Will Smart Electric Bicycles Change our Cities?

Urban planners talk endlessly about transforming our cities and inner urban areas with higher density and people friendly environments.  

But despite the rhetoric, the dominance of the motor car remains the primary factor dictating our city landscapes by requiring large road access, parking and safety measures.  Whilst public mass transport is solution it will not address personal mobility needs and desires and cycling does not suit everyone for health and comfort reasons.

But, maybe electric bicycles will do this as this interesting review of the new Smart electric bike by Joe Peach demonstrates.  Joe describes his experience of using the bike for work in Berlin over a few days.

And here's short video from Smart about the bicycle (if you understand German).



Imagine if even just 10% of the people using motor cars for short trips used one of these bicycles instead?

It makes we want one.  Plus, it's way less nerdy than a Segway.


Francesco ...

Creating Cities with Pen & Paper

Most cities are built brick by brick, building by building and block by block so it's a slow process that we don't notice around us.

But you could do it a lot faster with pen and paper. 

This great time-lapse video of London artist and illustrator Patrick Vale drawing an architectual view of the lower Manhattan skyline from the perspective of the Empire State Building is a great way to see how it has transformed things in that city.

Empire State of Pen from BigAnimal on Vimeo.

Enjoy!

Francesco ....

Wanna Buy a Slightly Used Strata Apartment?

Next Saturday (24 November) in Sydney, the Owners Corporation Network is holding a seminar about buying strata apartments in older buildings with presenters sharing knowledge and experiences about the benefits and pitfalls of older strata apartments.

It's a worthwhile topic and many strata apartment buyers could certainly benefit from more knowledge.

But, it also made me think about the idea of 'new' and 'used' apartments and why people don't (and shouldn't) think about them like cars or other products.

After all when you decide to buy a car one of the first things you decide is between buying new or second hand.  That will usually depend on price and what you can afford since older cars are usually worth less.  But sometimes you're after a specific model that no longer exists or has become a collectors item.  Next you'll have colour, trim and specification preferences.  And, then you want to check the condition (usually getting an auto service inspection).

But it's not quite the same for strata apartments.

Older apartments aren't cheaper than new (and in some case the opposite occurs as developers offer incentives to sell in slow markets and discounts for pre-construction sales). And, people don't tend to think of apartments as used.  The apartment features do make a difference to buyers but, surprisingly, the levels of pre-purchase inspection (building and strata records) are much lower than for cars.

Despite strata apartments being a manufactured product (bricks, timber, steel, glass and finishes) with a finite life - they are marketed and perceived to be like land by most stakeholders.  To me it's an interesting outcome that does not match the reality of strata ownership.  

So, wanna buy a slightly used strata apartment - only occupied by a little old lady on Sundays?


Francesco ...

A Quick Tram Ride through Victorian Strata

In Melbourne trams are a easy way to get where you want to go.

And now there's also an easy way to find out more about Victorian strata corporations called the OC Guide.  The website explains that the guide - 

"has been developed so that individual apartment owners and owners corporation committees of management  in an OC within the State of Victoria, Australia, may have an online reference for information to assist them in both understanding their Owners Corporation and hopefully resolving some of the many Owners Corporation challenges. Owners Corporations were formerly known as Body Corporates in Victoria and are often referred to as Strata as in Strata Title." 

I don't know who's behind the OC Guide but it hardly matters.  After all, more information about strata is a good thing for everybody.

So, check out the OC Guide if you're on a Victorian strata journey.


Francesco ...

Are Wooden Strata Apartments in Danger from the Big Bad Wolf?

Should strata owner be worried about timber apartment blocks?

Not necessarily because of the big bad wolf.  But, rather because of the heightened maintenance requirements and potentially shorter life span.

It hasn't been an issue in Australia since most apartments have been built with masonry and/or concrete construction (even if there are timber components).  But, it's quite common to see timber framed and clad apartment buildings in other parts of the world.

However, environmental fashions and initiatives have led to the first mainstream timber apartment building in Melbourne. 

It's called Forte and its developed by Lend Lease.

The 6 storey apartment building is built from cross laminated timber and has only 23 apartments.  Lend Lease says it's the world's tallest timber apartment building, has a remarkably low carbon footprint and will revolutionise apartment construction.

Although there's nothing different about running and maintaining a timber strata building from any other, I suspect that it will be more susceptible to incorrect, inadequate or delayed maintenance and repair.  So, more attention (and money) will be required to preserve it.

And, I wonder about the effective life of the building and what that means.  Since it's likely to be less than concrete or masonry construction should this kind of strata building have planned redundancy from the beginning.  Otherwise, what will owners do when it needs replacing (or when it nears the time for replacement)?

You can find out more about this innovative building here.

Maybe, routine ongoing maintenance and repair (and paying for it) will be the big bad wolf of wooden strata apartments.


Francesco ...

The Yin-Yang of Overseas Strata Owners

I recently read a few interesting articles that illustrated the yin-yang of overseas strata owners in Australian strata.

The Chinese concept of yin-yang, literally meaning "shadow and light", describes how polar opposites or seemingly contrary forces are interconnected and interdependent in the natural world, and how they give rise to each other in turn in relation to each other.

So, why are overseas strata owners a yin-yang strata issue?   

On the one hand it appears that an increasing number of strata owners live overseas.  They're attracted to Australian real estate investment by its stability and foreign investment laws make it relatively easy to buy and won in Australia.  And that's a good thing for Australian strata as this article Foreign Investment in Australia's Property Market by Strata Community Australia explains.

On the other hand overseas strata owners can cause serious strata grief when they don't pay their levies.  That's because strata laws are state based and legal action against people who are not Australian residents and/or not present in the state are more complicated.  Usually they need to be taken in superior courts (so are more costly) and things like service and enforcement action are more difficult without Australian addresses.

This was recently highlighted in a Victorian VCAT case about strata levies called the Sivanesan Case.  You can read more about the problems over strata levy recovery in these articles (The Challenge of Foreign Investors by SCA) and (page 6 article Recovering Fees from Overseas Owners by SCA VIC) and look at the Sivanesan Case judgement here.

So, as much as Australian strata wants and needs overseas strata owners to maintain growth and investment in the sector, they can pose a serious legal and cash-flow impact on strata corporations when they don't pay their strata levies.

It's a yin-yang strata thing.  Or, to put it another way "the sweet is never as sweet without the sour". 


Francesco ...

Artistic Elevators

I hate elevators!  They are just so annoying and boring.

You have to wait for them longer than you usually want.  When they arrive they are either empty so there's no company or so full they're overcrowded.  Inside they look so drab and boring and you're stuck there doing nothing (or worse listening to Muzak).

So, how about using that wasted space and time for art that challenges and stimulates?

Here's a dramatic approach that's been taken in Poland by Studio Pixers. 

Francesco ...

Victorian Strata Bedtime Reading

Can't sleep because you're thinking about the next strata corporation meeting in Melbourne?

Then you need this book.

Called Owners Corporations in Victoria, it's written by Rebecca Leshinsky and Simon Libbis who have many years experience and it provide answers to most of your questions about Victorian strata corporation operations.

You can find out more and buy it here.


So, there's now no excuse for restless Victorian strata nights.


Francesco ... 

More Law Changes for Strata Managers

It's just turned spring in NSW and the legislators are getting frisky with more and more law reform proposals every month.

This time they're reviewing the laws governing real estate agents and strata managers with a range of proposed changes affecting -

• trust account audit requirements & auditor qualifications
• agency agreements & payment entitlements
• regulatory powers over agents

Because NSW is one of the few places in Australia that strata managers are licensed these changes will affect them and strata corporations, so you should check them out.  And you can make submissions up to 5 October 2012.

You can find out more about the changes at the Fair Trading website.

There's a summary of the proposed changes here and you can read the draft legislation here.

Francesco ...

Strata Defects Submissions by SCA & OCN

In July I blogged about the NSW Government revamping Home Building laws and the opportunity to make submissions about this important strata issue (see Repairing NSW Building Laws).

Strata Community Australia and the Owners Corporation Network have made a joint submission focusing on strata building defect issues.  You can read the whole submission here but some of the suggestions SCA and OCN make specifically about strata building defects include the following (my paraphrasing) -

• Introduce a meaningful tiered licensing system for developers
• Define completion dates as strata plan registration dates (made 3 times)
• Create a database of all HOW time limits dates for all (strata) owners
• Educate lot owners about defects, rectification works, fair wear and tear & their rights and responsibilities
• Require builders & developers to inspect lots & common property before handover
• Further definition of "structural defect" is required
• Restore HOW insurance to all strata buildings over 4 storeys (made 2 times)
• Restore the single 7 year time limit for claims (made 2 times)
• Abolish self-certification of building completion
• Variously to improve the CTTT mediation system, impose binding expert determinations on defect claims, shortening the CTTT processes, increase CTTT's money jurisdiction 
• Prevent the use of Phoenix companies to avoid defects rectification
• Imposing the same obligations on unlicensed builders
• Tightening up builders' opportunity to rectify defects so that it's for a limited time, once only, based on detailed work scopes, independently defined-supervised
• Create a national register of unfit persons with ASIC
• Personal liability for directors and shareholders  of non public companies for building defects
• Create a public register of HOW insurance policies

It's great that OCN and SCA are supporting strata stakeholder interests and you can't criticise the intentions motivating the suggestions, but I can't help feeling that this submission is a bit defective itself.  I say that for 3 main reasons.

1.  The submission fails to understand and deal with the shifts that have occurred in NSW over the last 10 years affecting the Home Building Laws, Court decisions that have re-interpreted strata building rights, the downturn in real estate development and the shift in insurance sector participation rates.  So, making submissions that things should go back to the way they were in 2003 is naive.  It would be better to suggest changes that fit into the likely future legal, political and economic environment.

2.  There is no analysis of the way these issues are dealt with (successfully or otherwise) in other jurisdictions (Australian or international) to illustrate why changes are necessary and which changes have already been tried.  For instance, Tasmanian strata laws include provisions assigning developer rights against builders to strata corporations and Victorian strata laws impose obligations on developers to resolve building defect issues in the first few years.

3.  Where's the invention and innovation?  Strata defects wont go away with more of the old solutions - they need innovative ideas to align the interests of all strata stakeholder (owners, developers, builders and regulators) so that  everyone benefits from properly built buildings.  These kind of submissions are where the big (and new) ideas should be formulated since they're unlikely to come from anyone else.

Given the likelihood that NSW developers and builders will continue to campaign that building defects are lawyers' and experts' beat ups, HOW insurance is unaffordable and that thier profitability is adversely affected by over regulation, the strata sector needs to make well reasoned, supported and sophisticated arguements to get improvements (or avoid further reductions in consumer protections).  After all the NSW Government Issues Paper is framed on the basis of reducing (not increasing) builder obligations.


Francesco ...

Help for the Environment in ACT Strata

It's good to see strata corporations doing what they can to save the environment (at least in the ACT).

You see in most Australian strata corporations the changes, upgrades and/or additional equipment needed to make 'green' improvements might not be within normal repair and maintenance and be classified as upgrades which require higher level approvals. In most states a a special resolution (three quarter majority) is required but in the ACT and for South Australian community schemes where the upgrades costs more than $5,000 an approval by unanimous resolution is necessary.

So, environmental upgrades are harder to approve and implement than ordinary repairs - reducing the likelihood of them happening.

But, one Australian exception exists in the ACT where the new (2011) legislation permits upgrades and additions for installation of sustainability or utility infrastructure on the common property with only an ordinary (simple majority) decision.  This facilitates these kinds of upgrades.  But the definition of “sustainability infrastructure” is limited covering only infrastructure and equipment that improves the environmental sustainability of the units or reduces the environmental impact of the owners corporation and the unit owners (including related utility service connections and equipment.).  The laws cite examples such as - solar panels, clotheslines, rainwater tanks.

But even these reduced approval thresholds may not apply to climate change adaptation work that is not also sustainability infrastructure.

You can read the relevant provision (section 23) here.

Well done ACT and thanks (from the environment) to ACT strata stakeholders!


Francesco ...

Lessons from US Construction Defect Cases

Litigation by Australian strata corporations for building defects is still in its infancy compared to the USA.  So, there's some very useful lessons to learn from US strata experiences with making, settling and funding building defects litigation.

In this useful article by Berding Weil Attorneys from California they cover the issues facing strata corporations when deciding how to pay the legal costs of building defect litigation.

It's an interesting exposition in the 2 main options: Pay for Service or Contingency Fees - and I recommend it to anyone running a strata building defect claim.

Leaving aside any legal restrictions on contingency fees in Australia, it's important to understand that many US strata corporations agree to contingency arrangements because they simply can't afford to fund the defect case themselves.  So, unless they are prepared to abandon the building defect claim or accept whatever settlement is offered, they have to agree to give away part of their recovered damages to successfully run serious defect claims.  

In my view, that's a situation many Australian strata corporations are now finding themselves in for the following 4 reasons.

1.  Since builders, developers and insurers are fighting claims harder, it's getting more difficult  (and therefore more costly) to successfully run those claims.  

2.  Strata corporations don't have the funds to run these harder claims (without owners paying special levies) and so don't do so, or run them poorly (and cheaply) and lose.  

3.  That also leads to strata corporations settling building defect claims early and more cheaply than they could or should.  

4.  And, because commercial viable contingency arrangements are not permitted in Australia (contingency arrangements being mostly limited to a 10% surcharge on normal fees and not related to outcomes) there's no low cost option for running those cases.

It's a difficult cycle for strata corporation with building defects and we need some innovative solutions.  Any ideas ???


Francesco ...

Graffiti Croatian Style

There's street art everywhere.  And, here's some from Croatia.

Enjoy, and thanks to my daughter, Peta Andreone, for some of the images.

Francesco ...

Strata Words, Minutes, Poetry & Prose

I've haven't thought much about the poetry or prose of the written strata word, since my focus has been on technical accuracy and legal compliance. But, nowadays I believe that we can do all that and still make it a more enjoyable read.

After all, even if we just focus on strata meeting minutes, you'd have to admit that there's been a lot of words and pages written by a lot of people that no-one would choose to read unless they absolutely had to (and even then probably not read all of it).

So, why not make them easier to read, more informative and enjoyable (even just a bit)?

This recent post on HOA Brief by Robert M. DeNichilo called What Makes For a Good Set of Meeting Minutes is a good start.  Whilst it's US focused, the general guidelines about what should go and what should stay out are of universal value.

Next comes the formal requirements that apply to in your part of Strataland since you need to make sure the box tickers and strata auditors can't fault the records.  I'm assuming that you're already doing that by using templates and checklists.

And, finally how about a bit of wordsmanship?  Partly that's good grammar, modern expressions, first person voice and the present tense.  And, partly that's imaginative expression, story telling and creating a mood.  If you paid attention during all those creative writing classes you'd know what I mean.

I like to imagine Shakespeare writing the minutes of his strata meeting and the other owners eagerly waiting to read them.  Perhaps they'd read something like this -

A quorum once achieved, shortly after the half hour, the meeting thus began
No proxy was valid, but all men and women were appropriately financial for the day
The last minutes, after debate, were agreed by all present
And insurances were approved, but with two objectors
Yet considerable consternation ensued with the expenditures
Leading two objectors to propose amendments reducing the numbers
The amendments defeated, but there ensued a vote by poll demanded by the pair
Resulting, after time spent in scrupulously counting, in approval of new expenditures
2 score in favour and, but 3 opposed
So, fellow owners will pay, four times in the year 
On each eve of January, April, July and October
$100 dollars for each entitlement they hold
No more to discuss, the meeting then ended on the next hour
And all thee present returned to the bosom of those they love

My apologies to the old bard for this.

But seriously, I'm sure with just a bit of effort we could make our strata writing a lot better for everyone.

Francesco ...

A Very Victorian Strata Symposium

Some Victorians might not be amused by strata people getting together and having some fun.

But on 21 September 2012 SCAVIC is holding its 2012 Symposium at the Peninsula, in Docklands called Exploring the Boundaries.  They say that the Symposium will focus on knowing the limits that apply to strata corporations and stakeholders so they don't go too far - which is a good thing (I think).  

You can find out more and register here, but you need to do so before 14 September (presumably for security checks).

See you in Docklands doing the Victorian strata things.


Francesco ...

Developers - Love or Hate Them?

Most people in strata have (or should have) a love-hate relationship with developers.

You gotta love them because they take on the commercial risks to develop and build strata buildings and if they do it right we get great high density living for many people.  They make the (strata) magic happen.

But, there's many reasons to hate them too because of complaints that strata buildings are not built properly, they don't provide the new strata owners with the documents and information they need, strata levies are set too low, unreasonable and unfair long term contract get imposed and they sometimes try to interfere with strata corporation decisions.

So, many people like Michael Teys in his recent blog, think that the developers hang around too long and should be sent packing firmly and quickly.  He's not the only one - with people telling me over many years that the sooner the developer is out of the picture the better.

But I have a different view.  I think that developers should be forced to stay involved in the strata buildings they develop for longer and have responsibilities during that time.  

It's precisely because developers take a short term interest in the buildings they develop and leave almost as soon they're finished that strata owners get poor outcomes.  All of the developer's knowledge and understanding of the building structure and construction, operational plans and issues, their supplier arrangements and connections and their resources are lost.  Plus, they more easily avoid the consequences of inadequate budgeting, compliance or planning and have no responsibility for bad decisions that might be made by the new owners which they could have helped avoid.

I'd rather see developers being forced to have one (and only one) position on the committee, a requirement to provide a 'free' person to assist the committee, positive obligations to provide relevant information on financial, compliance, construction and certification matters for committee decisions and liabilities for the consequences of not doing so - for a few years after the strata corporation begins.  That would change things dramatically for everyone and help ensure better handover of new strata buildings.

Sometimes the counter-intuitive ideas are the best.


Francesco ... 

Great London Steet Art

London may have just hosted an impressive Olympics, but they also have some great street art as these images demonstrate.

Enjoy!   And, thanks Scott Beale.

Francesco ...

Are Strata Renters In or Out?

Why does everyone want to pretend that renters in strata apartments have nothing to do with strata corporation issues and operations?  Are they the silent and unseen strata majority that should be seen but not heard?

In a recent column at Flat Chat called You're not the boss of me! questions were asked about the strata manager communicating with renters which has prompted me to make the following important points.

Recent NSW data suggests that about half the strata apartments are tenanted, so 50% of strata residents are renters.  That means that their rent payments are funding half of the strata corporation budgets as well as providing their strata owner landlords with profits.

As strata residents, renters must comply with strata laws about damage to common property and behavioural matters as well as other laws governing neighbour behaviour.  Renters also have rights to get damaged common property repaired, make application for strata orders and participate in strata disputes affecting them.  They can even be elected to strata committees if an owner nominates them.

The only things they can't really do is attend and vote at strata meetings, and they don't have to pay strata levies.

Interestingly, in British Columbia, Canada long term renters (over 2 years) become de-facto strata owners and can vote and participate in strata meetings instead of the owners.

Maybe it's about time we recognised the significance of renters in Strataland?

Francesco ...

Another OCN Meeting

The Owners Corporation Network is meeting again this weekend and this time they're focusing on Fire Safety Work & Orders.  

You can download the agenda here and the meeting details are as follows.

18 August 2012 - 10:00am
The Station
Jackson’s Landing,
Bowman Street,Pyrmont


Francesco ...

Strata Fees Explained in Canadian

Understanding what your strata levies or fees seems to be a global strata owner problem.  Owners don't understand who they pay strata fees to, what they are for and why they are necessary.

And, funnily enough, the answer seems to be pretty similar all around the world too.

This short video by British Columbia Home Consultants called What is a strata fee?  Where does my money go? is one of the better simpler explanations I've seen.  Plus it's a good example of positive communication to strata owners that tells them what they want (and need) to know without legal and process clutter - so they get it.



You may have to translate some words into your local strataspeak ... but you can work that out pretty easily for yourselves.

Well done guys.

Francesco ...

NSW Construction Industry Inquiry

The NSW Government has become so concerned about the fragility of construction firms  in that state that it has launched a formal inquiry.

The inquiry, announced by NSW Finance and Services Minister Greg Pearce and being led by Sydney barrister Bruce Collins QC, will look at the construction industry insolvency with the aim of safeguarding the interests of sub-contractors in the sector.  But the terms of reference for the inquiry include how initiatives such as insurance schemes, trust arrangements, compulsory contract provisions or other mechanisms, could help to safeguard the interests of subcontractors in the sector.

They're calling for submissions from all parts of the sector and from other interested parties by 14 September 2012 and say that 'the views of legal professionals and insolvency practitioners with first hand experience in this area, together with the views of any other interested parties will also be sought.'

The cynical me thinks that this inquiry is largely motivated by the fact that two of the largest recent construction business collapses, St Hilliers and Reed Group, involved significant government projects and have led to some very messy litigation.  

But, regardless of that, strata stakeholders should take this opportunity to remind the NSW Government of the impact of construction firm collapses on strata corporations that are over 3 storeys and do not have Home Warranty Insurance.  In other words, those strata corporations have no-one to sue for defective work and have to bear the cost of rectifying defects entirely themselves.

You can find out more about the enquiry and lodge a submission here.

Francesco ...