read the Executive Committee (EC) minutes to see why that might be, and ask the Strata Manager for the proportions of owner occupiers to tenants.

Sixty per cent owner occupied, or over, is great, and 50-50 is perfectly acceptable, but beware of any building that has fewer than one in three units occupied by their owners.

One notorious Sydney city centre block, had been allowed to slide into disrepair, and residents decided the key to turning it around was to change the building managers. But for that, they needed the support of the majority of owners.

They wrote to all the owners but, with the majority living out of the building and overseas, had only a handful of replies. The rest, they were forced to conclude, either did not care, or did not understand, the problems.

In the end, those owners abandoned their bid to have the building better managed and, one-by-one, they sold up and moved out. As it continued to deteriorate, even during the recent property boom, prices of apartments in the building fell dramatically, damaging everyone’s investment.

If you do find yourself in a building with few owner-occupiers, try to get the EC to engage with the other owners well in advance of any problems by making sure they understand that your concerns are also protecting their investments.

Jimmy Thomson is co-author (with Sue Williams) of Apartment Living: The complete guide to buying, selling, surviving and thriving in apartments, ABC Books. $29.95


Q: I’m planning to renovate my kitchen. Do I need the permission of the Owners Corporation?

A: In short, the answer is ‘yes’, especially if the work involves any changes to common property, knocking down walls or changing floor coverings,. And, of course, you may also need approval from the local council, especially if you’re altering load-bearing walls.

But even if your work doesn’t affect the common property, you may even need permission to carry building materials and rubble through common property and in lifts. In exchange for their permission, your EC might restrict the times of day when tradesmen can work.

But most people recognise the need to renovate older apartments – they might want to do it themselves some day.

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