It’s April Fools Day … but this isn’t an Irish Joke

I know it’s April Fools Day and whilst I was tempted to play a practical joke on Strataland, I won’t.

And although this blog is about Irish strata it’s also not a joke.

In fact today in the Irish Republic brand new strata title laws come into force with the start of the Multi-Unit Development Act 2011.

Over the last 3 years government, law reform groups and stakeholders have been refining new laws to govern the 500,000 plus strata lots in the country.  They're a major departure from the older laws and have been largely welcomed by commentators.

Ireland is important in the world history of strata as one of the pioneers of strata title laws.

So, see you in some Irish strata clover. 

Francesco …

All about ACCAL

The Australian College of Community Association Lawyers is a non-profit group established in 2006 to bring together lawyers specialising in strata & community title law in Australia.

Today is has over 70 members from around the country and participates in the national debate on important strata issues.

According to ACCAL, the principal objects of the College are to –

• Establish and administer to the highest standards a system of specialist accreditation for lawyers skilled in the Discipline
• Promote the highest standards of professional practice
• Facilitate research and dissemination of research materials on all aspects of the Discipline
• Foster a collegiate relationship among accredited specialists and other members
• Promote public awareness and knowledge of the Discipline
• Work in a non-political way to improve laws relevant to the Discipline.

The College has a public interest focus and over time it is expected to build a substantial body of knowledge and skills in this important and expanding area of the law.

ACCAL also provides the following benefits to members and the public -

• Recognition of specialist strata lawyers by it’s Fellowships
• Submissions to Government on law reform matters
• Policy initiatives on strata matters
• Best practice contract and other documents
• Legal case directories
• An annual conference
• Member bulletins 

It’s another great organisation that’s working to improve things in strata.

So, if you’re a lawyer working in strata join ACCAL.  And, if you’re a strata stakeholder looking for a specialist lawyer, contact ACCAL.

Francesco  …

Schemes within Schemes

In there’s an interesting trend in more complex integrated developments that the latest figures in community title schemes reveal.

In NSW there’s currently –

• 589 Community Schemes           
• 24 Precinct Schemes           
• 1295 Neighbourhood schemes
• 69565 Strata Schemes

Neighbourhood schemes also split into –

• 1064 stand alone Neighbourhood Schemes
• 230 Neighbourhood Schemes in a Community Scheme

There’s 644 subsidiary Strata Schemes within a Community Scheme.

And, there’s 20228 strata lots in Community Schemes

These figures reveal that strata schemes within a community scheme have an average size of 31 lots per scheme. This compares to an average of 10 lots for strata schemes generally.

So, whilst the number of community plans remains quite low in comparison to the overall number of strata schemes, the size and scale of community schemes make them an important subdivision option.

And, it seems that larger strata corporations are becoming concentrated in multi-tier and layered developments. Which means the focus of managers, service providers and regulators needs to shift (or bifurcate) towards this more complex and challenging buildings.

So, see you at the multi-scheme meeting/s.

Francesco …

Calling All Strata Owners … Tell Us What you Think

The research project “Governing the Compact City” being run by the City Futures Research Centre and UNSW has entered it’s next stage.

So, it’s time to find out what strata owners think about how their strata schemes are run.  And, as far as I know it’s the first time that NSW strata owners can their say about the governance and management of strata schemes.

Strata owners can complete the survey by clicking here, or following the links at www.cityfutures.net.au.  And strata owners can go into the draw to win 1 of 5 $200 Coles Myer Gift Cards. 

So, go online and tell us what you think.

Francesco …

That’s Not a Strata Scheme … According to the NSW Planning Court

In Hillsdale, Sydney there’s a 30 year old block of apartments and house on a large (5636 sqm) block of land which is ripe for redevelopment.

Although the Botany Bay City Council approved development of the site in 2009 into a new 76 apartment complex with basement parking, the owner applied for approval of a smaller scale development. 

The new development involved upgrading the existing building, splitting the house into two dwellings, re-organising the car park to create 34 resident parking spaces and 4 visitors spaces, and a variety of associated building improvements.  This development would increase the site density from 33 dwellings to 34 and add 6 car parking spaces.

But, the Council would not approve it.  Arguing that to allow redevelopment of the site into only 34 dwellings when it could be 76 preserved an obsolete building, prevented it from achieving it’s strategic plans for higher density in that area and (as a strata scheme) it restricted the opportunities for future development of the site.

The Court agreed saying that the strata subdivision into 34 strata lots will virtually permanently remove the site from prospects of redevelopment and that development was both inconsistent and antipathetic to the requirements of the Environmental Planning and Assessment Act (NSW) 1979 in relation to “the orderly and economic use and development of land”.

It’s also an interesting case because unusually the Council wanted more development on the site than the owner.

This case reference is Marana Developments v Botany Bay City Council [2010] NSWLEC 1237 decided by the NSW Land & Environment Court, 3 September 2010 and you can find it here.

I’ve also prepared another Casewatch on this important decision which you can read at my professional website here.  Casewatch is an easy to understand summary of the more important strata cases in Australia.

Francesco …

NYC Timelapse

Do you like NYC?

Well, here's a great timelapse video by Josh Owens. The music is “Down to the Cellar” by Dredg.

NYC - Mindrelic Timelapse from Mindrelic on Vimeo.

Enjoy!

Francesco

Would You Pay for Dinner with a Strata Lawyer?

I could start this blog with a  few jokes about lawyers, but I won’t (after all I need to keep it short).

But, maybe we’re all wrong about the popularity of lawyers.  At least in Strataland.

You see, in Toronto, Canada, the Canadian Condominium Institute is organising Networking Dinners for condominium board members with a legal twist. At each dinner table, board members will be joined by a strata lawyer and throughout the evening the lawyers will switch tables so attendees will be able to pose questions to a variety of the top condo lawyers in Toronto.

The next one is being held on Wednesday, 30 March from 6:30 pm at Novotel North York Hotel.  It costs $40 for CCI Members and $55 for Non-Members (plus HST).  And, you can register with CCI here.

So, if you’re interested (or bored), why not have dinner with a few strata lawyers?

Francesco …

Why Aren’t you Living (it up) in Strata?

Are you living (it up) in strata? 

No.  I don’t mean in the real world, I mean in the virtual world.

There’s a great new website with lots and lots of useful information on strata called www.livinginstrata.com.au which you should be following.  It covers Queensland, New South Wales and Victoria and it's run by the clever people at Stewart Silver King & Burns, a leading Australian strata management company.

I do and I like the wider variety of information sources than you usually find.

So, check it out and keep following the website whilst living in strata.


Francesco …

What do Fanny’s have to with US Strata ?

I was reading about US strata corporations losing Fannie Mae and Fannie Mac approval and wondered why it was a big deal.  So, I investigated it more and found out some fascinating things about the drivers of the medium and high density real estate sector in the US.

The story goes something like this.  And, sorry, it’s a long story.

In the USA the residential real estate mortgage market works a bit differently to Australia.  Apart from the mainstream banks who provide mortgage finance there are organisations like Fannie Mae and Fredie Mac that sit behind banks and underpin residential mortgages.

GSE's Explained

So, what’s a Fannie Mae or a Freddie Mac?

Fannie Mae and Freddie Mac are government-sponsored enterprises with a mission to provide liquidity, stability and affordability to the US housing and mortgage markets and to increase the amount of funds available in order to make homeownership and rental housing more available and affordable. Fannie Mae and Freddie Mac work with mortgage bankers, brokers and other primary mortgage market partners to help ensure they have funds to lend to home buyers at affordable rates.  These kinds of loans have low rates and very low down payment requirements (usually 3%) and the government guarantees those loans so the lender is protected in the event of default.

Fannie Mae, Freddie Mac and other GSEs (government sponsored enterprises) buy loans from lenders – allowing the lender to offer a low interest rate since it sells the loan (and the risk) to one of these entities.

The Federal Housing Financing Agency (FHFA) is a government agency created to regulate and oversee GSEs like Fannie Mae and Fannie Mac and to make sure the GSEs operate in a "safe and sound manner".  So it reviews business practices of the GSEs and effectively sets the parameters for mortgage lending.

So when someone wants a Fannie Mae or Freddie Mac backed mortgage in a condominium or community association the condominium or community association operations must satisfy the FHFA requirements … otherwise there’s no loan at these lower rates and favourable terms.

Approval Guidelines

These requirements are detailed and complex and include things like –

• there are two or more units
• the project is 100 percent complete
• construction has been finished for at least one year
• 100 percent of the units have been sold
• no one owns more than 10 percent of the units
• the budget funding replacement reserves for capital expenditures and deferred maintenance (at 10%)
• home owners are in control of the association
• at least 50 percent of owners occupy the property
• there’s adequate hazard and liability insurance (including flood and fidelity insurance where necessary)
• less than 25 percent of the total floor area in a project is for commercial purposes
• the commercial portion of the project must homogenise with residential use
• less than 15 percent of unit owners fee payments are in arrears 
• only 30% to 50%, of the units can be funded under FHFA approved lenders (with exceptions available)
• there must be a satisfactory independent budget review establishing that the budget:

   - is adequate,

   - includes allocations to ensure sufficient funds to maintain and preserve all amenities and features of the project

   - provides for funding of replacement reserves for capital expenditures and deferred maintenance at least 10% of the budget

   - provides adequate funding for insurance coverage and deductibles

In some cases a reserve study may also be required.

And, FHFA approvals expire after a period of time so also need renewal.

Unsurprisingly, many of the current operational and management practices in US condominium and community association exist to satisfy FHFA approval, rather than because of legislative requirements or simple market forces between managers and owners.

Current Issues & Developments

In the past strata corporations viewed FHFA financing negatively.  But declining real estate values and the banking crisis has eliminated many options from conventional lenders who will not finance properties if the loan is not acceptable to the secondary market (Fannie Mae, Freddie Mac and the like).

So today, Fannie Mae or Freddie Mac approval may bring more buyers for units  

because financing will be more readily available. Additionally, the increased marketability of those units currently for sale in a Fannie Mae or Freddie Mac approved project not only helps the current sellers, but also serves to increase the value of all units in the condominium. This will not only help owners currently looking to sell or refinance, but will also help those unit owners who may wish to sell or refinance their units in the future.

The November 2009 guidelines temporarily increased the number of permitted FHA insured loans in a particular project from 30% to 50%.  100% of the loans can be FHA insured if the project meets all of the basic condominium standards and the additional items. 

Fannie Mae recently auctioned close to 100 South Florida properties.  Those properties were only offered to owner-occupants (individuals and families who plan to live in the homes), not investors, in an effort to stabilize neighborhoods severely impacted by foreclosures.

There are some obvious benefits to GSE financing and some obvious detriments.  One benefit is flexibility - government backing allows Fannie Mae to offer hardship relief to home/unit owners.  For example, Fannie has the ability to offer loan forbearance to mortgagors plagued with chinese drywall (allowing them to skip 6 months principal payments so owners can catch up other financial obligations.

See you at the next Fannie Mae mortgagee sale.

Francesco …

Arrr … What Makes a Neighbourhood?

Neighbourhoods are communities where people interact and share things in close proximity that enrich each others’ lives.

But, as the world get’s busier and we become more disconnected this happens less (and less).

However, social media is filling the gaps fast.  I’m not talking about Facebook, Foursquare, Twitter, Mozilla or that kind of application.  There are all sorts of even more edgy and far more local facilities like Neighbourhoodr.

Neighborhoodr is a local neighborhood blog network where anyone can quickly and easily post about what's happening in their neighborhood without having to log in or register. It’s already available in the following cities in the USA and around the world.

Some of the US cities where it's operating include Austin
, Baltimore, 
Boston, 
Charlotte,
 Chicago
, Columbus
, Dallas, 
Denver
, Detroit, 
El Paso, 
Fort Worth, 
Houston, 
Indianapolis
, Jacksonville, 
Los Angeles, 
Memphis, 
Nashville, 
New York
, Philadelphia, 
Phoenix, 
San Antonio
, San Diego
, San Francisco
, San Jose
, and Seattle.  And, internationally it's operating in Barcelona, Berlin, Hong Kong, London, Paris, Rome, Singapore, Toronto and Vancouver

Neighborhoodr says that over time, cities will have their individual neighborhoods represented, as the demand for that neighborhood presents itself.  And, that if they receive or see enough content from any particular neighborhood, they’ll launch a neighborhood page devoted to that hood.

For instance in New York there are already more than 50 neighborhoods.

This is an example of how larger strata building complex can create a resident, owner and neighbour contact space.  And, even smaller strata buildings could create a similar community with neighbouring buildings on or near their block.

So, why not explore and try to create your own strata neighbourhoodr?

Francesco …   

Buildings that Reflect what Happens Inside

Sometimes even the best designed buildings are a bit boring.  But what if the outside of  buildings revealed what was going on inside? I got the idea from this photo of the carpark of the Kansas City Public Library that's partially concealed by the a wall of giant book spines.  It's a striking feature of Kansas CIty's downtown, running along the library carpark on 10th Street.  The book spines are 25 feet high and 9 feet wide and show 22 titles suggested by library members. It's pretty cool. What if the outside of other buildings reflected what went on inside like - Office buildings that look like computers, filing cabinets, and stationery Banks that look like vaults, banknotes and coins Restaurants that look like stacks of plates, glasses, napkins and cutlery Mechanics workshops that look like car parts Francesco ...

Vroom Vroom …. Strata Car Sharing

What have cars got to do with strata buildings?

In fact, there’s a lot.  And, one of the more recent (and interesting) is how strata buildings and owners can take advantage of the car sharing.

Car sharing is a convenient and reliable way use a car without the cost and hassle of car ownership by booking car use online for an hour or a day and picking the car up from convenient nearby locations.  People join a car share scheme, get a smart cards (which acts as a car key) and after booking online or by phone, pick up a car from reserved green bays on nearby streets … and returns it to the same reserved space.  Hourly costs usually range between $6 - $10, plus costs per kilometer.

There are already more than four thousand people in the City of Sydney in car share schemes and over 200 cars available in reserved parking spaces in the Sydney local area.

Sydney City Council supports the program and has made 180 public spaces available for car sharing. 

But, of course, many strata buildings could also provide hundreds more car parking spaces for car sharing.

Car sharing is good for people since there’s no need to own a car, no need to worry or hunt for a parking spot, low rates by the hour, reduces demand for new cars, encourages more sustainable travel using public transport, walking and cycling.  So, it’s good for the environment. 

But it’s also good for strata buildings as it helps residents without cars and can raise money for the strata corporation to help reduce owner levies. 

One car share vehicle can replace up to ten private vehicles that would otherwise compete for local parking space.

There are a few operators of car sharing in Sydney including –

Charter Drive

Flexicar

GoGet

Creen Carshare

See you when I drop of my car share Prius off tomorrow.

Francesco ….

It’s Saint Patrick’s Day & We’re in Strata Clover

It’s Saint Patrick’s Day today.  A day when Leprechauns and everyone else goes green, looks for shamrocks and enjoys themselves in traditional Irish ways.

Saint Patrick's Day is actually a religious holiday celebrating the patron saint of Ireland who lived between AD 387 and AD461.  It became an official Irish feast day in the 17th century and is now a secular celebration of Irish culture all over the world.

But, what’s this got to do with strata?  More than you might expect.

Firstly, Ireland has strata title and strata titles laws.  (I know it's a pretty weak connection)

Secondly, Ireland (like New South Wales) developed some of the first strata title laws in the world in the early 1960's.  So, it's a pioneer.

Thirdly, Irish strata laws are about to have some major changes introduced at the end of the month.  So, watch out for my blog on that soon.

And, fourthly, I've heard rumours that Leprechauns live in medium density flats in the inner city areas of Dublin.

So wear the green today and I hope you find a four leafed clover.

Francesco …

Melbourne Wins on Liveability (Again)

In the never ending competition between Melbourne and Sydney, Melbourne wins another round.

The annual survey of world cities Liveability by the Economist Intelligence Unit have just been released and Melbourne claims second place whilst Sydney was in seventh place.

Vancouver topped the list of the world's most liveable cities for the fifth straight year.  The top 10 rankings are as follows.

1. Vancouver, Canada

2. Melbourne, Australia

3. Vienna, Austria

4. Toronto, Canada

5. Calgary, Canada

6. Helsinki, Finland

7. Sydney, Australia

8. (equal) Perth, Australia

8. (equal) Adelaide, Australia

10. Auckland, New Zealand

And, interestingly some of the world best know cities are well down the rankings as follows.

16th - Paris

18th - Tokyo

31st - Hong Kong

44th - Los Angeles

53rd - London

56th -  New York

72nd - Beijing

The Economist report says that "Mid-sized cities in developed countries with relatively low population densities tend to score well by having all the cultural and infrastructural benefits on offer with fewer problems related to crime or congestion".  That’s an interesting observation in the context of increasing densities in almost all cities and a warning that those increases need to be managed carefully to preserve liveability.

Harare, the capital of Zimbabwe, was the worst rated city just below the Bangladesh, capital of Dhaka.

The Economist Intelligence Unit survey ranks cities based on 30 factors such as healthcare, culture and environment, and education and personal safety.

So, congratulations Melbourne.  


At least Sydney beat Adelaide and Perth (but only just).

Francesco …