Every strata building should strive to be properly managed. There is simply no other way to avoid problems. Strata schemes cannot be legally run on the basis of verbal agreements and friendship. The Act states that meetings should be held and that they should be conducted professionally. Many people confuse “friendship” with “management”. The two are not the same and buildings that try to achieve high levels of “harmony” by being friendly and by avoiding “management” and formal meetings invariably end up in trouble.
Another common misconception is that because "we have a strata manager", that everything is OK. This is simply not correct. Even if the strata manager has been delegated all responsibilities under the agency agreement and attends all meetings, some decision making responsibilities cannot be delegated.
Any building that ignores the procedures outlined in the legislation is heading for trouble. The consequences of not holding proper meetings, not issuing notices of meetings, not providing an agenda, not recording proxies or minutes are significant.
For example, when strata apartments are bought and sold it is common to engage a strata search company to inspect the sites of the owners corporation. The purpose of these searches is to check not only the simple things such as insurance, but also to confirm that meetings are being held properly (and regularly) and the procedures detailed in the legislation are being followed. The search will also check that decisions are being made properly and will verify the bylaws and finances. When owners sell their apartments, if the strata search report states that regular meetings have not been held in the manner prescribed in the legislation, this will detract from the value of the apartments and everyone loses.
Problems also often arise prior to or during the course of repairs, renovations or other building works.Strata Renovations was recently involved in a building renovation project where a number of owners sought to disguise a major structural defect, in effect they sought to leave a part of the building structure in a state of partial collapse (thinly disguised) in order to save money. This is not what we call proper management!
No building project runs entirely to plan, and no plan can every cover every eventuality. The profession of risk management evolved from the construction industry which reflects the uncertainty associated with most building construction projects. When things go wrong during construction projects (and something will always go wrong) it is important to be properly prepared. Preparation includes proper plans, authorisations, approvals, specifications and contracts. The qualifications and credentials of builders and tradesmen should be checked and all projects should be properly supervised. If everyone is properly prepared the consequences of the inevitable hiccups that occur on every project are minimised, but if building works are attempted without proper preparation and things go wrong – the consequences can be significant for everyone concerned.
If proper meetings are not being held and the correct procedures are not being followed it only takes a single ‘disgruntled’ owner to make an application to the Tribunal to bring the whole house of cards down. If the owners corporation has not been following the correct procedures as outlined in the Act it is common for the Tribunal to appoint a compulsory strata managing agent and make an order that they exercise all powers of the owners corporation, Chairperson, Treasurer and Secretary under what is called section 162 of the Act. The consequence is that the value of all apartments is reduced and owners in the strata scheme lose most of their decision making rights. The stigma associated with an order of this nature being made can last for years – everyone loses. Try selling an apartment in a building that is being managed by a ‘compulsory manager’ because the owners corporation is incompetent or worse corrupt!
This site aims to document a range of processes and procedures, which if followed will largely minimise risks for all owners in a strata scheme.
