Monthly Archives: July 2012

Naming the Different Collections

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The accounts to which we pay our money is a matter of confusion in strata communities. Like a Catholic church, in strata management there are two collections.

The Catholics cannily worked out long ago two collections are better than one. Giving in smaller more frequent parcels apparently doesn’t hurt as much and as a result we are inclined to give more in overall terms. The first collection for the Catholics is for the administration of the parish and the second is for the priests of the diocese (or is it the other way around?). Apart from being good at collecting money, Catholics are also good at property. Look at the top of the best hill in any town or city and you will be sure to see a Catholic school, church or hospital. Those in strata could learn a thing or two from the Catholics about money and property; pay up, pay often and be clear about what the money is for and how it’s going to be spent. Even if you then spend it as you like.

The administration fund we pay our strata levies too is aptly named but the sinking fund or maintenance account should just be called for what it is, the building fund. This is our savings account and we only spend from this account when we are repairing and maintaining the building. Everything else comes from the administration fund. Keep it simple and people might understand where there money is going and might just be a little bit more ready to part with it on time for the collective good.

The Executive Committee A Creature With Limited Powers

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As an owners corporation is a creature of statute, it can only do the things that the strata title laws expressly say it can do. It is like the Commonwealth.

The constitution, itself an Act of the Parliament of the United Kingdom gives the Commonwealth certain powers but it can’t stray outside these heads of power and when it does occasionally try to do so, the states are quick to pull it up and protect their power base. So it is with owners corporations.

If an owners corporation was to sponsor the chairperson’s daughters’ netball team, then it is permissible only if the chairperson can point to that specific legislative power in the strata title laws that allow such donations. Not surprisingly, no such power will exist and for good reason. This is a body that looks after the common property of a development for the diverse owners of that property from time to time, who don’t know each other and quite probably don’t want to know each other. They certainly don’t want their money squandered on the chairperson’s daughters’ netball team no matter how gifted or talented she may be. Owners corporations are custodial beasts, nothing more, nothing less.

Learn to Be Compliant

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Compliance is a relatively new industry spawned in the nineties in response to a shift in thinking by corporate regulators from government imposed regulatory standards to the warm and fuzzy notion of self-imposed governance.

When the regulator tells you what standards you must meet but not how you must meet them, compliance professionals fill the breach. Those engaged in the pursuit of any form of collective or pooled asset management are conversant with this new dimension of management. Insurance companies, superannuation managers, share portfolio managers, agribusiness scheme managers, property syndicate and funds managers are all required to demonstrate compliance with laws that cover their field of expertise and are charged with the added responsibility of building and maintaining a compliance culture.

Owners corporations manage collectively owned assets and funds worth billions of dollars and have so far escaped the compliance police. A cursory review of any set of books and records of an owners corporation large or small will unearth little in the way of evidence of a compliance culture within strata communities.

Learn to be Inclusive

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For some time new developments have been alive to discrimination issues for the disabled with special entrances for accessibility devices but what about the ageing?

As we age in place, as the health authorities would have us do, the properties in which we live need to be adapted to cope with our frailties and not just our disabilities. The cost of this will have to be met by the owners corporation lest it be suggested that it is discriminating against the aged. Buyer beware is no answer to discrimination laws. If a new type of opening device needs to be fixed to the pool gate to allow those suffering from chronic arthritis to enter with ease and dignity, then it is a foolish and unlawfully acting owners corporation that would deny this adaptation. To the extent possible, new strata titled buildings will need to be built for more flexible future adaptation. As buildings become more flexible, of necessity, so too will attitudes of those that live within and manage the shared facilities.

Learning to Renew

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No matter how well kept; ultimately the time comes for all things to be renewed. Well this is euphuism. What really has to happen is that one-day the building we call home will have to be pulled down.

If deciding whether to have pets or not, or to charge interest on outstanding levies, or to put up the levies was challenging for a group of well meaning volunteers wait until someone moves that the joint be demolished. But it will happen. The only thing worse, is that it doesn’t and our skylines are littered with poorly maintained and dated piles that no one wants or knows how to dispose of and some of our best real estate is overlooked for redevelopment.

Renewal of our strata titled cities and towns is the political debate we haven’t had. When is a home a home, when it’s in the sky or only when it is freestanding? There are no votes in land titles and with governments fixated on 30-second grabs for the 6 pm news and re-election in three or four years, the prospect of something sensible from government on this issue is as likely as the unanimous resolution presently required to terminate a strata scheme.

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