Monthly Archives: July 2016

Why strata schemes need to learn the black magic of delegation

By | Uncategorized | No Comments

The_Wizard_of_Oz_Margaret_Hamilton_Judy_Garland_1939

The introduction of new strata laws is a time of renewal in which we should review old and new practices alike.

The use of delegated powers is in this category, but it’s also in the category of the dark arts. Those powers are regarded as good to have but dangerous to use.

The truth is that delegated powers are just as dangerous when they’re not used.

To paraphrase Nelson Mandela:

‘…with freedom comes responsibility’

When they’re free of the burden of calling meetings to make decisions, those with the powers delegated to them do things such as pay for repairs or censure by-law breaches.

But if they exercise those powers they’ll be dammed by owners who think they can do, but won’t do, better. You can’t have it both ways.

If this much was not clear to us under old laws, it must be under new laws that require functions to be exercised for the benefit, so far as practicable, of the owners corporation, and with due care and diligence.

These words, more than any others in the new laws, will change our working lives. Not so much because of the liability they will visit upon us but because of the scope for argument they will bring whenever powers are used against the will of another.

It’s time to master the dark art of delegation.

Maintenance schedules will be strata managers’ burdens to bear

By | Uncategorized | No Comments

Show Me the Money

When it comes to settlement of a new block the developers focus could not be more narrow: to borrow from Jerry Maguire, “Show me the money!”.

At this time when the developers construction loan facility is fully drawn and every days’ delay is equal to the yearly cost of educating a child at a Sydney private school, tempers fray and attention to detail is wanting.

This is precisely when the strata manager starts asking pesky detailed questions about what is it that the owners corporation owns and manages. Like a millennial avoiding commitment, a developer will deflect these requests. All too often the strata manager gives up and the owners corporation never gets the key information it will need in the months and years ahead to maintain and repair its buildings.

Our law makers have twigged to this and have created a thing called an initial maintenance schedule. Developers will need to list the competent parts of the building in great detail, attach warranties, service manuals, and the names, addresses, and contact details of manufacturers and installers. Developers must provide a schedule for the inspection of the 24 items listed in the legislation, down to details about the asphalt and guttering.

With the possible exception of one or two big brand name developers who take handovers seriously, the task of compiling the initial maintenance schedule will come down to the strata manager, or it won’t get done. That’s just the way these things work.

Buildings now under construction and to be completed after 30 November 2016 will require an initial maintenance schedule. My tip – there will never be a better time to get working on this than now.

‘Thanks for your email, we’ll get back to you in 3 – 4 days’, said no successful strata manager ever!

By | Uncategorized | No Comments

Overworked

The point’s been made loud and clear before today: there’s an urgent need for change in strata management practice and it’s not because the government has finally set the commencement date for new strata laws in NSW. It’s because of the automatic replies I got to my email announcing that my new strata management agreement was ready for sale.

First came, ‘Thanks for your email, we’ll be back to you within 3 – 4 days.’ Next I got, ‘We try to answer our emails within 24 hours but some strata managers get up to 150 emails a day so that’s just not always possible’.

I’m not having a go at strata managers. I’ve walked in your shoes. Indeed, on one level I applaud the honesty of these statements, but let’s be clear – this is no way to build a business today. I’d go so far as to say the reason clients aren’t leaving these firms in droves is simply that they don’t know how and they suspect they will get this everywhere they go. They might be right about that.

There’s nothing new about any of this. Managers and their advisors have been wrestling with this problem for at least a decade. What’s new is that on Friday we learnt that there’s just 20 weeks left until new laws start that will massively compound this problem. There are 39 new provisions about strata management alone to be digested.

Coincidently, on the same day we also learnt the market leader for strata management in the country has signed a 10-year deal to ditch their in-house software for the only true cloud-based strata software company in the market. I’ve used that software and it’s good. The client portal is particularly good, and guess what? It reduces email and telephone traffic because it’s a really easy to use portal where people can get what they want, when they want it, and share information.

And there’s more. As it happens the new strata laws put an end to ‘rollover’ contracts by 31 May 2017; strata management agreements for new building can’t go longer than 1 year and the disputes tribunal has the power to terminate and rewrite strata management agreements.

Let’s join the dots then… strata managers are over worked already, there’s once-in-a-generation reform coming, the market leader is changing to software with a superior client interface, and law reform will lead to provider churn like never before.

Times are truly changing.

Want to get in touch? Contact me