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New Post: Forum: Stalemate keeps fresh ideas at bay Strife in strata is so often a case of an irresistible force meeting an immovable object that it’s hardly worth mentioning – but then someone comes up with a new twist. In this case, you have a strata scheme with six units, each of which has the same number of unit entitlements. If this was a murder mystery, you’d be saying, “well there’s two red https://buff.ly/3X49MDR
New Post: Airbnb hosts face Vic tax and apartment bans Victoria is reversing its open slather policy on short-term holiday lets with new regulations to come into force at the start of next year that will tax holiday lets and allow owners corporations and local councils to restrict or ban them. And the rumour is that NSW policy wonks are watching closely to see if they can fill some holes in the state’s housing budgets https://buff.ly/4e5OjRX
New Post: Minns disclosed IPG shares, says department The NSW government’s Customer Service department says Property Services and Strata Commissioner John Minns is “providing full support” to its inquiries following allegations surrounding his investments in a property management company. Last week, a report on ABC news (https://buff.ly/3AIYyx2) tied Mr Minns to investments in the property management company Independent Property Group, alleging that he had misled the government – his employers – and the https://buff.ly/3X87Fir
New Post: Podcast: Conflicts of interest … and opinions There’s been considerable speculation about NSW Strata Commissioner John Minns this week after the revelation on an ABC news report last week that he has retained a significant holding in a property management company, albeit through a family trust. Is it a serious problem for the man tasked with overseeing strata management (among other things), especially in the wake of the Netstrata scandal? Or is https://buff.ly/3X7JCzY
New Post: Forum: Levies squeezes and admin fund fiddles There’s an old saying in strata – the smaller the block, the bigger the problems. When everyone knows each other, any points of conflict can quickly become personal. Add to the mix the most contentious of all strata issues – levies – and that’s a potent cocktail of potential conflict. In one post this week, two of the owners in a block of four want https://buff.ly/4cA041M
New Post: Defame game – when it’s okay to criticise With all the various defamation trials we’ve seen recently, it’s only natural that anyone who’s going to criticise anyone for anything might be a little concerned. And before I type another word, I should say that I am not a lawyer and if you are seriously thinking of suing someone or genuinely worried about being sued, you really need to talk to someone who is. https://buff.ly/3YT2eGq
New Post: Podcast: Company title chaos, strata solutions In this week’s podcast, we look at why a problem in a company title block would have been much easier to resolve had the apartment been in a strata building. The story in the Sydney Morning Herald (https://buff.ly/473LvlV) is about a septuagenarian woman who has had to move out of her home because of damp caused by faulty water pipes in common property. We explain https://buff.ly/4cDCPUx
New Post: Do you have this professional on your side? Here in strata, your building will hire a lot of people to help look after its and your interests. There’s probably a strata manager, there may be a building facilities manager and even a concierge. Cleaners – either full-time or external contractors – add to the team working away on your behalf. And let’s not forget the volunteers on your committees. But do you have https://buff.ly/3AB2rnO
New Post: Forum: Hanging out for an answer on abseilers There’s a really interesting post on the Forum about the first year in a new block’s life, but it has been sitting there for a week with a stack of questions unanswered. Is it a case of TMI (too much information) or maybe it’s TMQ (too many questions)/ In any case the original post is actually a success story about how a new building had https://buff.ly/3yBQuxx
New Post: Sustainability the rage at OCN conference It’s that time of year again, when strata experts drag themselves away from their research projects and academic papers to pass on their wisdom at seminars and workshops. The next cab off the rank is the Owners Corporation Network (OCN’s) annual Strata Matters conference which this year will focus on finance and sustainability, two topics that sound almost mutually exclusive. However, with “sustainability” the watchword https://buff.ly/3ABNZvu
New Post: My alter ego’s shameless appeal for your votes This has absolutely nothing to do with strata, unless you count the fact that it was written in a flat in Kings Cross and the hero lives in a pad in Surry Hills, both in Sydney. But then there’s me. I am outing myself as James Dunbar, author of the crime novel Mole Creek which has just been short-listed for the Danger Sydney Crime Writing https://buff.ly/3Aqnvx5
New Post: Podcast: Soft soap won’t clean up strata scandal So the NSW Fair Trading Minister has revealed his law changes in the wake of the Netstrata scandal (https://buff.ly/3SQnnNN)and they are, as one strata insider put it, like being slapped on the wrist with limp spaghetti. With the news hot off the printer, Jimmy jumped in with both feet to claim this is a pretty poor response to the revelation that apartment owners are being misled https://buff.ly/3WL5h0H
New Post: Big strata wins again as new laws tread softly It seems one person’s regulation is another’s backdoor legitimacy, if the reaction to this week’s anticipated “crackdown” on strata managers by NSW Fair Trading is anything to go by. Minister for Better Regulation and Fair Trading Anoulack Chanthivong introduced a suite of minor amendment Bills to the NSW Parliament this week, all drafted to tighten up control and transparency of strata management practices. The law https://buff.ly/3WKSewq
It’s Hug Your Strata Manager Day… if it’s OK
A new post from flatchat.com.au
New Post: Forum: Strata doesn’t have to be so difficult Sometimes you just have to wonder why strata owners make life more difficult for themselves, twisting themselves into pretzels to find ways of doing stuff that the law clearly does not intend. Take the strata committee where a member has voluntarily suspended themselves over some undeclared allegation of impropriety. Now this member wants to appear on the committee as a proxy. This is even more https://buff.ly/3WWuln0
New Post: State to crackdown on cheap ebike batteries The NSW government plans to crack down on poor quality, cheap or faulty lithium-ion batteries, a move that will come as some relief to strata committees and residents across the state. From February 1, 2025 NSW Fair Trading will require e-bikes, e-scooters, hoverboards and e-skateboards to meet new product standards. Sellers will face penalties of up to $825,000 if they do not meet the strict https://buff.ly/4deoM8X
New Post: Podcast: Future bright but present tense Having been to more conferences that they’ve had Ubereats deliveries – and with drawers full of lanyards to prove it – Jimmy and Sue headed off to the Gold Coast last week to the Strata Impact conference full of hope that this wouldn’t either be another whinge-fest (not least because JT was MC). In fact, it turned out to be absolutely fascinating with all sorts https://buff.ly/3Aft15P
Big and bright ideas meet huge strata challenges By Jimmy Thomson and Sue Williams Black mould built into new homes, fire safety measures ignored and undermined, real estate marketers (rather than town planners) shaping our cities – these were all issues canvassed at a conference in the Gold Coast last week. But before you dismiss this as doom-scrolling, the Strata Impact conference also https://buff.ly/46FWmSL
A new post from flatchat.com.au
New Post: Big and bright ideas meet huge strata challenges Elsewhere in this post Toggle- Build more apartments (https://buff.ly/46KS1Os)- Personal Liability (https://buff.ly/4fDVNgi) By Jimmy Thomson and Sue Williams Black mould built into new homes, fire safety measures ignored and undermined, real estate marketers (rather than town planners) shaping our cities – these were all issues canvassed at a conference in the Gold Coast last week. But before you dismiss this as doom-scrolling, the Strata Impact https://buff.ly/46FWmSL
And just in case you were wondering, this is what the book looks like. Feeling honoured and elated to be short-listed and very grateful to Echo for having faith in the book.
New Post: Compulsory SMs – be careful what you wish for The canceling of strata manager Whitney Wang’s licence (https://buff.ly/4c4mO9J) last week had an alarming aspect that many observers may have missed. Complaints about the boss of inner-west strata management firm Professional Strata Management Group reached a climax when he was compulsorily appointed by the Tribunal (NCAT) to one block after being sacked from several others by the same body. The problem with a compulsory appointment https://buff.ly/4c4cKxM
New Post: Bond and evictions boost for renters Elsewhere in this post Toggle- Moving stressful (https://buff.ly/3WKQsg5)- No-fault evictions (https://buff.ly/4d1CvA0)- Proposals slammed (https://buff.ly/3WFzsaO) Life looks like it’s going to get a little easier for millions of renters across NSW with two big announcements within a couple of days. Firstly, New South Wales Premiers Chris Minns announced his government plans to ban no-fault evictions, preventing landlords from ending a lease without a “reasonable” excuse from https://buff.ly/3WHeRTs
New Post: Compulsory SMs – be careful what you wish for The canceling of strata manager Whitney Wang’s licence (https://www.flatchat.com.au/six-strike-strata-manager-struck-off-for-10-years/) last week had an alarming aspect that many observers may have missed. Complaints about the boss of inner-west strata management firm Professional Strata Management Group https://www.flatchat.com.au/?p=75334
We cover many possible holidays and tours here on Mild Rover but it’s not often that we can say “been there, done that”. However, the Fishermen’s Trail Highlights on Rota Vincentina in Portugal was one of the first self-guided hikes that my friend Kieran Prendiville and I tackled together.
As you will read in my detailed (and
New Post: Free guide shows how strata committees work Last year we accidentally bought an investment property. I say accidentally because it was going to be our sea-change downsizer where we would live in peace and quiet while we wrote our books. But, as John Lennon once said, “life is what happens when you are busy making plans.” So now we have an investment in a smallish block where most of the other owners https://buff.ly/4dqa8LH
New Post: $225k fatal accident warning for Airbnb blocks A penalty of more than quarter of a million dollars imposed on a Wollongong strata scheme where a worker died in an avoidable accident should send a jolt through owners corporations everywhere – especially those that have commercial enterprises, including short-term holiday lets, in their blocks. And the clear message is that if you have commercial activities in your strata scheme, there’s a good chance https://buff.ly/3Woy4YR
New Post: Forum: Back-to-school daze for Qs and AsA strange thing happens on Flat Chat around this time of year. Actually, it’s not that strange – it’s related to school holidays, and makes perfect sense.
I’m guessing our readers with families are busy getting back from their vacations, buying new stuff for the kids and generally being too hassled by real life concerns to sit down and air any grievances or ask questions on the Forum.
But that’s okay because it gives us a chance to catch up on the backlog of existing questions and answers that tend to be ignored when we roll out the new ones every week.
That said, there are new posts, including one where a Flatchatter asks who’s responsible for registering a new by-law once it has been passed, bearing in mind that this one has already been “timed out” once because no one registered it.
And while we’re on the subject, how do you calculate the voting for a by-law? Okay, it’s 75 per cent – but of what?
Also, an owner wants to know what the process is for getting the OC to fix water pooling and flooding on their balcony.
And speaking of water problems, among the old favourites (and more recent questions) are queries about water hammer in pipes; compensation for water damage from upstairs, and whether landlord insurance covers a leaking balcony.
If that whets your appetite, you can find a stack of other existing questions and answers HERE. There are thousands of them. It’s enough to make your eyes water.
How to ask and answer questions
Anyone can read our posts at any time, but you have to be registered to ask or answer questions. However, there are so many easy ways you can search, access, ask questions and reply to others’ queries once you have registered using the green “register and sign in …” box on this page.
The best way may be to click on “Forum: Your Qs & A’s” on the top menu bar or on the drop-down menu (three lines) on the screen on phones and tablets, under the Strata Choice ad. Then click on the topic title that interests you, and off you go.
Alternatively, you can click on the new “Latest Qs and As” Forum button on the top right of a computer screen or the link on the “hamburger” menu on a phone.
Or look at the list of “Your latest questions and answers” under the ads on the right of the page on a computer screen. Or at the bottom, after the ads and stories, on a tablet or phone.
finally, you can go “old school” and go to the Forum Home Page and work your way through the topics there.
Whichever route you take to get there, the best way to keep up to speed with what’s happening is to register (if you haven’t already done so), then login and subscribe for free to the topics that interest you most.
That way you’ll get an alert whenever the discussion moves forward, and you can also chip in with your own comments and questions. Have a look HERE at our instant guide to getting online. https://buff.ly/3zXAiH4
New Post: Nailing the big problem with too many by-laws https://buff.ly/46lbXan Over 25 years ago our regular guest columnist Francesco Andreone enthusiastically promoted by-laws as the best way to customise strata building operations.
However, he now thinks the proliferation of strata by-laws and rules since then has gone a bit too far; leading to many unnecessary, inappropriate and invalid by-laws and rules with most strata stakeholders placing undue reliance on them to fix all strata problems.
Here are some of Francesco’s examples of bad by-laws and rules, from his own website GoStrata, and his thoughts about how to tame the strata by-law beast.
INTRODUCTION
You’ve probably heard of … the ‘law of the instrument’ or the ‘Birmingham screwdriver’. It goes something like: ‘If all you have is a hammer, then every problem looks like a nail.’
It refers to the practice of using one tool (usually your favourite) for all purposes.
Well, I’m worried that too many strata mechanics think their by-law or rule hammer can fix everything that happens in strata buildings and are using it everywhere.
I’ve had to review a few by-laws and rules and found some serious flaws in a surprising number of them. Plus, many of them are poorly written (verbose, overly formal and unstructured) and others are just impractical or impossible to apply or enforce.
What gives, and why?
SOME BAD BY-LAW & RULE EXAMPLES
Here are just three examples of the unnecessary, invalid or just bad use of strata by-laws and rules I’ve come across (plus the problems with each of them).
- A NSW by-law that restricts the number of people that can be in strata lots or use common property facilities that’s intended to stop overuse by non-residents
This kind of by-law restricts people numbers and is intended to prevent the overuse of common property facilities like a gym or pool, particularly by non-owners or non-residents as strata buildings somehow consider it unfair that they do so.
But, strata owners and strata tenants have unfettered property rights to have guests and visitors to their lots and to use the common property, so this kind of by-law is likely to infringe on their basic private property rights.
It’s also likely to be outside the very limited scope that the untested provisions in section 137 and regulation 36 of the NSW strata laws appear to give to by-laws limiting the number of adults who can reside in a strata lot.
So, there are serious doubts about the validity of that kind of by-law or rule. Plus, I don’t know how it would be policed or enforced. I guess those strata buildings will also try to limit fob or other security device access which opens another legal can of worms.
- A rule that requires polite communication between strata owners and others and excuses committees, managers, etc from responding to rude contacts
This kind of rule or by-law prescribes behaviour in communications and sometimes authorises strata committees, managers and others from having to respond to rude communications.
I suspect a rude strata owner would not know (or care) about a politeness by-law. Or, even if the strata committee could respond by sending the strata owner a copy of the politeness by-law that’s unlikely to work.
It’s very likely that trying to prescribe communication protocols isn’t within the functions of strata corporations.
Plus, to the extent that the strata laws require strata corporations to respond to or deal with strata owner requests, a rule or by-law saying they don’t need to will be invalid.
And, exactly how do you define appropriate and inappropriate communications?
Perhaps there are better ways to improve intra-strata building communications.
- A strata by-law or rule restricting the installation of and prescribing controls over apartment blinds and curtains.
These kinds of strata by-laws or rules are often found in newer and more upmarket strata buildings and are intended to provide a more uniform appearance to the strata building when viewed from the outside.
However, there are already standard appearance by-laws or rules in most Australian states that deal with appearance issues in less prescriptive way and Cooper’s Case in NSW suggests that blanket bans in by-laws will be invalid.
Plus, in New South Wales, the strata law provisions about cosmetic and minor alterations allow blind and curtain alterations without approval so this kind of by-law or rule would be ineffective to the extent it is inconsistent with those strata law permissions.
There are many many more examples of bad by-laws or rules like those banning pets, Air BNB, and imposing money penalties and fines.
Frankly, invalid and poorly written by-laws and rules are a waste of strata stakeholder time as they’re never going to fix any problems and will hurt the strata building and the wider strata sector in obvious and less obvious ways.
But, even valid …
New Post: Podcast: Struck off and probed, that has to hurt https://buff.ly/46fOxmR Oh, dear. Not another swipe at strata managers, please! Yes, OK, it’s a well-trodden path but, to be fair, the baddies have made themselves easy targets for the past few months.
As for the goodies, we’d say (as we often do) that they are in the majority. And how frustrating must it be to try to earn an honest buck and provide a good service to your customers, knowing that your rivals are getting ahead by playing fast and loose with the rules and regulations?
And it’s with that in mind that we venture into the strata naughty corner this week, to discuss two pieces of information, both of which we hope will encourage the many honest and decent strata managers to keep doing what they’re doing.
One topic is news that a well-known strata manager, who had been sacked several times but then promoted by NCAT into an all-powerful compulsory role, has now been struck off.
Yes, you read it right. On a total of six occasions, his contract was not renewed or he was even replaced with a statutory manager, but then appointed to exactly that role, taking over from the strata committee and owners corp in another strata scheme.
And we have unearthed the amazing, deep-dive parameters of the $300k investigation into Netstrata which looks like it’s going to leave no stone unturned.
Now, to be scrupulously fair, the independent inquiry could discover the whole problem was little more than a misunderstanding about who was paying how much to whom for what (“what” being insurance premiums and fees to contractors).
It’s as deep a dive into a company’s structure, business practises and culture as you will ever see, so we hope you’ll forgive us for spending a little longer in the naughty corner than usual.
That‘s all in this week’s Flat Chat Wrap.
Transcript Under Construction
New Post: Netstrata ‘forensic’ report only weeks away https://buff.ly/4dhJ7tU If you thought the dust had settled on the Netstrata schemozzle, think again. The strata management giant is currently reaching the end of what can only be described as a truly forensic review of their business structures.
And while Netstrata has agreed to pay costs of the review of up to $300,000, the investigation by McGrath Nichol Advisory Partnership appears to be totally independent.
The review follows an ABC investigation earlier this year – and follow-up reports – which alleged that Netstrata was using subsidiary companies to hide payment of commissions on insurance premiums, while funnelling strata owners’ funds into preferred service companies.
The word is that Netstrata has been cooperating fully and the final report is expected to be submitted to Fair Trading within weeks, rather than months. The investigation has involved detailed interviews with about 50 strata schemes and numerous local strata managers.
Meanwhile, NSW Fair Trading has already made moves to improve consumer protections across the industry with proposed new laws that will improve transparency and combat conflicts of interest.
Among these is a proposal that strata managers can’t claim commissions on insurances unless they can prove that they were instrumental in negotiating better deals for the strata owners.
As far as the current investigation goes, as well as those issues, questions around large companies amortising costs and increasing profits by going for quantity of clients over quality of service have surfaced.
A NSW Fair Trading website says the review covers the period from January 2022 to 27 March 2024 and has been looking into:
- The business structure of Netstrata and its related entities.
- Processes, policies, procedures, practices and systems of Netstrata in relation to relevant statutory functions.
- Matters related to brokering of strata insurance, to third party contractors and to promotions and incentives to engage third party contract and suppliers.
- Matters relating to the general operation of Netstrata, including whether there are sufficient systems, processes and procedures to ensure statutory compliance, whether there is appropriate supervision and whether there are other consumer interest matters.
- Any recommendations arising.
But it’s the nitty-gritty detail of the scope of the forensically detailed review, reproduced below from a Fair Trading document, that justifies the “no stone unturned” claims.
McGrathNicol will present the report to Fair Trading and it will offer Netstrata a chance to comment before the document will be published. Meanwhile the Owners Corporation Network (OCN) and Strata Community Association (the strata managers’ professional body) will confer with Customer Services on what the new laws will be.
Now that WILL take months rather than weeks, but all the indications are that the reforms will be worth waiting for.
While you’re waiting for that to drop, here’s the whole scope of the Netstrata inquiry, as published by Fair Trading. Now, ask yourself if your strata managers would stand up to this level of scrutiny.
Netstrata inquiry: Scope of Review
1. Netstrata Group:
- a. Business structure of Netstrata and its related entities including all parent and all subsidiary entities and key personnel.
- b. Processes, policies, procedures, practices and systems of Netstrata in relation tothe statutory functions applicable to Netstrata under the Property Stock and Agents Act2002 (NSW) (PSAA) and the Strata Schemes Management Act 2015 (NSW)(collectively, Applicable legislation) including but not limited to compliance withdisclosure obligations and conflicts of interest.
2. Strata Insurance Services (SIS)
- a. What is the relationship between SIS and Netstrata?
- b. What are the arrangements in place between SIS and Netstrata for the brokering of strata insurance?
- c. How is strata insurance brokered by SIS for its clients?
- d. What is the process that Netstrata follows when arranging strata insurance for an owners’ corporation that it manages?
- e. What are the total insurance costs charged for strata insurance? How are these calculated?
- f. What was the disclosure of the total insurance costs referred to in 2(e)?
- g. Whether the total insurance costs generally reflected market costs for the services provided.
3. Contractors and suppliers
- a. Were third party contractors and suppliers engaged by Netstrata when exercising delegated functions of owners corporations?
- b. Were there terms of engagement or other contractual arrangements between Netstrata and each of the third party contractors and other suppliers?
- c. Where third party contractors and/or suppliers were engaged, did Netstrata disclose any related party nature of the engagement?
- d. Did Netstrata receive any payme…
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