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THE HOT WATER SYSTEM UPGRADE

The Challenge

The licensee has had experience with a building of historic value with over 600 units of student accommodation.

Once the hot water system went out in one of its 4 zones, the result was no hot water being available for the students in 150 apartments.

Whilst the on-site building engineer and current hot water service contractor made on-going temporary repairs to the hot water system, a good case was provided to upgrade the system.

The challenge was to build a new and modern hot water system giving consideration to energy efficiencies/solar power and reliability for the coming decade(s). Furthermore, it was essential that there was limited downtime when the system was being decommissioned and installed.

The Strategy

At the schemes Annual General Meeting the Chairperson and Treasurer outlined items that would be required to be considered by the incoming new Executive Committee for the forthcoming year and the replacement of the hot water system at a cost of approximately $400K was set as a priority.

Accordingly, a hot water system upgrade sub-committee (of which the licensee was a member) was appointed to liaise with the on-site building engineer who had experience with the current system to determine the needs for the building.

The sub-committee accordingly discussed the buildings needs with an appropriate hydraulics consultant and recommended to the Executive Committee their appointment.

Once appointed, the hydraulics consultant wrote the scope of works for the removal and installation of the new hot water system and then tendered the replacement in the open market.

The Result

Following the successful tendering of the hot water system replacement, the Executive Committee agreed and has had the new hot water system installed.

The system is still zoned into 4 zones, however, built into it are also redundancies for peak periods of use. The water is constantly hot and opportunities for any breakdowns have been minimised.

Additionally, extended warranties were provided to the scheme and the on-going savings of the new installation meant that the project had a buy back period of 3 years.

THE BUILDING MANAGEMENT COMMITTEE

The Challenge

The licensee has had experience with a Building Management Committee (BMC) consisting of four lots. Three of the lots are associated with the original developer and the other is a strata scheme built by the original developer.

It is noted that the original developer was not in the business of property development.

The challenge being that previous to the licensees involvement, the site had been managed by another strata managing agent and the BMC had not been established.

The issues raised were appropriate contributions had not been raised for shared facilities, the strata scheme had been paying for the majority of the costs and the insurance was undertaken by a broker that did not specialise in BMC’s, nor was the allocation of the insurance appropriately attributed to the 4 BMC members.

The Strategy

It was important to understand why the BMC was established. Trips to the BMC site and a review of the Strata Management Statement allowed the licensee to start piecing the puzzle together.

A review of the all accounts paid for the previous 2 years allowed the licensee to establish whether the correct entity had paid the invoices.

The BMC was also valued for insurance purposes and the insurance was tendered for an appropriate BMC policy.

The BMC shared facility percentages were also reviewed with associated members to ensure accuracy.

The Result

Members of the BMC meet officially and ran through a detailed agenda that cleared up any defective work. The meeting set the ground work for the coming years. A meaningful budget was adopted and where required, adjustments of expenses were granted to members.

The BMC is now appropriately established and its members and representatives understand how the Strata Management Statement operates and why there is a need for it.

The BMC has a good working relationship with all members. BMC correspondence is active and meetings are attended by all members regularly.

A co-operative approach has seen even the most difficult of issue raised, resolved quickly and at a minimum of cost to the BMC members.

CASE STUDY: BUILDING MANAGEMENT AGREEMENTS

The Challenge

The licensee has had experience with a large development of 4 Strata Schemes and a Community Association sitting over the top.

The Building Manager that had been on the site for 14 years had decided to retire and move closer to his family.

Furthermore, the Building Management Company wanted to exercise its right to assign its 5 agreements to a new company.

The challenge that arose was that all agreements had different expiry dates and there was no prior knowledge of the proposed new managers.

The Strategy

With all agreements being different, the licensee co-ordinated 5 Executive Committee’s to discuss important criteria for the new Building Manager and agreements.

The licensee nominated a pool of solicitors to give advice on the current agreements which did not comply with the current legislation and the registered by-laws.

The licensee co-ordinated numerous meetings of all 5 Executive Committee’s and the associated correspondence regarding the new agreements and their associated deeds and guarantees.

The licensee co-ordinated the costs associated to having the final meetings held to consider the appointment of the new Building Manager.

The Result

Meetings were held co-jointly between the 4 Strata Schemes and Community Association and the new Building Manager was appointed to all schemes and the community association for new 10 year agreements.

The agreements are the same for all Strata Schemes and the Community Association and considered to be a better agreement to that previous had.

It is noted that all Strata Schemes and the Community Association are pleased with the performance and proactive nature of the new Building Manager.

CASE STUDY: THE INSURANCE RENEWAL

The Challenge

The licensee has had experience with a $130million prestigious building with two Strata Schemes and a Building Management Committee (BMC) sitting over the top controlling the shared facilities.

At the height of the Global Financial Crisis, the Strata Scheme Representatives on the BMC wanted to consider what options were available for the buildings insurance policy renewal from the current abroad insurers as well as local insurers.

The challenge was to seek the best policy matched against its associated premium.

The Strategy

Whilst a broker had been appointed by the building in previous years for all its insurance renewals, for this renewal the licensee co-ordinated the input of the current Executive Committee, Representatives on the BMC, Building Management, the current broker as well as speaking directly to local insurers.

The licensee commenced the process 2 months prior to the insurance renewal by reviewing the needs of the building by co-ordinating all relevant stakeholders.

Interviews of brokers and local insurers allowed for a defined policy to be determined and tendered in the open marketplace.

The Result 

The building chose to change from its current insurer.

The new policy included improved terms, increased and better policy coverage, direct lines of communication with the underwriter and one insurer, improved claims management and a local insurer.

The building is pleased with its new insurance policy and in the coming year simply renewed its cover on the same terms.

THE BIG ANNUAL GENERAL MEETING

The Challenge

The licensee has had experience with one of the Australia’s largest Strata Schemes and whilst the majority of the motions on the Annual General Meeting Notice were not contentious, proper preparation for the meeting was essential.

The challenge was to understand which of the 450 proxies held were valid, which Owners were financial and how to collate all votes during the AGM quickly.

The Strategy

Instead of having a summary of owners, their financial positions and voting entitlement in 3 – 5 different reports, a simple computer programme was developed to allow attendees to be registered and votes to be counted on the night.

In addition to the above computer programme being created, attendees voting papers were distributed on registration at the meeting to ensure an accurate summary of votes could be confirmed, should Owners wish to inspect the summary of votes of the meeting.

The Result

Before the commencement of the meeting, the licensee could declare the number of Owners present, proxies held and during the meeting declare accurately the resolution to a motion on the agenda whether it was an ordinary or special resolution.

Following the meeting, a summary of attendance and votes was placed on top of the Annual General Meeting file for future review and ease of reference.

BUILDING DEFECTS

The Challenge

The licensee has had experience with a medium sized building with a lot of first home buyers. Its location has attracted a large percentage of ethnic residents.

The building is riddled with defects within individual lots and throughout the common areas. The builder has gone into administration and a lot of the lot owners were in arrears. The Owners Corporation were also considered to be dysfunctional.

When the licensee started working on this Strata Scheme, the Owners Corporation had a small window of opportunity to make a Home Owners Warranty (HOW) Claim against the builder to preserve their rights under the HOW Insurance Policy.

The Strategy

Court cases told the strata industry and residential unit Owners, that to preserve ones rights, the best plan of action was to be informed about where one stood.

Accordingly, the licensee and his team co-ordinated correspondence, old reports and certificates and passed them onto a specialised defects solicitor for input and feedback.

Following the feedback from the solicitor, an Extraordinary General Meeting was held to explain to all Owners the options available to them, to further appoint the solicitor to manage the HOW Claim, to appoint a defects consultant, a fire consultant and to raise a special levy for the costs.

Whilst Owners did not like the idea of raising the special levy, a large percentage of the Owners agreed to it.

Defects and fire inspections of every unit were co-ordinated through all stakeholders over a two day period and the reports were provided to the solicitor and Owners Corporation as evidence for the HOW Claim against the HOW Insurer.

The Result

The above co-ordination resulted in the Owners Corporation preserving its rights under the HOW Insurance Policy by being able to lodge a complete and substantial Claim within the prescribed time.

The claim was successful for the Owner’s Corporation to the value of $7 million.

The scheme had all its defects rectified in accordance with the relevant Australian Standards by a remedial builder who also gave the Owners Corporation the appropriate insurances for their work.

THE NEW STRATA SCHEME

The Challenge

The licensee has had experience with a new strata scheme in a multi-award winning waterfront development.

The challenge was to set-up the Strata Scheme on the company database as quickly as possible following the registration of the strata plan to allow purchasers to settle on their new homes and to enjoy the lifestyle and facilities which they bought into.

The Strategy

Having a good relationship with the developer and assisting in previous set-ups works to our advantage.

In this case, the licensee worked closely with the developer for a long period of time before the registration of the strata plan at the Land and Property Information.

The licensee assisted the developer by preparing meaningful budgets for marketing material based on similar buildings, sought insurance quotations to cover the new strata scheme, provided advice on the by-laws, inspected the site to get a good understanding of what purchasers were buying into and answered questions from prospective purchasers on what could be done following their settlement.

The Result

With good planning and the successful registration of the strata plan at the LPI, a meeting was subsequently held with the developer to allow the strata scheme to be set up on the company computer system. This enabled section 109 certificates to be produced and enabled Owners to settle on their purchase with full disclosure and knowledge of what was being purchased.

To this day, many of the original Owners still call the development their home and are happy enjoying the lifestyle and community they have bought into.

THE CHILLER REPLACEMENT

The Challenge

The licensee has had experience with a retail arcade of 15 shops in the centre of Sydney with a large passing traffic of pedestrians per morning/afternoon transiting from and to work and home. The current chiller located on the roof of the 20 storey building above was old and run down. The split condenser system was down to its last two condensers and the retailers were starting to raise concerns about the quality of the cool air coming through their air conditioning systems which were connected to the chiller as well as suitability of the air temperature in the arcade which affects through traffic and clientele.

The Strategy

Whilst the scheme had a building manager and an air conditioning contractor on site, the licensee co-ordinated the Executive Committee and a specialised independent consultant to discuss the retail arcades needs, write a scope for the termination and removal of the old chiller by crane over a weekend, write a scope for the installation (nominating preferred machinery) and tendering in the market place on a like for like basis, analyse all submissions and make recommendations on the preferred contractor.

The licensee documented all the co-ordination and timing for ease of reference for the Executive Committee and building manager. Any Owner or potential new Owner was able to see how the decision was made by the Executive Committee and understand the status of the replacement.

The Result

The chiller was replaced for a cost of over $100K and the appointment of the consultant saved the scheme and a group of non-technical Owners valuable funds. The new chiller is more energy efficient, quieter, has appropriate warranties in place and a maintenance agreement for its on-going periodical servicing. The retailers are pleased with their new chiller and are now even considering using the above strategy to upgrade the appearance of the retail arcade and its entrance.

ENERGY TENDERING

The Challenge

With prices for most services and utilities increasing and their associated costs having an impact on the overall levies raised by an Owners Corporation, the challenge was to seek where monies could be saved to keep levies at a stable level.

The Strategy

Whilst most people could approach the big electricity providers to seek a quote, putting all the information, rates and charges into a simple to read table and graph was difficult for the average consumer.

Accordingly, for a marginal fee, the licensee introduced the Strata Scheme to a broker to tender their electricity supply needs in the open market, to report back to the Executive Committee in a simple to read format and to give their recommendations on whom to enter into a contract with.

The Result

The tendering, reporting and recommendations made it easy for the Executive Committee to make a quick and informed decision on its electricity supplier.

The building chose to move electricity provider, generating a saving of approximately 30% per annum and $130,000 over three years. Accordingly, this saving helped minimise any increases in levies.

The building is now pleased with its new electricity contract and improved competitive rates. It has diarised to undertake the same tendering process closer to the end of the new current contract to ensure the best electricity rates are achieved again.

THE CHANGE OF CLEANER

The Challenge

The licensee has had experience with a medium sized building in a chic part of town. The residents are predominantly young professionals and the standards demanded for cleanliness are high.

The challenge facing this building was having a cleaner that was not performing and homeless people gathering in front of the building during the night creating additional work for the cleaner on a daily basis.

The Strategy

With the Executive Committee resolution, the scheme determined it was an appropriate time to review the current cleaning contractor. At the same time, the building agreed to review the services of the part time building manager and have both the services incorporated into one caretaking roll.

Accordingly, the licensee was instructed to write a scope of works, new contract and nominate appropriate contractors that could take on the new roll.

The licensee co-ordinated the tendering of the new roll, created a matrix to assess the submissions and sat on the sub-committee for the review of the new caretaker.

The Result

With the assessment matrix circulated to the Executive Committee, a short list of the tendering was made and the cleaning sub-committee interviewed the 3 companies.

Following the interviews, the cleaning sub-committee made a recommendation with reasoning for the appointment of a new cleaner/caretaker who continues to clean the scheme to date.

The scheme was impressed by the cleaning undertaken by the new contractor that the building also introduced a weekend clean to ensure the standard for the buildings cleanliness was preserved all week round.

The scheme has now introduced a quarterly walk around with the caretaker to determine where attention to any missed detail is required.

The scheme has now also taken a further step (approved by the local council) for their building streets to be re-zoned to an alcohol free zone, allowing the police to move on the homeless people who gathered at night; drinking, causing noise and additional cleaning duties for the schemes cleaner.