Category Archives: Industry

When there is not a Lot in Common

When you buy into a strata building you are, in fact, purchasing a ‘lot.’ Think of your lot as your own, small component of the larger strata plan. Typically, a lot will comprise an apartment or commercial suite and, where applicable, parking spaces and/or an outdoor area of some description.

Everything outside your lot is Common property. From your external walls to the hallway outside your front door to the courtyard and driveway, the Common areas are those that all residents and occupants have equal access to. And when you think of strata services, they typically apply to the Common areas as opposed to individual lots.

In general, owners are solely responsible for the upkeep and maintenance of their own individual lots. In the case of new buildings – where building or appliance warranties are often concerned – strata management companies may deal with individual lot owners, but by and large owners are responsible for their own individual lots. When it comes to dealing with major strata management matters, your Owners Corporation will represent you.

The Owners Corporation is the body that owners are automatically admitted to upon purchasing a lot in a strata plan. Being an owner entitles you to a share in the Owners Corporation and, therefore, a say in everything from determining your preferred provider of strata management services to who gets to use the visitor parking.

The Owners Corporation – or Body Corporate as it is more commonly known – has five key areas of responsibility.

  1. Strata Plan Insurance
  2. Maintenance of the Building and Common property
  3. Financing the Strata Plan
  4. Maintenance of the Strata By-laws
  5. Record keeping

And, therefore, it is perfectly correct that when people think of strata management they tend to think of who it is that provides for the care of the Common areas. The strata manager appoints the cleaners responsible for maintaining your courtyards and hallways. And the strata manager is the one who arranges repairs to Common property. Importantly, the strata manager also arranges insurance for the building. However, owners should note that the strata insurance does not cover their individual lot and that home and contents insurance is highly recommended.

An established provider of strata services in Sydney, Wollongong and Newcastle, Netstrata has been managing strata plans for over 18 years.

How to choose a Strata Manager

When it comes to choosing a strata manager for your scheme, be it a new or existing building, we find that the decision typically comes down to a few key issues.

Price

Strata owners are like the rest of us; they do not like wasting money. And therefore, understandably, price is front of mind for Owners’ Corporations seeking strata management services in Sydney. But as with anything, you tend to get what you pay for. If your prospective strata manager’s pricing seems too good to be true, then it probably is.

As a reputed Sydney strata manager, Netstrata offers excellent value for money. Our highly skilled and professional strata managers are available when you need them and our pricing structure is completely transparent. At Netstrata, there are no hidden costs for incidentals.

Knowledge of legislation

Another factor often cited as a major influencer on decision makers is a strata manager’s knowledge of the relevant legislation governing strata schemes. As a strata management company with over 18 years experience in Sydney, Wollongong and Newcastle, we know the ins and outs of all the relevant legislation and are proud supporters of Strata Community Australia.

Capability and experience

But perhaps the biggest factor for many Owners’ Corporations is experience. Given the increase of medium density housing in Sydney, strata managers who have the relevant experience with high volume and  complex schemes are increasingly in demand. The days of simple 10 Unit walk up blocks are gone and with them, we hope, the often ineffectual strata managers of old.

Today, it is increasingly common for buildings and, therefore, schemes to house many more residents. It is also common for buildings to incorporate a mix of residential and commercial spaces. And then there are the pools, gyms and common areas that new buildings typically boast. These developments call for a truly professional strata management offering. And with approximately 800 schemes under management worth some $4.2 billion, Netstrata is the Sydney strata manager best equipped to handle your strata requirements.

At Netstrata, we are so confident that you will be satisfied with our strata management service that we offer No Lock In Contracts.

Is your Owners Corporation hounding you unfairly?

Australia boasts the highest incidence of pet ownership in the world. Pets may be found in over two thirds of Australian homes. And with one in five Australians living in a strata scheme of one form or another, the issue of pets and strata plans is not one that is going away any time soon.

Now, what rights you, as an owner or a tenant, have vis-à-vis your pet depends entirely on the strata plan in effect at your place of residence.

Strata managers have a few options when it comes to deciding what By-laws will govern a strata plan. They can either draw up their own or rely on the pre-existing Schedule 1 By-laws (for schemes registered prior to 1 July 1997) or the Model By-laws (for schemes registered on or after 1 July 1997.) It should be noted here that the Owners Corporation has the authority to amend the Schedule 1 and Model By-laws.

As far as pet ownership goes, in general the approval of the Owners Corporation cannot be unreasonably withheld. As for the particular By-laws, Schedule 1 is clear: A resident or tenant needs the prior written consent of the Owners Corporation. The Model By-laws are slightly more complicated and give strata managers three options for dealing with the issue of pet ownership. Approval for pet occupancy may be granted in a manner consistent with the provisions of the Schedule 1 By-laws; approval may be granted providing certain conditions are met, such as the resident’s undertaking to carry the pet across common areas, or the resident’s request may be denied.

If you intend to rent in a strata plan, you will typically require two separate approvals. The onus is on the renter to obtain approval from the leasing agent and the Owners Corporation prior to occupancy.

In the event that the Owners Corporation denies a reasonable request, residents have a few avenues in which to pursue resolution. The first port of call should be an informal discussion with a representative of the Owners Corporation. Failing that, a resident may seek to take the matter to mediation, adjudication or the Consumer, Trader and Tenancy Tribunal.

One thing that residents should bear in mind is that a strata manager is, in general, not in a position to affect outcomes in these areas. Although strata management does involve deciding the By-laws that will apply to a particular strata plan, the authority to amend those By-laws is vested in the Owners Corporation.

For more information regarding Pets and Strata Management please refer to this document produced by the Law Society of New South Wales.

Strata scheme up in smoke

Inner-west smokers take note – as of April 2011, the body corporate of an Ashfield block of units in Sydney implemented a no-smoking law for anyone wanting to light up inside their apartment or on their balcony.

In an interview with the Sydney Morning Herald, the chairman said, “We asked our managers if we could have a by-law to ban all smoking in units as well as on common property and two weeks later they came back with a draft of a by-law to make the building a smoke-free zone in its entirety.”

But the body corporate now faces rebuttal. Those who smoke are in the clutches of addiction – one they should have the right to carry out in the comfort of their own homes. But what about the non-smokers? Smoke tends to waft throughout buildings, potentially affecting other occupants’ health.

So the moral battle begins. Building management is well aware that there aren’t any mandatory laws that prevent residents from sparking up in their own unit. Building management is also aware that there are existing laws that prohibit smoking on common property.

According to Section 6 of The Smoke-Free Environment Act 2000, a “smoke-free area means any enclosed public place.” But at this given point in time, cigarettes are legal and there aren’t any government laws stopping smoking in one’s home. So, the issue is presented to the body corporate: What happens to the non-smokers who would rather refrain from passive smoking?

Strata management company, Netstrata, has a few words of advice. If your apartment block is permeated by cigarette fumes and affects the enjoyment of residents, you can take the following steps to ameliorate the situation.

Firstly, you should approach your smoking neighbour about the matter. You don’t need to be a part of building management to flag the issue with them. Just remember to speak calmly and rationally. More often than not, your neighbour will be cooperative to resolve the issue.

Perhaps you’re not at ease with the idea of approaching the smoker, or if your neighbour isn’t flexible – what then? Your next step is to raise the issue with the building owner’s corporation. Hopefully a solution can be reached collectively.

If you would like further advice regarding smoking in your building, we encourage you to get the advice from the strata management experts, Netstrata.

NSW strata management flooded by weather

Prime Minister Julia Gillard has recently announced that the Federal Government will invest $100 million over the next two years into flood mitigation projects. Given the recent floodings, this investment is aimed at reducing flood risk and the subsequent strata managers building insurance premium renewals.

By targeting the flood and natural disaster mitigation measures, The National Insurance Affordability Initiative will finance $50 million per annum for the next two years in hopes of establishing the National Insurance Affordability Council.

The Council will run the national coordination of flood risk management, assisting strata management services. The Council will also make suggestions to the government regarding floods mitigation projects, and will undertake other actions directed at reducing building management insurance premiums in the event of natural disasters.

Beyond reducing private insurance premiums, the government will have the potential to save expenditure on building management across all levels of NSW strata management.

Since 2009, more than $6 billion has been accounted for due to natural disaster recovery, a recent press release stated. “Rather than have taxpayers cross-subsidise insurance premiums for those in areas of high risk, this initiative will identify and supplement the funding of mitigation works that will have a real impact in terms of lowering risk and achieving sustainable reduction of insurance premiums in areas exposed to high risk,” the government adds.

CEO of the Insurance Council of Australia (ICA), Rob Whelan, labeled the move as a noteworthy step towards financially covering the sustainability of the various flood-prone communities that NSW strata management have been working toward restoring.

The investment “will ensure that at-risk Australian communities will be better protected in the future from the devastating effects of floods,” said Whelan.

The floods experienced in NSW and Queensland due to a knock-on effect from ex-tropical cyclone Oswald has resulted in over $661 million in insurance losses. Whelan has noted that over the last ten years, floods have caused around $4.5 billion in insured losses across the country.

The ICA has encouraged the Australian Government Actuary to take on additional studies concerning strata management services pricing across Australia. The aim of this is to deliver a benchmark that will accurately inform policyholders how insurance premiums are directly related to risk.

Netstrata provides high quality strata services to their client schemes across NSW. All classes of properties – from small home unit schemes to high-rise residential and commercial buildings – receive a tailored approach to ensure they’re receiving the best option possible.

Private water supply to Broadway units could whet developer appetite

WHEN the first of 5000 people begin moving into the vast Central Park apartment complex on Broadway next year, they will be the first city residents to have water in their taps that is not supplied by Sydney Water.

A private water company, Water Factory, will deliver water to the 1800 apartments and to the businesses that will eventually employ 10,000 people on the former Carlton and United brewery site.

Under a deal signed by the developer, Frasers Property, Water Factory will also collect the sewage, run-off and other waste water produced in the development and recycle it for use in all toilets, washing machines, gardens and air-conditioning towers.

An underground treatment works is being built in the basement. The Water Factory founder, Terry Leckie, says it will be the biggest in a high-rise residential project.

It was impossible for a private company to provide drinking water and treat sewage in private developments until the NSW government passed the Water Industry Competition Act in 2006, the first law in the country designed to encourage private companies to bid for the rights to supply and treat water.

Since then, there has been a trickle of interest from companies. A few environmentally sensitive commercial developments in the central business district have installed recycling systems and use grey water in toilets, including Westfield in Pitt Street Mall, No.1 Bligh Street and workplace6 in Pyrmont, where Google is based.

The plans for Central Park go a lot further and may prompt interest from developers to use private companies to provide water and sewerage in new projects, especially those in more isolated areas if, as Mr Leckie claims, they can do it cheaper.

While each apartment will be built with separate pipes for recycled water, the main difference residents will notice is with their bills. Most NSW apartments have one water meter for the whole block and residents pay an equal share regardless of the number of showers they have. In Central Park, each unit will have its own meter, giving residents the same incentive as house owners to save water.

A separate charge for sewage treatment will be calculated depending on how much drinking water each unit uses.

The Water Factory will buy the drinking water for the complex

Thank you SMH for this article

Individual Water Metering for plans approved after 30th June 2012

Sydney Water will make individual water metering for multiple dwelling buildings a requirement for the issue of a compliance certificate under s73 of the Sydney Water Act for all applications received after 30 June 2012.

Metering specifications will require:

  • Individual supply point to each unit.
  • Provision of a space for the meter installation.
  • Installation of the meter in a cupboard in a common area with a drain.
  • Provision of space for a data logger/transmitter and 240V power.

Sydney Water intends to nominate at least two accredited suppliers for the new metering.

Sydney Water may take a flexible approach to plans which have been lodged with council prior to 1 July 2012 but which do not come before it prior to that date.

Thank you J.S Mueller & Co Lawyer for this article

Housing Review a major step forward

The NSW Government’s review of potential housing opportunities reported in the media today shows the government’s commitment to boosting housing supply and increasing affordability in a common-sense and transparent way, UDIA NSW believes. In what is one of the biggest steps forward for NSW housing supply for years, the Government has given a commitment to pursuing housing opportunities where the landholdings are, rather than designated growth areas that suffer major land fragmentation issues.

Late last year Planning and Infrastructure Minister Brad Hazzard made a public call to developers with large landholdings, close to infrastructure, to approach the State Government with their projects, in recognition that residential development in NSW had stagnated for many years. This month, the Government published online the results of that process: a list of 43 sites which are potential candidates for rezoning for urban development under the Review of Potential Housing Opportunities on Landowner Nominated Sites.

In the Sydney region, the sites are in the local government areas of Auburn, Blacktown, Camden, Campbelltown, City of Sydney, Hornsby, Liverpool, Penrith, Pittwater, Sutherland, The Hills, and Wollondilly. Regionally, the sites are in the local government areas of Cessnock, Clarence Valley, Hawkesbury, Port Stephens, Wingecarribee, and Wyong. Submissions closed on November 29 and the review process is predicted to be finalised in the first quarter of this year.

The projects are being assessed on three criteria, according to the Department of Planning and Infrastructure’s website:

  1. Housing delivery: The site is suitable for urban development and has viable prospects to produce houses in the short term.
  2. Infrastructure: Infrastructure and services for new communities will be delivered in a timely and efficient manner and at no additional cost to Government.
  3. Strategic setting: The proposal supports the broadly planned pattern of growth and urban policies.

The process is governed by a Chief Executives’ Review Committee, which is chaired by the Director-General of the Department of Premier & Cabinet. Recommendations will then be made to State Government. Consultation will take place with the relevant Councils to seek their feedback on the proposals. Today, in the Sydney Morning Herald, Minister for Planning and Infrastructure Brad Hazzard said many of the nominated sites were outside the growth centres and that the growth centres strategy had failed. “The lines on the maps for the growth centres are supposed to encourage development in those areas, but it has not worked and the corollary has been it deterred development outside these lines,” Mr Hazzard told the newspaper.

UDIA NSW believes this process shows the government is deeply committed to fostering housing growth and that it is also being transparent about the process and consultative with councils, which is essential. UDIA NSW Chief Executive Stephen Albin said says he believes the process is a realistic approach to fostering development where the landholdings are, rather than simply rezoning land in areas of fragmented ownership. “Our own research, which we have put to Government, clearly shows that the large sites where the landowners have been ready, willing but not yet able to develop are largely outside the growth centres,” he said. “It is clear, for the state to meet its future population and economic growth targets, that the process needs to take into account achievable development rather than operating off a wish-list that may not be viable or achievable.” “We support development that is led by the realities of the industry, whether it is inside or outside a growth centre – so long as it is commercially viable, sustainable, and supported by the appropriate infrastructure.” “As an industry group, we feel it is important to stress that this process is one that will benefit the state as a whole, in terms of housing affordability and economic growth.”

Thank you to UDIA NSW for this Article

Tenants’ groups push for renters to have a greater say on building management

TENANTS should be allowed to attend owners’ corporation meetings to give renters a much greater say in how their strata buildings are managed and maintained, tenants’ groups and strata experts have said.

There should also be changes to the legislation to stop the misuse of bylaws, such as banning pets from buildings, as part of the state government’s review of the strata laws, a leading strata law expert, Cathy Sherry, said.

As part of its review, the government last month launched an online forum to give people and businesses the chance to discuss and debate potential amendments to the strata legislation.

One of the big issues raised was inviting tenants to meetings held by the owners’ corporation.

Chris Martin, the senior policy officer with the Tenants’ Union of NSW, said strata bylaws were often the biggest problem faced by tenants, especially those banning pets in buildings or delays in repairs to common areas.

“About half the people living in strata [buildings] are tenants so generally we would be supportive of tenants being given more of a say,” he said.

He said one of the most problematic bylaws tenants came up against was the prohibition of pets. “Really it should be about the ability of a responsible adult to make a responsible decision,” Mr Martin said.

The last review of the Strata Schemes Management Act was carried out in 2004 and a review of the Community Land Management Act was last conducted in 2006, but the government said only “cosmetic reforms” were achieved.

Ms Sherry, a senior lecturer in law at the University of NSW, said there was good reason for tenants to be more active in the running of their building, especially if they have lived in it for many years.

“Tenants are often much more connected to the building than an absent investor-owner,” she said.

“Owners obviously need to have a say because they are the ones that own the buildings but there should also be a way to give renters a say, so perhaps that could be renters collectively getting one vote or a tenants’ forum.”

More than 2 million people now live in over 70,000 strata schemes in NSW and within 20 years, half the state’s population are expected to be living in strata and community schemes.

Alexandra Smith

Thank you for TEYS Lawyers for this article

Housing demand set to increase on the back of higher population growth

22,771,649. That’s the estimated total of Australia’s population.  According to the Australian Bureau of Statistics there is one birth every 1 minute and 46 seconds and an Australian dies every 3 minutes and 40 seconds.  Every 2 minutes and 44 seconds there is another international migrant crossing the Australian border.  Overall the Australian population increases by one person every 1 minute and 31 seconds.

Population and more importantly, the change in population, is intrinsically linked with housing demand.  To put it simply, more people means more homes.

Unfortunately, for such an important indicator, we only see quarterly updates of Australia’s population estimates at a macro level (ie national and state).  More geographically granular updates are released only annually.  Additionally, there is a long time lag for updating population data.   The official estimates at a state and national level are currently up to date as at March 2011 with the June quarter estimates due to be released on December 19th.

Total population growth has eased since peaking back in the March quarter of 2008 (+0.63% over the quarter – note that there is some seasonality in population growth and Q1 typically shows a higher rate of growth than other periods).  Part of the slow down can be attributed to the migration cuts brought in by the Federal Labor Government (the migration intake quota was virtually halved).  Additionally we have seen a swift rise in the number of permanent and long term departures from Australia which has only recently started to reverse.

In fact, based on the more timely migration data released by the ABS (migration data is released monthly, about a month and a half in arrears – so quite a timely data set in comparison with the demographic statistics report which is quarterly and released about six months in arrears) we are now seeing an ongoing trend of higher net migration rates; fewer residents leaving and more new or returning residents arriving.  The migration data is also quite seasonal, with spikes being recorded during February and July each year.

On a rolling annual basis, the September results for net migration were the highest since August 2010.  This is likely the result of the improved migration intake, with the Federal Budget announcing a 10.5% uplift in the skilled migrant intake and a 7.4% increase in the number of migrant families.   The trend of fewer long term and permanent resident departures is also helping to drive the net migration figures upwards.

Almost without doubt, as the ABS progressively release the new demographic data for the June and September quarters of this year we will see an improvement in population growth figures.  Theoretically the uplift in population growth should translate to greater housing demand; so we should start seeing that reflected in some improved dwelling approval and commencement figures.  That will be a welcome development by the residential building sector where the latest construction data from the ABS showed the value of residential construction was down 3.9% over the year.

Thank you Tim Lawless from RP Data for this article