Seminar: Caring For Your Building - From Birth to Death | Owners Corporation Network

Seminar: Caring For Your Building - From Birth to Death

Opening Address

Stephen Goddard, OCN Chair

Stephen's address (2 mins, 860 KB)

BIRTH: What should you be demanding from a building manager of a new building?

Eric Francis of independent building management company Francis Management, spoke about the necessities of life when appointing a building manager of a new block. He said a BM of a new block should:

  • show concierge or EC isolation points for all essential services in case something goes wrong
  • make sure he has gathered all building documentation, including warranties, asbuilts and detailed specifications
  • draw up annual maintenance schedules
  • create and maintain a defects database
  • give EC site knowledge with tours of plant rooms and parts of the building they may not be familiar with
  • give detailed monthly reports on building
  • question any maintenance expenditure (could be defect or warranty issue!)
  • carry out regular maintenance as in the first year, little done at all. Should be done in accordance with manufacturers’ instructions
  • produce a technical manual about building
  • put all contracts out to tender
  • make sure everything done that’s necessary for certification

Eric's presention: text (14 KB) | audio (31 mins, 14 MB)

The Buying of Building Management Rights – is it good or bad for apartment owners?

Debate between Jeff Beere, President of the Australian Resident Accommodation Managers' Association (NSW) Inc, and Chris Williams, former Chair of a building whose rights had been sold

ARAMA is the peak organisation for building management rights in NSW with 200-300 properties ($2 billion’s worth) managed under this system (developer selling building management rights to a separate company or individual who also has a financial interest in a building). Jeff said it’s a great system to ensure on-site management, which also looks after rent role) according to the mix of owners and investors. It’s also a good way to vet people moving in.

Jeff's presentation (177 KB)
Jeff's notes (22 KB)

Chris said owners end up paying for the contract, and investors receive little return. The system encourages short-term use of buildings which is detrimental. These building managers contract out services, which could be done by the Owners Corporation itself, and often for less money. It’s a system that allows developers to make more money out of their building, through the sale of rights, and the level of services received is uncontrollable and variable.

Jeff & Chris' presentation (31 mins, 13.8 MB)

How Do You Tackle Defects?

Three buildings talked about the different ways they’ve each gone about their fight to have defects fixed, and their experiences:

One building applied to have problems fixed through insurance, and is now in dispute with the Office of Fair Trading over the claim. The Chair talked all participants through the process, advantages – and hitches - audio (14 mins, 6.1 MB)

Another building also sought to have problems fixed via insurance, and with more success with their developer. The problem remains, however, the quality control on fixes - audio (15 mins, 6.8 MB)

A third building is currently in the NSW Supreme Court with their developer, pursuing a legal remedy which has been slow, costly and irksome but which promises final results - audio (17 mins, 7.8 MB)

Help! Is there anyone who can offer help to win the defects fight?

David Adamson from Constructive Advice gave his take on defects

David advised that a full defects audit of a building be done as soon as possible, generally as soon as control of the building has been taken from the developer. A project manager is usually needed, just as an orchestra needs a conductor.

He said it’s important to have someone there to manage the whole process, ensure the audit is done properly and to approach the builder/developer to see whether they’re likely to cooperate on fixing problems.

Someone consistent is needed throughout the whole process, he recommends, especially when ECs change or members don’t have enough time.

David's presentation (23 mins, 10.6 MB)

MIDDLE AGE: How Should You Care For Your Building Through Old Age?

By Geoff Linders, building manager with Linders Property Group, who has managed a number of older buildings.

Geoff talked about the importance of planned maintenance and keeping up healthy sinking funds for older buildings, to make sure the cost of replacing items like water tanks, roofs and window frames are adequately budgeted for, and anticipated. It’s a false economy to try to save money on maintenance, as fixing the bigger problems that result will prove more costly.

A sinking fund analysis report is a vital tool, so you can act early when things go wrong, eg when 2 shower membranes fail in a 30-year-old building, you’ll know all may be on verge of failing. Typical expenses are replacing electrical systems; replacing rotted, unpainted window frames; and having to excavate the car park to replace sewer and stormwater pipes. It should be remembered that the Fire Brigade can always be negotiated with on fire orders.

Special levies are always unpopular, and aren’t tax deductible for investors.

Geoff's presentation (23 mins, 10.5 MB)

DEATH: When a building is no longer worth saving, the extinguishment of strata

OCN Chair (and strata lawyer) Stephen Goddard talked about the issue of the difficulties of extinguishing strata, ie when a building is past its use-by date, it can only be knocked down and rebuilt with the consent of 100 per cent of owners. That permission can be extremely difficult to obtain, even though it might be perceived to be in the best interests of all owners.

He quoted the case of one elderly woman objecting to a developer’s generous offer to buy all apartments in an old block for an inflated price because she didn’t want to move – despite not being in a position to afford a special levy to fix the falling-apart building.

He then quoted the case of another building in which all but one of the owners had voted to sell – but the last owner was holding out for a premium price for his property as he knew he had the power to nix the deal.

There was a spirited debate on whether the 100 per cent law needed to be changed, to the Singapore model of 80 per cent of owners agreeing to sell up, or 75 per cent or …

Some pointed out that the 100 per cent could be challenged in the NSW Supreme Court, others suggested a reverse mortgage could pay a special levy, some felt it was one’s inalienable right to refuse to sell a property. Others said the current 100 per cent rule meant the interests of one person were able to beat the interests of the majority.

A vote was taken, and won by those who felt the law should not be changed.

Listen to the discussion (27 mins, 12.4 MB)

Closing Address

Flatchat columnist Jimmy Thomson delivered the seminar’s closing address - audio (8mins, 3.6 MB)

More Information: