griffith uni presentation 040815
TRANSCRIPT
Slide 1
Strata building performance as a lottery: If I hadnt bought into my new building 10 years ago, what would be its standing today?
Gerry ChiaVice Chair, Owners Corporation Network
Chairman Pacific Place Community AssociationSecretary Epica Owners Corporation
Epica, completed 2005, by MirvacChatswood, Lower North Shore Sydneyhttp://www.pacificplacechatswood.com/
Chatswood NSW Epica 31 storey new Mirvac apartment buildingCompleted 20051 of 4 strata plans in a Community AssociationChatswood, Sydney lower north shore
2005
2007
EPICA
Very complex building with multiple plant and machinery
3 high rise and 2 small liftsCentrally supplied water cooled air conditioning, 2 cooling towersCentrally supplied gas fired and solar assisted hot water consisting of 3 separate systems for low / mid / high rise
Very complex building with multiple plants and machinery 30,000 litre drinking water supply tank 20,000 litre fire sprinkler supply tankFed by pumps at street levelFire sprinklers throughout the buildingCEBus lighting control system
Very complex building with multiple plants and machinery
Strata manager did not consider plant and machinery breakdown insurance cover necessary!Office bearers liability insurance $1m
ISTM Strata Agency Agreement
3 years, with 3 year auto rolloverAnnual retainer, 5% annual increaseSchedule B disbursements uncapped18% Commission on strata insurance
On Site Building Management
Likely to be 3 years, but could be up to 10 years under NSW Strata LegislationNo opportunity to review contractNo KPIs
Motions at Inaugural AGM
Appoint strata manager for 6 monthsAppoint building management firm for 1 yearIncrease office bearers liability to $5m
Strata Management
Went to tender late 2005Fixed fee based on scope of worksNo schedule B disbursementsNo insurance commissionsMinutes and agendas sent electronically
Strata Management1 year appointment, monthly rollover after thatMajor amendments to ISTM contractMany of our changes now in SCA NSW 2012 agency agreement
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2006 Extraordinary General MeetingEGM to appoint new strata manager organised by volunteer ownersPrinted over 3000 sheets for EGM agenda, all collated and posted or inserted by ownersNew strata manager appointed March 2006. Still with same strata manager 9 years on
Insurance
Original cover arranged by the strata manager:Property insured value $110mPublic Liability $20mOffice Bearers liability $1mNo plant and machinery coverPremium $93,000pa
Insurance
In 2006 I combined the buying power of the 3 completed stratas and community association and went to tender for a broker, then to market for our insurance
Insurance 2015EPICA property insured value $190m Public Liability $50m plus additional $50m shared across all entitiesOffice bearers liability $20mPlant and machinery breakdown plus loss of rent as a result of breakdown
Insurance 2015Fixed brokerage fee Epica Premium of $120,000Combined property insured value of 4 stratas and community association of nearly billion dollars
Take home message:Owners must involve and take control of their affairs. In our case combining our immense buying power has given us top tier insurance cover at a very competitive rate, with excellent service backing. Without my involvement perhaps none of this might have occurred. It takes a champion to push to obtain the best result
Shared facilities under community association in 2005:25m outdoor pool, spa, kids wading poolBBQSeveral acres of gardensGym and sauna
Inadequate Levies
Opening levy 2 bed apartment on an upper level with ocean views $880 per quarterOn site building management Sinking fund $45,000 pa
Levy $880 per quarter
Levy $880 per quarter
Compared with 2 bed 3 storey walkup block of 6 units, $600 per quarter
Epica
Sinking Fund Survey we commissioned in 2005 recommended a levy of $300,000 PANo assistance or recommendation from original strata manager on sinking fund surveyFirst year many maintenance items were included in the supply contract, so no charge to owners corporation for year 1
Epica
Second AGM increase levies by 71%My 2 bed premium aspect now $2,100 per quarter
Taking care and reinvesting in the assetA healthy and robust sinking fund is essential to ensure the proper maintenance of the assetMany capital items require replacement or refurbishmentFor example major painting in 10-15 years, and lifts 20 years
Taking care and reinvesting in the assetWithout a robust sinking fund, the owners corporation would need to strike special levies or leave the asset to deteriorate and progress into a downward spiral, which is the case in many buildings
Taking care and reinvesting in the assetInsufficient levies cause buildings to deteriorate, rents and resale values decline, and eventually the buildings may become economically unviable and unsafe.
UPPING THE ANTE Epica in the first yearAppointed new strata managerGot high performing on site managerIncreased levies by 71%Combined and marketed our insurance requirementsfor the whole site
CREATING A HOME AND COMMUNITY:In the beginning.
Residents in the lifts pushing close buttons even though others trying to catch the liftResidents pushing into lifts before passengers have had time to alightCigarette butts, some still burning, thrown from balconies
CREATING A HOME AND COMMUNITY:In the beginning.
Visitor parking chaosResidents renting out their allocated car spaces to outsiders contrary to DATeenage residents with no parental supervision behaving badly
CREATING A HOME AND COMMUNITY:In the beginning.
Coles trolleys brought into building and left on resident floors
CREATING A HOME AND COMMUNITY:In the beginning.
Many lights outI checked external doors each night to secure them after trades and residents had propped them openI checked lights out in garden, and put fluro colour dots to indicate to building management to change globes
THE ACTION PROCESS:QUALITY SERVICE PROVIDERS
Epica a new high performing on site managerThe Community Association contracted permanently assigned on site security guards to have round the clock on site presence
QUALITY SERVICE PROVIDERSLook after, acknowledge and motivate good people
$3000 bonus pa for building managerXmas bonus for long term guardsXmas cash gift card for strata manager
QUALITY SERVICE PROVIDERSLook after, acknowledge and motivate good people
Pay peanuts !!!!!!But being charged more may not equate to quality service if you dont have the right firm and right people
BUILDING A COMMUNITY CULTURE I purchased and installed a community notice board for EpicaHeld lift doors open for people Rebuked people pushing into lifts
Greeted other residents in lifts etc.Got to know neighbours on my floorLeft welcome gift for new neighbours moving in next door
BUILDING A COMMUNITY CULTURE
Residents year end get together November 2006Organized residents end of year BBQ2006 volunteer residents cooked and prepared food60 attendees
Now for all the Pacific Place Community
380 residents attend from all 4 buildingsfully catered
Pacific Place Community Petting zoo
Santa calls with gifts for kids
Pacific Place Community
Face painting
Pacific Place Community Special guest at Community End of year event
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Other Community initiatives
Tai Chi group Mothers group
Other Epica Initiatives
Christmas tree DefibrillatorTrolleys for residents use
Other Epica Initiatives
Christmas tree DefibrillatorTrolleys for residents use
Other Epica Initiatives
Christmas tree DefibrillatorTrolleys for residents use
Other Epica Initiatives
Christmas tree DefibrillatorTrolleys for residents use
Other Epica Initiatives
Car jump starterCar wash bay industrial grade vacuum cleaner and hose reel, upgraded lighting on movement sensor
Other Epica Initiatives
Car jump starterCar wash bay industrial grade vacuum cleaner and hose reel, upgraded lighting on movement sensor
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BEEFING UP THE BY LAWS Parking enforcementShort term lettingsOvercrowding
BEEFING UP THE BY LAWS
Emergency powers in event part of the building becomes unable to be occupied as per Bondi Junction Eastgate Gardens gas explosionTimber floors standards to protect neighboursRenovations Smoke drift
INVESTING IN THE ASSET EPICA 2007 CCTV Security cameras in all public areas, entrances and 6 basement car parksUpgraded 72 fire stair door locks and lift control locks to high security Bi locks
INVESTING IN THE ASSET EPICA2010 Retrofitted all basement and fire stair lights to LED, assisted by $25,000 grant from Willoughby CouncilNow 98% all common area lighting LEDInstalled variable speed drivesReduced monthly consumption by 30,000kWhImproved power factor to .92
INVESTING IN THE ASSET EPICAReprogrammed CEBus system for better efficiencyInstalled Satellite TV dish and upgraded TV reception cable infrastructure to enable residents to receive over 100 pay and free to air satellite TV services
INVESTING IN THE ASSET- EPICA100Mbps download internet access via Telstra HFC (Hybrid Fibre Coaxial Cable), and very soon NBN Fibre to BasementPlan to install fibre backboneMain lobby update to stay ahead of newer buildings in the areaContinuous program of refreshing common areas
Investing to Improve the Community Asset:
Constructed a community roomExpanded the gym Purchased additional gym equipment and 5 flat screen TVs
Investing to Improve the Community Asset:
Constructed a community roomExpanded the gym Purchased additional gym equipment and 5 flat screen TVs
BUYING INTO STRATA IS INDEED A LOTTERY Will the building, which is your home, become a de facto hotel of serviced apartments, or student accommodation? Is there overcrowding?
BUYING INTO STRATA IS INDEED A LOTTERY How secure is your building? Certainly serviced apartments can reduce your standard of security and house keeping compared to if it was only used as full time residentialDoes the building have unresolved or hidden defects?
BUYING INTO STRATA IS INDEED A LOTTERY Do you know how your levies are spent? Do your service suppliers do quality and fairly priced work? Do they care about you as a client?
BUYING INTO STRATA IS INDEED A LOTTERY Is your executive committee transparent and committed to ensuring the well being of the building and those who live there, or are they just in it for their own agendas?Does the committee have an effective policy of quality maintenance and investing in the asset?
ENSURING STRATA WILL BE A QUALITY LIFESTYLE:
I challenge you all here today to incorporate at least 3 things To those of you who conceive and design apartments lets make them a community. Give us better design, energy efficiency, ventilation, natural light and community facilities.
ENSURING STRATA WILL BE A QUALITY LIFESTYLE:
To those who build, give us buildings that properly conform to building standards, and dont leak, and have the correct fire safety systems in place
ENSURING STRATA WILL BE A QUALITY LIFESTYLE:
To those who shape the legislation: make builders and developers accountable for defective buildings
ENSURING STRATA WILL BE A QUALITY LIFESTYLE:
To those who shape the legislation:Give us greater powers to deal with those who abuse our community. What if I came and parked in your house carport and went off to do my shopping because you lived close to the shops, and you had no powers to deal with me
ENSURING STRATA WILL BE A QUALITY LIFESTYLE:
To those who manage our assets: give us greater accountability and transparency, and guide us how to maximize our assets and create a community. Dont just see us as a means of income
ENSURING STRATA WILL BE A QUALITY LIFESTYLE:
To those in academia:I hope you will take further the concepts I have touched on in your research and studies, as strata living is now the lifestyle of choice of many living in our cities, so quality of life is a key element
ENSURING STRATA WILL BE A QUALITY LIFESTYLE:
And to those of you who live in strata help make it a house proud community. It is after all your home.
Strata building performance as a lottery: If I hadnt bought into my new building 10 years ago, what would be its standing today?
Today I have given you a glimpse into the major things we have done in Epica and Pacific Place Community AssociationI leave up to your imagination where we would have been had I not bought into my scheme 10 years ago