Seminar: Safeguarding Your Apartment Investment & Making the Most of Your Funds | Owners Corporation Network

Seminar: Safeguarding Your Apartment Investment & Making the Most of Your Funds

Opening remarks

Stephen Goddard opened the seminar by briefly outlining who OCN is and what OCN does. OCN, he said, is the only community-based group in Australia representing owner’s corporations and their members. He reminded the audience of the need for a group such as OCN, namely the limited consumer rights of purchasers of property.

OCN is the peak body for apartment owners, making representations to government on issues concerning owner’s corporations.

The future of large apartment living - the developer’s perspective

In this talk, Sylvia Hrovatin (Walker Corporation) started by describing how apartment living is now regarded as a viable way of living in Australia. The focus of her talk was on large strata schemes of 100 apartments or more. She indicated that developers are changing their attitude inasmuch as they have realised that they are selling not just an apartment but a life-style. This means they need to be interested in governance of strata schemes. In so doing, she argued that developers have a shared vision with purchasers in that both wanted open and transparent governance that was financially stable and harmonious.

To achieve this end she put forward the view that there was a need for professional people to run large strata schemes having a role not unlike that of asset managers and she advised “don’t contemplate the idea of part-timers being involved”. She suggested that within this “vision” of professional strata management was also the idea that strata management could be likened to a 4th tier of government, becoming increasingly involved in community activities and carrying political weight.

Are short-term rentals and serviced apartments ruining your building - and how can you stamp them out?

Peter Stavely (Tourism & Transport Forum) started by describing the black market which is operating in Sydney whereby residential apartments are being used, illegally, for short term rentals. Peter pointed out that this activity interferes with both the market for hoteliers as well as the residential market. Undermining the market is but one problem. Others include lack of adequate amenities, disquiet for residents and safety issues, as well as the potential for reflecting poorly on Australia as a tourist destination because of poor accomodation. Peter emphasised the need for further control by councils, concluding with the observation that “the price of liberty is eternal vigilance”.

Mark Kelly (Sydney City Council) provided a council’s perspective on this issue indicating that, typically, council can only help when there has been a breach of the development application. Otherwise, many of the issues that are associated with short lets (e.g. overuse of facilities, garbage, nosie etc) can be regulated by the owners corporation, through bylaws.

He provided several informative examples of how owners corporations may manage short-let problems such as placing conditions on the building managers contract limiting certain activities and provided an example of a notice issued by council aimed at limiting bill posting.

Making your savings work for you

Maria Linders (Linders Corporation) gave a succinct and informative account of strata levies: why pay them, how to pay them and what they can be used for.

Maria's presentation: text

Rex Wood used some straightforward conservative calculations to show that in a 3 year old strata scheme, consisting of 100 lots, the value of the sinking fund would be $137 million assuming 40% of levies were put into the sinking fund. With this amount of money, he argued, it is well worth investigating how best to invest (albeit within the constraints imposed by current legislation regarding sinking fund assets). In particular, he stressed the value of engaging a personal banker, saying that such a service would be provided to a private investor as a matter of routine.

About the speakers

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