Presentation for Rockend\'s Melbourne Strata Users Day - June 2011

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A presentation about 4 topics of interest to Victorian strata title stakeholders

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Presentation for Rockend\'s Melbourne Strata Users Day - June 2011

  1. 1. A Strata TitleUpdate<br />ROCKEND STRATA USERS SEMINAR<br />7 June 2011<br />Melbourne, Australia <br />
  2. 2. Today’s Agenda<br />A selection of strata issues<br />2 Stage Victorian strata law changes<br />Compliance issues<br />Existing & emerging trends in strata<br />50 years of Australian strata title<br />Questions <br />
  3. 3. 2 Stage VictorianStrata Law Reforms<br />Some more Victorian strata law changes<br />Consumer Affairs Legislation Amendment Act 2010 [CALAA]<br />Consumer Affairs Legislation Amendment (Reform) Act 2010 [CALARA]<br />Stage 1 started on 1 January 2011for everything except delegation to committees and proxies for committee meetings<br />Stage 2 starts on 1 September 2011<br />
  4. 4. 2 Stage VictorianStrata Law Reforms<br />Registered managers and chairpersons can witness use of the seal for owners corporation certificates<br />Delegations to committees can be made by instrument or by resolution<br />Delegations (by instrument or resolution) must be by general meeting<br />Delegations to committees end at next AGM<br />Non valid delegations can be ratified<br />
  5. 5. 2 Stage VictorianStrata Law Reforms<br />VCAT can award costs in fee & charge recover actions<br />VCAT costs can include professional & volunteer manager charges directly or indirectly relating to recovery<br />Only lot owners can appoint proxies to committees<br />Empowers police officers, CAV inspectors or other CAV authorised people to serve infringement notices under Consumer Acts<br />
  6. 6. Compliance Issues<br />There’s a lot of laws, regulations, rules or contracts in strata<br />They apply to everyone in strata <br />So, everyone in strata needs to comply with them<br />But, there’s a lot of non compliance everywhere in strata<br />Why does it happen?<br />Why does it matter? <br />
  7. 7. Compliance Issues<br />Ignorance: People just don’t know what to comply with.<br />Lethargy: People can’t be bothered to do what’s required<br />Busyness: People are too busy in their other lives<br />Miserliness: People won’t spend the money<br />Arrogance: People simply don’t want to <br />Corruption: What’s required is against their interests<br />Civil Unrest: The rule or provision is actually inappropriate and should be ignored<br />
  8. 8. Compliance Issues<br />It may be okay for owners not to comply (for whatever reason) since the consequences mostly affect them<br />But, one strata stakeholder can’t get away with non-compliance - the strata manager <br />Strata manager contracts require the strata manager to <br />operate the scheme according to all applicable controls<br />other laws (negligence, trades practices and registration controls) require performance to strict competence standards<br />There’s exposure to contract breach issues & damages claims<br />Plus strata corporation & owner relationships will suffer<br />
  9. 9. Trends<br />The future of strata title will include more of the same<br />But a few other trends will also influence strata over the next 10-20 years as follows<br />Decentralised control away from committees<br />Increasing owner empowerment on decisions& governance<br />Hyper-regulation of strata scheme operations<br />Degeneration of management into over-formality & processes - rather than outcomes<br />Large scale owner apathy and ignorance <br />Increasing operational complexity of buildings & systems<br />
  10. 10. Trends<br />Haphazard application of other laws to strata corporations leaving them out of sync with other property<br />Effective strata scheme support services become more crucial to good management & operation but increasingly hard to find<br />Rapidly rising operating costs to owners causing stress & conflict<br />Debates over appropriate owner engagement to determine how much is not enough & how much is too much<br />Debates over tenant status, their rights & responsibilities.<br />
  11. 11. 50 Years of AustralianStrata Title<br />A sparsely populated country with 7.6 million square kilometres, 22.5 million people & 8 major cities<br />A strong culture of property ownership<br />Stable banking & long term low interest mortgage sector<br />Taxation incentives for residential rental investment property<br />Enthusiastic property developers operating in boom-bust cycles<br />Multi unit housing represents 25% of total Australian housing <br />51% of new housing in NSW in 2010 was multi unit housing<br />
  12. 12. The Beginnings<br />Apartments appear in the early 20th century<br />The post war period see many more low rise apartments: mostly rented to younger couples saving for a home<br />1950s income & wealth levels of baby boomers lead to pressure to own apartments so a few innovators looked at apartment titling options<br />Lend Lease (via Dick Dusseldorp) lobbies for & initiates law reform for strata title and a joint working committee of private & government lawyers develop new NSW laws<br />The Conveyancing (Strata Titles) Act 1961 starts on 1 July 1961<br />
  13. 13. The 1960’s & 1970’s<br />First NSW strata laws have29 sections& 2 schedules<br />The first Australian strata building still exists in Ashfield<br />NSW Laws copied all around Australia and Australian laws copied in Canada, New Zealand, Singapore, South Africa, Indonesia, Malaysia, Fiji, Philippines, Cayman Islands, India & Hong Kong<br />Major NSW law reform ofin 1974 with 200 sections, 4 schedules & separate regulations<br />Pioneering times for everyone<br />Negative gearing promotes strata rental investment<br />A specialised strata management industry emerges<br />
  14. 14. The 1980’s & 1990’s<br />Major NSW law reforms: community title laws allowing estate subdivisions & 2 part laws (splitting development & management)<br />Major QLD law reforms: creating core Act & Regulation Modules for different building types<br />Steady growth in stratapopularity, acceptability & values plus the 1990s property boom adds massive growth in strata numbers<br />Large scale foreign investment in strata property ownership<br />Professional strata associations/groups emerge & strata managers regulated in 2 states<br />Holiday apartment syndrome starts in QLD & long term (25 year) onsite management contract emerge<br />
  15. 15. The Naughties<br />Australian laws copied in United Kingdom & United Arab Emirates<br />Proliferation of law reforms in every Australian state<br />Over 33 separate strata Acts, with over 1600 sections, over 3000 regulations & more than 70 schedules<br />Proliferation of legal decisions in Courts around Australia<br />GFC puts pressure on property values & strata cash-flows<br />Larger & more complex strata developments emerge<br />Smaller sized housing units become standard in strata<br />Strata manager business polarise with large oligopoly style operators & micro businesses<br />
  16. 16. Conclusions & Questions<br />What have we learnt?<br />Where do we go from here?<br />What are the next questions?<br />Where do I find answers?<br />
  17. 17. Contacting Me<br />Contact me anytime about strata matters at …<br />francesco@strataexperts.com.au<br />And, follow my blog on worldwide strata matters at …<br />www.francescoandreone.blogspot.com<br />Find information about strata at my websites at …<br />www.francescoandreone.com & www.strataexperts.com.au<br />

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