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The need for multi-faceted insurance For an accommodation provider, risk management is one of the major fundamentals of conducting business and insurance is at the forefront, which can be a minefield on its own.
Insurance requirements can largely be divided into: • • • • •
Property Public liability Management liability Loss of business Disaster
Bearing in mind, each of these can overlap into each other areas.
Property One of the most important issues when insuring your business assets is the establishment of an adequate sum insured for the property after a partial or total loss. The setting of an adequate sum
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insured should be considered when taking out a policy, not at or after a loss. Post-loss, it’s then the job of an assessor to determine the full replacement value prior to the loss so that the insurer can determine if any underinsurance penalty should apply. Managers should also consider the strata property value - engage a qualified valuer or qualified surveyor to help give the best value. Most insurers recommend this be done every two to three years and no more than every five years. The policy limit needs to take into consideration a number of factors, such as: •
Small, as well as large, damage
•
The actual replacement value of buildings, out buildings, perimeter fences, paths, car parks, underground services,
allowing for escalation of building costs during the rebuild process. •
Replacement cost of contents, plant and equipment, including things like pool replacement, major signage and landscaping. This cost should also account for the effects of inflation, cost increases and currency fluctuations on imported equipment.
•
The maximum level of stock likely, if a loss occurs at a peak period or while a stockpile has accumulated.
•
Costs of fire extinguishment.
•
Demolition of damaged property and removal of debris, site clearing, clean-up of contaminants, transport and disposal of high hazard contaminants such as asbestos.
•
Temporary protection
of undamaged property and temporary repairs to minimise further loss. •
Administrative costs to restore records.
•
Architects, engineers, surveyors and other professional fees in the reconstruction of the building.
•
Increased building costs as a result of government requirements - local, state and federal (such as upgraded fire prevention measures, flood risk minimisation, heritage preservation order, disabled access, etc.). Take into account changes in building regulations i.e. railing height, ACP and cladding as they may entail product replacements along with the removal of debris and demolitions.
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Public liability Needless to say, in today’s increasingly litigious society the need to protect a business against personal harm has never been greater. An accommodation provider may think a claim is completely baseless or without merit but it will cost time and money to defend successfully, no matter how good risk management procedures are. Public safety in an accommodation complex is paramount. Despite all the risk management processes in place, accidents do happen. Public and third-party insurance is inescapable.
There are countless examples where cover has not been sufficient or totally negated by conditions laid down within a policy
The key issues are: 1.
How many aspects does the policy cover and is it adequate?
2.
Is the amount of cover adequate?
3.
Does it cover both personal and property liability: i.e. a roof caves in or window breaks during a storm and damages guest’s personal property, or a garage door damages a car.
In each of these cases, most accommodation providers would have to respond in the negative.
Management liability What many accommodation managers do not realise is that their personal assets can be put at risk by many claims. The insurance industry has seen a need for noncorporate businesses and their managers/directors to be covered in the same way as larger corporate bodies have been in the past. Consequently, the advent of management liability insurance has become available to almost all types of business and covers a wider range of risks than those normally associated with directors and officers cover. The benefits of having management liability cover in today’s business world are obvious and have been highlighted by many high profile cases in the media recently.
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A management liability policy will help with the legal costs associated with defending allegations of misconduct in areas such as occupational health and safety or sexual or other types of discrimination. Such allegations may have no truth in them whatsoever but, as many companies have found in recent times, the cost of defending them can easily run into hundreds of thousands of dollars. Some of the covers offered by management liability policies in today’s insurance market are as follows: •
Crime cover: this section is designed to protect the company for dishonest acts by its employees.
•
Employment practices: this refers to protection against claims arising out of employment practices (harassment and unfair dismissal being two common claims).
•
OH&S investigations and defence costs: this cover protects the entity and the directors against costs associated with occupational health and safety and workers
compensation investigations. •
Statutory liability: this is designed to protect the directors against costs associated with any regulatory body.
For strata properties, you should also ensure that the body corporate/strata insurance provides cover for office bearers, that is people on the executive/ strata committee. It protects office bearers for errors, acts or omissions made in good faith when acting on behalf of the body corporate. Resident unit managers can also be included in this cover if they are also part of the executive/ strata committee.
Business interruption (loss of profits cover) Loss of business can occur as a result of a number of factors, such as fire, theft, technological breakdowns, area gas leaks, landslides, large construction accidents that necessitate an area evacuation or anti-terrorist measures that are beyond the control of the accommodation provider. Policies to cover such eventualities are highly complex and beyond the boundaries of this article.
Disaster Accommodation providers in Australia are probably subject to more minor and major disaster risks than most other countries. These range from bush fires through droughts, floods, cyclones and even civil unrest and obtaining insurance coverage for these is not at all easy. As has been evident in the past, the detail is in the policy conditions and exclusions - such as when is a flood a flood? The definition of the policy conditions and exclusions differs from area to most-at-risk-prone area as do the conditions and cost. And there are countless examples where cover has not been sufficient or totally negated by conditions laid down within a policy. These are the areas that are hardest of all for accommodation providers to prepare for risk management. It is one thing to prepare for a cyclone in a cyclone-prone area like Mission Beach, but how does one anticipate and plan for an earthquake in Newcastle or civil protest in Brisbane? The key is for insurance brokers to provide you with a total, costed assessment of what you, the accommodation provider, needs in the way of protection but you also need to know just what you need to protect. Look for an insurer that can respond quickly so that no further damage occurs. You will need an insurer that has the support of the people on the ground, as well as accessors, repairers, and ideally a ground response team. ■
RESORT NEWS – AUGUST 2018
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supplier profile CAPITOL BODY CORPORATE ADMINISTRATION
Common area tiles and slip testing Part of the responsibility of the body corporate is to ensure the safety of the occupants and visitors to the common property of the scheme. With the risk of injury and possible cost to the body corporate in the event of a slip and fall incident, many committees are choosing to play it safe by relying on an independent expert in slip testing to ensure they know how their site sits within the Australian standards and building code. Undertaking inexpensive floor slip resistance testing is done on-site and will ensure that your body corporate meets the current Australian Standards AS4586 and AS4663. Sliptest Australia are just one of the companies that carry out these tests. www.sliptest.com.au
Did you know there is a universal anti-slip rating for outdoor tiles?
When the report comes back and your tiles / flooring are compliant within these standards, that’s a relief for the body corporate.
But… what happens when the report comes back and it does not meet the standards? There are tile treatments that can be applied to the tiles. Anti Slip Floor Safety are one company who provide a treatment which is a penetrant and not a coating so it lasts the life of the floor surface. www.antislip.com.au
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Slipgard is also a DIY application that when applied, creates a microscopic pattern that channels and disperses water from under foot, allowing contact to be made with the surface at all times. www.slipgard. com.au
So how can you avoid choosing the wrong tiles when renovating or upgrading to begin with? Did you know there is a universal anti-slip rating for outdoor tiles? Tile Factory Outlet have written a great article on what to consider when looking for outdoor tiles and how to avoid realising a mistake in tile selection has been made after someone has been injured. Read more here https://www.tfo.com.au/ outdoor-tiles/non-slip-floor-tiles
Want access to free educational body corporate information? Visit Capitol’s resource centre www.capitolbca.com.au/resource-centre. Article written and supplied by Tina Scanlon, Community Relationship Manager, Capitol Body Corporate Administration.
RESORT NEWS – AUGUST 2018
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supplier profile CHU UNDERWRITING AGENCIES PTY LTD
Insurance – There When You Need Help Insurance is like a fire extinguisher – it’s there when you need it. The risk of damage to strata properties is ever present but some owners don’t know what their insurance covers.
Generally, a landlord is only liable for a tenant’s losses if the landlord is found to be negligent in some way. Another thing that the tenant needs to think about is liability. The landlord is responsible for ensuring the home is properly maintained and safe and will be liable if a tenant or their guest are injured on the premises as a result of negligence.
Landlords insurance, such as provided by CHU*, is cover for strata property owners who are renting out a unit, apartment or townhouse to tenants.
However, there are circumstances where liability for losses falls to the tenant. This is known as occupier’s liability. A tenant can face liability for damage or injury if they fail to maintain a safe environment for anyone who comes into the property.
It provides cover for accidental loss or damage to contents in the landlord’s unit from events such as fire, flood or storms. It covers items such as carpets, light fixtures, built-in wardrobes and kitchen cupboards. Importantly, as the apartment is a revenue generator for the landlord, the insurance also covers loss of rent if the unit is unfit to be occupied. It also covers the landlord if the tenant fails to pay rent.
Some renters are less likely to have the same quantity of furniture or homeware as a home owner. However, they are just as likely to own electronics (mobile phone, laptop, TV, etc.) and personal goods, such as clothing, accessories, books, beddings, bikes, and jewellery.
Additionally, it covers the landlord and their investment property for malicious damage to contents/ buildings caused by tenants and/or their guests. Remember, a landlord’s policy premium is tax deductible. There are a number of risks that are covered by landlords insurance: 1. Contents: Contents are covered on a replacement (new for old) basis against accidental loss or damage. A minimum excess usually applies. 2. Building Damage: Walls, windows, doors, floors, ceilings and fixtures of the lot/unit are covered against theft and damage caused by vandalism or malicious A minimum excess usually applies. 3. Loss of Rentable value: Loss of rentable value if the lot/unit is rendered unfit to be occupied Period of cover for loss of rentable value varies between policies. For example, CHU’s period of cover is 52 weeks 4. Loss of rent (departure of tenant): Loss of rent if the tenant absconds. Period of cover for loss of rent for
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departure of tenant varies between policies. CHU’s period of cover is six weeks 5. Loss of rent (default by tenant): Loss of Rent if the tenant:
7. Liability to others: Should a landlord become legally responsible to pay compensation for personal injury or property damage.
• Defaults in payment of rent which requires a court or tribunal order for termination or eviction;
8. Government audit costs: Professional costs incurred in connection with an investigation by the Australian Tax Office or other statutory body.
• Defaults in the payment of rent following the issue of the termination notice by the landlord or property manager;
It’s worth reminding your tenants they should look to have insurance for their contents. It’s often overlooked.
• Does not depart following the issue of a court or tribunal order;
Research by the Insurance Council of Australia reveals that 82 per cent of renters in apartments do not have contents insurance, compared to just 7 per cent of home owners. At the same time, renters are twice as likely to need to make a claim for theft or burglary.
• Dies while occupying under a sole person tenancy agreement; • Is released from payment on the grounds of hardship. Period of cover for loss of rent for default varies. CHU’s period of cover is 15 weeks 6. Legal expenses: Legal expenses in connection with a claim.
An example of a recent claim, was when a tenant’s unit was broken into. Although only a handful of items were stolen (a SLR camera, a MacBook computer, TV and jewellery), the claim totalled to $10,500. Many tenants believe that any damage caused to the property or furnishings will be covered by the deposit initially paid at the beginning of their lease. Deposits only tend to cover wear and tear or minor breakages, not large-scale damage. * CHU is Australia’s leading strata insurer with offices in every state. Website: www.chu.com.au
Many renters assume that the strata building insurance or their landlord’s insurance will cover their possessions in the event of a fire or burglary but this is not the case.
RESORT NEWS – AUGUST 2018
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How upgrading to the NBN will affect your elevator’s emergency phone If one has to face the harrowing ordeal of being trapped in an elevator, there are certain dos and don’ts.
Existing phones rely on power from the copper lines to operate
Primarily, one needs to stop panicking and must believe that claustrophobia will not kill them and this too shall pass. One must also try to remain as calm as possible and wait for the help to arrive.
Most existing elevator phones are powered by copper lines. As a matter of fact, this mechanism has become a bit archaic. It has been seen that in case of a power failure the emergency phones do not work very eff iciently failing their purpose of installation. In case of any sort of power failure these phones are rendered useless and the entrapped people have to wait helplessly for the rescue team to arrive. This is the age of modern technology and digital advancements. There are many devices that are not dependent on these wires anymore and can provide very eff icient and effective services.
What happens to your lift emergency phone once the NBN is connected? In most modern day lifts and elevators, the emergency phones will be connected to the NBN. This is done for the convenience and peace of mind of the everyday users of the lifts and elevators. In case of any emergency, the concerned people will be able to contact the relevant support with the use of these emergency phones. When these phones are connected to the NBN, they continue to work as if connected via a landline; however, power will no longer be available as was the case on copper land lines pre NBN. This will be the case for all lifts and elevators where emergency phones are installed.
Will your existing phone still work? It has often been said that - in case of emergencies or technical breakdown - the existing phones fail to provide the appropriate services. On the other hand, it is very common not to have wireless cellular signals to make any sort of phone calls. Therefore, it has become a need of the hour to provide the best and the most advanced emergency phones in lifts and elevators for the convenience and peace of mind of the common people who are availing the service.
Can you cancel your current fixed line connection? You can seek professional help to cancel the current fixed line connection in the lifts and elevators. There are many companies and establishments that offer services when it comes to emergency phones in lifts. A lot of attention and focus must be paid to this because it entails the safety and the security of the common people who are availing the services of the lifts and elevators. One can always go for major upgrades when it comes to
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the emergency phones installed in the lifts.
What is the best reliable alternative, and how can you be sure you do not pay too much? In most cases, the old analogue emergency phones are being gradually replaced by the more advanced and state of the art mobile communication systems. As an owner of lifts and elevators, one need not panic, because there is a host of upgrade options available. While there are many companies and firms in the market that can provide the alternative communication systems, one has to choose carefully and prudently to ensure the best results prevail. By Brian Fulcher, Director and Principal Consultant, Innovative Lift Consultants
RESORT NEWS – AUGUST 2018
5
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supplier profile BRIGHT & DUGGAN
A new level of Strata Management arrives in QLD bright & duggan, Australia’s most trusted name in strata management, has arrived in Queensland. At bright & duggan, we care about your property as much as you do. It is what sets our team apart from the rest and what our customers value most about our service. With off ices now in Newstead and Southport, we bring with us more than 40 years of strata experience and customer service excellence. We pride ourselves on our team’s unrivalled expertise, accessibility, and old-fashioned values of courtesy and respect for our customers, who are treated as part of our business family. The properties we manage are not just investments, they are homes. The bright & duggan Group manages some of the largest high profile integrated lifestyle resorts throughout Australia including Hope Island Resort and Royal Pines Resort on the Gold Coast, Magenta Shores on the Central Coast of NSW and Martha Cove on the Mornington Peninsula in Victoria. Further to this, we manage some of the most complex developments across Australia including Barangaroo South, World Square and multiple mixed-use sites within King Street Wharf Sydney.
We’re passionate about being the best at what we do. We’ve built our success through developing and tailoring products and services to meet individual customers’ needs and our portfolio now includes over 1,500 schemes ranging in size from 2 lots to estates with over 1,600 lots.
We’re passionate about being the best at what we do. We’ve built our success through developing and tailoring products and services to meet individual customers’ needs and our portfolio now includes over 1,500 schemes ranging in size from 2 lots to estates with over 1,600 lots. We’ve got Australia covered with our national network. At bright & duggan we employ over 100 strata management professionals, with a combined team of 210 across our national brand network, who focus on meeting the needs of each and every customer. Our unique corporate structure enables dedicated teams to specialise in differing fields of strata expertise; meaning our customers get the very best advice and service. Strata Community Association (QLD), the peak membership body for strata managers, service providers and owners in the strata sector, has awarded bright & duggan multiple top honour awards.
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RESORT NEWS – AUGUST 2018
A new level of strata management has arrived Australia’s No. 1 strata management team has opened 2 offices in Queensland.
Waterpoint Residences is a layered development in excess of 600 lots. A gated community with state of the art facilities and amenities. bright & duggan have managed this development from its infancy 3 years ago and will continue to manage to its completion.
A team that cares as much as you do One of the biggest challenges with strata management today is the reliance on individual managers. At bright & duggan, we don’t believe your most value asset should be reliant on any one person. That’s why we always have a team of experts on hand, and why we’ve opened in Queensland. Having bright & duggan as your strata manager, you are guaranteed; Over 40 years of strata experience A Strata Community Association (QLD, NSW, & ACT) member & multi award winner Service level guarantee that stakes our reputation on delivering service promises Access to a full strata team, not just a single manager The most stable workforce in strata To better service our clients, we have opened 2 new offices in Queensland, investing in our promise and making sure we are accessible for all your strata needs.
Daig Allman - Queensland Development Manager daig.allman@bright-duggan-qld.com.au 07 5532 1900 bright-duggan.com.au/qld Shop 1, 27 Cunningham Street, NEWSTEAD QLD 4006 193 Ferry Road, SOUTHPORT QLD 4214
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Embedded Networks – entering energy contracts, utility billing and regulatory compliance Following the finance sector, Energy, in particular Electrical Embedded Networks, must be one of the most regulated industries providing utility services to multi residential and commercial customers. With numerous regulatory bodies to keep pleased, our compliance teams are definitely kept busy. The last few years in particular have called for sellers of electricity to register their activities with the Australian Energy Regulator (AER), abide by new rules surrounding security deposits, the removal of additional charges imposed on customers such as Late Payments Fees & Reminder Charges etc, obtaining explicit informed consent (EIC) and the appointment of an Embedded
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Network Manager to administer Power of Choice reforms. Under these Power of Choice reforms, the regulators are calling for transparency within the Industry and we welcome it. The regulator has written the rules so that it is simple for a customer, supplied by the Body Corporate or Network Owner, to be able to easily compare their charges to that of an authorised retailer (the likes of Origin, Alinta, AGL for example). The charges applied by the on-billing agent should mirror that of a retailer without the additional extras and need of a maths degree. They must be clear and concise to the end customer in order for them to compare apples with apples.
S
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INDUSTRY LEADER IN UTILITY BILLING AND COLLECTIONS FOR EMBEDDED NETWORKS ACROSS AUSTRALIA. Actively reducing energy costs for Body Corporates, Developers & Building Managers for over 10 years. • Industry Compliant
• Energy Procurement
• Bill Presentment
• Energy Consulting
• Customer Collections
• Meter Reading
• Payment & Receipting
• Meter Provision
• Asset Management
Meter 2 Cash Solutions Pty Ltd ABN 51 145 008 196 Ph: 07 3350 5999 Fax: 07 3265 4412 enquiries@m2cs.com.au www.meter2cashsolutions.com.au
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With so many changes, it’s not surprising Body Corporates in particular are waiving the white flag. Is there a light at the end of the tunnel? That would be a crystal ball moment but one thing is for certain, changes will continue to keep us on our toes. Participating in regulatory requirements and being ahead of industry changes is key, or at least ensuring on-billing companies that you use actively patriciates to give Body Corporates protection and a competitive edge to be at the forefront of compliance with their billing services. It’s all about customer protection and so it should be. Having an experienced team of experts to work closely with body corporates and strata companies is key to ensuring that residents have peace of mind and access to consistent and competitive pricing. Smart procurement of bulk contracts not only provides competitive pricing to customers directly, but indirectly can help reduce levies across common property areas too. As the exemption holder, in most cases, the Body Corporate holds all responsibility for the running of the Electricity Network and the service they provide the owners & residents. This includes unpaid accounts and the replacement of faulty meters. Not only is it imperative to have an effective and current strategy in place to best manage the energy tariff, it is also beneficial to factor in future industry changes, future compliance changes and improvements that can be made to a sites infrastructure going forward. We understand how the rising price of electricity is hitting the wallets hard which means that industry needs to find ways to innovate and solve problems. Whether a site has adopted a third party agency billing model
or is looking for an authorised retailer, it is in the best interest of the Body Corporate owners to take a proactive approach to any contract engagement or re-engagement of a contract to ensure that they are aware of the current and future benefits each model may have to the site. This allows for benefits to the end consumer and overall community. No matter what the industry, we all look for experts in their respective fields to guide us in making the correct decisions for the community as a whole. For example, you wouldn’t contact a Body Corporate Manager or an Insurance Broker for instance and request they advise on Energy Rules or the state of the wholesale electricity market. Equally, an energy expert wouldn’t be your first point of call for Body Corporate Act matters or insurance quotes. We need these industry experts and their respective resources to ensure compliance in those sectors they operate within, removing any threat of large fines imposed by the regulators. Ensuring you are with a compliant billing agent is imperative. A good billing agent will be able to provide both on-billing style model and a Retail model and be able to provide the appropriate billing system in order to comply with the strict requirements under National Energy Retail Rules (NERR) and Performance and Compliance Reporting to the Australian Energy Regulator (AER). In an industry constantly in the spotlight, we can help you make that right choice to ensure your energy costs remain as low as possible, offering a compliant service and structure operating within your embedded network. No matter which model your site falls under, Retailer or Billing Agency, our focus is on the end consumer and community alike. By Richard Claus, Meter2Cash
RESORT NEWS – AUGUST 2018
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Waterproofing: preparation and vigilance Accommodation providers often have unique difficulties with waterproofing. Owners require advice and guidance on how to approach their waterproofing issue. Well respected contractors are able to provide them with advice and the knowledge to make informed decisions about what they may be able to do. Water damage to buildings can cause serious consequences including the crumbling of concrete foundations. Leak damage may not be covered by insurance so owners are encouraged to regularly check bathrooms, balconies, basements and car parks, plant rooms, laundries, pools, cold rooms and tanks for leaks and signs of lime scaling and efflorescence. It is important that owners gain a comprehensive assessment and a report on possible solutions for rectification. Careful consideration must be given to waterproofing and materials used to ensure the project is carried out to Australian standards and covered by a warranty. Salt water corrosion and below water table leakages are often seen as being problems for resort owners, as well as maintenance of wet areas, and leakage through cracks. Most unit owners will look towards replacing their bathrooms once every ten years and waterproofing is now mandatory under local bylaws. Renovations to bathrooms generally mean that
the waterproofing membranes must be replaced and there are a number of options of materials available that will suit under tile or vinyl applications. Polyurea sprays are suitable for many applications, including large areas, tanks, planter boxes and roofs. The material is environmentally friendly, hard wearing and mostly carries an extended warranty dependant on the thickness of application. The benefits of using polyurea sprays are such that they can be walked on in a matter of minutes following application and they remain stretchy for many years without cracking or flaking. There is nothing better for protecting against salt water erosion, sand or other harsh abrasives. Tanks coated in polyurea material are safe for drinking water and can withstand permanent immersion. Crack repair in basement, car park walls and swimming pools must be carried out by trained applicators. This often involves a two-day system of injection of material under high pressure followed by the application of a material that is two to three times the strength of the surrounding concrete. The technique has provided waterproofing to many hotels, resorts and heritage listed buildings and pays special attention to providing a Green Star Rating in its service; being kind to the environment and to residents alike. ■
Our premium range of solar films block out everything except your view, preventing up to 82% of solar heat entering your home, can cut glare by up to 93% and block 99% of harmful UV rays.* *Amount varies by product
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