Published on March 5, 2014
The Truth About Strata; what purchasers really need to know. Part 1 Are our owners corporations complying with the law?
The truth about strata is …we are asleep at the wheel
The strata wheel of (mis)fortune ? Owners decide (or not) Purchasers buy Lawyers advise Managers act Inspectors report
Let’s take a building somewhere • 15 res apartments • Part of a mixed use stratum (separate OC’s) • Balance commercial and retail lots • Onsite management • Res OC levies $ 1550 per quarter • 4 years old
The seven things the owners must do meet record manage comply insure maintain $ave
The duty to meet (s.14) • Signifies developer control • Defines period for holding First Initial period AGM First AGM AGMs • Check developer handover • Defines the AGM meeting window • Check requirements for last notice of AGM • Look for next AGM if the date is close to avoid nasty surprises
The duty to manage ( s 61) Pets Parking Privileges Common property
The duty to maintain (s.62) • Reasonable steps • Best endeavors • Reasonable care … All fail the test of strict liability for repair and maintenance of common property in NSW; Seiwas case.
The duty to $ave ( s. 76) Year Plan Reality 2007 - - 2008 - $ 20 000 2009 - $ 30 000 2010 $ 44 572 $ 26 000 2011 $47 742 - Balance end 2010 $87 358 $ 61 249 Compliance (under 41.6%) ( short $ 26 107) ( 29.8 %)
The duty to insure ( s.83) Expectations of cover Reality of exclusions
The duty to record (s. 100) Soft copies Hard copies
The duty to comply (s 12)
The truth about this strata Disclosed Undisclosed
Purchasers remain dazed and confused Owners corporations tight ineffective Strata managers underpaid beyond scope Strata inspectors unsupported at risk
How we propose to help ? Educate inspectors Unite inspectors Better informed purchasers