Self Managing a Strata Scheme Fraught with Risk and Liability

Self managing a strata scheme is often suggested by members who think that by running their complex themselves, they will save money. Certainly they will not have to pay management fees, but they immediately expose themselves to considerable liability if they neglect any essential tasks. Imagine for example, the anguish, stress and financial loss, and personal recriminations, if the building insurance lapsed and there was a major fire.

Here at WA Strata Management we understand the difficulties facing strata company Councils that decide to self manage. We know this because we are often called in after they have tried it and found how complex it really is. Along with the complexity, in some cases, we have seen conflicts between some of the Council members that created barriers to essential tasks being completed.

Professional Management Offers Peace of Mind

Every unit owner wants reliable body corporate management to protect their investment and living standards. If that means hiring a professional strata management company like ours, what is the better option? Is it better to pay fees and have peace of mind knowing that everything is looked after; it also saves having to constantly check on Council members to see if they have done this or that.

When we start working with a strata Council for the first time we establish first what they have in place. We check their level of knowledge about statutory requirements and regulations, which usually is only a fraction of that held by our professional strata managers. We check insurance cover, fire safety measures and workplace health and safety compliance. Again, these major risk areas are never adequately covered.

Major Risk Factors Kept in Check by Professional Management

With record keeping, we find again that the statutory requirements are rarely fully met, and the management and accounting systems set up to track income and expenditure are at best, basic. At WA Strata Management we have IT support, current software and compliant management systems that address all legislative requirements. Without these modern tools and support systems, being able to produce the required reports and ensure that financial obligations are paid on time is difficult and prone to error.

Often the minutes of mandatory meetings are inadequate and sometimes even non-existent. Producing and issuing notices and collecting levies is a vital part of keeping the building functioning, but again, many self managed Councils lack the skills or the will to collect outstanding debts essential to sound financial management.

If this all sounds far too hard, you are quite correct. The legislation is complex, the personal liabilities onerous and it is all unnecessary when you engage a professional strata management company. Full details of the services we offer are at www.wastrata.com.au. Do yourself and your Council members a favour and check us out.

Buyer Education Needed to Fully Benefit From Apartment Living

To older Australians, it doesn’t seem all that long ago that the only experience they had of people who lived in apartments was confined to actors in American movies. Some apartments were glamorous and spacious while others were the stereotypical slum housing with families crammed into tiny areas and washing hanging everywhere. Times certainly have changed, and now in Australia, more and more people are embracing apartment or townhouse living.

Apartment and Townhouse Living Attractive Alternative

There are many things that attract people to this lifestyle. Better security, having neighbours close by, not having to maintain a large yard and garden and the convenience of on-site recreation facilities are all reasons people have given us for wanting to live in a strata scheme. However, some of these attractions can also become liabilities for people who don’t really understand how different this is from living in a typical house.

Our primary business at WA Strata Management is to provide operational services to keep apartment complexes running efficiently so that the council and lot owners are free to enjoy their own experiences of apartment living. We believe this experience has given us an insight into the lifestyle, and we are in an excellent position to point out some things that people should check before they make this move.

Quick Checklist for New Buyers

It is important that they should understand exactly what they are buying by checking the lot boundaries, finding out what is and is not common property and knowing their responsibilities. They should check if the complex is well managed by obvious measures such as looking at the gardens, the outside of the building, drive and pathways and recreation areas. Do they appear to be well maintained or are they all a bit rundown?

They should also check minutes of meetings, especially the annual general meeting to understand what issues are discussed and the type of motions that are passed. Finding out if the building has a reserve fund is crucial as it is from here that large maintenance items are funded. Do they understand that they must pay a regular levy for maintenance? Check things like financial records and insurances to make sure the building is not a poorly run, poorly funded financial nightmare.

Buying into a complex run by professional and astute strata management services such as ours at WA Strata Management is a very good way to protect your investment. Our excellent financial and operational systems assist our clients with their reporting responsibilities. Our team members know the applicable legislation and regulations as well as having good communication skills and being able to follow council instructions. Our website at www.wastrata.com has more information.

Reducing Disputes in Strata Situations Requires Lateral Thinking

First-time purchasers of a unit or apartment who have previously lived in freehold dwellings often find this new style of living a challenge. It is not so much about the close proximity to neighbours, as this is only to be expected. What they find difficult is getting used to living within the confines of the by-laws set by the Council. Where previously they could make their own decisions about their property, they now have to consult others.

Western Australia’s Strata Titles Act places an obligation on strata companies to enforce their by-laws and many owners and occupants do not understand this. Disputes arise when they feel victimised by the actions of the management companies, not realising that this is a legal requirement. It is all so unnecessary, and we believe that providing some competent strata title knowledge would go a long way to minimising these unpleasant situations.

Granting Permission for Reasonable Requests Diffuses Disputes

At WA Strata Management we also believe that there are a number of other things that could be done to reduce disputes and gain respect for the intent of the by-laws. On top of our list is something that seems obvious, but often is not considered and that is to simply grant permission for reasonable requests. By-laws that prohibit activities without the consent of the Council were intended to be exercised with some flexibility and offering that flexibility where it is warranted removes all reasons for a dispute.

As we alluded to earlier, educating the occupants about the by-laws and giving them the opportunity to participate in any reviews of them fosters ownership and understanding. Publish them regularly and invite comment about their viability and relevance and you will see breaches of these by-laws begin to decrease. When these reviews identify by-laws that are unworkable or inappropriate, we recommend that they be abolished.

Leave Anti-Social Behaviour to the Law

If disputes about noise or inappropriate behaviour continue unabated, don’t treat it as purely a breach of the by-laws. It is a civil matter, as it would be in any other suburban neighbourhood. Call the police or the local council who have much more authority than the strata company to put a dampener on anti-social behaviour. We have found this tactic to be particularly effective in several locations managed by WA Strata Management.

There are other techniques that will achieve the same result, but the message we try to give to our clients is to be more flexible, use external legal resources and make sure the occupants actually know what by-laws apply.

2014 THE YEAR FOR MAJOR STRATA REFORM IN WA

Major changes to strata laws in Western Australia are under government consideration following the successful implementation of similar changes in New South Wales. It is widely recognised that the current laws are outdated and in need of reform; also, there is broad support for this to happen.

Some of the issues on the table for discussion and some possible changes are making it easier for tenants to keep pets and setting stringent laws for smoking that reflect community expectations. Landgate in WA will have the responsibility for updating the legislation. They are concentrating on other key issues including recognising strata managers and simplifying the disputes resolution process. The government also wants to investigate ways to terminate a strata scheme with safeguards where 100% agreement has not been reached.

It’s Still the Little Things that Get up Peoples’ Noses

Tenants, however, have set their sights much lower and want reforms to restrict smoking, a simple system of applying fines to misbehaving tenants and regular valuations for apartment buildings. This makes sense when you consider that it is the tenants who have to live with the behaviour of others in the building who think that good neighbour laws don’t apply to them.

From our point of view here at WA Strata Management we have always worked within the legislation and any changes to the laws in strata title properties will be incorporated into our systems and processes. As soon as we have some definite indication of where the laws will change, we plan to commence training our staff and updating our procedures accordingly. In this way, we can continue to provide the quality of service our clients expect from our managers.

Reserve Funds, Permission for Minor Design Changes being Discussed

Calls have been made from other groups to look at wider reforms, including the requirement for reserve funds to be made mandatory. Many WA apartment buildings are ageing and in need of expensive refurbishment. Currently, new owners are left with all the costs of these refurbishments, which would have been better covered by an ongoing fund collecting contributions from all owners over a period of time. We are not sure if this will be looked at this time but it has certainly been raised.

Another key change being mooted that would make life easier for tenants is the proposal to improve their ability to make minor design changes without being blocked unreasonably by other tenants. A good example is that of solar panels. Currently, it needs the permission of everyone in the building for tenants to install solar panels for their own use.

No doubt the Minister’s portfolio briefings will identify other issues, but we all agree that legislative reform is well overdue.

Why Australians are Embracing Apartment and Townhouse Living

The great Australian dream, reminiscent of the classic Aussie film “The Castle”, is fast becoming a thing of the past with the changing way of life for many Australians. In 2014, there were two apartment blocks being built for every five houses, and the trend continues, demonstrating the vast change in the housing choices that Australians are choosing for themselves. This trend towards more Australian’s embracing apartment and townhouse living can be attributed to a number of different aspects of social evolution, as WA Strata Management has found in its work with apartment owners.

Rising Population

The population growth in Australia means that there are more people needing housing, and many more people moving towards the cities to find work, as employment opportunities evolve with new technologies. One of the simplest ways of accommodating the rising population in terms of the available space is to build more apartment and townhouses, which can house more people per square metre than regular housing.

Changing Face of the Family Dynamic

The nuclear family of two parents and 2.5 children is no longer the norm in the society today, with more couples opting to remain childless, and many others choosing to have fewer children than they once did. As a result, the need for houses to accommodate larger families is not as important, so many families are inclined to choose apartment or townhouse living as a more economical alternative.

Busy Lifestyles

In terms of the way that people use their time, lifestyles have changed over time, and many people are finding themselves time poor, and unable to keep up with the maintenance of their own homes. A positive aspect of apartment and townhouse living is the ability to enjoy the benefits of having a swimming pool and landscaped gardens, without the need for being personally responsible for the maintenance requirements. Because apartments and townhouses are under a strata title they are usually managed by a body corporate, with a fee paid to a central organisation that is responsible for the upkeep of the communal surroundings. Clients of WA Strata Management have found that embracing apartment and townhouse living is an affordable way of enjoying excellent facilities while having more time for doing other things they want to do.

Achieving Effective Communication With Property Stakeholders

In the property industry, the stakeholders are the people who have an interest, whether directly or indirectly, with the property. This includes the property owners, home buyers, real estate developers, property brokers and housing finance institutions.

With so many people involved in a property, this means that there needs to be an effective chain of communication to ensure that everybody is on the same page to achieve the desired outcome for the property. Often, people will choose to employ the services of a company such as WA Strata Management to oversee the property to ensure that all areas of the process are covered effectively.

Understanding Stakeholders

When involved with property, it is important to be aware of all the different stakeholders involved with the property and this includes knowing what their role is. If each party is clear on their role they will each be able to do the job that they need to do, as smoothly as possible, by engaging effectively with the other members of the ‘team’ that is looking after the property.

Engaging Effectively

Engaging effectively with all of the property stakeholders enables you to plan ahead and to use the skills that are available to you to achieve the desired outcome in any property transaction. Staying up to date with communication is hugely important and all stakeholders need to be kept in the loop with all aspects of the property.

In choosing to put your property in the hands of a reputable strata management company such as WA Strata Management, you are able to have the peace of mind of knowing that all areas of the property management are focused towards the common goal of achieving the desired outcome.

Operational Effectiveness

Effective networking among the various stakeholders is an important aspect of attaining effective communication among the property stakeholders, which is why many people choose to employ a single body to oversee property matters. Having a body that oversees the entirety of the property guarantees operational effectiveness and ensures the best outcomes for all involved.

All of the stakeholders involved with a property should be in the driving seat with the changing property market, to ensure the best outcomes for all involved. This means getting involved in the industry in all aspects including the bureaucratic processes, determining how this impacts on the stakeholders, and putting in place effective strategies for ensuring the best outcome for all involved.

How To Keep Your Property In Top Condition To Avoid Future Expense

With our experience in the property business, WA Strata Management knows that as a property owner, it is up to you to ensure that your property is kept in the best condition that it can be, for as long as possible. This means taking care of the little things along the way, to avoid them becoming expensive repair jobs down the track. Following a few simple guidelines and regularly checking for what needs doing will assist you in keeping your property in top condition throughout its life.

Regular Maintenance and Inspections

Regular maintenance of the property and its surrounding areas is an important part of maintaining a great property, both aesthetically and in every other way. This means inspecting and cleaning all areas of the property, including air filters, sinks, regular spring cleaning of all surfaces both inside and out, checking outdoor drainage areas, window screens and cleaning out gutters.

Service Appliances

Appliances such as water heaters, range hoods and air conditioning systems should be serviced regularly. Testing the water heater pressure relief valve prevents mineral corrosion and will safeguard it against leaks, which will help it to run more efficiently and save you money on your power bills.

Update As You Go

An older property will start to look and feel a bit tired after a while, so it’s a good idea to give it a fresh burst of energy when you can, by updating tired aspects of the property. Depending on your financial position you may not have the capital to renovate the whole property in one go, but updating along the way makes sense and is both affordable and aesthetically pleasing.

Maintain the Garden Areas

One might imagine that the garden is a harmless part of the property, but as WA Strata Management has found, an unruly vine or tree can become a real problem in some circumstances. Ensure that the garden is maintained by a professional maintenance team to prevent any harm coming to the property over time.

Check Roof Regularly

One part of the property that needs to be regularly checked and repaired is the roof area as small issues can lead to much larger and expensive issues for the whole property if left undetected. Have your roof checked and repaired at least once a year to prevent internal damage to your property.

Managing A Large Block Of Apartments Requires Skilled Staff

Registered owners of lots in a strata company have unlimited liability for any losses or debts incurred by this legal entity. This should be an issue of concern, especially for those owners who do not occupy their premises but rent them out as an investment. They have a large vested interest in ensuring that the residential complex where their asset is located is being managed by experienced professionals.

Councils Prefer to Engage Professionals to Discharge Their Responsibilities

Although the owners are responsible, via an elected Council, for meeting their legal obligations, most elected members lack the knowledge, skills and indeed the time to meet these obligations effectively. Our company, WA Strata Management, offers the services of a professional strata manager to take over the daily operational matters and relieve the owners and the Council of the stress.

A large residential complex with multiple owners and tenants requires strong management systems to ensure that all legal obligations are fulfilled. A trained and experienced person running such a complex is required to establish and maintain good financial, administration and communication systems.

Strong Financial Systems Protect Funds

When we are contracted to manage a complex on behalf of a Council, our people prepare realistic budgets that cover all costs associated with running the facility. They review the existing accounting processes and records and if they are inadequate, they establish systems that align to modern accounting and business practices. This allows them to run regular financial reports for the Council to keep them up to date with their financial situation.

Organised Administration Prevents Lost Records

A robust and organised administration system makes clerical work a routine task. This is a vital component of this role and one that is ongoing throughout the year. Preparing and issuing notices of the annual general meeting and any extraordinary general meetings, distributing the minutes of those meetings and maintaining all necessary records are essential tasks performed by our people in this role.

Communication Skills – Both Routine and Special

Acting as a conduit for communication with the Council, the proprietors, the residents and any external service providers is also part of the duties of a strata manager. Specifically, this could be as routine as taking phone enquiries, answering emails and providing information during office hours. It could also be as unusual as delivering services that can only be performed with the authority of the Council or their representative.

Managing a large block of apartments with many proprietors and tenants is just as challenging as running a large business. The organisational skills required to do this effectively are essentially the same, and require the knowledge of current accounting and management practices.

When we are engaged by a Council to provide these services, we ensure that all our WA Strata Managementstaff members working in these roles have skills that are up to date, and experienced at taking on these demanding roles.

What Does A Strata Council Do?

Buying a unit in a group housing scheme is an attractive alternative to buying single lot housing for many people. However, all owners are responsible for how the complex is managed, and this is usually achieved by forming a strata council, made up of owners and elected by them.

Under state legislation, there is a number of clear responsibilities assigned to this group of people. In large complexes, the administration of these responsibilities can become too difficult for the members of the council. In these cases, they often appoint an external management company to handle these operational and administrative matters for them.

Our company, WA Strata Management, offers these services to councils who find it difficult to keep up with legislative changes, and to establish and maintain the management systems necessary to run their complex efficiently. We take over these tasks for them, which allows them to enjoy the benefits of group living. However, the legislated responsibilities still rest with the councils.

Council Responsible for Conduct of Meetings

The council regulates the conduct and frequency of the meetings unless a meeting is called by a council member with 7 days’ notice. There are other procedural responsibilities regarding the conduct of meetings including keeping minutes of each meeting.

Specific Duties of the Secretary

Members of the council must appoint a chairman, secretary and treasurer from among their ranks, and the same person can be appointed to more than one of these roles. Specific responsibilities are attached to these roles. For example, the secretary is required to:

  • Prepare and distribute minutes of meetings
  • Distribute notices required under legislation on behalf of the strata company and the council
  • Answer communications and supply information as required by legislation
  • Call for nominations of candidates to be elected to the council
  • Convene meetings of both the strata company and the council

Role of the Treasurer

The treasurer is responsible for keeping accounting records, preparing statements, receipting, banking and acknowledgement of money paid to the strata company. Notifying proprietors of any contributions lawfully levied and preparing any certificates applied for under Act are also responsibilities of this role.

Councils can Appoint Professional Management

In a very small complex, these duties can be performed by council members who have some financial and administration skills. In most cases, however, efficient management is beyond the scope and experience of most councils.

Councils have the responsibility for all of these functions, but they can arrange for companies such as ours to perform them on their behalf. We have skilled staff, years of experience and knowledge of the legislation. Councils that engage WA Strata Management to keep their buildings running smoothly are assured that everything required by legislation is done.

Group Living – an Exercise in Managing Complex Arrangements

Whenever a group of humans live in close proximity to each other, there always seems to be a need for structure and rules to allow them to co-exist in relative harmony. From those youthful days in student accommodation to our final years in aged care, we are always looking for solutions to the challenges of group living.

Perhaps the very individuality that makes us human creates the need for a common set of rules everyone can follow. Whatever the reason, throw into the mix the actual ownership of the places we live in, and humans can become very territorial. It is little wonder, then, that there is a continually expanding need for our services.

Professional Management Protects Every Owner

We are WA Strata Management, a company that manages strata schemes on behalf of the owners. Our role is to perform all administrative, financial, clerical and advisory services within the bounds of the power delegated to us by the Council. Our professional staff members are trained to manage all classes of strata properties so that unit owners can enjoy their property without being involved in daily operational matters.

From long experience we can safely say that these arrangements create much more harmonious living environments than those where the owners are directly involved in running the premises. A complex mix of ownership types that is not well managed creates the perfect opportunity for those more volatile and vocal members to override the wishes of other, more reserved, owners.

How Many Different Types of Ownership Are There?

There are as many different types of ownership in a large apartment complex as there are in any other block of real estate. Some strata properties are owned by self-managed superannuation funds, some are held in family trusts, others have been purchased by friends or siblings as tenants-in-common, some have one owner while others are held by two people as joint tenants.

These are not all the possible configurations but give some indication of the variety of options people have when they are purchasing real estate. Put these together in ownership of part of a residential building, and it becomes clear that universal agreement on any subject would be a miracle. There would always be a dissenting vote, and for this reason, rules and by-laws are developed and supported by legislation to enable everyone to access their rights under law.

Individual Management Plans Restore Harmony

It is the management of this complexity that forms the core of our business. We recognise that all residential situations are different, and no single modus operandi fits every scheme. They are all as individual as the property owners, and we treat them this way by designing a management plan that suits the situation.

With all this in place, we are able to manage any residential complex efficiently for the benefit of the owners. The staff at WA Strata Management can maintain a harmonious environment in group living situations, regardless of the level of ownership complexity.