Strata Law Resources & Services for Owners Corporations &

Bodies Corporate

A  Word  From  Our  Founder  &  Principal  Lawyer  

An increase in apartment living is a sign of the times in which we live. The ageing of our population, environmental concerns about urban sprawl, the shrinking number of those living together in one household and housing affordability, all mean that there will be more apartment living in the future. Yet surprisingly little is known about bodies corporate and owners corporations that govern common property in strata buildings and developments.

That’s where TEYS Lawyers can help. We are a group of professionals dedicated solely to legal issues arising in strata and community titled buildings throughout Australia. This has been my passion for my entire working life. I have been a strata manager, developer and financier which has given me different perspectives about this form of living but first and foremost, I am a lawyer and fighting for the rights of people in strata living arrangements is my calling.

We are particularly strong in five areas:

• By-laws and rules to regulate the use of common property; • Building defect litigation against builders and developers to fix bad workmanship; • Strata community dispute resolution; • Management rights and building management contract negotiation; and • Levy and fee collection.

I hope the information you find here will help you understand our distinctive approach to these matters and that one of our lawyers will be able to help you get the best results for your strata community.

Kind regards

Michael Teys Founder & Principal Lawyer

Michael Teys is the Founder and Principal Lawyer of TEYS Lawyers. He has a Bachelor of Laws and practices exclusively in the area of strata title law. He is a Fellow of the Australian College of Community Association Lawyers. He was formerly an Adjunct Lecturer with Charles Sturt University. He appears weekly on SKY News Business Channel's Property Success with Margaret Lomas and is a regular panellist for the property edition of Your Money, Your Call for the same channel. You can read Michael’s weekly blog at www.michaelteys.com and follow him daily on Twitter at @MichaelTeys

7  Activities  That  Drive  Our  Client  Relationships  

A  singular  focus….  

We are a specialist strata law firm. We only act for strata titled property owners and their owners corporations, bodies corporate and community associations.

Dedicated  to  one  client  group….  

We have a strong conflict of interest policy that means we are absolutely free to represent strata title owners and their managers. We do not accept instructions from developers and builders and we will never act against a referring strata manager.

A  unique  insight  into  strata  management….  

We understand strata management acutely. Our Founder and Principal Lawyer, Michael Teys has previously owned and run a large strata management business that operated in New South Wales, Victoria, Queensland and Western Australia.

Heavily  focused  on  client  training  and  resources….  

We invest heavily in educating our clients and referring strata managers. No other law firm publishes the amount of material we do on strata law. By teaching, we continue to learn.

Online  fee  disclosure  and  flexible  billing  methods….  

Our online fee disclosure billing system (Freshbooks) is quick and easy to understand. We will work on a fixed fee, an hourly rate or a retainer depending on your preference. We will not charge for photocopying, couriers, postage, stationery and other minor expenses.

Project  management  software  for  transparency….  

We use online project management and collaboration software (Basecamp) to deliver our services. This means clients, committees and their strata managers can all view at any time our entire file and internal workings to check on the progress of their matter. This reduces work for strata managers and committee members.

Leveraging  knowledge  gained  nationally….  

We practice nationally so we are alive to different issues arising in strata at different times in asdifferent places. We apply this knowledge across state and territory borders so we can use the latest developments in strata law to get the best outcome for our clients wherever they are located.

By-­‐Laws  and  Rules    By-laws and rules regulate the use of common property. They are fundamental to the good functioning of a strata community. Unfortunately, they tend to be written before a building is completed and often do not meet the needs of the community they are meant to serve.

Our  work  in  this  area  includes….  

• Specific by-laws and rules (for example, animals and parking)

• Exclusive use and special privileges by-laws and rules

• Review and update of current and proposed by-laws and rules

• Audit of existing by-laws and rules

• Registration of by-laws and rules

What  makes  our  by-­‐law  and  rules  service  unique….  

ü Easy to understand language

ü Fact sheets for owners to explain the need for the by-law or rule

ü Fixed fees for by-law and rule preparation and registration and reasonable hourly rates for customisation

ü Compliant with the latest cases and rulings on the topic

ü Usually done in 48 hours

A scheme came to us with a set of by-laws written for their building when it was completed 18 years ago.

They had some troublesome new owners behaving badly around their pool. They got a copy of the by-laws from their strata manager and realized that this behaviour was not covered. The language was also out-dated and referred to laws that were no longer current. They came to us with a set of by-laws from their neighbouring building that they quite liked.

We wrote a new set of by-laws for them using modern language and used the neighbours’ set as a guide for matters to cover. We were able to safeguard previous approvals for renovations, improvements and permissions granted under the old by-laws. Also, we advised that restrictions on the minimum age of pool users was discriminatory and therefore unlawful.

We charged a fixed fee for this work in accordance with the estimate accepted by the committee.

CASE STUDY A review of by-laws past their use by date

Helpful  fact  sheets….  

The best by-laws in the world won’t change a thing if your strata community does not understand what they are about and why.

We have identified 25 common by-laws and rules and have prepared a fact sheet on each one to help our clients and their managers clarify the problem they are seeking to address and ensure they get the outcome they want.

These fact sheets, which are tailored to the law and practice of each state and territory, are then useful in communication with the broader owners’ group about the need for the by-law or rule and how it will be interpreted.

Our fact sheets about by-laws and rules:

• Define the behavioural problem to be addressed; • Describe the solution; and • Summarised in a short paragraph the latest cases, rulings and adjudications on the

relevant by-law or rule.

Fact  sheets  you  might  find  interesting….  

• Air conditioning • Fire services call-outs • Parking controls

• Alterations to lots • Floor coverings • Roof areas

• Animals • Hot water services • Anti-smoking

• Balcony enclosures • Overcrowding • Solar Panels

• BBQ’s • Garbage Disposal • Towing Cars

TEYS  Lawyers  training  resources  for  by-­‐laws  and  rules….  

Apart from our fact sheets, we have developed a popular 1-hour training module for strata owners and managers on by-laws and rules. This covers:

1. 5 step formula for making valid by-laws; 2. Examples of invalid by-laws; 3. Controversial by-laws to be avoided; 4. Tips on enforcing by-laws; and 5. Suggestions about improving by-laws.

Building  Defects  

Latest research shows that of respondents who owned a property built since 1997, almost two-thirds had ongoing defects in the building (Easthope et al, “Managing Major Repairs in Residential Strata Developments in NSW’ City Futures, UNSW, 2009)

The  typical  legal  approach  to  this  problem....  

Typically, owners upon discovering defects, engage a consultant to produce a large report, several inches thick. This is then served on a builder with a demand that rectification work be done within a specified time otherwise legal proceedings will be commenced.

While this practice reflects the ‘usual course’, the reality is that it reinforces an adversarial approach. Indeed this approach is out-dated and runs counter to new thinking in the construction industry that is increasingly relationship-based.

Consequently, when the builder receives the report, usually viewed as an ‘ambit claim’, the builder immediately takes up a defensive position which leads the parties to an expensive and long drawn out fight.

Many lawyers and consultants take this approach not so much because it is an outcome that suits lawyers and consultants (which it does), but moreover, because of laziness and a lack of imagination.

We  are  approaching  building  defect  problems  in  an  entirely  new  way….  

TEYS Lawyers has been able to achieve rectification of defects worth millions of dollars with an entirely new collaborative approach. We have developed this with a consultant who is able to communicate effectively. This approach has the following characteristics:

• It engages with the builder as an equal; • It facilitates an open, full and frank discussion with the builder in a ‘without prejudice’

context (before battle lines are drawn); • It assists the builder in finding a solution to the problem which the builder doesn’t

necessarily know as having caused the problem in the first place; • The agreed solution may be a practical one which satisfies both parties rather than an

ambit claim which just antagonises our opponents for no benefit; • Legal proceedings are an implied (rather than explicit) threat to encourage the builder

to engage in the process; and • Once agreement is reached, it is recorded in a deed avoiding litigation.

Resources  we  have  developed  to  assist  with  building  defect  cases….  

We understand that major litigation is a big decision for owners. Accordingly we have developed a suite of resources to assist owners and their managers in determining how best to achieve rectification of their defects.

This package includes:

• 5 Tips and Traps for Engaging Experts in Apartment Building Defect Cases (fact sheet);

• The Strata Guide to Rectifying Apartment Building Defects (27 page booklet); • How to Prevent Building Defects Tearing Your Owners Corporation Apart (one hour

training module); • Public Officials and Certifiers, What’s Their Fair Share? (one hour presentation); and • Building Defect Litigation for Committee Members (17 part series of short notes).

 

An owners corporation with over 200 lots had significant water penetration affecting most units. The owners, went directly to an ‘expert’ and commissioned a defects report. The report was extensive but on closer examination consisted almost entirely of photos of the same problem. The strata manager sent the report straight to the builder who denied liability on the basis that the real cause was ‘wind driven rain’. The owners corporation took a year to get to this stalemate. The owners corporation came to us to write a letter of demand and commence legal proceedings. Instead we advised the owners should determine the solution rather than the problem and engage a different expert to approach the builder more collegially to discuss how the rectification work might be done progressively on a unit-by-unit basis. The rectification cost was estimated to be more than $ 5 M. We recommended a different expert because we had success using him on other cases and have developed an understanding of how a collaborative approach to dispute resolution can work in these types of cases. After two months of meetings between our expert and the builder, with us in the background pointing out the worst case to a negotiated outcome, the builder conceded responsibility and began the rectification work. We achieved this outcome in just 6 months and for a fee far less than the cost of commencing proceedings and approaching the matter in the traditional legal way.

CASE STUDY Less is always more in building defect cases

Strata  Community  Disputes  

Disputes with neighbours are always nasty. Some are easily resolved and others are very serious involving discrimination and violation of individual and collective rights. Wherever your strata community is on that spectrum, we recognise that your home is a very important space and resolving your strata community disputes is something we take very seriously.

Common  disputes  on  common  property….  

Our work in this area centres on the resolution of conflict within communities and between communities and their service contractors. Common disputes involve:

• Repair and maintenance claims; • Unreasonable refusal to make by-laws or grant approvals for pets and improvements; • Compulsory appointment of strata managers in dysfunctional schemes; • Noise and nuisance restraining orders; and • Removal of unauthorised improvements.

Our  dispute  resolution  services  come  in  a  variety  of  forms….  

• Written advice to help settle arguments • Mediation services where we act either as a facilitator or advocate • Adjudication applications • Tribunal appeals • Court work for more complex cases

Our preference is always to come to a sensibly agreed outcome.

A 10-year-old community association comprising a mix of high-rise units and townhouses was faced with major repairs and a painting project. The community was divided on the extent of works required and the timing of this expense. The community management statement did not empower the community association to enter into contracts binding all the townhouse owners to one contractor and a standard set of specifications. It could only be amended by unanimous approval, which wasn’t going to happen. We devised a way of giving notices to repair and maintain the townhouses under other powers that compelled individuals to do certain work. By a series of meetings, which we addressed, we helped the townhouse owners come to the conclusion that joining with the unit owners to get the work done was the best solution.

CASE STUDY There’s'always'more'than'one'way'to'get'a'job'done'

Helping  communities  to  understand  their  conflict….  

We publish many tools and resources to help communities understand the nature of their conflict. Understanding is the first step to dispute resolution. Here is a list of some of our material:

Committee guides

• Constructively Resolving Conflict in Strata Communities • Holding a Successful Annual General Meeting • Effectively Managing Your Owners Corporation • Fair and Proper Use of Common Property

Weekly e-training notes

• Solving Neighbourhood Problems (12 part series) • Effective Governance for Strata Communities (12 part series) • Effective Communication for Strata Communities (12 part series)

Training presentations

• Death on the Common Property – Who’s Responsible? • Identity Fraud, Discrimination, Sustainability and Other New Threats to Strata Living • A New Work Health and Safety Regime • Would Your OC Survive a Financial Performance Health Check? • Best Practice for Strata Insurance Claims • Repairing and Maintaining Common Property: The Inconvenient Truth

Videos (available on YouTube)

• Is Your Strata Complying With the Strata Schemes Management Act? • Merrimac Heights Case: Lessons Learned • The Truth About Strata: What Purchasers Really Need to Know

Management  Rights  ‘Management rights’ are arrangements where the body corporate or the owners corporation have contracts with parties to provide a combination of caretaking and letting services. The ‘resident manager’ will have a licence to act as a residential letting agent and live on site. These arrangements are very common in Queensland and exist also in New South Wales, Victoria and the ACT.

Type  of  management  rights  work  we  do….  

• Interpreting the meaning of contacts for management rights and building management

• Advising bodies corporate and owners corporations on their rights and responsibilities when there is a transfer of the management rights

• Preparing breach and termination notices in cases of poor performance • Advising on rights and responsibilities when bodies corporate and owners

corporations ask for an extension of contracts • Reviewing and advising on new contracts

A body corporate retained us in a case where a resident manager demanded the consent of the committee to the transfer of management rights within 10 days and presented a deed to be signed under seal.

We advised the body corporate:

•  They had a right to 30 days notice

•  They could interview the new manager

•  They could withhold their consent of the transfer acting reasonably

•  The outgoing manager had to pay their legal fees for retaining us; and

•  The proposed deed contained representations by the body corporate which the body corporate was not required to, and should not give

CASE STUDY Where a body corporate felt bullied by an outgoing resident manager

Guidance  for  bodies  corporate  and  owners  corporations….  

Management rights and building management contracts are often the cause of emotive disputes in apartment and townhouse complexes.

Developers typically sell the management rights and building management contracts to make extra profit on the development and before governance responsibilities for the body corporate or owners corporation are transferred to the new owners.

Many lot owners, bodies corporate and owners corporations that we represent are of the view that long-term contracts for building management services lead to sub-standard and over-priced services.

From our perspective we see too many cases of unconscionable conduct by managers exploiting their owners who suffer from an unequal bargaining position.

To assist owners in understanding their rights and responsibilities we have written two booklets, which are very popular, particularly in Queensland where these issues are rife:

• The Committee’s Guide to Getting the Best From Your Resident Manager; and • The Committee’s Guide to Approving Transfers of Management Rights.

Did  you  know….  

We have full-time legal assistants located on the Gold Coast and in Melbourne to liaise between our clients and referring managers in these places and our team of strata lawyers based in Sydney. This enables us to provide quality and independent advice on these contentious matters wherever they arise.

Levy  and  Fee  Collection  

Collecting strata fees and levies has always been a problem for committees and their strata managers. No one likes turning on their own but frankly, it is just one of those things that has to be done. Owners share responsibilities to fund common property expenses when they need to be paid.

Our  services  in  levy  and  fee  collection  include….  

• Effective letters of demand that call for immediate action • Court and tribunal proceedings commenced exactly when we said they would be if

our demand is ignored • Judgements in contested and uncontested matters that include costs and interest • Enforcement by bankruptcy proceedings or selling the debtor’s goods and property

Experience  shows….  

1. Serial debtors know how the system works and the only way to counter this is with swift, decisive legal action

2. Repayment arrangements seldom work because new levies and fees are incurred every 90 days

3. Interest and discounts are effective as the ‘carrot and stick’ in collecting levies and fees

4. Owners are becoming wiser to excessive collection fees being recorded on their ledger and are contesting these charges

5. In tough financial times owners corporations and bodies corporate need to budget for bad debts at least until apartments are sold and the ledger is cleared

All of these factors mean owners and mangers need clear, concise and effective policies on levy and fee collection.

Collecting  levies  and  fees  as  a  matter  of  policy….  

All strata communities should have a written collection policy that makes it clear to all owners what will happen if they do not pay their levies. The policy should clarify:

• When levies are due; • If there is a discount for early payment; • If there is interest charged on late payments; • If there is an interest free period; • When payments are deemed to be received; • How part payments are appropriated; • What reminders are sent; • When will lawyers be engaged; • What enforcement steps will be taken; and • What happens in cases of genuine hardship.

We provide simple levy collection policies for all schemes where we are engaged to collect levies. This is a free value-add service from TEYS Lawyers.

The benefits of using our written collection policy:

1. Owners become educated about why it is important that levies and fees be paid on time;

2. The policy acts as a roadmap to guide the committee and strata manager on what to do when payments are late; and

3. A written collection policy shields the committee and strata manager from allegations of unfair, harsh and oppressive conduct sometimes alleged by people in financial stress;

Learn  more  about  collecting  strata  fees  and  levies….  

Our free booklet ‘Collecting Strata Levies and Fees Without Being Out of Pocket’ helps strata communities and managers improve collection practices and covers the following topics:

• Budgeting for the inevitable; • Legal techniques to aid collection; • Collecting levies as a matter of policy; • Talking frankly to owners about money; and • Stopping the dance of the delinquent debtor.

Here   is  an  extract  from  our  guide  you  can  use  to  benchmark  your  collection  

performance….  

Delinquency Performance Ratio

Your Performance Guide

0% You are all over those levies! But don’t assume this rate will last for ever –hard times hurts owners

5% Not bad – this is the average – you are within striking distance of out performing the industry

10% Warning bells – this is too high and you will be facing hard questions soon if not already about your recover processes (or lack thereof)

15% + You are in strife – this will involve some serious application to pull back from here – you have to collect debts and re-educate your owners immediately

Our  Project  Management  Approach  to  Legal  Services  

All legal matters, litigious or otherwise, are projects in themselves and need to be managed as such. In the commercial world this means having clear objectives, timelines, delegated responsibilities and collaborative communication. We believe that there should be no difference in the legal world. We, like millions of people in the commercial world, use Basecamp, the leading online project collaboration tool.

Each  matter  we  handle  has  its  own  website….  

You will receive an email invite that looks like this. You simply open the email, click on the website and create your own user name and password. After that, you will be messaged via your normal email service and any replies will automatically be posted to our project management website.

 

 

   

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Landing page sets out our agreed objective for the matter and recent traffic on the matter

 

 

 

 

 

 

 

 

   

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This works like a forum so we can comment on different messages

We can give access to all committee members and the strata manager to cut down email traffic between these parties

Using the ‘to do’ feature we can

create action lists and assign tasks

that send alerts by email days before

the due date

In ‘files’ we upload all of the documents

relevant to your case so that they are

conveniently available to everybody using the

website

Here you can create categories for files and sort by different methods

How  We  Charge  For  Our  Services  

We pride ourselves on our fast and straightforward communication about fees and billing.

Your  call  on  how  we  charge….  

We are happy to work for you and charge in any one of three ways:

1. Hourly rate – this is the traditional method for charging for legal services. Our hourly rates are within market range for services of the type we provide. There are a range of rates to match the experience of the lawyers working for you;

2. Fixed fee – this is a popular method of charging for advice and transactional work where owners are concerned about unexpected blowouts in legal fees. If the scope changes, we will let you know but otherwise you can be certain you will never be billed for more than the fixed fee in your quote; and

3. Retainer arrangements – for some clients, particularly strata managers looking for in-house legal support or at call training, we provide services on the basis of a monthly retainer. The benefit of this arrangement is that team members can access legal services whenever they want without concern that they will be charged for every minute of our time that may affect their budgets.

Our  estimates  and  invoices  are  delivered  online……  

Click to accept or request changes

Describes work being done at

appropriate charge out rates

Includes GST to avoid misunderstanding

Terms and conditions

disclosed in accordance with our professional

obligations

PayPal facilities for paying online

Clear description of work done in

accordance with agreed fee or

hourly rate

Tax invoices will be rendered every month and are payable within 14 days of issue

We do not charge for photocopying, couriers, postage, stationery or other minor expenses

Staying Informed About Strata Law

Strata law is constantly changing. Keeping abreast of these changes is fundamental to our business and we like to share this information with our clients and friends in the strata management world.

Follow  Michael  Teys  daily  on  Twitter….  

Michael tweets daily about his thoughts and activities in representing owners and their strata bodies. You can follow Michael on Twitter @MichaelTeys.

Subscribe  for  our  weekly  e-­‐newsletter  StrataSpace….  

StrataSpace is published each week and distributed by email. It contains the latest articles on strata from around the world as well as Michael’s Sky Business Channel videos, fact sheets and training notes. Michael’s weekly blog is also featured. There are separate editions for New South Wales / ACT, Queensland and Victoria. You can subscribe for these on our website www.teyslawyers.com.au.

Monthly  webinars  mean  you  don’t  have  to  travel  to  learn….  

Webinars are live, online training presentations that you can access from your home or desk. We deliver these monthly. They last for 45 minutes and you can ask questions during the webinar by typing on your keyboard. The slides are available afterwards on SlideShare and you can access the video recording at our YouTube channel www.youtube.com/teyslawyers.

If  you  prefer  live  training,  attend  one  of  our  seminars….  

We are regularly invited to deliver live seminars by the various industry groups we support including unit owners associations, strata inspectors and strata management lobby groups. You can check our speaking and travel arrangements on our website.

Contact  us  today  to  have  a  conversation  about  we  can  help  you…    

Telephone: 02 9562 6500

Email: service@teyslawyers.com.au

Sydney Office: Suite 73 Jones Bay Wharf 26-32 Pirrama Road Pyrmont NSW 2009

Gold Coast / Brisbane: 07 5563 3301

Melbourne: By Appointment