PSST - Wanna be a strata committee member?

As an operational structure, strata and community title associations need owners to volunteer as committee members.

And whilst it makes logical sense that after investing significant amounts of their wealth into a strata apartment, owners would want to be committee members for the building, there would be more volunteers than available committee positions and elections would be necessary.  So, most strata laws and procedures are based on those assumptions about committees.

But, my experience suggests a very different situation in the real world of strata committees which is dominated by the following key features.

• Low owner participation levels - it's hard to get meeting quorums and even harder to find committee volunteers
• Long term committee appointees - appointed committee members tend to stay in those roles for a long time
• Increasing compliance requirements - committees have more and more regulatory controls and responsibilities impacting on them
• High owner complaint levels - when lot owners contact committee members its mostly about an immediate problem they have
• Single issue membership - where owners join committees to resolve or further a single issue that concerns or interests them 
• Inadequate resources - there are very few tools to help committee members in their roles

All of which have and are conspiring to discourage committee membership and participation.

This status quo has emerged over a long time to favour and entrench the existing vested interests - which are not always what's best for the strata building and/or the lot owners - and to concentrate decision making and power in strata buildings.

Funnily enough, many law reforms proposals are worsening things.  For example, in NSW there are law reform proposals and suggestions to further lower strata meeting quorums and restrict proxies (leading to even lower levels of owner participation), moves to increase committee member disclosure requirements, introduce committee training requirements, reduce committee power and increase committee accountability (making it harder to become and riskier to be a committee member), and changes to increase committee sizes (making it easier for anyone to join a committee and enabling single issue members).

What's actually needed to get better strata outcomes are more owners participating in committees (and meetings) and that requires more good reasons for owners to want to join strata committees with positive outcomes.  That's not easy.

But, I was encouraged by this recent article by Marc Bhalla in Condo Voice about his owner experiences as a committee member.  It's worth reading to help reset negative perceptions about strata committees and start you thinking about committee participation in different ways.

Francesco ...

If Bogota has Bike Sharing, Why not Sydney?

I'm a cyclist and believe that bikes are an important part of a modern city's transport options.

So, reading about the latest international major bike sharing scheme for Bogota, Columbia in This Big City, made me wonder why we don't have one in Sydney when it seems to me perfectly suited to the city's needs

You might be surprised that Wikipedia lists 535 bike sharing schemes in 49 countries around the world with a total of 517,000 bicycles.  That's a lot of pedalling by a lot of people in a lot places (except Sydney).

And, although many bike sharing schemes are in places where cycling is more prevalent, cultural differences are not the answer since even car loving California has bike sharing in 5 different cities.  Nor is city size the determinant, as Melbourne is smaller but has Melbourne Bike Share and Brisbane is even smaller and has City Cycle.

Some commentators say its because of our bike helmet laws.  http://www.smh.com.au/executive-style/fitness/blogs/on-your-bike/share-bike-schemes-need-to-lose-the-lids-20120920-267wg.html but is that seriously a reason not to have bike sharing?

I'm looking forward to being able to hire a bike to ride from Bondi Junction station to Bronte beach for a coffee one Sunday and avoid the problem of trying to find a parking spot.


Francesco ...

Help Needed for 'off the plan' Strata Buyers

In Australia (unlike many other parts of the world) a lot of residential strata apartments are developed and sold using an 'off the plan' sales method where buyers contract to buy before construction and complete purchases when the building is finished.

And, as far as I can see, 'off the plan' strata sales are here to stay and will remain the predominant way to buy new strata apartments in Australia.

Whilst this approach helps developers fund the development and lowers prices for buyers, it also has some pitfalls for everyone involved because it relies on assumptions about the future and can be affected by unexpected changes in personal, business and economic conditions.

So, buyers need to take extra care and be better informed when buying an 'off the plan' strata apartment.  

There's plenty of information for buyers from an investment, amenity and finance perspective like this recent booklet produced by Property Observer and Frasers.  However, when you look at that booklet closely, there's nothing at all in there about important strata title issues that will affect buyers and could lead to future strata disappointments.  

That got me looking at the results of a google search for 'buying off the plan strata apartments' to see what did exist on the subject in Australia with the following outcomes.

The NSW Fair Trading webpage on buying off the plan has a few lines of information about unit entitlements, exclusive use by-laws and building management comments plus a link to their more general information about buying into a strata scheme (which is actually pretty good).

Our old superhero friend, Strataman talks briefly about levies, lot sizes, restrictions on facility use and by-laws.  Plus Strataman provides links to other (more or less) useful webpages.

The Strata Community Australia website has short article which raises issues about strata manager appointment (and perceptions of conflicts of interest), first AGMs and defects.

Findlaw chooses to identify defects, by-laws and unit entitlement allocations as the key strata issues for off the plan buyers at their webpage.

The NSW Law Society Guide to Buying a Home identifies participation in the strata corporation, levies, by-laws and common property maintenance as the key strata issues.

And, Housenet's webpage only refers to Home Building Act insurance requirements.

So, when the available information is pretty limited, basic and incomplete, It's no wonder first time strata owners don't know much. 

I suppose there isn't a lot of incentive for developers, financiers and sales agents (who don't understand strata issues  and/or worry that giving too much strata information will scare off buyers) to provide more.  But, it can't be too hard to put together better material for strata buyers about the membership of the strata corporation and it's role, budgets and levies, by-laws and other restrictions, meetings and how strata and building managers work.

Regardless of the reasons why, it's a sad state of affairs that we have such limited publicly valuable information in relation to the predominant form of future property ownership and housing in Australia.


Francesco ...

Surrealism Meets Strata in Melbourne

I wanted to call this blog 'Imagine Salvador Dali in Your Strata Building' as I couldn't think of anything more incongruous than the master of surrealism having to operate within the confines and formalities of strata title laws.

But the world has changed and we all want to live in an imagined surreal existence (no matter how sanitised).  And you could do that in this surrealist inspired Melbourne strata building.

It's located at the corner of Eastern Road and Palmerston Crescent, South Melbourne, was developed by Arno Corporation, has 48 apartments and was inspired by Anish Kapoor's Sky Dish sculpture in NYC's Rockefeller Centre.

You can read more about this property at the Melbourne Review and SMH Domain.

Its my kind of strata living.

Francesco ...

NCCARF Continues Climate Change Research

In 2012 and 2013 I was involved with Griffith University on a National Climate Change Adaptation Research Facility research project about the impacts of climate change on stakeholders in Australian strata title buildings.  

That's now finished and the reports can be found in my other blogs on this site or at the Strata Climate Change blog.  But, the work being done by NCCARF on climate change adaptation issues continues.

You can follow NCCARF activities, latest research, conferences and more here.



Francesco ...

NCCARF Strata Climate Change Research is Now Available

During 2012 and 2013 I've been working with Griffith University on a National Climate Change Adaptation Research Facility research project about the impacts of climate change on stakeholders in Australian strata title buildings.

The final report, Adapting strata and community title buildings for climate change, and the stakeholder manual, Adapting strata title communities for climate change: a stakeholder action list manual, are finished and published on the NCCARF website.

They make interesting reading about this important issue whose impact is only just emerging. But, even if you're not interested in climate change, the report identifies recurrent themes in all kinds of difficult issues facing strata title stakeholders.  

So, I recommend it to anyone interested in getting better strata outcomes.

You can view the report here: www.nccarf.edu.au/publications/strata-title-buildings-climate-change

You can view the manual here: www.nccarf.edu.au/publications/strata-title-stakeholder-manual 
You can also view the short presentation I gave about the research at the Griffith University Strata& Community Title in Australia Conference on the Queensland Gold Coast here.

Please share the link with your colleagues and anyone else who might be interested. And, if you have any relevant supplementary information (summary documents, fact sheets, videos etc.), please send it to me.

Strata Apartments as Investments

You might think that strata apartments are real estate.  And, mostly you'd be right.  But you're not Donald Trump.

Sometimes strata apartments are so embedded into complex building operation and management structures that they no longer have typical real estate characteristics.  You can't live in them or use them yourself, someone else decides when they're rented and at what rate, they get renovated at your cost without you input, you can only sell on conditions and you have to share (or pool) the returns with other owners/investors.

In such cases the apartment has (effectively) become the underlying asset in an investment product and is no longer real estate in the traditional sense.  

This doesn't matter much if the investment is providing fair returns.  But, when it's not things start to get messy and loss making owners look to their lawyers.

That's exactly what's happening right now in Toronto at the Trump International Hotel & Tower Toronto where a group of investor owners are suing everyone (including Donald Trump himself) over the representations, delays and returns from their strata apartment investments in that development.  They are arguing, amongst other things, that the development and investment was governed by securities laws (as well as real estate and other laws).

It's an interesting story and case which you can read about at the legal action website of the plaintiff's lawyers, Heydary Hamilton.

It's also novel and unusual that the primary documents in the case are being published in this way by (at least) one of the parties in the litigation.

I guess this is one situation where some strata owners would like to tell Donald Trump - 'You're Fired!'


Francesco ...