Monthly Archives: January 2012

Strata Managers Need Some Plain Talking Fast

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Is there any wonder strata managers are struggling to get executive committees on-board with work health and safety?

Just look at the websites for Safe Work Australia and its hard to find a direct answer about their application to the 2 million strata titled properties in this country affecting about one in four Australians.

In an effort to make it look as if residential strata owners are not being discriminated against compared to house owners the government material starts with this; ‘Do residential strata schemes have to comply with WHS’ Answer. ‘NO’. At this point the residential apartment owners would be excused form reading on and retreat to something more pleasant like pulling your fingernails off without anesthetic.  But alas, for the more patient website readers, it turns out the laws really do apply if you ever have anyone come on to common property to do work. And read on further, even if the owners did this work themselves, for free, you still need to comply. So why not just answer the question truthfully, ‘The WHS applies to residential strata when work is being done on common property.’

These new laws are complex. The duties are intended to apply to multiple persons simultaneously. The key word is ‘work’ not ‘workplace’ and the duty applies to all people not just ‘workers’. There is a new focus on proactivity and committees are required to exercise due diligence at all times, not just when there is an incident or an investigation. This is about doing the right thing and being seen to do the right thing. The fines and penalties are potentially huge and there is no directors and officers insurance cover.

This is a time and an issue that deserves some plain talking. This is what the Judges are going to expect when someone has to go to jail for a death on common property.


The Missing Link Between Sustainability And Termination Of Strata Schemes

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There is a missing link between the top two topics presently being discussed in strata circles. Between sustainability and termination lies maintenance.

Termination of strata schemes is being discussed in terms of buildings being past their use-by date but this is being accelerated by the neglect.

Sustainability of strata schemes is focused on the use of energy and water but the purest form of sustainability is perhaps to make do with what we have used already and make it last longer.

Maintenance is the missing link between these two important discussions but it seems to be off the agenda. It is as if having passed laws for ten-year repair and replacement fund studies last time strata laws were seriously reformed, we thought that box was ticked and we moved on.

But the plans are not being taken seriously and certainly where independent experts are doing plans regularly; they are not being funded progressively by owners of the day. And buildings are aging before their years and resources are being wasted on replacements when repairs would have done.

Victoria and Queensland laws about maintenance plans are superior to those of New South Wales and the Australian Capital Territory. The former call for 10 year rolling plans and the latter require static ten year plans. Rolling plans are better because they require strata communities to focus each year for budgeting purposes on the next ten years. Static plans are for ten years and are reviewed at the five-year mark but there is never a constant ten-year outlook.

Victoria pips Queensland for the best laws in this field because it sensibly requires the executive committee to report each year to the annual general meeting about spending in according to the plan.

Of course owners corporations don’t need laws to require them to adopt ten year outlooks – they could and should adopt these forms of studies and report about them annually as best practice and in so doing show the reformers the way.

Termination The Next Big Thing for Strata

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On the agenda for strata law reform this year is the trendy topic of termination.

It’s trendy to talk about termination of strata schemes because it’s a big picture issue when so many things in strata are not.

Entering the debate on this topic enables one to talk about other trendy topics like sustainability, urban renewal and new design paradigms.

The fact is that termination debate has been had. No more talk is needed. Everything has been said.

We know buildings are aging, we know they have been badly cared for, we know that getting approval from every owner to knock them down is impossible, we know that most other civilized countries have reduced the threshold for a termination resolution to 80% and we know how they go about protecting those who do not want to participate in the redevelopment.

What remains is for a decision to be made. It is a difficult decision. Will our state governments require individuals to sell their homes against their will if a super majority of their co owners want to redevelop?

My opinion: sharing walls, floors and ceilings necessarily involves compromise. This should extend to calling time.

State governments and local authorities will continue to choke on this pill. Quite possibly they will reform all the laws that don’t need reforming and leave the one that does. It will be up to us to navigate owners through demolitions and redevelopments.

Reform or no reform; renewal is the next big thing in strata.

Get Your WHS Get Out of Jail Free Card Ready

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All states and territories except Victoria, Western Australia and Tasmania signed up for new uniform work health and safety laws (WHS) from 1 January 2012. Despite this legislation being available for months, in strataland we are not very well informed about its application.

There are many unanswered questions about how these laws apply to owners corporations and bodies corporate managing common property, but there are some things we know for sure. The first of these is that any building with a shop or other form of commercial lot within, will be caught by the new regime.  So if you enjoy the convenience of fresh milk and bread downstairs, it will now cost a little more in compliance costs.

In this new world of nationalised health and safety laws, recklessly exposing a person to a risk of death or serious injury can be met with a fine of up to $3m for corporations and $600k for individuals and / or five years imprisonment. Serious risk of harm without recklessness comes cheap at $1.5m for a corporation, $300k for individuals and no visit to the ‘big house’. Failure to comply with WHS duties will cost a mere $500k for corporations and $100k for individuals.

‘Due diligence’ is your ‘get out of jail free’ card. You get these cards by demonstrating due diligence. Herein lies the concern for strata managers and owners. Our strata organisations have not been that good at actually doing things to improve health and safety. Creating systems and processes by which owners corporations and bodies corporate can be seen to be doing things is going to require a whole new level of sophistication.

Sadly, there will need to be a death or two before someone within a strata community, or their manager, is charged with recklessness and executive committee members begin to take this matter seriously. In the meantime, the wise will be getting their cards in order.

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