SCA Inside Strata December 2016 by arkmedia4217

DECEMBER 2016

Emerging risks for strata managers The increasing pace of change

PAGE 16

PAGE 24

Why strata corporations should consider embedded networks

PAGE 52

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Contents Reports

Chief Executive Officer Kim Henshaw Ph: 02 9492 8252 E: kim.henshaw@stratacommunity.org.au Web: www.stratacommunity.org.au

National Report

National Features

SCA National Office Level 1, Suites 101 & 102 845 Pacific Highway Chatswood, NSW 2067

CHU goes digital

Emerging risks for strata managers

Evaluating contracting companies

The increasing pace of change

Viridian in the High Court of Australia

Underinsurance

State Pages New South Wales

ABN: 57 074 729 007 Contact: PO Box 824 Surfers Paradise QLD 4217 Ph: 1800 222 757 F: 1800 063 151 E: publications@crowtherblayne.com.au Web: www.crowtherblayne.com.au

Victoria

Queensland

Managing Editor: Trish Riley Editor: Jessica McCabe Production Manager: Lynda Keys Production Coordinator: Yvonne Okseniuk Sales: Peter Bunn, Vivianne Reiss

Western Australia

Australian Capital Territory

South Australia

Tasmania

New Zealand

Social pages

Events calendar

Strata benchmarking project

A 100-National introduction to working

and living in strata communities

Design Team: Andrew Crabb, Dan McGirr, Michelle Triana

Why strata corporations should

consider embedded networks

Printed By: Newstyle Printing

When developers come knocking

Real estate agents pushing

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National partners

Business supporters

DECEMBER 2016

INSIDE STRATA

National Report

It gives me great pleasure to report as your President on what we have achieved during the last financial year.

Erik Adriaanse FCPA President, Strata Community Australia

Kim Henshaw Chief Executive Officer Strata Community Australia

INSIDE STRATA

DECEMBER 2016

One year ago I reported to you about our achievements during a tumultuous year with a changing of the guard, a change of CEO, new location for the national office and an entirely new team. We also had a move to a new public relations company, a move to a new membership management system and the first steps are in place for revamping our education, professional standards, and subcommittee structure. We also worked on continuing efforts to move to an accreditation system, which would recognise different levels and finally a move to standardise and settle our sponsorship arrangements. One of our biggest goals was our plight to convert states and territories to individual chapters under the one banner and brand. In addition, I reported on a massive turnaround in our financial position. One year on, our net equity (including the chapters) amounts to just over $400,000 from $283,000, or $510,000 at the end of September 2016. This resulted in a healthy trading profit of $119,566; being $48,000 over budget and gross revenue of $1,476,420 - some $231,655 over last year and well over budget.

Our convention at Alice Springs was a huge success and regarded as the best yet. Our goal was to provide quality education and networking opportunities in a beautiful part of Australia, which many had not visited. Next yearâ&#x20AC;&#x2122;s conference at the Hunter Valley 14-16 June 2017 is shaping up well and we will continue to set even higher standards with speakers, structure, music and fun. Four territories are now chapters and most of their back offices are now centralised and made more efficient. WA and the other three states are at different stages of membership consultations and voting, and whilst the process of conversion is taking longer than expected, I optimistically hope we can be one National entity by June next year. This will achieve branding and advocacy advantages as well as economies of scale. The cost savings can then transform into further member benefits. We are now meeting with the state General Managers on a regular basis to tease out any concerns and suggestions. The membership system is now fully functional for the chapters. Although the

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National Report

four states are yet to follow, WA is leading the pack. This task has been an ongoing challenge, as these conversions are. Claudia Montiel from the National office should be thanked for her persistence and hard work with the new membership management system. All but two states have adopted the Accreditation Standards. This structure, the revision of the CPD structure and the new A100 and CPSIC endorsed Certificates III and IV are game changers. The A100 is running hot with 200 candidates having completed the course. Cert IV built by our brothers at RMIT went live mid-November and we already received enrolments of over 200 people. We thank Strata Community Insurance for being our National Education Partner for helping us deliver our educational courses. We need to educate many more people to keep pace with the growth in the strata industry. We have the perfect opportunity to increase the size of our membership from the unique learning experience that is totally relevant, endorsed by regulators and dovetailing this into our Accreditation system and CPD system. This will ensure our standards are recognised and maintained to the highest standard and improved. We now have a National Code of Conduct and a National Disciplinary Committee, which already is getting complaints from around the country.

INSIDE STRATA

DECEMBER 2016

Our sub-committees are meeting regularly and their agendas are growing by the day. A special thanks to Bill Coles, Marietta Metzgner and Michael Hurley for their leadership and the members who contribute a lot to these forums. Naturally, the chapter committees state boards and all their subcommittees should be thanked for their contributions. We would not be the organisation we are without them. This last year saw the birth of National Council and it has now met on a number of occasions providing valuable input from each of the states and chapters through their Presidents. Before I thank others, I would like to express my excitement at the creation of our Cross-Tasman NZ chapter. A huge thank you to Joanne Barreto and her peers for their extensive involvement and enthusiasm in assisting with the introduction of the SCA (NZ) chapter. I was fortunate enough to meet with some members of this rapidly growing chapter earlier this year and am pleased to say the chapter has already New Zealandised the A100 (named the NZ100), which will be available early next year. I am also happy with the level of media we have generated through our PR contract with Market Place Communications. The coverage of the latest High Court decision is a testament to this with SCA name featuring prominently.

At present we could not exist without our sponsors. They generate nearly 45 per cent of our revenue base thereby enabling SCA to provide membership fees and benefits at a discounted price. Naturally we would hope the sponsors benefit from the partnerships, but we would like to thank them for their ongoing contributions, support and involvement of our organisation. With thanks to our National Partners, BCB, CHU, Grace Lawyers, Higgins Coatings, Macquarie Bank, Savant Energy Power Networks, StrataMax and TPG Telecom. Furthermore, I would like to thank Stuart Mellington for his contribution during the last two years to the National board and welcome George Martin as a new board member. I also thank all the board members for their time and input over the last year; Andrew Chambers, Bill Coles, Fiona Michel, Greg Haywood, Kim Henshaw, Simon Barnard and Stephen Raff. Lastly, I would like to thank Kim for his work. His team of Erin Gillin, Claudia Montiel, Anne Cai, Carol Anderson and Sarah Cha do such a great job and their passion keeps the organisation ticking. I hope you and your families have a safe and merry Christmas. I look forward to improving on our member services for you next year. Erik Adriaanse President, Strata Community Australia and contributions by Kim Henshaw, CEO, Strata Community Australia

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Apartment Owners|Occupiers

INSIDE STRATA

DECEMBER 2016

Apartment Owners|Occupiers

CHU goes digital:

New arm set to deliver benefits to apartment owners and occupiers.

Many people have seen words like fintech and insurtech in the media as the financial services and insurance markets look to offer their products online. CHU, one of the most trusted brands in strata, is following this trend with the development of the CHUiSAVER brand. This new brand will be delivered by CHU’s proprietary StrataTech platform, an online purchasing platform specifically designed for the needs of the strata market. The aim for the StrataTech platform is to provide strata consumers with a digital platform to purchase a range of products and services they need as an owner or occupier, living in strata. From insurance to other products such as electricity and other utilities. “The impact that digital disruption has had on a number of industries such as taxi’s, banking, hotels and so on has been well documented,” CHU Chief Executive Bobby Lehane says. “Through CHUiSAVER we will be able to introduce this new way of doing business in the strata market. We will look to offer products and services that will deliver real benefits and savings to strata consumers.” “I’m keen to ensure the opportunities that digital can unlock are delivered to the strata market. We will be looking to add products in the coming weeks such as a Low Cost (Budget) Strata Insurance product. However, CHUiSAVER will not be limited solely

to insurance, we will look to add other product and service categories in due course. We have already started work on a number of initiatives outside the insurance space designed to provide strata consumers with more information on the products they are buying; real savings, with the convenience and ability to purchase online.” Setting up the digital arm underlines CHU’s determination to stay closely attuned to consumer expectations and their emerging purchasing demands, Mr Lehane says. “To stay relevant, we need to understand, to meet, to exceed and indeed sometime pre-empt the emerging needs of our customers.” “While I believe CHU is among the best at doing so in the strata market, we need to continue to push ourselves, to lead. CHUiSAVER will provide us with a vehicle for this.” CHUiSAVER has chosen its first product to be residential strata cover underwritten by QBE, and is all ready to launch once the agency receives its Australian financial services license. “Residential strata is the single biggest product in the strata insurance market and one we feel would benefit greatly from both the digital toolset as well as the value proposition of this business,” Mr Lehane says.

This article was kindly supplied by CHU

DECEMBER 2016

INSIDE STRATA

Management Risks

Emerging risks for strata managers

Insurance advice – the risk of omission Strata managers increasingly find themselves in a very complex and competitive insurance marketplace. Some managers believe they are acting in the best interests of the owners they act for by “covering the market” when they seek insurance quotations. This sometimes leads them to source direct quotations from the underwriting agency market and then also invite a broker to provide additional quotes from the balance of insurers and agencies that distribute only through brokers. This jumble of intermediation has potential to confuse owners as to who is actually acting in their best interests and who is able and willing to provide them with explanations and advice across the range of products and services on offer. The plethora of documents presented to owners in these scenarios will reveal that some quotes come from an agent of an insurance company and others from a broker acting in the owners’ best interests but who may have only sighted some of the product alternatives and prices. How are owners to make sense of who is acting for who? Owners will need to understand how the manager’s role straddles having a delegated authority and a contractual agency obligation to the owners on the one hand and meanwhile on the other hand they are acting as agents for an Australian Financial Services License Holder (either an Authorised Representative or Distributor). The manager or broker should clarify what role the broker has been asked to

INSIDE STRATA

DECEMBER 2016

Management Risks

perform and the differences between the advice models available to the owners. The owners may have a particular risk exposure such as machinery or flood etc. and need advice on the optimum insurance solution. Perhaps there is already a special condition or cover in place for a particular exposure. How is the advice surrounding this exposure handled year to year, in particular when a policy is transferred? Often owners are simply provided with quotes, policy documents, financial services guides and the like to wade through. Owners are left alone with the responsibility to determine the most appropriate cover for their needs. When it comes to financial advice managers should consider not only what level of advice they can or canâ&#x20AC;&#x2122;t provide in particular circumstances, but also what they may be omitting to provide to owners to assist them to make an informed decision.

take weeks to recover data or find out what caused the breach. You may lose revenue if you canâ&#x20AC;&#x2122;t trade and carry the cost of losing files or intellectual property. Your business reputation might also be damaged, particularly if customer records are compromised, leading to a long-term impact on the business. More than 20 per cent of Australian businesses experienced cyber-crime in 2012 (CERT Australia) and 40 per cent of all attacks were directed at Small Business! (Symantec). Are you protecting your business against these emerging and growing risks? Body Corporate Brokers are strata insurance specialists. We have partnered with strata managers for 20 years providing protection for their owners best interests. In addition, BCB help managers protect the value in their business assets.

Cyber risks Strata managers are responsible for all sorts of personal information ranging from, lot owners, executive committees, and tenants etc. Personal information such as names, addresses, phone numbers, bank details, even potentially credit card information.

Stephane Pouzet Branch Manager â&#x2C6;&#x2019; NSW P. 02 9024 3850 | M. 0402 246 418 E. stephane.pouzet@bodycorporatebrokers.com.au W. bodycorporatebrokers.com.au

There are varying levels of backups and protection on networks, some better than others, however, regardless of how good we think our system may be, we may still be vulnerable to cybercrimes or security breaches in one form or another. Often, it can

This article was kindly supplied by BCB

DECEMBER 2016

INSIDE STRATA

Celebrating 20 years of partnerships with Strata Managers 1996 â&#x20AC;&#x201C; 2016

Protecting

communities

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Jane Evans T: 03 8695 4041

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Nick Swallow T: 08 9274 8004

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Painting Contractors

Evaluating contracting companies: what you need to know Contracting companies can either cause real headaches, or be a joy to work with. But how do you go about selecting the cream of the crop for your property maintenance needs and before it’s too late?

Before you even think of hiring your next property maintenance and painting maintenance contractor, you may want to use the following criteria to evaluate and shortlist a few good candidates: Think ‘legal’ and ‘protocol’ You don’t want to partner with any providers that don’t have their legal and work safety ducks in a row, that’s for sure. First do your homework and ask the following: Do the contracting companies you are considering have the necessary occupational health and safety policies and procedures in place to prevent things going wrong? Do they have a system in place for when things do go wrong? This is vital in any building project work, especially when working around vulnerable population groups. Does the company conduct internal risk audits and assessments, train all its staff in work safety behaviours, report incidents and then implement steps to prevent reoccurrences? Moreover, is the company appropriately insured and do they have the necessary legalities in place as a buffer for both you and them in the event of an accident, injury or damage to your property?

INSIDE STRATA

DECEMBER 2016

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Painting Contractors

Think ‘networks’ It is always good to know the quality of work that contracting companies have already delivered, so don’t be scared to call around and get the appropriate input from the companies’ references. Where else have they done work? We suggest that you choose at least five other places that have dealt with the company and give them a call. Or go and visit the properties they have worked on to see the quality of their maintenance work for you. You may learn something that could really encourage you to hire them – or scare you right off.

back-to-front. They have a better idea of their customer’s needs and pain points, as well as the parameters in which they will be expected to work.

Think ‘experience’ How long has this business been going? Contracting companies that have stood the test of time are a safe bet. If they have been around for more than 30 years, then they have managed to keep in business via word-of-mouth marketing channels and not through any fancy sales gimmick. They are not a flash-in-the-pan deal and customers clearly trust them.

Contact us for more information on our WHS policies and procedures or to find out more about the painting services and maintenance solutions we can offer to your properties.

Think ‘track record’ Have the contractors worked on similar projects? Contracting companies, like Higgins Coatings, which specialise in certain project types, generally know their field of work

INSIDE STRATA

DECEMBER 2016

As the preferred painting contractor for the SCA, Higgins Coatings is one of the leading contractors in the strata industry.

Nick Higgins, National Operations Manager P. 1300 HIGGINS | E. strataquotes@higgins.com.au

This article was kindly supplied by Higgins

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Technological Advances

The increasing pace of change In 2015 we published an article based on a presentation by Daniel Borin called ‘Tomorrow’s Future Technology Today’ (stratamax.com/tomorrow). At the time, some of the items in this article did seem rather futuristic but it is surprising how these new technologies are now a part of our daily lives.

So what has changed from these original observations? Processing power In the year 2000 one of the biggest and best computer was the HP Superdome, which sold for more than $1.5M USD and weighed in excess of 1.2 tonnes. Last year this was equivalent to the processing power of three smart phones at a cost of under $1500USD and weighing less than half a kilogram (1000 times cheaper and 3000 times lighter). One year on The processing capacity of one Samsung S7 worth $750 (as opposed to three S5’s one year ago) would exceed the processing power of this super computer by 17 per cent. According to Wikipedia, the cost reduction in processing power per GFLOP has reduced from $1,300 in 2000 to just 0.06 cents in January 2015 – that’s 21,666 times cheaper in just over 15 years. Storage capacity In the year 2000 people shared files on 3.5 inch floppy disks with a mere 2.88MB in storage capacity, not big enough to store a single photo from your current phone. A year ago we reported people were using micro SD cards with a storage of 64GB, representing an increase in capacity of more than 20,000 times plus a decrease in physical size of over a hundred times. One year on SanDisk have announced their 1TB SD card. This represents a 347,000 times increase in capacity over the floppy disks on something not much bigger than a fingernail. Network speed One of the most common ways to connect to the Internet in the year 2000 was via a 56K dial up modem. A year ago people were

INSIDE STRATA

DECEMBER 2016

Technological Advances

mainly connecting via ADSL, cable or wireless offering 24.7Mbps – 441 times faster than in 2000. One year on The NBN is now rolling out across Australia and is on track to put Australia ahead of the world for high speed, universal broadband access. The NBN offers customers up to 100Mbps download speeds and upload speeds of up to 40Mbps. Networks A network offers the ability for a device, computer, or piece of technology to communicate with another network or a user. Without some form of communication, devices are essentially useless. But there also needs to be an appropriate level of speed and quality of service for the technology to be effective. This diagram represents the progress of networks, where they have come and where they are going.

Artificial intelligence (AI) Artificial Intelligence has come a long way since IBM’s Deep Blue defeated chess champion Garry Kasparov in 1997. IBM’s AI system, simply known as Watson, defeated two champions of the popular TV game show Jeopardy, and has since seen remarkable progression. One year on Over the past 18 months all areas of Artificial Intelligence have seen improvements in application, underlying hardware and algorithms. Watson has now been deployed in oncology wards in hospitals around the world helping to diagnose patients and provide individual care. Watson considers supporting evidence and draws from information contained in 15 million pages of text from medical journals, textbooks, patient cases and other sources.

Wearables/internet of things (IoT) The Internet of Things refers to the collection of traditionally passive objects that are being given smarts and connected to the Internet. A year ago the technology which was emerging still seemed out of our reach or not within our reality.

For consumers, the biggest advancement has been the accuracy and speed of voice to text and natural language understanding. These developments have occurred through one particular type of artificial intelligence known as machine learning. This natural language understanding has now spawned virtual personal assistants that work off an audio interface, that listens for a user to ask a question or issue a command like “Order me a ride to work” or “What does my schedule look like today”. The capabilities of these virtual assistants are growing exponentially especially as the companies involved are opening up their assistants through APIs to any company that has information or services that users might want.

One year on The IoT industry has grown rapidly with thousands of everyday products now having a smart connected version. In the wearable’s space, fitness has been one of the biggest areas to embrace the technology with an entire market of smart watches having evolved in the last 18 months.

Robots The well-known robot duo Baxter and Sawyer are examples of an emerging technology known as multipurpose robots. Whereas typical automation through robotics would set back companies hundreds of thousands if not millions of dollars, these multipurpose robots can start at just $29K USD.

Some other items to be introduced include the connected Nespresso machine that not only makes your coffee but tracks how many pods you have left and lets you order more from the machine. Another is the ‘Click and Grow’ pot plant which is a small robot farm that can water, light and feed your plants automatically, allowing you to have fresh herbs, tomatoes or even strawberries growing on your kitchen counter. The mission is to bring technology to apartment dwellers all over the world as vertical farms.

One year on This is another explosion for an emerging technology with smart machines such as robots being purchased from over 2,500 technology vendors across the globe. The technology has now evolved from the domain of small factories and into our homes. Domino’s Pizzas first introduced the technology called the Dominos Robotic Unit (DRU) here in Australia to deliver your pizza fresh and hot to your door. A controversial introduction at last years Consumer Electronic Show was the robot nanny called iPal launched by AvatarMind. Its current model sells for around $1500USD in China, stands at three foot tall and includes a surveillance camera, touch screen tablet and a choice of hundreds of apps.

One year on We predicted the 5G network to be a reality in 2020 but already Telstra are testing this network in Melbourne achieving 20Gbps, and have announced a trial of their 5G on the Gold Coast for the Commonwealth Games in 2018.

Underlying technology The IoT is driven by the access we now have to all-in-one processing chips, which are affordable and capable of supporting this new technology. Last year Intel launched the Edison with dual CPU, 5GB of RAM and Bluetooth all for under $50 USD. Prices, capabilities and form factor are improving at such a rapid pace that the idea of including smarts into every kind of everyday object will be commonplace in no time. One year on Intel has now introduced Intel Euclid. This new integrated microcomputer not only boasts all of the processing power of the Edison but is also 3D aware of its surroundings via dual cameras and includes an accelerometer. All this packed into the size of a small chocolate bar. With full 3D vision and other sensors this simple add on could turn a simple robot into an affordable autonomous machine.

When we first wrote this article the idea of self-driving cars sounded like science fiction to most of us. But a year on almost every car company is developing a self-driving prototype with expectations that we will see models on the road very soon. The US government has paved the way having released their Federal Automated Vehicles Policy on September 20, 2016. Here in Australia, South Australia has made self-driving car trials legal, paving the way to attract automotive companies from around the world.

This article was kindly supplied by StrataMax

DECEMBER 2016

INSIDE STRATA

Dispute Resolutions

Viridian in the High Court of Australia – what role does an Adjudicator play? In Queensland, an owner may obtain exclusive use rights over part of the common property if authorised by resolution without dissent.

That resolution type will pass if no voter opposes the motion. It is a high standard to meet, and it is designed to safeguard the rights to common property to ensure they are not removed unheedingly or inadvertently to the detriment of lot owners. If an owner is aggrieved by the failure of their motion to pass by resolution without dissent, they may ask an Adjudicator in Queensland’s Office of the Commissioner for Body Corporate and Community Management to resolve the dispute. The Adjudicator can make an order giving effect to the proposal if satisfied the motion was not passed because of opposition that in the circumstances is unreasonable. The High Court of Australia has now finally determined what role the Adjudicator plays in determining whether the opposition was unreasonable. Background Viridian Noosa Residences is situated in Little Hastings Street, Noosa, and is an architectural award winning development. The matter of Ainsworth v Albrecht [2016] HCA 40 involved a dispute in this strata scheme over the reasonableness of opposition to an owner’s attempt to acquire exclusive use of 5m² of common property air space so he could join a small external deck to a daybed to create a larger external deck. The air space was valued at no more than $10,000 - $20,000. The grant of exclusive use had to be authorised by resolution without dissent. 50 per cent of the voters opposed it, including on the grounds that: •• it was inconsistent with the architectural design and intent of the villas to limit external use; •• the creation of a larger deck is likely to generate more noise and interfere with the privacy of neighbouring villas;

INSIDE STRATA

DECEMBER 2016

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Since 1922

Dispute Resolutions

• it would set an undesirable precedent and open the floodgates for other owners to seek the same privilege; and • despite the benefit the owner would receive by the exclusive use grant, they had not offered to pay anything for it. The dispute was first determined by an Adjudicator, who relevantly found that: • her role was to “determine the balance between the need to protect the genuine interests of owners and their voting entitlements, and upholding the justifiable position of proponents the face of unfounded or vexatious opposition”; and • it is not reasonable to seek to prevent any deviation from the original design intent, that she “simply cannot see the claimed change to the architectural integrity of the scheme” and, in the face of numerous competing architectural expert reports, she considered the opinions of one set of architects to be “more supportable” than the other. Appeals The opposing owners appealed to the Queensland Civil and Administrative Tribunal (QCATA). The presiding member allowed the appeal and relevantly found that there was nothing in the arguments of those opposing the exclusive use grant that was “inherently implausible or unreasonable if one gives any respect to the notion of architectural intent and architectural integrity.” The matter then went before the Queensland Court of Appeal, where the President relevantly found that: • “…the Adjudicator is not limited to determining whether the opposition to the motion could have been reasonably held. She was required to reach her own conclusion after considering all relevant matters.” • “As the reasons of both the Adjudicator and QCATA demonstrate, views as to what was reasonable or unreasonable involved value judgments on which there was room for reasonable differences of opinion, with no opinion being uniquely right. Had QCATA’s views as to unreasonableness been the views of the Adjudicator, and had the Adjudicator made no errors of law, that finding would have been unassailable…” So in other words, while the views of the Adjudicator and QCATA were different, they were both reasonable. But as the Adjudicator gave her views first, they could not be appealed as there was no legal error to them. The significance of this case The approach of the Adjudicator and the Queensland Court of Appeal would cause concerns for bodies corporate and committees across the industry. It would permit an Adjudicator to impose their own value judgment on what is reasonable in the circumstances of a particular scheme, as opposed to simply determining whether the grounds for the body corporate’s decision or the opposition were reasonably held and allowing the stakeholders involved to form their own value judgments on what is appropriate for their scheme. This dispute involved many owners opposing an external change to the scheme on architectural grounds as the change was inconsistent with the original design intent. Architecture is in many respects an art. People will appreciate it in different ways and to varying degrees based on their unique tastes, preferences and values.

An implication of the Queensland Court of Appeal’s decision was that the values of an Adjudicator can be substituted for the values of lot owners who have invested and live in a community titles scheme, and the Adjudicator’s value judgment is “unassailable”. The matter was then appealed to the High Court of Australia. The High Court’s decision It is not surprising that the opening remark of His Honour Chief Justice French at the hearing before the High Court was: “Ultimately, I think there has been a lot of ink spilt in this matter on the way to this Court.” The Justices of the High Court unanimously allowed the appeal of the opposing lot owners and sharply criticised the approach taken by the Adjudicator and the Queensland Court of Appeal. Her Honour, Justice Nettle found that the Adjudicator had erred “by exercising her own subjective judgment in what she conceived of as a balancing exercise aimed at assessing the appropriateness of allowing the improvements” and that the dispute over whether the opposition was unreasonable could not be resolved “upon the subjective and unexaminable opinion of an Adjudicator.” When resolving a dispute about opposition to a motion that required a resolution without dissent, the Adjudicator’s role was limited to considering the reasonableness of the opposition. So “opposition prompted by spite, or ill-will, or desire for attention, may be seen to be unreasonable in the circumstances of a particular case”, but it is not the role of an Adjudicator to reach his or her own conclusion as to whether it would be reasonable to approve the motion. Why the decision matters While this case involved the reasonableness of opposition to a resolution without dissent, the sharp criticism given to the approach the Adjudicator took in forming and imposing her own subjective view is likely to translate across to how Adjudicators resolve other disputes about the reasonableness of body corporate decisions or by-laws. In our respectful view, this decision of the High Court reaffirms one of the fundamental purposes of the Body Corporate and Community Management Act 1997 (Qld) – to balance the rights of individuals with the responsibility for self management as an inherent aspect of community titles schemes. A body corporate cannot be responsible for self management if any decision it makes is tentative until such time as an Adjudicator gives their subjective views on what is reasonable and appropriate in the circumstances of that particular strata scheme. The CEO of Strata Community Australia described this decision as a victory for common sense as it acknowledges the concept of self-determination by common interest communities. We agree with those sentiments.

Grace Lawyers – a service provider with a difference. This article was kindly supplied by Colin Grace, Grace Lawyers

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Insurance Protocol

Underinsurance: … an ongoing problem for the strata sector.

In spite of the fact that legislation requires corporations, owner corporations, plans and strata companies (“Bodies Corporate”) to insure buildings for rebuilding and/or replacement value, it is possible that even with a valuation, the sum insured is incorrect. This would occur if the instructions given to the valuer did not meet the requirements of the Act and include all building and planning issues. Office bearers for Bodies Corporate have substantial obligations and can be held personally liable for their actions and decisions made on behalf of lot owners. Whilst office bearers are protected when they act in good faith, they are still potentially exposed if it is proven that they did not act in good faith. It is therefore prudent to ensure the instructions given to the valuer meet the requirements of the Act and include all building and planning issues. In addition, as lots have an unlimited financial obligation in regard to the conduct of the building, they will be responsible for any shortfall in the rebuilding costs. Legislation In all states and territories, the Acts require the Body Corporate to insure buildings for reinstatement and/or replacement value. The Acts define buildings, i.e. it includes improvements and fixtures, but not temporary wall, floor and ceiling covers. The Act also specifies what must be included in the valuation such as removal of debris and professional fees. Zoning changes An additional consideration for valuations is the impact of changes to zoning since original build. Paul Keating, Managing Director, Strata Community Insurance notes, “Many local councils make changes to zoning requirements over time that would have an impact on the cost of reinstatement following a loss”. Consider, for example, a strata building that currently has no dedicated car park, but where council zoning changes require that in the event of a total loss to the building a car park will

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DECEMBER 2016

Insurance Protocol

need to be built. Under this scenario, the building insurance would need to reflect the increased cost of rebuilding and/or replacement associated with the car park to ensure the building is fully covered.

Valuations offer a way of ascertaining that owners are meeting their legal obligations. Without professional assistance this task can be complex, leaving owners exposed to possible uncapped financial liabilities. “

Some other considerations include known hazards (e.g. asbestos material used in roofing), the effect of Goods and Services Tax, and increased costs associated with events of a certain nature – including catastrophes such as earthquakes or cyclones.

As advocators and educators, Strata Community Insurance is committed to protecting and supporting the interests of strata managers and their body corporates.

Timelines in the calculation of a sum insured It is vital to ensure escalation of costs has been correctly calculated from the date of the valuation, to the eventual end of the rebuilding/reinstatement period the valuer has considered appropriate for the building in question. The valuer should clearly show the following periods as a minimum, when arriving at the sum insured for rebuilding/replacement: 1. Date of valuation; 2. Start date of period of insurance; 3. End date of period of insurance, assuming a loss could occur on the last day of the period of insurance; 4. Post loss: (a) Removal of Debris / Planning period; (b) Rebuild period; (c) Fit-out and completion; 5. Re-occupation. Partner for protection Keating states “Body Corporate office bearers need to be aware of the implications of underinsurance and their personal liability for decisions made on behalf of lot owners.

As such we’ve developed a of Standard Operating Guide that covers off all aspects of the valuation process. Simply contact your local branch of Strata Community Insurance on 1300 724 678 and make an appointment for one of our team to take you through these best practice procedures. About Strata Community Insurance Strata Community Insurance provides specialist products and services to the Strata and Community Title sector. Strata Community Insurance is an independent private company partnering with the Allianz Group – the largest property and casualty insurer in the world. Strata Community Insurance is a business founded, owned and staffed by a group of Australia’s most experienced strata insurance professionals. The founders have four decades of experience across six countries developing products and writing this form of insurance business. As we deal exclusively in strata insurance market, we understand the complexities of the sector and its governing legislation.

They can mitigate this exposure by ensuring they partner with a respected and experienced valuer and give the correct instructions to the valuer, i.e. the valuation must be in the accordance with the Act and must include all building and planning issues. This article was kindly supplied by Strata Community Insurance

DECEMBER 2016

INSIDE STRATA

State News

New South Wales

Evolving to meet future challenges The definition of evolve is to develop, progress and advance. I could not think of a better description of what is happening with the NSW strata industry at present. I’m Chris Duggan and I was elected by the SCA (NSW) board to the role of President at the Annual General Meeting in late October. I am honoured to have been elected to this role and to follow Greg Haywood who served SCA (NSW) as President for four years and was responsible for overseeing the progression of the new legislation through the government processes. Thank you, Greg, for the work you put into the President’s role and the support you have provided the board, the membership and the secretariat. As we all start the evolution process I am pleased that we are coming from such a solid base and that we will have Greg remain on the board to guide us. Our Annual Convention in October was themed “Evolve” and provided delegates with a great diversity of speakers. This year we reverted to the two-day format with strata managers coming the first day and principals on the second. Topics were geared towards helping members understand their new obligations under the strata laws. I was interested to hear from NSW Fair Trading’s Michael Courtney who indicated that the government expects there will be a feeling out period while the new laws take effect. If you get stuck and need help, Fair Trading can be contacted and we have assurances you won’t be penalised. My advice is to ask questions and get assistance as soon as possible after any issue or interpretative concerns arises. As you’ll see from the photos on page 42, the Convention also involved fun, food, dancing and some slightly sore heads on the second day. We pushed through however and our strata principal members were rewarded with a great program on growing their businesses, engaging with their employees, understanding Fair Work obligations and a confronting presentation on cyber security (you should be worried if your security is not up-to-date or up to scratch). During the Convention Gala Dinner we handed out our awards, which are determined by the board. Congratulations to CHU’s Pip Ryan who received the Max Dunn Award and to Strata Plus’ David Ferguson who received the President’s Award. This year we also recognised outstanding contributions by two of our Platinum sponsors CHU and Macquarie Bank. Both these companies have supported NSW for as long as we can remember in sponsorship and we are grateful also for the guidance, education and assistance they have given during that time and continue to do so.

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Thank you also to Magnatex’s Neil Trenwith and Christine Kinsela for the work they put into reviewing the Strata Works Agreement. A lot of work is done by members who volunteer their time like Neil and Christine and we are delighted to be able to recognise it and thank them. I want to also congratulate Tony Irvine who was elected to represent the strata manager chapter – we are thrilled to have him back on the board. Also re-elected was Greg Haywood, Bill Coles and Colin Grace. Thank you to Deanne Holz who has now stepped down from the board. I am looking forward to the next 12 months. It will be exciting and challenging as we go through this time but there is plenty of support so make sure you take it. As this is the last edition of Inside Strata for 2016 I want to thank the SCA (NSW) board, General Manager and Secretariat as well as you, our members, who keep SCA (NSW) going. We have a great organisation that is going from strength-to-strength. I wish you all a Merry Christmas and Happy New Year. See you all at the 2017 Sailing Day. Chris Duggan President, SCA (NSW)

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State News

Victoria

Press coverage and Victorian strata law review The SCA (Vic) media campaign, to raise the media profile, continues and recently there was a front page article with SCA (Vic) comments in The Age, regarding defects. Picking up on this print story about defects, Channel 10 News also ran a report nationally with SCA (Vic) comments. On the topic of defects, and specifically flammable cladding, SCA (Vic) received a briefing from the Municipal Building Surveyor of City of Melbourne regarding the flammable cladding audits, and the “validation” process for medium risk OCs. There’s also been significant building law reform. The Building Legislation Amendment (Consumer Protection) Act 2016 recently provided for stronger domestic building protections to avoid costly disputes. SCA (Vic) has recently met with the government about a further Cabinet-in-Confidence Building Legislation Bill considering how Notices given under the Building Act are served. The building regulator, the Victorian Building Authority, is conducting a Research Project – Failures in the Built Environment. SCA (Vic) has made a submission on defects and met with the VBA. Another article, with SCA (Vic) comments, ran about Melbourne’s defects, illegal materials and a lack of warranty insurance. This was in the Global Property Guide, a publication for investors who want to buy apartments in other countries. SCA was also interviewed on Melbourne’s 774 ABC radio station re the strata High Court dispute saying an owner could not extend a balcony into common property. A full review of Victorian strata law is underway. Regulatory changes can have a big impact. Take, for example, the recent NSW strata law change that developers cannot also be strata managers. Well, Meriton is now selling its 6,000 lot strata management business. So, have your say and send us your thoughts when the Options Paper is published. SCA (Vic) was appointed to the short-stay serviced apartment’s government panel; and which culminated in the Owners Corporations Amendment (Short-stay Accommodation) Bill 2016. This Bill includes prohibition orders, loss of amenity compensation orders & orders for a civil penalty. Parliamentary debate on this Bill was extensive with many MPs speaking on this Bill, including [amongst many others] Russell Northe, the Shadow Minister for Consumer Affairs. One MP, commenting on how far it goes, notes that – if criticism is coming from all sides, it’s probably doing something right. The Greens’ Ellen Sandell, who says it doesn’t go far enough, moved a reasoned amendment, which was defeated. But the overarching emphasis on the need for

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‘balance’ is pervasive in the debate, being cited 27 times. It has now passed the Legislative Assembly, and moved into the 2nd House [Legislative Council]. The government has made changes in order to have “Better Apartments”. In a good outcome in line with the SCA (Vic) submission to prioritise “design: not size”, there will be no minimum dwelling size; but with improved design, amenity and functionality [eg noise, storage space, open space]. SCA (Vic) backs the decision to prioritise “design: not size” in a raft of changes to apartment standards. We hope to see developers step up and provide clever design, not just smaller design. The Consumer Affairs Victoria “Guide to Strata” has been redeveloped in Chinese simplified, and helps you tackle one of the barriers to communication – language. In the City of Melbourne the most common languages, other than English, are simplified Chinese and Arabic. Ethical standards are important. A number of members have been censured following complaints, as well as suspended. A number of membership applications have also been refused. SCA (Vic) congratulates the winners of the 2016 Awards for Excellence on stamping their professional credibility. Peter Davies was the winner of the Owners Corporations Manager award category. An ad was placed in The Sunday Age Domain. Pictured are all the winners. Rob Beck General Manager, SCA (VIC)

State News

Queensland XXX

The A Game: Awards, accreditation and advocacy In 2016 SCA (Qld) for the first time held the Strata Community Awards for Excellence and we are excited to continue the Awards in 2017. Members are encouraged to reward themselves and peers, and publicly acknowledge leadership, commitment and passion. The judging panel consists of academics who are reputable strata experts. Our sector is full of engaged people who thrive on the challenges we meet in our day-to-day work with strata community schemes. Too often we forget to pause and reflect on what we have achieved and to set new markers for commercial and personal success. Awards are similar to accreditation in that they give individuals a place in this sector and an incentive to continue professional development.

We’re not excited to start a conversation around Lot Entitlements again as it seems there is no solution that satisfies every interest. However, it is a positive sign that some door knocking has certainly alerted our Attorney-General Yvette D’Ath to the fact that SCA (Qld) as a reputable stakeholder will not sit back and passively watch time go by. I believe our proactive engagement (or our squeaky wheel approach) has led to the release of the last three reports and issues papers. Our board and myself are committed to have true progress in 2017 and we are confident we will achieve that. Next year it’s been 20 years, what better year than that to implement critical reforms and take Queensland back to heading the nation. Simon Barnard President, SCA (Qld)

They are also a reminder that professional standards are critical to succeed in an industry where relationship management is one of the biggest skills needed. Our September seminars addressed soft skills such as dispute resolution, negotiation skills and time management and it was encouraging to see great interest from members. We’ve received 126 registrations for the four webinars presented by professional Australian Institute of Management speakers and take that as an indicator that members focus on professional standards. Of course the high attendance number also demonstrates that our newly introduced webinar structure is appealing and reaching members across the whole state. Our professional development program aims to educate as best we can to as many members as possible and we have finally achieved that this year. Board elections and advocacy We are pleased to welcome three new Directors to the SCA (Qld) board and two returning Directors after our October AGM: Jason Carlson, Ian D’Arcy, Michael Hurley, James Nickless and Sue Seymour join existing Directors Ric Allard, Kerri Anton, Simon Barnard, James Freestun, Kay Trimble and Kelly Roberts. The new blood on the board is welcome as we head into the new phase of negotiating the property law review, which seems to have been stuck for a year now. Two solicitors on the board should play in our favour given the recent release of the Lot Entitlements Report. I must thank retiring Directors Colin Archer, Alan Buckle and Andrew Suttie for their many years of service to the Queensland membership. Having met with many more Members of Parliament such as John-Paul Langbroek, Jarrod Bleijie, Fiona Simpson and Di Farmer has pushed along the Property Law Review in Queensland. The Legislation Committee has already responded to the recent Seller Disclosure Report, which suggested an increase in administrative requirements upon the sale of a lot – which is of course costly for vendors and purchasers and unnecessary work for Body Corporate managers.

Strata Community Australia (Qld) recognises and celebrates Queensland’s outstanding professionals in strata.The awards showcase exceptional individuals in strata management and services firms who have significant impact on a thriving sector. Nominate for: - Strata Manager Award for 2017 - Young Strata Manager Award for 2017 - Commendable Strata Supporter Award for 2017 - Ann Shevill Essay Award 2017 Step 1: Nominate yourself or a peer for an award by 13 December 2016 Step 2: Upon invitation, submit your full application by 30 January 2017 Step 3: Be recognised at the 2017 Conference and Awards Dinner on 16 March 2017

For more information on how to nominate: stratacommunityqld.org.au admin.qld@stratacommunity.org.au ph 07 3839 3011

DECEMBER 2016

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State News

Western Australia

Membership, education and resources In 2015/2016, SCA (WA) Inc. continued its focus on membership, education and resources with many key achievements marking an exceptional (and exceptionally busy) year for the association. Membership Our core services to members include education, training, access to knowledge, technical support, networking and advocacy. A tangible example of how we responded to members’ feedback is the advertising that we have done throughout the year. Members called on the association to do more to promote the SCA brand. This year we have pursued an ambitious public relations program, which has involved: •• Radio advertising •• Lift outs in the West Australian •• Production of a web based video •• Various media releases picked up by several media outlets throughout the year. A significant new benefit for members this year is the revised Strata Management Contract. We also published a series of policies on matters ranging from short-stay, pets, smoking and commissions, to assist our strata manager members to in turn inform and guide their clients. A highlight for 2016 was the inaugural SCA (WA) Inc. Awards and Christmas celebration. Generously sponsored by Park Legal Solutions, the evening honoured the great work our members do in style. Another pleasing achievement was the adoption of the National Code of Conduct. The new code is in substance the same as the previous Code of Conduct but has been standardised for all states. Our members can now say that they are bound by a code which applies nationally. This step was a precursor to the even more significant nationalisation of Professional Standards complaints and discipline. A member identified that it is critical that SCA facilitates accountability for our profession. It was a busy year on the advocacy front. It might appear that the pace of strata law reform has slowed but the need for advocacy has in fact intensified. The Legal Affairs Committee has continued to give feedback to Landgate to inform the task of drafting amendments. We have engaged with other industry bodies, PCA and UDIA, to lobby government and written to government and opposition to call for progress on the reforms. Education Members continued to enjoy the benefits of a comprehensive calendar of education events, this year adding to the diversity of topics by partnerships with our allied industry bodies such as

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REIWA and the Australian Institute of Conveyancers WA Inc. This year also saw us take events to regional areas. Key milestones were reached in our journey towards nationally recognised qualifications for the industry. These benefits, which will be enjoyed by the industry nationally, are very much the result of work done at state level, by the Education and Best Practice Committees in WA and their convenors Leonie Milonas and Marietta Metzger. A great deal of work was done during 2016 to plan for the 2016 Symposium. We had an ambitious vision of an event to showcase our management members, rather than cloistering those members away for a conference. Resources Members have said they want a better resourced association to increase benefits that flow back to members. We have listened to that challenge and remodelled the subscription fees for more sustainable charges which incentivise participation. Council and Committees have committed to exploring the benefits that might follow governance restructure with SCA (WA) converting to a chapter of SCA Ltd. While consideration of this model is ongoing, there can be no doubt that working in better ways with our other state counterparts and SCA Ltd can potentially unlock efficiencies and improved access to benefits. One example of this is the alignment of accreditation. Adopting a national accreditation standard has meant that the processing of accreditation applications can be performed by SCA Ltd allowing SCA (WA) Ltd staff to focus on local issues and events. Acknowledgments I thank the hard working and dedicated SCA (WA) Inc. Council members: Marietta Metzger (Vice President), Ryan Murphy (Treasurer), Janine Chapman (Secretary), Leonie Milonas, Phill Geary, Andrew Chambers, Scott Bellerby and Emma Watton. Thanks also to the many committee members who have contributed their time, talents and ideas. I know that each of our committees had busy years with unique and difficult challenges. Special thanks also to our wonderful General Manager Suellen Bottecchia who makes dealing with SCA (WA) Ltd a great pleasure, whether you are a member or potential member, councillor or sponsor. Finally, I thank our members for their commitment to the profession and to the public interest through upholding the integrity, high standards and ideals of SCA. Rachel Cosentino Outgoing President, SCA (WA) Inc.

State News

Australian Capital Territory XXX

Tips on getting the most out of the SCA (ACT) Christmas party It’s the most wonderful time of the year…for networking! During the festive season, opportunities to network with other people from within your work sphere are abundant. Christmas parties, award ceremonies and events seem to pop up everywhere. However, if you are one of the many people who cringe at the thought of face-to-face networking, it’s hard to think of these events as a golden opportunity for your business, and far easier to dread any potential awkward conversations. Fear not! I’ve got a few dos and don’ts to help you make the most of the festive season… Networking dos: •• If you’re standing on your own in a room full of strangers feeling nervous, think about how you would feel if someone came up and introduced themselves to you – pretty relieved? So pluck up some courage, look around the room and pick someone to say hello to. •• Have plenty of business cards on you, but more importantly, make sure you collect other people’s. The SCA (ACT)’s Christmas party will be full of potential partnerships/ opportunities with people companies that strata managers can leverage.

•• Make sure you make the time to follow up with people quickly after the event. A quick email to say ‘nice to meet you’ or even better – send a LinkedIn invite and build your network of contacts at the same time. Networking don’ts: •• Butting into existing conversations is the worst of networking faux pas. There is nothing worse then someone jumping in with a big ‘hi’ when you are mid-conversation in a useful discussion. •• Don’t do all the talking. You can gain a lot more information and assess a potential partnership/opportunity by listening to what is being said. •• Even if you are really enjoying a conversation with someone, don’t hog them for too long or you could end up missing out on lots of other potential contacts in the room (or making them miss some). The best way to network is to establish a mutual interest, make a connection (exchange cards) and arrange to follow up over a coffee or phone call away from the event at a later date. So remember to lock in your tickets for the SCA (ACT) Lawn bowls Christmas party which shall be held at The RUC on Friday, 2nd December 2016. Chris Miller Outgoing President, SCA (ACT)

DECEMBER 2016

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State News

South Australia

South Australian sectors celebrate at their annual awards ceremonies Leaders of the South Australia strata property sector came together on Friday, 4 November to present the annual awards for excellence in strata. The SCA (SA) 2016 CHU Strata Community Awards recognised and rewarded the individuals and companies who make a significant contribution to the strata industry and community. In its first year running, the event was a huge success held at Adelaide Oval. “It was really exciting to recognise the achievements of local leaders. Our members collectively manage hundreds of thousands of strata title lots throughout the state so a lot of people have a stake in their performance.” “The best structure for the strata sector involves all managers as members of an overarching organisation like SCA (SA), who establish benchmarks for professional practice, enforce strict

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codes of conduct, and provide education and training measures which in turn helps the greater community.” Mr Steen says that beyond the organisation’s regular lobbying and advocacy efforts it is more important than ever to maintain strict codes of conduct and levels of professionalism within the sector. Congratulations to all winners and finalists. •• Best Support Team Member of the Year: Krystene Tremayne, Horner Management •• Rising Star of the Year: Jonathan Argent, Horner Management •• Professional Commitment to Ethics and Service: Whittles Management Services •• Strata Industry Leader of the Year: Carrie McInerney,Horner Management •• Innovation of the Year: Whittles Management Services •• Small Strata Management Business: Horner Management •• Large Strata Management Businesses of the Year: Strata Data and Whittles Management Services •• Strata Manager of the Year: Tony Johnson, Horner Management Marc Steen President, SCA (SA)

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State News

Tasmania

Efficiency, planning and the right information will keep clients happy On checking recently with the ‘Land Titles Office’ in Hobart in regard to the latest figures, I was advised that of the certificates of titles issued, around 10.67 per cent is made up of strata titles complexes - this being some 8884 strata plans. Our biggest challenge in Hobart is to make people aware of the implications, rights and responsibilities of being an owner within a strata. Our small pool of professional managers are always eager and ready to help people that attempt to manage a complex of units themselves. We regularly get calls for help from people who are not sure exactly what they are doing, and some that have no idea. Education is the key for these people, and this takes time. Most of what we do is common sense and the manager’s involved in strata generally have been doing if for some time. All the managers I have met are very passionate about what they do and the service they provide to clients. One of the key aspects of our jobs is communication. We have all had the experience of the tradie that says “I’ll be there between 8.00 am and 4.00 pm”, in our world this simply isn’t good enough. People are all busy and time poor and cannot sit around all day. We find all our clients want regular updates and near to exact times of which works will commence and for it to be planned. They want someone to show up when they say they will. So again keeping the client updated at all times is great for them and good for you, it looks like you’re organised. Of all the thousands of emails we get every year each are important and deserve a timely response. People want to be heard and have their concerns addressed quickly with the right information being given. A strata manager has a huge responsibility over a vast range of fields. We cannot know it all, and it was drummed into me recently at the A100 course, to “get an expert” if unsure. This is safe and sound advice. So many different laws and legislation whether it be lodging BAS return or preparing an Income Tax statement to regulations on fire safety or building compliance. Never fall into the trap of giving advice if you’re not qualified to do so, this only gets you in hot water. It may impress the client for a brief moment but if the information is false or misleading your not doing anyone any favours. Tim Barwick President, SCA (TAS)

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State News

New Zealand

Full steam ahead! It is timely that October marks a year since I flew across to Sydney to try and woo Kim and his team at SCA HQ across the ditch. And here we are eight months on from having formally launched the chapter in February 16 with an exceptional group of national members and three chapter Sponsors on board. A big thank you to Solutions in Engineering, Rockend and Higgins Coatings, as well as all our members, especially the legal fraternity (you know who you are!) as we couldnâ&#x20AC;&#x2122;t have done it without your support. Like all chapters, SCA (NZ) has embraced the goals of the SCA brand through education, advocacy and networking with open arms. In October we launched our chapter website: www.stratacommunity.co.nz (thanks Erin!) and are really excited to announce the launch of the NZ100 and our industry ebook event on the 16 February 2017. The NZ100 is a contextualised adaptation of the A100 and will put NZ on the SCA education pathway. We held our inaugural AGM in September and have been lucky enough to form an executive and subcommittees with a wealth of experience and knowledge across various aspects of the sector. This has enabled us to focus on our core goal of raising the bar in the industry. With a somewhat dysfunctional housing market at the forefront of the countries agenda, the local council elections and unitary plan debacle in Auckland, our largest city, and a myriad of other elements of the property sector in the limelight - we continue to work with the media and the government to ensure our voice is heard. Supply is of course and ongoing issue, as is affordability with Aucklandâ&#x20AC;&#x2122;s average house price just cracking $1m! With Christmas looming it is likely any reforms will have to wait until the New Year when we will continue to battle on with the MBIE legislative review and pushing the professional standards and best practice models we have been lucky enough to bring across the Tasman. The powers that be should be congratulated on the unitary plan, both on a local and central government level. Over 1500 days in the making, 13,000 submissions, the amalgamation into a super city and development of an independent hearings panel, and we are hopeful it will soon be free of the bureaucratic bottlenecks and able to meet its objectives. If implemented, it will be a game changer for our industry with future growth and urban rejuvenation with the development of both new and existing economically and socially sustainable communities. The 2013 council target for 213,000 houses has

doubled to 422,000 new dwellings. This will potentially double the current amount of body corporates and strata units, so the adventure has just begun! Again, a huge thank you to all those who have taken us under their wings and helped with the growth and development of the Kiwi chapter. I was lucky enough to meet with some of the Queensland board earlier this month and am continually reminded of the strength of your industry. We continue to learn and develop with the backing of a fantastic international brand and look forward to working with you all moving forward. After discussions with Kim and Erik, we look forward to developing the international presence of SCA through the various forums, and as always welcome any members to join us for events, visit us and be part of this exciting journey. Joanne Barreto President, SCA (NZ)

DECEMBER 2016

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SOCIAL PAGES

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DECEMBER 2016

2016 SCA (NSW) Convention

CHU SCA (VIC) Symposium 2016

DECEMBER 2016

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SOCIAL PAGES

2016 SCA (WA) Events

SCA (WA) Platinum Sponsor Perrott Painting celebrating 100 years in business

Rachel Cosentino and Mark Atkinson presenting Navigating the Strata Titles Act

Networking

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Laura Chapman, Facilitator, Smoking in Strata

Phill Geary presenting Money Management

DECEMBER 2016

2016 SCA (ACT) CHU Strata Community Awards

James Mathison - MC

Chris Miller - Outgoing SCA (ACT) President

Vantage Strata wins Innovation of the Year

Natasha Drage wins Rising Star of the Year

Civium Strata wins Strata Management Business of the Year

Tim Maly - Incoming SCA (ACT) President

City Strata Management wins Professional Commitment to Ethics and Service

Caroline Mitchell wins the Student of the Year award

Geoff King wins Best Support Team Member of the Year

Pascal Deschanel wins Strata Manager of the Year

Jarrod Smith wins Strata Industry Leader of the Year

A100 Trainers awarded certificates

DECEMBER 2016

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SOCIAL PAGES

Marc Steen - SCA (SA) President

SCA (SA) 2016 CHU Strata Community Awards

Large Strata Management Businesses of the Year - Strata Data and Whittles

Rising Star of the Year - Jonathan Argent

Professional Commitment to Ethics and Service - Whittles

Strata Industry Leader of the Year - Carrie McInerney

Innovation of the Year - Whittles

Small Strata Management Business of the Year - Horner Management

Best Support Team Member of the Year - Krystene Tremayne

Strata Manager of the Year - Tony Johnson

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DECEMBER 2016

2016 SCA (QLD) Events AGM: SCA (Qld)â&#x20AC;&#x2122;s 33rd Annual General Meeting, 20 October 2016

SCA (Qld) Leadership Forum The 2016 SCA (Qld) Leadership Forum saw 32 delegates converge in the beautiful Hunter Valley for two days of building business plans for potential strata businesses.

DECEMBER 2016

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EVENTS CALENDAR SOUTH AUSTRALIA

NOVEMBER

QUEENSLAND

NEW ZEALAND

SCA (SA) 2016 CHU Strata Community Awards - Adelaide Oval

DECEMBER

New Zealand Chapter Christmas Function

JANUARY

FEBRUARY

07 07

MARCH

15 - 17

06 06

APRIL

06 06

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Best Practice Social Media – the employer, Brisbane Best Practice Social Media – the employee, Brisbane Meeting Procedures: General Meetings 1 & 2, Brisbane

SCA (Qld) Annual Conference: Brave New Strata World, Sheraton Grand Mirage Southport, Gold Coast

Retaining Walls, Brisbane Boundaries and Fences, Brisbane Borrowing, Brisbane Meeting Procedures: Committee Meetings, Brisbane

NZ100 and eBook Launch event

STRATA BENCHMARKING PROJECT 2016 / 2017 Do you know how the operations of your business compare with other strata businesses in the same area? How productive are your strata managers? Are your rates per scheme competitive? How do your overheads compare with similar businesses?

Find the answers by joining Australiaâ&#x20AC;&#x2122;s only independent Strata Benchmarking Survey since 2001!

How do the best strata businesses achieve their success?

To register or for enquiries: Email: strata@benchmarking.com.au Phone: 02-9262 5564

For more information, visit benchmarking.com.au/strata

Advertorial

The storm season is here!

As long as we can remember, Australians have been menaced by intense storms due to the size, shape, and location of the Australian continent. Our continent provides the perfect spawning ground for cyclones, severe thunderstorms, tornadoes, and even super-cells.

And… it’s predicted, due to climate change, that Australia’s storms are likely to grow stronger and more frequent in the years to come. The 2016 storm season has started! So, what can you do to prepare for the unexpected and minimize any impact for now and into the future? 1. Firstly, check out a great 3D link outlining what you can do around your home at: www.brisbane.qld.gov.au/prepare-storm-season 2. Window maintenance ‘glass is dangerous’ - clean the tracks of your windows and your doors too. If there is any dirt lodged in the corners or the sides, gently remove it using a strong but non-abrasive cleaner. Pipe cleaners are good for this purpose or something small and slim which won’t damage paint work or the surrounds. Next, check the sealant around the edges of your windows. Some people have vinyl which also needs checking. Ask yourself if it’s firmly in the right place and looks clean – with no pitting or erosion. If it is tight to the window, it is in good health. If it is loose or starting to wear away then it will need replacement because it means that the edges could give way, causing the glass to blow-out during bad weather. 3. Keep your garden tidy – trim low hanging and overgrown branches that are sitting close to your property. 4. Conduct a maintenance check – if your home has been exposed to storms in the last few years (or if it’s an older property) it may pay to hire a qualified tradesperson to come and evaluate your property and ensure everything is secure. Some great starting points are to check your roofing and gutters for any loose fixtures. 5. Secure loose items – If high winds or storms are forecast, secure loose items outside the home or store them away. This includes outdoor furniture and children’s toys.

6. Take out home and contents insurance – in the unlikely event that your home sustains significant damage as a result of storms, flooding or bushfire activity, appropriate home and contents insurance will be essential to mitigating financial loss. The same goes for car insurance, especially if you don’t have anywhere undercover to park. 7. Register your pets – while your furry friends might appear to be secure in your yard on any normal day, in incidences of extreme weather activity gates can blow open, fencing detaches or frightened pets could find a way to escape looking for reprieve from the elements (should you not be home to bring them inside). Registering and microchipping your animals is highly recommended in the event that they should find themselves far from home. 8. Bushfires -if you live in a bush fire area, have a plan in place should you, your family, or your property be at risk. 9. Keep these contacts handy: •• Express Glass Emergency Glass Repairs 24/7/365 Australia-wide - 1300 66 234 •• Australian Council of State Emergency Services www.ses.org.au/contact.html •• SES Australia-wide 132 500 •• Australia’s Emergency Call Service Triple Zero (000) Download the phone app NOW www.emergencyalert.gov.au/contact-us.html For more ingomation: Express Glass, P. 1300 666 3234 | E. enquiries@expressglass.com.au, W. expressglass.com.au

This article was kindly supplied by Express Glass

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DECEMBER 2016

Education Report

A100 – National introduction to Working and Living in Strata Communities visits Cairns

The A100 travelling roadshow recently visited Cairns on 25-27 October. There were 10 students who attended the course: Sophie Mc Donald, Dean Stoplemann, Brian Uy, Samantha Remmington, Amanda O’Shea, Mike Anstee, Darren, Kristy, Taryn and Shane Devenish. Some of the students were relatively new to the Strata Industry others were more experienced however they all expressed their gratefulness that the course had been brought to the area and that they had the opportunity to attend. A big thank you to Kelly from TCM Strata for arranging the venue and the assistance she provided so that the course could proceed. Trainers for the course were Melissa Butwilowski, Shane Devenish - Devenish Legal, Kimberly Jonsson – CHU and Carole Anderson – SCA National. We thank Strata Community Insurance for being our National Education Program Partner. Carole Anderson National Education Officer Strata Community Australia

DECEMBER 2016

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Energy

Why strata corporations should consider embedded networks Embedded Utility Networks have received a lot of attention of late in the Strata space, so what is an Embedded Network and why should strata managers consider them for their properties? It is no secret that people hate energy and utility bills and they are never paid happily; we get it, but there are ways to reduce these costs and simplify the supply. What is an EN?

An Embedded Network (EN) is the infrastructure that allows electricity, water or gas to be on-sold to multitenant developments. It permits such developments to leverage the volume of the utilities they use as a whole, in order to improve efficiencies and therefore lower costs for individual occupants. This means that rather than each occupant negotiating their own contract with various utility retailers, they combine their purchasing power to obtain services at significant discounts to what they could achieve individually. What are the benefits for the strata corporation? The development on an EN delivers the following key benefits: •• Reduced energy costs for tenants and common areas with pricing that energy retailers cannot normally match for small to medium sized customers; •• Simple billing and contractual arrangements without ongoing renewals; •• A true user pays system for hot water and gas, whereby the tenant pays for all associated costs, not the body corporate or the owner of the apartment is tenanted. Hot water systems In many apartment buildings the hot water services are centralised, providing hot water to all tenancies. These systems have a finite useful life, generally around 10 years, before they need to be replaced. In our experience many bodies corporate find it challenging to raise the necessary funds from owners for these replacements.

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We are able to replace the existing infrastructure and operate an Embedded Hot Water Network (EHWN) in the building. We pay for the new HWS and metering to establish an Embedded Hot Water Network. This then becomes a full user pays system, with each tenant only paying for the hot water they use. The implications of the establishment of an EHWN are: •• No need to fund replacement/ maintenance of centralized HWS through Strata fees. •• All costs of running HWS (gas and electricity) removed from common costs. •• No credit risk for the Strata body. All credit risk likes with the EHWN operator. •• Charges are levied to the occupier of the apartment, significantly reducing the out of pocket expenses for the owner if the apartment is being rented. •• SEPN manages meter reading, billing and collection function, thus reducing the workload for body corporate managers. The most common reaction when we are discussing this structure with existing Strata Corporations is “what is the catch?” The answer is there is no catch. An EN results in lower utility costs where the resident only pays for what they use. Non user pays systems can create significant animosity amongst tenants, and the removal of this angst is a key outcome of the establishment of the EHWN. Gas Rather than each apartment having a direct connection to the gas network, with the associated costs, an Embedded Gas Network (EGN) can be established where all gas is purchased in bulk and the cost savings passed onto residents. Electricity Electricity is a volume based commodity; the more you purchase the cheaper it is. It therefore makes perfect sense for Strata Buildings to pool their collective electricity requirements in order to access lower pricing. This is the fundamental basis of an Embedded Power Network (EPN). In an existing building, it is likely that some amendments to the electrical infrastructure within the

Energy

building will be required in order for an EPN to operate, however these amendments and their associated costs are borne by the EPN operator. A competitive market With the significant volume of strata apartment buildings that have been and are still being developed, the concerns that both owner/ occupiers and investors have around strata fees is significant. In our experience of dealing with strata managers, well managed buildings with EPN’s have materially lower strata fees. Old versus new EPN’s EGN’s and EHWN’s can all be established in both new and existing multi tenant facilities. In existing facilities the common reason for the implementation of an EN is to replace ageing plant (for bulk hot water) or through a genuine desire to access lower energy costs (EPN, EGN). Our strong relationships with strata managers have given us significant insight into what is important for members of corporations: •• Solutions to utility issues. •• Simplicity with low strata manager involvement. •• Lowest possible cost. •• Equitable amongst tenants. We have been dealing with Whittles in Adelaide for some time. The view of Peter Affleck, General Manger is that “the implementation of Embedded Networks into apartment complexes has been very beneficial to owners from a number of points of view. Firstly they have resulted in lower utility costs for owners and secondly strata fees have also been reduced due to a number of associated now being borne by the user. No one would deny that an actual user pays system for utilities is best practice in multi tenant facilities. Reduced strata fees also have the potential to improve the attractiveness of strata lots to prospective purchasers.”

One ancillary benefit of an EPN or EHWN is the integration of renewables into the network. For an Embedded Power Network solar power can be incorporated, whereas a EHWN allows for the integration of solar hot water. A word of caution The Embedded Network space has become increasingly attractive in recent years, leading to a number of new service providers entering the market. Sorting the wheat from the chaff in this space is quite easy; reputable operators are licenced to sell electricity and gas by the Australian Energy Regulator (AER). The AER’s role is to regulate energy markets and takes its role as a regulator of these essential services extremely seriously and they have a clearly stated intention of cracking down on unlicensed operators. The most important point to note when dealing with unlicensed operators is that all financial risk for the operation of the network remains with the Strata Corporation (SC). There have been numerous instances of unlicensed operators billing and collecting from customers, whilst at the same time not paying their supply bills. The liability to pay the bills ultimately rests with the SC, which can result in it the SC being tens of thousands of dollars out of pocket. It is also worth noting that this is a specialist area and the AER place significant obligations upon EN operators. The AER has recently issued a fine of over $200,000 and made specific court orders to an organisation operating an EN without proper authorisation who were also non complying with their AER rules.

This article was kindly supplied by Richard Mintz, Director Savant Energy Power Networks Pty Limited

DECEMBER 2016

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Development

When developers come knocking: why strata law shake-up won’t deliver cheaper housing Recent changes to strata title legislation in NSW will remove the need for all owners to agree to sell or redevelop their apartment block as a whole.

This means that some owners may now have their apartments sold against their will. Only 75 per cent of owners in a building have to agree to the sale for a block to be redeveloped. The NSW government hopes that this change will increase the number of homes in popular parts of the city and allow older, run-down properties to be rebuilt. Other Australian states and territories are either considering implementing a similar strategy, or already have. However, new research released today shows that while this may increase the rate of redevelopment of older blocks, on their own these changes may not improve housing affordability or availability. Change on the way In a report launched today, we anticipate that this change will: •• Create more uncertainty for apartment dwellers, as it makes apartment ownership less secure than house ownership, and therefore makes these residents more susceptible to market pressures. •• Depending on the location, increase either gentrification or densification. Low-rise blocks in expensive areas (around Sydney harbour, North Shore and Eastern Suburbs) are likely to be replaced with boutique higher value blocks, but not necessarily at higher density (gentrification). Low-rise blocks in lower value suburbs will be replaced by high-rise blocks where planning regulations allow this (densification). Whether this densification will improve affordability is less certain.

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Development

Strata renewal feasibility Laurence Troy •• Create no significant improvement to affordability of rental and home ownership in Sydney. Old apartment buildings that might be knocked down and rebuilt often provide more affordable housing options. However, our research shows that very few blocks could be developed profitably by private developers into housing that’s affordable to people already living in the local area. While the increase in housing supply may be welcomed, the scale of the increase in housing supply is also unlikely to result in increased affordability.

However, many people qualified their support by saying it depended on the outcome for any given block redevelopment. Most people didn’t want to see a single owner holding out on a development purely for personal financial gain, but they also didn’t want to see a vulnerable resident removed from their home against their wishes.

Qualified support For this project, we analysed data from the 2011 census, the NSW Strata Title database and the NSW Valuer General’s database. We interviewed 34 key stakeholders including specialist legal and financial professionals, strata management industry professionals, local planners and spokespeople for owner and tenant representative bodies. We also surveyed 1,261 strata residents and owners in properties registered prior to 1990 about their attitudes towards the redevelopment of residential strata schemes. We held workshops with strata owners in the Sydney suburbs of Cabramatta, Coogee, Mosman and Parramatta.

However, many people were sceptical that new buildings would be of a better quality than existing blocks, and that services and local amenity, including open space, would be provided to cater for increases in population.

People also saw the benefit of making the renewal of apartment buildings easier if this meant better buildings, better local services and amenity and increased housing affordability.

Similar changes are planned in Western Australia, Queensland and overseas. The Northern Territory and Singapore and New Zealand have already made similar changes too. Planners will need to tackle head on the challenges outlined in our research if they are to deliver a compact city that works for all residents – not just the wealthy ones.

Our research showed that many people acknowledged the importance of these planning goals and supported the need for some type of change to allow for the easier redevelopment of strata properties.

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Feature

Real estate agents pushing to get involved in strata Sue William, Domain Reporter Jul 4, 2016

Real estate agents are now pushing to get involved in strata management for apartment buildings in a move being branded the controversial â&#x20AC;&#x153;uberisationâ&#x20AC;? of unit-living.

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Feature

With advances in technology and a new outsourced strata service they can tap into for expert help, a number are now becoming strata managers in addition to their traditional roles of selling properties and managing them for investors. “Strata management used to be seen as an administratively difficult, specialised area, entangled in separate legislation and requiring often sophisticated knowledge and skills,” says Murray Cameron, managing director of Strata Real Estate Services, which has developed the back office software to enable agents to extend their range.

Current strata managers, however, say they’re aware of real estate agents entering their industry, but don’t see it as a healthy move. “They can offer cheaper contracts but you certainly get what you pay for,” says Scott Martin, director of one of the market leaders in strata, Strata Choice, which has just won the strata management of Barangaroo.“They tend to focus on sales and property management, and that’s a world away from strata management. “We’ve been called in at times to take over from them, and we often find a complete disaster. They might operate one single trust fund for all their leasing activities as well as all their strata buildings with everything mixed up, including the admin and sinking funds for each building.” But one agent who’s already taken up strata management is Aladdin Elmir, the licensee of All Property People in Ingleburn, in Sydney’s south west. With five years in real estate, he’s now also looking after the strata management of 15 buildings in his area, through Strata Real Estate Services’ new software.

Many real estate agents are now starting to offer strata management. Photo: John Shakespeare

“It was seen by most real estate agents as ‘too hard’ and by some as ‘the devil’s work’, so they shed it to concentrate on the more lucrative and immediate opportunities in sales commissions and property management fees. But they then lost its potential investment returns and, in turn, apartment-owners missed out on people with so much actual knowledge of their building which could have provided them with a better service responsive to their needs.” As a result of the new OutSourced Strata service, many real estate agents are now starting to offer strata management. Macquarie Bank research has found that by becoming strata managers, agents increase regular contact with apartmentowners with the potential for a 19 per cent rise in sales listings, and a 19 per cent increase in property management contracts. Tim MacKenzie, national head of strata at Macquarie Bank says, on the release of the 2016 benchmarking results, that it can make good financial sense. “Industry growth projections suggest we need around 150 new strata managers every 12 months in Sydney and 120 in Melbourne,” he says. “To meet that demand, businesses need to re-examine their business models and find new ways to hire, train and retain high quality staff.”

“It’s good as we can offer apartment owners the complete package to look after all their property needs,” says Elmir. “I think it works for them too as they’re only dealing with one office for everything and, when they might eventually be ready to sell, they feel connected with us.” Agents in NSW do have to obtain a strata management licence to take on the work, but Cameron says, with previous experience in the property industry, it’s usually a matter of simply taking a three-day course that costs around $1000. In Queensland and Victoria, no additional licence is necessary. CEO of the Real Estate Institute of NSW, Tim McKibbin, likens the opening up of the strata industry to the collaborative models pioneered by Uber and Airbnb. “It is the uberisation of the industry,” he says. “These things are coming along daily now. “If agents have the competencies and necessary training and licensing, I don’t think there’s any issue with that. If they’re going to provide a competent service, then that’s another string to their bow. But it is a different skill-set that’s needed for strata management, with the keeping of detailed records and meetings, and that has to be recognised.” But Strata Choice says there are many complications which often the real estate agents aren’t over. “They often don’t understand the difference between lots and common property and all the idiosyncrasies of the act,” says Martin.

“And while that might be fine for small buildings in the country where there might not be any specialist strata managers available, it’s not for Sydney, especially with schemes growing bigger and more complex all the time.” Strata Real Estate Services new software. Photo: outsourcedstrata.com.au

DECEMBER 2016

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Feature

Sustainable housingâ&#x20AC;&#x2122;s expensive, right? Not when you look at the whole equation

Low-energy or zero-energy housing is international best practice, but is still considered costly. Part of the problem is that studies of housing standards typically use only cost-benefit analysis to assess their value, and so often wrongly conclude that sustainable housing is unaffordable. Our new research shows how such analyses may miss some flow-on financial benefits â&#x20AC;&#x201C; such as reduced energy bills and lower mobility costs. Most importantly, these analyses also overlook effects on householdersâ&#x20AC;&#x2122; health and quality of life arising from factors such as improved thermal comfort. Sustainable housing can also have important benefits for some of the most vulnerable members of our community, as the report released this week shows. The environmental performance of Australian housing has improved slowly, associated with changes in minimum building regulations and the creation of subsidies such as solar rebates. This is despite sustainable housing having many documented benefits, including lower (or non-existent) utility bills and greenhouse gas emissions, and improved comfort and health. Conventional cost-benefit analyses exclude these benefits. That leaves significant gaps in the story that could be used to support investment in sustainable housing.

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What did the study assess? Our study involved a three-year, mixed-method evaluation of a small sustainable housing development in Horsham, Victoria. Commissioned by the Victorian Department of Health and Human Services (DHHS), the study used both quantitative and qualitative methods, which are rarely combined to assess housing policy and environmental performance. Four two-bedroom, nine-star-rated (under the National House Energy Rating Scheme, NatHERS) houses were built to maximise passive solar principles. The design elements and technologies used included (partial) reverse brick-veneer construction, double-glazed windows, solar hot water, a 1.5-kilowatt solar photovoltaic system and a shared 5,000-litre rainwater tank. The houses were built without air conditioning. They do have ceiling fans and gas heating in the living area. We evaluated these nine-star houses against seven control houses also in Horsham and built to DHHS standards, with a six-star NatHERS rating. We also compared the results to a DHHS technical model of standard industry practice. We conducted a traditional cost-benefit analysis, technical performance analysis (utility consumption, internal temperature), three rounds of interviews with the householders during different seasons, and a personalised household sustainability assessment. Through a traditional cost-benefit lens, the nine-star housing was not financially viable for DHHS. Even if DHHS was able to capture the savings to the householders, payback was only achieved within 40 years for one of the four dwellings in a high-energyprice future. This was due to higher-than-expected capital costs for the sustainability initiatives.

Feature

Residents confirm well-being benefits Interviews with residents highlighted positive social outcomes from living in sustainable housing, which supported the technical data. The benefits they described included improved health and personal finances. For example, these householders said they had extra spending money due to low (or no) utility bills. This meant they could buy children Christmas presents, avoid personal debt and lay-by, or go on a holiday.

However, resale value could be up to A$40,000 higher per unit. The technical performance analysis also identified significant benefits for the nine-star households. These included reduced utility consumption and bills. One occupant told us: “Look, I haven’t paid any off my power bill in six months and I’m still in credit”. We found that these households: •• were A$1,000 a year better off as a result of reduced utility consumption (including solar feed-in tariff); •• purchased 45 per cent less electricity than the control households (and 73 per cent less than the standard industry practice); •• consumed 22 per cent less water (30 per cent less than the industry standard); •• had 40 per cent less CO2 environmental impact from power use (63 per cent less than the industry standard); and •• were comfortable with the indoor temperature of their house for 10 per cent more of the time (even without air conditioning).

I do go clothes shopping on occasion now instead of thinking, “Oh God, I have to go and lay-by that.” Householders described how this led to reduced stress and better mental health. The research demonstrates that the housing sector’s overreliance on cost-benefit analysis may be overlooking important benefits (and detriments) of different housing arrangements. Combining qualitative and quantitative evaluation methods can help uncover a more detailed and complete picture of how housing affects people’s lives. Our research also highlights how sustainable housing benefits extend beyond the environment. These flow-on effects can improve the living conditions of some of the most vulnerable members of society. This, in turn, potentially reduces pressure on health and other support systems and sectors. Combining sustainable and affordable housing Our study is part of an emerging body of research that challenges the idea that sustainable housing is unaffordable. The evidence increasingly shows that sustainability and good design can improve affordability when fuller cost-benefit analyses are undertaken and non-monetised social, health and well-being benefits are considered. To date, however, there is limited “real world” research into people living in sustainable housing, particularly in the affordable housing sector. Without more multidisciplinary evaluations of this kind, we are left with an incomplete picture of the benefits of this type of housing.

Extreme weather events magnified the comfort benefits. On a second consecutive day above 41°C, the nine-star houses were up to 16.6°C cooler (without air conditioning) compared to the department’s standard six-star house (which had air conditioning).

Such studies will be critically important as Australia seeks to make the transition to a more sustainable future. Climate change and increased livability costs are likely to add to the challenges for social housing organisations and the tenants who depend on their services.

This meant householders could stay at home during heatwaves rather than needing to seek alternative accommodation, which happened sometimes for the control households. One occupant said:

…in summer I would sit down at the supermarket, you know, because it was cool … [Now] I can stay home and veg out.

Authors Trivess Moore, Research Fellow, RMIT University Cecily Maller, Vice Chancellor’s Senior Research Fellow, RMIT University Ralph Horne, Deputy Pro Vice Chancellor, Research & Innovation; Director of UNGC Cities Programme; Professor, RMIT University Yolande Strengers, Senior Research Fellow, Centre for Urban Research, RMIT University

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