The Truth About Strata; what purchasers really need to know.

Part 1 Are our owners corporations complying with the

law?

The truth about strata is …we are asleep at the wheel

The strata wheel of (mis)fortune ?

Owners decide (or not)

Managers act

Inspectors reportLawyers advise

Purchasers buy

Let’s take a building somewhere

• 15 res apartments • Part of a mixed use

stratum (separate OC’s)• Balance commercial

and retail lots • Onsite management• Res OC levies $ 1550

per quarter• 4 years old

The seven things the owners must do

comply

meet

manage

maintain

$ave

insure

record

The duty to meet (s.14)

Initial

period

• Signifies developer control• Defines period for holding First

AGM

First AGM

• Check developer handover• Defines the AGM meeting

window

AGMs

• Check requirements for last notice of AGM

• Look for next AGM if the date is close to avoid nasty surprises

The duty to manage ( s 61)

Common property

Parking

Pets

Privileges

The duty to maintain (s.62)

• Reasonable steps • Best endeavors• Reasonable care …

All fail the test of strict liability for repair and maintenance of common property in NSW; Seiwas case.

The duty to $ave ( s. 76)Year Plan Reality Compliance

2007 - -

2008 - $ 20 000

2009 - $ 30 000

2010 $ 44 572 $ 26 000 (under 41.6%)

2011 $47 742 -

Balance end 2010 $87 358 $ 61 249 ( short $ 26 107)( 29.8 %)

The duty to insure ( s.83)

Expectations of cover

Reality of exclusions

The duty to record (s. 100)

Soft copies Hard copies

The duty to comply (s 12)

The truth about this strata

Disclosed Undisclosed

Management processes

underfunded

Building defects

Insurance cover

Safety risk

Purchasers remain dazed and confused

Strata inspectors

unsupported at risk

Strata managers underpaid beyond scope

Owners corporationstight ineffective

How we propose to help ?

Unite inspectors

Educate inspectors

Better informed purchasers