The City Futures Research Centre’s new ARC Linkage Project will put the multi-unit housing sector under the microscope and propose specific changes to protect people buying units.
UNSW Sydney’s City Futures Research Centre will address the severe and growing concern about building quality issues in the multi-unit housing sector.
The centre has been awarded a $273,702 ARC Linkage Grant for a two-year project to tackle major defects in strata housing in NSW.
The project, led by UNSW City Futures Director Professor Bill Randolph, will build on previous research to accurately identify the scale of major defects threatening to undermine the multi-unit housing sector. The project team also includes UNSW Built Environment Professor Martin Loosemore, UNSW Scientia Fellow Dr Hazel Easthope and UNSW City Futures Research Fellow Dr Laura Crommelin.
As well as identifying the prevalence of significant building defects, the project will seek to understand the causes and provide innovative solutions to improve housing quality, which could bring about sweeping changes to the sector.
The multi-unit housing sector in Australia is estimated to be worth more than $1 trillion and provides almost half of new Australian housing. Sydney is at the forefront of the construction revolution, now building more units than standalone houses.
A previous study conducted by the City Futures Research Centre, one of the only quantitative assessments of multi-unit housing defects in Australia to date, found that 72-85% of owners’ corporations had identified at least one significant defect in their building.
“It is generally recognised that developments in residential buildings have a high proportion of defects when they’re built,” says Professor Randolph.
“Despite these problems, there is no comprehensive data available on defective apartment buildings … what kinds of defects exist, or why they’ve occurred.
“We have now put together a team of industry partners to support a new research project to address this knowledge gap.”
The research will focus on three areas of Sydney’s biggest high-density housing markets – City of Sydney, Parramatta and Canterbury-Bankstown.
Professor Randolph says the project methodology is one of the most ambitious undertaken by the research centre and will engage stakeholders across industries, including strata, insurance and law.
“We’re actually going to do an in-depth data gathering exercise on about 600 of these blocks in these three areas, with a view to trying to work out what’s going on – which ones have defects, what are the defects if they have them and, importantly, how much it is going to cost to fix and by whom.
“It hasn’t been done before – nobody’s ever done it before because it’s a tough job.”
Professor Randolph anticipates the project will also have international implications in markets such as the US and the UK.
“It’s certainly of a comparable scale internationally.
“There are lots of high-density towers going up in cities like London and Toronto, let alone Singapore and Hong Kong, and with very similar processes and conditions in the investor market which is driving the development.
“It’s happening everywhere, and it’s a generic issue worldwide.”
He believes the project will further uncover fundamental issues the housing sector – being undermined by cascading risks, blame shifting and lack of oversight.
“There’s a whole series of places where things can go wrong.
“There’s a whole chain of risk which is pushed further and further down the chain from the developers right down to the sub-contractors, where people can cut corners, as they did in the Opal Tower, and nobody really checks up on them, because there is no proper oversight.
“They basically self-certify themselves, and that’s a real problem,” Professor Randolph says.
“Quality control methods need to change, and our project will give some pointers as to how that might happen.”
The Professor says that the combination of continued high-density growth and the unknown scale of major structural defects is unsettling, and poses a real threat to the viability of future cities.
He says the project comes at a pivotal time, following growing concern about the safety and quality of new buildings after the infamous Opal Tower saga.
“This is not a minor problem, as the recent Opal Tower incident has made clear – the majority of new dwellings in Sydney are multi-unit.
“Cities by and large are growing rapidly and are being reformed with multi-units in a way and in a scale that has never been done before.
“Therefore, if we’re building sub-par quality, then we’ve got a real problem on our hands now, and in the future.”
The issue of defects is of real concern to the strata industry, given the risks posed if sentiment turns against apartment living, according to Professor Randolph.
He says that dealing with defects is a critical matter for urban planners, that, if not addressed, will pose a significant threat to Australia’s real estate market.
“The worry is people won’t want to live in these apartments because they feel they’re problematic, and I think Opal Tower exposed this. Then the market will collapse … on a scale that we haven’t seen before.”
Professor Randolph hopes to see the balance of power shift towards the consumer, with increased transparency, extensive building documentation, and more information about track records.
“Thousands of consumers are buying properties and they really don’t know whether they’re good, bad or indifferent.
“We need to get this information and knowledge into the hands of the consumers which will help shift the balance into their hands rather than have it all on the side of the developers.
“The good developers will welcome it and welcome a more knowledgeable consumer. The bad ones will be squeezed out of the market.”
An interim report on the project findings will be released at the end of the year.
Author: Ben Knight
Source: UNSW Newsroom
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Meetings of the Strata Committee – What you need to know!The owners corporation needs to elect a strata committee and then can delegate some of its functions to this committee. The strata committee’s role is to make quicker decisions on the day-to-day issues and management of the scheme. Any decision made by the strata committee is treated as a decision of the owners corporation.Strata committee members are responsible for electing office bearers – Chairperson, Secretary and Treasurer. This usually takes place at the first committee meeting after the annual general meeting. Strata committee meetings can be held as often as the members like, the Secretary can call a meeting or one third of the strata committee members can ask the Secretary, or any other committee member, to call a meeting.

Giving notice of a strata committee meeting

Each member of the strata committee, and every lot owner, need to be notified of an intended strata committee meeting at least 3 days before the meeting is due to be held. The notice of the meeting must include a detailed agenda for the meeting.In a large strata scheme (more than 100 lots), the Secretary or meeting organiser needs to put the notice of the meeting on the noticeboard and deliver it to each owner. In other strata schemes, the notice can either be put on the notice board or delivered to each owner. You can deliver the notice by post or email or in person to someone over the age of 16 years at that address. If no address is recorded in the strata roll then the notice needs to be delivered to an owner by:delivering it personallysending it to their postal or email addressplacing it in their letterbox, orleaving it on a part of their lot that is their residence, but not in a garage or storeroom.

Attendance

An owner or, the company nominee of the corporation, can attend strata committee meetings but they cannot speak unless the committee allows.

Chairing meetings

If the Chairperson is present they must attend all strata committee meetings. If they’re away, the strata committee must appoint another committee member to chair that meeting only.

When does a quorum exist for a meeting?

The quorum for a strata committee meeting exists when at least half of the appointed members are present.

Voting

Each strata committee member, other than any tenant member, has one vote. The Chairperson does not have a deciding vote under any circumstances. A decision on any motion at a strata committee meeting is made by a majority vote. A member of the strata committee is not entitled to vote if they are an unfinancial owner of a lot in the strata scheme when the notice of meeting was given and the amounts owed by them were not paid before the meeting or if the person who nominated them is unfinancial.

Addressing conflicts of interest

If a strata committee member has a monetary or other interest that could raise a conflict of interest in relation to matter to be considered by the committee, this interest must be disclosed at a meeting of the committee. After a member has made this disclosure they must not be present when the particular matter is discussed and they cannot vote on the matter unless the committee resolves otherwise. Details about the potential conflict of interest needs to be recorded.

Adjourning meetings

A strata committee meeting can be adjourned for any reason if a motion is passed at the meeting. Notice of when and where the adjourned meeting will be must be put on the noticeboard. If there is no noticeboard, written notice must be given to each owner at least one day before the meeting.

Voting in writing

Unlike general meetings, the strata committee can vote on a motion in writing even if a meeting was not held. For this to be a valid vote, the correct procedure for giving notice of the meeting must be followed and a copy of the motion to be voted on should be given to each committee member. The motion is approved if the majority of strata committee members, other than any tenant member, approve the passing of the motion in writing.

Voting by email, teleconference or other technologies

A strata committee can pass a resolution to adopt any of the following ways of voting:voting by teleconference, video-conferencing, email or other electronic means by a member while participating in a meeting from a remote location, orvoting by email or other technological means before the meeting at which the matter is to be determined by the committee. This can include accessing a voting website or even a Facebook page. This form of voting cannot be used for the election of officers of the strata committee.

What general meeting notices include

Notices for general meetings must include:a motion to confirm the minutes of the last general meetinga motion to elect the strata committee, if the meeting is for that purposea form of motion for each other motion to be considered at the meetingwhether a motion needs a special resolution or unanimous resolution to be passeda statement that a vote by an owner does not count if a priority vote is cast for the lot for the same mattera statement that an unfinancial owner, mortgagee or covenant charge cannot vote at a meeting on a motion (unless the motion needs a unanimous resolution). This is unless, before the meeting, they pay all contributions levied on them, and any other amounts recoverable from them, in relation to their lota statement that voting or other rights may be carried out by the owner on the strata roll, by a company nominee (if the owner on the strata roll is a corporation), or by an appointed proxyhow a quorum is determined at meetings, according to NSW strata lawsA statement about pre-meeting electronic voting. A pre-meeting electronic vote can be ‘cancelled out’ if the motion voted on is amended at the meeting. The notice for the next general meeting must:include any amended motion that involved a pre-meeting vote, andstate that it may be put to the upcoming meeting for a vote, under section 19 of the Strata Schemes Management Act 2015.

Objecting to motions on the agenda

Owners holding more than one-third of the total unit entitlements for the strata scheme can oppose any motion. Written notice of the objection must be given to the secretary before a decision on the motion is made. Any decision made by the strata committee on that matter will have no force or effect.

Minutes of meetings

A strata committee must keep full and accurate minutes of all meetings. The minutes must include details of all resolutions passed, including those considered without holding a meeting. Within 7 days after a meeting of a strata committee or the passing of a resolution by the strata committee, copies of the minutes must be given to each member of the committee. In a large strata scheme a copy of the minutes must be given to each owner who requests a copy within seven days. In other strata schemes a copy of the minutes must be given to each owner within 7 days.

The Tenants representative

In schemes where tenants make up more than 50 per cent of occupants, a tenants representative may have been nominated by the tenants to be their representative (member) on the strata committee. Whilst the tenant representative is free to speak at meetings, they cannot contribute to the numbers required for a quorum for the committee, and do not have a vote on motions put before the committee. The tenant representative can also be excluded from a meeting whilst the following matters are being discussed or determined:financial statements and auditor’s reportslevying of contributionsrecovery of unpaid contributionsa strata renewal proposal under Part 10 of the Strata Schemes Development Act 2015 or any related matter.For information on the appointment of a tenants representative, read the tenant participation page.

© State of New South Wales (NSW Fair Trading). For current information on meetings of the strata committee go to fairtrading.nsw.gov.au

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Strata Proxy Limit – How many proxies can I hold?

Proxy farming is now a thing of the past in NSW. A new strata proxy limit came into effect on 30 November 2016.

Changes to proxy voting now prevent an individual controlling owners’ decisions at general meetings of the owners corporation.

‘Proxy Farming’ is a practice whereby an individual or a group of individuals collect votes from fellow owners who can’t or won’t attend their building general meetings (Annual or Extraordinary General Meeting). This allows the individual or group of individuals to have the majority vote over those owners that do turn up for a meeting.

Prior to November 30th 2016, proxy rules would allow one person or a small group of people to control management of a building, sometimes at the expense of most owners.

You can read the ACT here: Strata Management Act 2016 (Schedule 1, 26-7)

Read more: Proxy Limit QLD, VIC, WA & SA

Strata Proxy Limit – NSW

Proxies – voting on someone’s behalf 

Sometimes, an owner may delegate their voting rights to another person, who becomes their proxy.

A proxy has no effect if the person who gave the proxy attends the meeting and votes in person.

How to appoint a proxy 

A valid proxy must be on the form prescribed by the Strata Schemes Management Regulations 2016.

An owner can make any person their proxy, including their tenant. Download a proxy from here. 

Proxies must be given to the Secretary before or at the meeting. For large schemes, the proxy must be given to the Secretary at least 24 hours before the scheduled meeting.

The form appointing the proxy must state:

the date on which the proxy is made
whether the proxy can vote on all matters, or only certain matters and what those matters are, and
how the proxy must vote on a motion for the appointment or continuation in office of a strata managing agent.

How long is a proxy valid? 

A proxy is valid from:

the date it is signed until the period specified in the proxy (if any), or
12 months from the date of signing or the end of the second AGM held after that date, whichever is the earlier.

Strata Proxy Limit

There are limits on the total number of proxies that can be held. The limits held by one person are:

one proxy vote only for schemes with 20 lots or less, or
a number that is equal to no more than 5% of the total number of lots if the scheme has more than 20 lots.

EXAMPLE:
Question: I’m an owner in a 151 lot apartment building. How many strata proxies can I hold?
Answer: You can hold 7 proxies and your own individual vote which totals eight votes.

Calculating the Strata Proxy Limit

Number of Lots

Maximum No of Proxies

1 – 20 Lots

1 proxy vote

21 – 39 Lots

1 proxy vote

40 – 59 Lots

up to 2 proxy votes

60 – 79 Lots

up to 3 proxy votes

80 – 99 Lots

up to 4 proxy votes

100 – 119 Lots

up to 5 proxy votes

120 – 139 Lots

up to 6 proxy votes

140 – 159 Lots

up to 7 proxy votes

160 – 179 Lots

up to 8 proxy votes

Proxy votes and material benefits 

A proxy cannot be used by a building manager, strata managing agent or an on‑site residential property manager to obtain a financial or material benefit for the proxy holder. Material benefits include:

extending their term of appointment
increasing their remuneration
deciding not to pursue, or to delay, legal proceedings involving the proxy holder.
A developer or a person connected with the developer cannot make use of a proxy voting appointment or power of attorney resulting from:
a condition in a contract for the sale of a strata lot, or
another related contract or arrangement.

Proxy appointments before 1 August 2008 

Valid proxy voting appointments or powers of attorney in place before 1 August 2008 remain in effect. However, that appointment or power is invalid if obtained through a sale contract, which has been renewed or extended on or after 1 August 2008.
You can download a proxy appointment from here.

© State of New South Wales (NSW Fair Trading). For current information on strata proxy limit go to fairtrading.gov.au

 

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To get a strata motion on the agenda of an annual general meeting, you should email or mail the statement of intent to the secretary of the committee at least six weeks before the meeting. 
If you can’t wait or don’t want to wait for the next annual general meeting, owners can request a general meeting, known as a qualified request, if it is made by one or more owners of a lot or lots in the strata scheme having a total unit entitlement of at least 25%.
(General meetings were formerly called extraordinary general meetings)
The agenda will include details of the motions for that meeting. Only motions provided in the agenda can be voted on. You cannot put forward new motions in a meeting other than to amend a strata motion or allow a tenant to speak at a meeting. They must be left until the next meeting.
You can submit a strata motion
Any owner, or any person entitled to vote at a general meeting of an owners corporation, may require a motion to be included in the agenda of the next general meeting of the owners corporation.
Written notice must be given to the secretary who must put the motion on the agenda for the next general meeting. The written notice must:
sets out the required motion, andstates the name of the person making the strata motion, andincludes an explanation of the strata motion of not more than 300 words in length.
The secretary must give effect to the requirement However, if the requirement is made after notice has been given of the meeting, the secretary must include the motion in the agenda for the next subsequent meeting.
An owner or a person may make a requirement even if the owner or person cannot vote because the owner is an unfinancial owner.
Reference: Schedule 1, section 4– Strata Schemes Management Act 2015
You might be interested in:Meetings of the strata committee – NSW Meetings of the owners corporation – NSW Notice of meeting of the Owners Corporation Rogue Strata Secretary Strata Proxy Limit – NSW Role of the Strata Chairperson The role of the strata committee Calling a Strata General Meeting Calling an extraordinary general meeting | NSW Running an effective strata meeting
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The chairperson at a strata general meeting can rule a motion out of order.
Motions out of order can be defined as a motion that is flawed in the sense that if passed it would be unlawful, discriminatory, in conflict with a by-law or the Act, be unenforceable or the like.
The general rule of thumb when drafting a strata motion is that a motion must be worded in such a way that owners can respond with a simple yes or no. The motion must be actionable and should be CLEAR so that a resolution can be implemented.
The chairperson of a meeting must rule a motion is out of order if;

the motion, if carried, would conflict with the legislation or the by-laws
the motion, if carried, would conflict with another motion already voted on at the meeting
the motion, if carried, would be unlawful or unenforceable for another reason (the great catch all)
the substance of the motion was not included on the agenda for the meeting
proper notice of the motion was not given

Making decisions about what should be deemed out of order requires knowledge of the relevant legislation. Topics will be controversial, contentious and important.  Voices may be raised, fists may thump tables, opinions will differ wildly, and passions may be inspired.  But as chair, you need to captain the ship like a 40-year veteran of the high seas. Decisions must be clear, concise, swift and informed. Read more on running an effective strata meeting here.
NSW

The chairperson’s decision at the meeting is absolute.
The chairperson should explain why the motion is unlawful or unenforceable, such as giving reference to the Act.

Reference:

General Meetings: Schedule 1, 19– Strata Schemes Management Act 2015
Committee Meetings: Schedule 2, 15– Strata Schemes Management Act 2015

QLD

The persons present and entitled to vote may reverse the chairperson’s ruling by passing an ordinary resolution.
The reasons given by the person chairing the meeting for ruling a motion out of order must be recorded in the minutes of the meeting.

Reference: Part 3, 81– Body Corporate & Community Management Regulation 2008 (Standard Module)
You might also be interested in:
Strata Motion – getting a motion on the agenda Meetings of the strata committee – NSW Meetings of the owners corporation – NSW Notice of meeting of the Owners Corporation Rogue Strata Secretary Strata Proxy Limit – NSW Role of the Strata Chairperson The role of the strata committee Calling a Strata General Meeting Calling an extraordinary general meeting | NSW
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Receiving notice of meetingsThe Secretary must give each person on the strata roll at least 7 days’ advance notice of a meeting, in writing. (Schedule 1, section 7)If the notice is sent by post, the Secretary must allow an additional 7 working days for postage. (Interpretation Act, section 76)Owners can choose to receive notices by email but the old ‘snail mail’ is still quite popular. The secretary, or the strata manager in larger schemes, must send the notice of meeting of the owners corporation to the address on the strata roll.The Strata Schemes Management Act is silent on the issue of ‘time for postage’ and it is the Interpretation Act that appears to prevail for ‘service by post’So, when calculating the notice period, 7 clear days’ notice is required:Exclude – the date of posting, the actual meeting date, weekends, public holidays and bank holidaysAllow 7 business days for deliveryThen 7 clear days’ noticeThe basic rule of thumb is to allow a 3-week notice period but as per the Easter example below you would need to allow 3.5 weeks.This table is a handy guide of how to calculate when a notice of meeting of the owners corporation must be sent for a meeting to occur on or after May 11 2019.

Day

Date

Event

Comment

Wednesday

17 April 2019

Meeting notices posted

Thursday

18 April 2019

1st working day after postage

Friday

19 April 2019

Good Friday

Public holiday, not a working day

Saturday

20 April 2019

Easter Saturday

Public holiday, not a working day

Sunday

21 April 2019

Easter Sunday

Public holiday, not a working day

Monday

22 April 2019

Easter Monday

Public holiday, not a working day

Tuesday

23 April 2019

2nd working day after postage​

Wednesday

24 April 2019

3rd working day after postage​

Thursday

25 April 2019

Anzac Day

Public holiday, not a working day

Friday

26 April 2019

4th working day after postage​

Saturday

27 April 2019

Weekends are not counted as ‘working days’

Sunday

28 April 2019

Weekends are not counted as ‘working days’

Monday

29 April 2019

5th working day after postage

Tuesday

30 April 2019

6th working day after postage​

Wednesday

1 May 2019

7th working day after postage​

Thursday

2 May 2019

1st day of 7 day notice

Friday

3 May 2019

2nd day of 7 day notice

Saturday

4 May 2019

Weekends are not counted as ‘working days’

Sunday

5 May 2019

Weekends are not counted as ‘working days’

Monday

6 May 2019

3rd day of 7 day notice

Tuesday

7 May 2019

4th day of 7 day notice

Wednesday

8 May 2019

5th day of 7 day notice

Thursday

9 May 2019

6th day of 7 day notice

Friday

10 May 2019

7th day of 7 day notice

Saturday

11 May 2019

The first day that the meeting could be scheduled

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The owners corporation must have one annual general meeting (AGM) each year. This meeting deals with matters that the owners need to consider including insurance and building defects. Meetings other than the AGM are called general meetings. This information explains how general meetings work and their requirements.

Key Roles

The Chairperson runs the meetings. They do not have a deciding vote. If the Chairperson is away, the people present can choose someone to chair that meeting only.The Secretary organises the meetings. They provide everyone with notice, prepare and distribute meeting agendas and minutes, and keep the strata roll up-to-date.

Raising a matter for a meeting

Only motions on the agenda for a meeting can be voted on.If you want something heard at the meeting, you can write to the Secretary with the motion. It must include:the motion you are putting forwardyour namean explanation of up to 300 words.A Chairperson can rule that a motion is out of order if:proper notice of the motion was not given, orit would be unlawful, in conflict with the by‑laws or not enforceable if passed. 

Amending motions

Motions on the agenda can be changed at the meeting, except for:the subject matter of the motionmotions determined by pre-meeting electronic voting.

What if pre-meeting voting has happened?

If the motion is changed at the meeting, and then passed, the minutes should document this. These minutes must include a note. It must state that:the Secretary can call another meeting to again consider the motion. Owners entitled to vote can write and ask for this meeting. There must be at least a quarter of the total unit entitlements at the meeting.

Receiving notice of meetings

The Secretary must give each person on the strata roll at least 7 days’ advance notice of a meeting, in writing. The notice can be by post, email or fax. If the notice is sent by post, the Secretary must allow an additional 7 working days for postage.Use this handy table to calculate the notice period of meetings of the owners corporation. Click here

Calling a General Meeting

General meetings, other than AGMs, should be held when needed.There are two ways to arrange for a general meeting:the Secretary or strata committee can call one at any time, orif owners entitled to vote, who together hold at least a quarter of the total unit entitlements, ask for a meeting in writing.The secretary or a strata committee (formerly executive committee) of an owners corporation may convene a strata general meeting (that is not an annual general meeting) of the owners corporation at any time.If owners request a general meeting, known as a qualified request, the secretary of the owners corporation, or another officer if the secretary is absent, must convene a general meeting not later than 14 days after, receiving a qualified request.Can you read more on calling a general meeting in New South Wales here Strata Schemes Management Act 2015 – SECT 19 & Strata Schemes Management ACT 2015 – Schedule 1

Voting

Each owner has one vote for each lot they own. The different types of votes are:general resolution: a one lot/one vote format, which requires a majority passing vote (over 50 percent of votes).special resolution: a vote by unit entitlement, with no more than 25 percent of the votes cast against it.unanimous resolution: where every vote has to be the same.Most decisions can be made by a simple majority vote (more than 50 percent).A poll can be called for regardless of the vote. In a poll vote, votes are worked out by counting the unit entitlements.Voting from a remote locationVoting does not have to be done in person. An owners corporation can vote on matters by:teleconference, video-conferencing, email or other electronic devicespre-meeting electronic voting. This is a vote by email or other electronic means before the meeting. Both the owners corporation and strata committee can use this method of voting. An election cannot involve a pre-meeting electronic vote.Who can vote?Each owner, and each person entitled to a priority vote, can vote at general meetings. The owner or person must be shown on the strata roll. Each person must provide the owners corporation with written notice of their right to vote at general meetings. Other people with voting rights include:co-ownersfirst mortgageesowners of successive estates in a lot, where owners hold lots as trustees.If someone has outstanding strata fees still owing they are considered unfinancial. They cannot vote unless a unanimous resolution is needed. 

Proxies – voting on someone’s behalf

An owner can delegate their voting rights to another person, who becomes their proxy. A proxy has no effect if the person who gave the proxy attends the meeting and votes in person.How to appoint a proxyAn owner can make any person their proxy, including their tenant. Proxies must be given to the Secretary before or at the meeting. For large schemes, the proxy must be given to the Secretary at least 24 hours before the scheduled meeting. The form appointing the proxy must state:the date on which the proxy is madewhether the proxy can vote on all matters, or only certain matters and what those matters are, andhow the proxy must vote on a motion for the appointment or continuation in office of a strata managing agent.Download the proxy form on the forms page or call 13 32 20 to ask for a copy.How long is a proxy valid?A proxy is valid from:the date it is signed until the period specified in the proxy (if any), or12 months from the date of signing or the end of the second AGM held after that date.Proxy limitsThere are limits on the total number of proxies. The limits held by one person are:one proxy vote only for schemes with 20 lots or less, orin schemes with more than 20 lots, a number that is equal to no more than 5 percent of the total number of lots.Proxy votes and material benefitsA proxy cannot be used by a building manager, strata managing agent or an on‑site residential property manager for a financial or material benefit. Material benefits include:extending their term of appointmentincreasing their remunerationdeciding not to pursue, or to delay, legal proceedings involving the proxy holder.A developer or a person connected with the developer cannot make use of a proxy voting appointment or power of attorney resulting from:a condition in a contract for the sale of a strata lot, oranother related contract or arrangement.Proxy appointments before 1 August 2008Proxy voting appointments or powers of attorney in place before 1 August 2008 remain in effect.If that appointed was from a sale contract that has since been renewed or extended after 1 August 2008, it is not valid. 

Agenda for an AGM

The agenda for an AGM must include:a motion to confirm the minutes of the last general meetinga copy of the minutes from the last general meeting (for owners not previously given a copy)a motion to consider appointing an auditora copy of the last statement of key financial information and any auditor’s report (if any)a motion for accepting the financial statementsthe details of each insurance policy held by the owners corporationa motion to consider insurance policies that have not already been taken outan item to consider the annual fire safety statement (if one is required for the building) under the Environmental Planning and Assessment Act 1979 and arrangements for obtaining the next annual fire safety statementsan item to consider building defects and rectification. This item is needed until statutory warranties end (those that apply under the Home Building Act 1989) for buildings of the strata schemeany other motion to be considered at the meetingany motions needing a special or unanimous resolutiona motion to establish matters the owners corporation will decide on instead of the strata committee, for the year aheada motion to elect the strata committeea motion to decide the number of strata committee membersan item to prepare or review a 10‑year capital works fund plan.

What general meeting notices include

Notices for general meetings must include:a motion to confirm the minutes of the last general meetinga motion to elect the strata committee, if the meeting is for that purposea form of motion for each other motion to be considered at the meetingwhether a motion needs a special resolution or unanimous resolution to be passeda statement that a vote by an owner does not count if a priority vote is cast for the lot for the same mattera statement that an unfinancial owner, mortgagee or covenant charge cannot vote at a meeting on a motion (unless the motion needs a unanimous resolution). This is unless, before the meeting, they pay all contributions levied on them, and any other amounts recoverable from them, in relation to their lota statement that voting or other rights may be carried out by the owner on the strata roll, by a company nominee (if the owner on the strata roll is a corporation), or by an appointed proxyhow a quorum is determined at meetings, according to NSW strata lawsA statement about pre-meeting electronic voting. A pre-meeting electronic vote can be ‘cancelled out’ if the motion voted on is amended at the meeting. The notice for the next general meeting must:include any amended motion that involved a pre-meeting vote, andstate that it may be put to the upcoming meeting for a vote, under section 19 of the Strata Schemes Management Act 2015.

Quorum

There must be a quorum at a general meeting before any motion, including electing a strata committee, can be voted on. A quorum is:no less than one‑quarter of the people entitled to vote, orowners entitled to vote holding one‑quarter or more of the total unit entitlements.If there is no quorum within 30 minutes of the scheduled start time, the Chairperson must either:adjourn the meeting for at least 7 days, ordeclare a quorum and go ahead with the meeting. The quorum is then the owners and proxies present who are entitled to vote.

Quorum for adjourned meetings

If there is no quorum within 30 minutes of the start time for the rescheduled meeting, the people entitled to vote, including proxies, can make up a quorum. 

Adjourning meetings

A general meeting can be delayed or rescheduled for any reason. A motion must be passed and the person chairing should set the time and place for the next meeting. A written notice should be sent to each owner at least one day before the meeting.

First AGM

The original owner must hold the first AGM within two months of the end of the initial period. There can be a fine of up to $1,100 if this is not done. Notice of the AGM must be given to each owner and each first mortgagee and covenant chargee shown on the strata roll. This must be done at least 14 days before the meeting.

© State of New South Wales (NSW Fair Trading). For current information on meetings of the owners corporation go to fairtrading.nsw.gov.au

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Simon, from NSW, asks can the strata secretary convene a meeting without the knowledge of the chairperson and treasurer

I have a situation where a strata manager has proposed an EGM on the basis that one of the committee members is at odds with the other two.

On the committee, the Chairperson and Treasurer responded to the proposal stating there was no need for an EGM as any relevant issues were all covered by existing By-laws. However, it would appear the Secretary (who is the person with grievances regarding having to abide by said by-laws) seems to have worked with the strata manager to ensure the EGM was organised.

As a result, the EGM was announced much to the surprise of the Chairperson and Treasurer and other owners. There are 6 units in the strata.

My question is, does the Secretary have the right to enforce the EGM to proceed? Essentially the Secretary is acting in self-interests only on matters that are clear in existing bylaws that they simply feel should be changed to meet their personal preferences (it’s a new strata).

Hi Simon,

Thank you for your strata question.

Unfortunately, rogue strata committee members are common place. Even strata schemes with a committee code of conduct run into problems. 

As you are probably aware, the primary duty of all Owners Corporations, and its strata committee, is to control, administer and manage the common property for the benefit of all owners, tenants and occupants at the scheme. 

Section 37 of the Strata Schemes Management Act 2015 states; It is the duty of each member of a strata committee of an owners corporation to carry out his or her functions for the benefit, so far as practicable, of the owners corporation and with due care and diligence.

The Act is pretty clear that strata committee members should be free of personal agendas, agendas that are not for the benefit of all owners. That said, does this help your situation? Unfortunately, not. 

Read Related: Role of the Strata Secretary

General meetings (formally called extraordinary general meetings in NSW) should be held when needed. 

There are two ways to arrange/call/convene a strata general meeting of owners (Section 19): 

the Secretary or a strata committee can call one at any time, or;if owners entitled to vote, who together hold at least a quarter of the total unit entitlements, ask for a meeting in writing. This is known as a ‘qualified request’

This places significant power in the hands of the rogue strata secretary. They can convene a general meeting and control the agenda without consultation with the strata committee or other owners. It would be preferable if Section 19 stated that the majority of the strata committee could call a general meeting and not the secretary on their own.

Read Related: Calling a Strata General Meeting

Where to from here?

The general meeting has been called, sure it is inconvenient, but it is legal. It sounds like you have the numbers to vote down any motions that are of concern to owners. The Act does however require that the owners corporation act in a reasonable way. 

As a long-term chairperson in a Sydney scheme, I’ve had to learn to let some annoying pointless motions slide for the greater good of the scheme and general ongoing harmony. 

Best of luck and please get back to us if you have further questions. 

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What is strata title?

Strata title is a form of ownership devised for multi-level apartment blocks and horizontal subdivisions. It facilitates individual ownership of part of the property (called a ‘lot’) whilst sharing ownership of common areas.

Strata title is actually an Australian innovation in property law that has been copied around the globe.

The concept came into being nearly 60 years ago, to replace company title, and there are now more than 270,000 such schemes encompassing more than two million individual lots across Australia. In Sydney, strata now accounts for more than half of all residential sales and leases because of its popularity with investors.

Read Related: What is Company Title?

The word strata, the plural of stratum, can be defined as one of a number of portions or divisions likened to layers or levels.

When you buy into a strata plan you buy a “lot” – generally an apartment, unit or townhouse which may include the main unit area and possibly a balcony, garage or even storage area. Other parts of the property are known as common property. These areas could include car parks, entrances and lobbies, external areas such as gardens and lifts, and any recreational facilities such as pools and gyms.

The Strata Community Association define Strata Title as ‘allows individual ownership of part of a property (called a lot’ and generally an apartment or townhouse), combined with shared ownership in the remainder (called ‘Common Property’ e.g. foyers, driveways, gardens) through a legal entity called the owners corporation — or body corporate, strata company or community association, depending on your state or territory of residence and the type of scheme.’

Residential and commercial properties can both exist under strata plans, along with mixed use properties, retirement communities and caravan parks. Strata title can exist in properties with just two duplexes all the way to large tower blocks with hundreds of owners.

Read Related: History of Strata Title

Strata Title Pros & Cons

STRATA TITLE PROS

Strata Title is widely considered a fair, transparent and equitable system.
Strata properties (e.g. unit, apartment of townhouse) are often a great starting point for people looking to make their first home purchase, as the cost is generally much cheaper relative to buying land with a free-standing house.
Constant demand for strata properties could push up their price in the future and can make for an easier sale in due course.
Owners get to vote on bigger decisions.
Typically strata title adds value to a property when compared to company title.
Maintenance of the property is organised by the strata corporation (owners corporation or body corporate) and mostly paid for via strata levies/fees, which are paid every three months.
Maintenance (strata levies) can be budgeted with more certainty, and you’ll have the peace of mind of knowing that there is money available for repairs before they come up.
Strata Title is a great way to discover what upkeep properties need before buying a stand-alone house.
Depending on the suburb, bank lending policies are favourable for strata title.
The rules that limit what individual owners can and can’t do are designed to preserve the value and comfort for all owners, which, for example, lessens the risk of troublesome neighbours.
If you’re buying an investment property, strata fees and associated costs are tax deductible. The various restrictions on what can and can’t be done with the property can also be an advantage if you’re renting to tenants.

STRATA TITLE CONS

Owners are required to pay levies, adhere to bylaws and vote at meetings.
Strata fees, levies, are subject to change and are likely to increase as buildings age.
Strata levies can be expensive, particularly in larger blocks with lifts, gyms and pools.
As an owner in a strata title building you also have a share of the liability for anything that goes wrong. However, strata insurance is compulsory.
It can be very noisy to live in a strata title apartment since you’ll might have neighbours living above, below and besides you.
Your unit/apartment could lose significant value, particularly in large blocks, if your neighbour has to sell quickly as a result of divorce or other financial difficulty.
To get the most out of your purchase, stay engaged with the owners corporation and know what’s going on.
The rules (by-laws) which govern what owners can and can’t do can serve to your advantage, but are also restrictive compared to Torrens title. For example, it is not uncommon for a owners to require permission to keep pets on the property, or to make external changes to your lot.
Prospective purchasers are entitled to see the strata records and know the financial state of the building. This is only an issue if your buildings isn’t well run or doesn’t have satisfactory funds in a capital works fund.

Before buying property it’s important to understand what sort of title you’re purchasing.

Owning your own castle, on its own land, has many wonderful freedoms but all maintenance and upkeep falls on your shoulders. Conversely, a strata title property is maintained, external to your lot, by an owners corporation where you pay quarterly levies. Lots to consider before signing on the dotted line.

Strata title, an innovation in property law, has enabled individuals or businesses to own a section of a property, or a ‘Lot’ and combined this with the shared ownership of Common Property.

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Strata title was first introduced to better cope with the legal ownership of apartment blocks.

Historically, communal ownership of apartments, units or flats usually fell under company title. This was the only adequate method of dividing ownership. A company would own the building and a prospective buyer would purchase shares in the company that then entitled them to inhabit a specified apartment.

Company title do not confer separate ownership of a lot and financial institutions saw this as a risk, weren’t then keen on lending money to such purchasers, and purchasers were typically charged higher interest rates as a consequence.

This funding impediment made it difficult for real estate developers to build and market large residential buildings. So around 1960 Lend Lease made representations to the then New South Wales Government for legislation that facilitated flat ownership. In support of these representations they engaged a Sydney barrister, Mr Rae Else-Mitchell (later Mr Justice Else-Mitchell of the New South Wales Supreme Court), to draft a new titles law.

The goal was to devise a solution to make it easier to borrow money for these types of residential units. The answer was Strata Title, a world first Aussie phenomenon.

Read Related: What is Company Title?

The very first version of strata title was the Conveyancing (Strata Titles) Act 1961 which came into force on July 1 1961. A few weeks later the first Strata Plan in the world was registered in the suburb of Burwood, a block of 18 units named Lindsay Gardens. It would be the beginning of strata living and has led to a thriving strata community!

The most significant feature of the new legislation allowed each lot or apartment to have its own title deed. It can be bought, sold, rented out or mortgaged without any consent being needed – hence giving the banks the much needed security for the loan.

Strata Plan No 1 – “Lindsay Gardens” 189 Liverpool Road Burwood

Click on image to open interactive map

living with more than 270,000 strata schemes in Australia that cover in excess of two million individual lots.

The growth and increasing popularity of strata is captured in this interactive map of strata schemes in Sydney from 1961 to 2015.

Strata title, an innovation in property law, has enabled individuals or businesses to own a section of a property, or a ‘Lot’ and combined this with the shared ownership of Common Property.

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The owners corporation is responsible for making sure all necessary insurance policies are in place and up-to-date. Policies must be with an approved insurer authorised by the Australian Prudential Regulation Authority.

IMPORTANT!
Strata managing agents delegated to arrange insurance on behalf of an owners corporation must obtain three quotes, unless it is not reasonable to do so. This helps you know if the policy is value for money. Check exactly what cover you will be provided under the policy and any limitations of the policy.

Types of insurance needed include building insurance, public liability insurance, workers compensation insurance and voluntary workers insurance.

BUILDING INSURANCE

The building must be insured under a damage policy. Schemes with just two lots may be exempt (See: ‘Requirements for large schemes and two lot schemes’ in this guide). The policy must cover the building if damaged or destroyed, and pay for:

replacing (where destroyed) or reinstating (where damaged but not destroyed) the building back to the same condition it was in when new
removing debris
the services of architects and others needed to repair the building.

The building includes owners’ fixtures and fittings. Fixtures and fittings are items like sinks, shower screens, cupboards, internal doors, stoves, common air conditioning systems and intercom systems.

PUBLIC LIABILITY

This insurance covers damage to property, death or injury for which the owners corporation could become responsible. The minimum amount of cover is $20 million.

WORKERS COMPENSATION INSURANCE

The owners corporation must have workers compensation insurance, with an approved insurer, where it is required under the Workers Compensation Act 1987. Further information is available from SafeWork NSW, safework.nsw.gov.au or call 13 10 50.

VOLUNTARY WORKERS INSURANCE

This is needed to provide cover for any damage that the owners corporation may become liable for when a person does voluntary work for the owners corporation in the building or on the common property. A voluntary worker is any person who does work without any fee or reward, or without expecting any fee or reward.

WHO INSURES THE CONTENTS OF AN OWNER’S PROPERTY?
It is highly recommended that residents, whether an owner or a tenant, take out adequate insurance on the contents of their property. Even where damage is caused by a common property issue, personal items such as furniture, electrical appliances, curtains and carpets may not be covered. Landlords should also consider specific landlord insurance to suit their circumstances.

© State of New South Wales (NSW Fair Trading). For current information go to fairtrading.gov.au

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Rebecca’s question relates to noise transfer between apartments

I am an owner occupier in a strata building in NSW with a big problem. NOISE!
There is no acoustic sound proofing in the building so I can basically hear everything. Next door blasting their TV on the common wall. Doors slamming, people arguing, parties etc. If I complain I’m the worst person in the world!
The main problem is that the owner directly upstairs has replaced the carpet with floor boards without an application to the owners corporation.
The tenants upstairs constantly drop things and stomp day and night on my roof. One of the tenants is in air conditioning. It’s written on his van and spare parts are stacked in his car space. I suspect from the hammering, sawing and other mechanical noises he is work shopping/completing repairs in the unit. Noise transfer between apartments, my life is a misery!
The strata manager and committee refuse to help. Even after raising the issue at a recent meeting and sending several emails with sound files / evidence provided.
I’m at my wits end. Any advice or assistance would be greatly appreciated.

Hi Rebecca,

Noise transfer between apartments is a huge problem in strata complexes. The issue has become worse as more and more apartment owners have a preference for hard floor coverings.

The Building Code of Australia (BCA) sets a standard for impact noise transmission not greater than (LnT,w < 62 dB). This is a measure of the noise produced by the hard floor surface. There is however much debate on whether this < 62 dB rate is low enough to be really effective. The reality is that in most cases it is unacceptable to occupants and can result in the need for costly reparation works. A number of strata schemes have taken the initiative and introduced by-laws with sub 50 dB rates. A BCA complying floor can and will transfer noise and this could mean hearing the footsteps above or worst. A complying floor doesn’t absolve an owner of their responsibility to not interfere with the peaceful enjoyment of a lot by another owner or occupier. Now to your issue, noise transfer between apartments. The owners corporation has an obligation to reasonably enforce by-laws. Your scheme will have a by-law related to noise. It is probably similar to the NSW Model by-law: An owner or occupier of a lot, or any invitee of an owner or occupier of a lot, must not create any noise on a lot or the common property likely to interfere with the peaceful enjoyment of the owner or occupier of another lot or of any person lawfully using common property. In order for the owners corporation to act or to enforce a by-law they require evidence of a breach. This would normally require compelling evidence to satisfy the owners corporation that any action could not be challenged. The first step, as the complainant, is to gather evidence. This might include: Make a log or diary – include the day, time and a measure of the level and type of noise. Record the excessive noise on a smart phone. Consider the expense of an acoustic consultant to measure noise transference between the lots. (I note that you have already provided evidence) Read related: The Pros and Cons of Apartment Living Step 2: Ask some questions of the strata manager: Does the scheme have a by-law in relation to the installation of hard flooring? Was the installation for the hard flooring in the above apartment approved by the owners corporation? Does the scheme have a minimum acoustic underlay requirement? If so, is there evidence that the minimum acoustic underlay was installed in the above apartment? Once you have a response and gathered some evidence you should consider mediation with the owners corporation. Any good strata manager will offer this before an issue gets out of hand. Mediation would normally involve a meeting with a member/s of the committee, the alleged offending lot and yourself. Both parties will have the opportunity to state their case and hopefully the committee can broker a peace. Simple things like rugs and hall runners can be quite effective. Should a resolution not be achieved, the next course is to lodge an application with the NSW Civil and Administrative Tribunal (NCAT) The process is quite straight forward. You will present evidence in point form and pay an application fee of $101 The post Noise transfer between apartments. Please Help! appeared first on Strataville.

How many quotes are required by the owners corporation?

Ask any building manager, getting several quotes for Owners Corporation expenditure is a hard task, particularly when the item or job doesn’t have a large budgetary impact.

How many quotes are required by the Owners Corporation is a common question. The answer is not made easy after reviewing the Act.

What does the Act say?

An owners corporation, of a large strata scheme, must obtain at least 2 quotations in relation to proposed expenditure in respect of any one item if the proposed expenditure exceeds the prescribed amount (Strata Management Scheme Act 2015 Section 102)

Reading the Act alone when it comes to managing quotations and expenditures, would strike fear into any strata committee.  The key wording here is the ‘prescribed amount’; however, you need to search a little further to find out what the ‘prescribed amount’ actually means.

It is totally impractical for the Owners Corporation to seek several quotations for work or an item where the expenditure might only be a few thousand dollars. Therefore, the Strata Schemes Management Regulation 2016 Section 25 provides a prescribed amount, that being a proposed expenditure of $30,000.

Read related: Requirements of large strata schemes

How many quotes are required by the Owners Corporation?

Under the Act it means that at least two quotes are required by the Owners Corporation for amounts (on a single item) of $30,000 or more.

Is there a limit on spending by large schemes?

An Owners Corporation must not spend (on a single item) an amount greater than the amount specified in estimates provided at an annual general meeting. (Section 102)

Once again this is not practical in reality as quotations might need to be varied and it can restrict the strata committees’ ability to manage effectively.

The Act deals with these circumstances in two ways.

A large strata scheme can spend up to 10 percent above the budgeted amount for any item
The Owners Corporation may by special resolution passed at a general meeting remove the 10% limitation on any single item

The special resolution may look something like this;

That the Owners Corporation resolves in accordance with section 102(3) of the Act to remove the limitation on spending imposed by section 102(2) of the Act, provided that the total expenditure for the current financial year shall not exceed the total budgeted expenditure for both the Administrative and Capital Works Funds by more than 10%.

Removing the limitation allows your strata committee to govern effectively and not get bogged down when a single item of expenditure suffers a blowout.

What happens when emergency expenditure Is required?

The Act does not restrict expenditure for emergency purposes. This might include (but not limited to):

burst or blocked water or sewerage pipes,
serious damage caused by fire or storm or any other natural disaster,
unexpected electrical or security system failure,
glass breakages that affect the security of any building in the strata scheme or could result in damage to the inside of any such building

(Strata quotes requirements – The same rules apply for how many quotes are required by strata or strata committees)

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What is the Emergency Services Levy (ESL) and does the ESL mean for strata insurance premiums?

The emergency services levy (ESL), sometimes referred to as the Fire Services Levy or FSL, is a levy on general insurers to fund emergency services organisations in New South Wales.

Most insurers reclaim this amount from their policyholders by charging an ESL with your insurance policy premium. The ESL paid with any premium on a policy is used to fund emergency services in NSW in the financial year in which the policy commences.

This type of insurance levy has been phased out in all Australian states and territories except for New South Wales and Tasmania.

Emergency Services Levy (ESL) vs Fire and Emergency Services Levy (FESL)

The New South Wales Government had planned to replace the emergency services levy with a new property-based levy from 1 July 2017.

The new Fire and Emergency Services Levy (FESL) would have been collected with council rates, instead of from insurance companies.

However, on 30 May 2017, the NSW Government announced its intention to delay changes to how emergency services are funded in NSW. The Government identified that some businesses were unfairly impacted by the new FESL, so the changes were delayed indefinitely.

Why has the owners corporation insurance premium for ESL increased?

In preparation for the intended FESL reform, many insurers varied the rates of ESL charged during 2016-17, in order to reclaim sufficient funds to meet their contribution obligation, whilst reducing the ESL rate to zero by 1 July 2017.

Following the reform deferral, insurers had to re-introduce the levy with little notice, which led to inconsistent levy’s being charged and varied transition periods between insurers. For some owners corporations this meant there was no charge or a reduced charge for the ESL on their insurance premiums during this period.

The re-established emergency services levy has meant an increase to some owners corporation insurance premiums.

Read related: Emergency Services Levy Explained

Why has the owners corporation insurance premiums risen so much year on year

Following a 5-year cycle of record low premiums and massive reductions in insurers total investment income, the insurance industry is beginning to experience a hardening market. Insurers are now implementing strategies to recoup losses. One of which is the increased cost of premiums.

The insurance industry earns revenue from the sale of insurance policies and the investment of premium reserves in bonds, stocks and other assets. In the five years from 2012 to 2017, insurers total investment income reduced from $5.2 billion to $2.4 billion. Investment income was down 18.1% from June 2016 to June 2017.

Source: Australian Prudential Regulation Authority (APRA)

Who decides what ESL I should pay?

Each financial year the NSW Government requires insurance companies to contribute 73.7% of the funding for the fire and emergency services budget. Local councils contribute 11.7% and the NSW Government 14.6%.

Insurance companies generally pass on the costs of their contribution to their customers by charging an ESL on building, contents, motor vehicle and certain other policies. The contribution, by each insurance company, is set by the Government and adjusted according to the insurer’s market share within the year.

Each insurer sets an ESL rate, on your owners corporation insurance premium, it considers will reclaim an amount similar to the contribution it is required to pay to the Government. This means that different insurers may charge different ESL amounts for similar policies.

Read related: False fire alarm strata by-law

Therefore, there is no fixed ESL amount that an insurance company is required to charge each policyholder. Some insurers publish their ESL rate or percentage and you can expect to pay at least 32% on top of the base owners corporation insurance premium.

If you would like further information on the Emergency Services Levy you can visit the ESL Monitor website.

The information relates to NSW only. Some of the above information is subject to copyright.

© State of New South Wales (Emergency Services Levy Insurance Monitor), 2018.

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What is the charge for false fire alarms in strata?

False fire alarm call-out fees for strata can cause a significant impact on owners corporation expenditure. The charge for false fire alarms in strata are charged at $1,600 per call-out in NSW.

Is it essential that a strata building’s automatic fire alarm system (AFAS) is well maintained as a poorly maintained system causing a weekly call-out would cost the owners corporation $81,600 a year. (The first call-out in a 60-day period is free of charge). Poorly maintained systems are the primary cause of false alarms.

Automatic fire alarm systems

Automatic fire alarm systems often play a major role in loss prevention during a fire emergency. These systems can be just as complicated as they are important.

The basic purpose of an automatic fire alarm system is to detect a fire in its early stages, notify the building occupants that there is a fire emergency and report the emergency to Fire & Rescue NSW (FRNSW). These alarm systems are common in large strata schemes.

It’s a requirement in NSW that an Automatic Fire Alarm system is remotely monitored by an automatic fire alarm service provider.

Call out Statistics*

48,000 call outs to automatic fire alarms each year
97% of automatic fire alarms are false alarms
38% of all Fire & Rescue responses are to automatic fire alarms

(*2015 figures – the latest available)

Unwanted alarms create complacency towards genuine alarms that can result in serious injury or loss of life. They also divert fire and rescue resources that would otherwise be available for genuine emergencies.

Read related: False fire alarm strata by-law

What is the charge for false fire alarms in strata?

The charge for false fire alarms in strata is $1,600 per call-out.

Historical false fire alarm charges

$250 from 1 September 1995
$500 from 1 July 2009
$750 from 1 August 2011
$1,250 from 1 July 2013
$1,600 from 1 December 2016 (current)

The NSW Fire Brigades ACT 1989, Sec 42 allows FRNSW to charge for attending false alarm call-outs to monitored automatic fire alarm systems. This charge is intended to motivate building owners and managers to be continually pro-active in managing their systems and to ensure they are properly maintained.

Are all strata false fire alarms chargeable?

Not all false fire alarms are chargeable. In certain circumstances false alarms will not be charged. For example;

the cause was beyond the control of the owner, for example as a result of storms or natural disasters.
there is only one false alarm within a 60-day period (subsequent false alarms in the 60-day period will be charged).
there are repeat false alarms in a 24-hour period (only the first alarm will be charged).

Can I apply to waive the strata false fire alarm charge?

FRNSW can, in certain circumstances, waive all or part of an alarm charge. A building owner or manager can seek a waiver for the false alarm charge through their Automatic Fire Alarm Service provider.

FRNSW officers attending incidents do not have authority to waive unwanted alarm charges. A waiver or reduction of unwanted alarm charges is at the discretion of the Commissioner.

Read related: Emergency Services Levy Explained

The main causes of false fire alarms in strata

poor ventilation
burnt toast
cooking fumes
steam
aerosol sprays
cigarettes and candles
tradespeople and cleaners
dust
dirty smoke detectors
damage to ‘break glass alarms’ or ‘manual call points’
system malfunction
poorly-maintained systems
insufficient maintenance frequency in harsh environments
insect infestation.

How to avoid false fire alarms in strata

Be aware of where all alarm detectors are in your home and ensure all reasonable measures are taken to avoid false alarm activation.
Some smoke detectors are extremely sensitive and steam from showers, smoke from burning food, even sprays from aerosol cans such as deodorant and hair-spray can set them off.
Ventilate steam and fumes away from smoke detectors, particularly from bathrooms and kitchens.
Ensure any fans, vents, and if possible windows, are open before cooking or showering.
Do not leave cooking unattended.
Do not walk away from a toaster that is in use.
Do not smoke near smoke detectors.
Do not use aerosol sprays near smoke detectors.

It is the role of strata building management to effectively maintain the automatic fire alarm system. Building management should also ensure a well-regulated workplace for contractors. They should manage work activities that produce dust, heat, smoke etc. to ensure a detector is not activated. Steps should be taken for the appropriate isolation of fire detectors while maintenance work is undertaken.

Need further information on the charge for false fire alarms in strata?

Full details of the information above can be found on the Fire & Rescue website.

Fire & Rescue NSW have also produced a brochure on ways to reduce unwanted fire alarm instances. You can download a here

Parts of this article may be subject to copyright – © Copyright Fire & Rescue NSW

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False fire alarms in strata can be annoying and actually quite costly for the owners corporation. In NSW, each call-out for a false fire alarm is charged at $1,600.

As soon as a fire sensor is activated it triggers the automatic fire alarm system that alerts Fire and Rescue NSW. If a fire alarm is later deemed to be a false alarm, Fire and Rescue would normally charge the owners corporate a false fire alarm fee.

Rolling out onto the pavement, in your PJs, after a false fire alarm doesn’t need to happen too many times before the strata committee would act to change the behaviour of some residents.

If residents engage in a reckless or negligent manner, the owners corporation should consider enacting a false fire alarm strata by-law.

Putting the financial burden on residents for reckless behaviour might be the right answer for your building.

Read related: What is the charge for false fire alarms in strata

What can the owners corporation do?

Many owners corporations and their strata committees are not aware that the owners corporation has the power to make a by-law under Section 136, of the Strata Management Act 2015. Section 136 provides for the making of by-laws in relation to the management, administration, control, use or enjoyment of the lots or the common property and lots of a strata scheme.

A false fire alarm strata by-law would:

Impose an obligation on the owners and occupiers of the lots in the building not to inappropriately activate a fire sensor or trigger a false fire alarm.
Impose an obligation on the owners of the lots to take reasonable steps to ensure that the occupiers of their lots do not inappropriately activate the fire sensors or trigger false fire alarms in the lots.
Permit the owners corporation to recover from any owner or occupier of a lot who breaches the by-law any loss it suffers because of that breach including the Fire and Rescue NSW false fire alarm fee.

A false fire alarm strata by-law could read something like this:

An Owner is responsible for the costs associated with damage caused by or attendance by the Fire Brigade, the setting off of a smoke alarm or an alert from any fire protection system on Scheme Land

Read related: Emergency Services Levy Explained

The main causes of false fire alarms in strata

poor ventilation
burnt toast
cooking fumes
steam
aerosol sprays
cigarettes and candles
tradespeople and cleaners
dust
dirty smoke detectors
damage to ‘break glass alarms’ or ‘manual call points’
system malfunction
poorly-maintained systems
insufficient maintenance frequency in harsh environments
insect infestation.

How to avoid false fire alarms in strata

Be aware of where all alarm detectors are in your home and ensure all reasonable measures are taken to avoid false alarm activation.
Some smoke detectors are extremely sensitive and steam from showers, smoke from burning food, even sprays from aerosol cans such as deodorant and hair-spray can set them off.
Ventilate steam and fumes away from smoke detectors, particularly from bathrooms and kitchens.
Ensure any fans, vents, and if possible windows, are open before cooking or showering.
Do not leave cooking unattended.
Do not walk away from a toaster that is in use.
Do not smoke near smoke detectors.
Do not use aerosol sprays near smoke detectors.

Fire & Rescue NSW estimate that 97% of automatic fire alarm call-outs are false alarms. This equates to over 45,000 false fire alarm call outs each year.

The owners corporation should consider legal advice to enact a false fire alarm strata by-law.

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Most Australians of a certain age probably associate the word ‘apartment’ with an American accent.  Think: quirky neighbour Kramer bursting into Jerry’s New York ‘apartment’, or Jack Lemmon’s lonely character in the 1960 hit ‘Apartment’ letting his work buddies host their sordid affairs at his place on the Upper West Side.  But apartments are no longer just about New York.  With populations growing, incomes being squeezed and housing affordability at all time lows, the pros cons of apartment living are now being weighed up all over Australia.

Pros Cons of Apartment Living

CONS

Even so, apartment life was never really a part of the great Australian dream of home ownership, featuring a sprinkler on the front lawn and a barbeque out the back.  But the big question now is whether the benefits are outweighed by the following disadvantages of living in an apartment:

Con #1: The squeeze

Living in an apartment generally means settling for less space, smaller rooms and a balcony or view rather than a proper garden or veggie patch – although for many this is a ‘pro’ because it all just means an apartment is much easier to look after.

Con #2: The noise & the nose

And unlike a house on a nice big block of land, apartment living could be noisier and (depending on your neighbours) nosier.  ‘Apartment’ comes from the French word ‘appartement‘, which basically means a smaller space within a larger one, but the positive side of being more squeezed together means it’s easier to make friends and organise parties.

Con # 3: The rules & costs

It’s not just space and privacy that you give up with apartment living – you also lose some autonomy.  Decisions about how life should be within your building are often also up to a collective ‘body corporate’, which means less freedom to do exactly what you like including renovations.  Strata fees can also add up over a year, but you do get plenty of value for that money (read on).

THE PROS

However, for many people considering that ‘apartment or house’ conundrum, the plethora of pros of strata living can most certainly outweigh the cons.  In fact, units and apartments now make up almost half of all Australian dwellings, and depending on your lifestyle and aspirations, it could be a perfect choice for you.

Pro #1: The convenience

Buying or living in a house is not necessarily the ‘Australian dream’ any more, with many people actually preferring the convenience of a self-contained unit rather than a full-scale house that needs lawns mowed, gutters cleaned and electricians called.  Indeed, apartment maintenance is almost always covered and paid for by the body corporate or landlord, and precious time burned doing housework is always kept to a minimum when living that apartment lifestyle.

Pro #2: The location

Certainly for many people including singles and couples, living in an apartment near work and the city action – even in the CBD itself – is preferable to long commutes either in traffic or on public transport.  But even families are now choosing family apartment living simply because they’d prefer to be in better suburbs in the city or near the surf rather than buried in the ‘burbs.’

Pro #3: The savings

One of the reasons some people prefer apartments is because of Australian housing affordability, with the average house mortgage now cracking a mega half million bucks.  Whether renting or buying, apartment living is generally a lot cheaper in terms of rent and utility bills, and it can be a great stepping-stone investment to a bigger place later down the road.

Pro #4: The side-benefits

You may be getting your little space within that bigger building, but you’re actually getting a lot more than that.  For instance, apartment residents may have shared rooms, a pool or gym, barbeques, security systems, communal gardens and secure parking.  So unlike a standalone house, getting a true sense of community and also feeling like you’re doing your bit for sustainability and the environment is easier in an apartment building.

Summing up Pros Cons of Apartment Living

So whether you love those pros or you’re grappling with some of the cons, one thing is beyond doubt: Australian apartment living is very much here to stay.

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The Strata Schemes Management Act 2015 provides some partial exceptions for two lot strata schemes that are different to the usual strata management structure and the resulting administration costs.

A do-it-yourself approach may suit some schemes but it is vital to have knowledge of your responsibilities, the special provisions as well as staying ahead of legislative changes. You may decide to look after the day-to-day tasks and leave items like record keeping to a third party.

Administrative Fund (Section 73)

It is compulsory for all strata schemes to have an administration fund. Regardless of the building configuration (attached or detached), two lot strata schemes must establish a fund and lot owners must pay the levied contributions.

Capital Works Fund

Two lot strata schemes are exempt from having a capital works fund (Section 74, 5) if:

the building in each lot are physically detached;
no building or part of a building is situated outside the lots; and
the owners pass a unanimous resolution for the owners corporation not to have building insurance for both buildings and/or not to have a sinking fund.

If a two lot scheme has a capital works fund they must prepare a ten-year plan. (Section 80)

Accounts & Finance Statements

Accounts and finance statements are not required to be audited unless the annual budget exceeds $250,000 (Section 95)

Read related: Two lot strata scheme – getting some painting done

Insurance

(We recommend you obtain professional advice for the insurance of two lot strata schemes)

Owners can obtain their own building insurance for their lot (Section 160) if:

the building in each lot are physically detached;
no building or part of a building is situated outside the lots; and
the owners pass a unanimous resolution for the owners corporation not to have building insurance for both buildings and/or not to have a sinking fund.

Section 164 of the Strata Scheme Management Act 2015 states the other mandatory insurance requirements.

Two lot strata schemes insurance can get complicated. Taking out the wrong insurance for an Individual lot or the owners corporation could void a claim on an insurable event. We recommend you obtain professional advice for the insurance of two lot strata schemes.

Strata Committee

an owner from each lot form the strata committee. (Section 30)

Read related: Requirements of large strata schemes

Portions of this article may be subject to copyright.

© State of New South Wales (NSW Fair Trading). For current information go to fairtrading.nsw.gov.au

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