Strata Management - Owners and Tenants issues

Services
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Are you an owner or renting? If you are renting your issue is between you and your landlord/owner. If you are an owner you need to be sure everything is in writing between you and the owners corp and that you attend the AGM and express your issue accordingly. OC are generally responsible for external building issues and if they are not responsive could be held liable, state dependent.

By use of the terminology ‘the manager’ and contacting fair trading it suggests you might be renting? If that is the case and the manager / landlord / owner is not responsive, in a practical sense your option is unfortunately to relocate. Why? By raising complaints although it is supposedly fine to do so you could be placed on a blacklist.

That being written, the owner must also rely on the OC for repairs when it is responsible, so it is not always a crisp interaction.

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I own the unit

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It sounds as if you are on the upper level, and it is the roof that is leaking, or a related issue, EG gutters. Is that correct? Is the leak only evident with rain events or other? Have you spoken with the roofing contractor about what they found, or asked the OC’s manager the same? It appears that the OC’s manager has responded by having the leak inspected. Did the contractor also inspect inside your unit? It’s reasonable to ask for feedback and a report into what was found by the contractor and for their recommendations.

It may also assist indicating which state your unit is in. Each state/territory legislates responsibilities for the OC/BC, owners responsibilities, steps to follow where urgent action is required, and what to do if the response is inadequate or not timely.

As @PhilT has already pointed out, putting requests formally in writing (EG email) is an important step. It can follow on from any verbal request. It is best to do both to be sure the matter is recoded reliably with the OC’s appointed manager. If the leak is causing damage to the ceiling or any other parts of your unit or may be, include that in the formal advice.

P.S.
The best advice on how to progress your issue may come from contacting your state/territory Govt department responsible.
EG QLD Body corporate and community management | Your rights, crime and the law | Queensland Government
Depending on how your OC AGM is actioned it may be necessary to raise a motion in advance to have your matter acknowledged and responded to at the AGM. For a leak through the ceiling the OC should have the authority to act without waiting for an AGM. Depending on the cause (assuming it is related to the common property) the work might be covered by insurance, or an urgent maintenance item paid for by the BC. Any internal damage to your unit should also be repaired by the BC.

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Leaks have occurred in several areas most were repaired but one area is dripping through the roof and ceiling leaving a small hole. I have repeatedly told the manager i spoke to the roofing person another time about the same leak which was not fixed. Really is lousy. I did look online fair trade and it clearly states if i was to attempt repair myself it can make me liable. I wasn’t going to attempt repairs unless done by a qualified person. I wasn’t sure if i should state that due to poor maintenance ibam entitled to repairs under the consumer law unless it doesn’t cover this issue. Either way i cannot understand when several times I have mentioned the manager just ignore it. Ill look at my options further. My last option is contact choice for advice.

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Strata schemes are legislated in each state and territory. If you can advise which state or territory it will enable further feedback on where to get the best assistance and legal advice.

P.S. while one might want a workable relationship with the OC it’s important to use the tools provided. Note @PhilT has added a reminder about formalising your communication with the Manager. Assuming the Manager is one of the larger national Strata Title businesses, it may assist to mention who they are. They may also have in place a procedure for escalating problems. That’s my current experience.

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You need to go formal using the Letter of Complaint template. Anything verbal is idle chit chat in getting resolution once the initial round of pleasantries has been ignored or not resolved an issue.

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I am in NSW

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https://www.fairtrading.nsw.gov.au/housing-and-property/strata-and-community-living/strata-schemes/responsibilities-of-the-owners-corporation
Note the topics listed along the right column including
https://www.fairtrading.nsw.gov.au/housing-and-property/strata-and-community-living/strata-schemes/resolving-disputes-and-mediation
While Fair Trading can provide mediation it appears at the end of the day the repair is essentially a legal issue between you and the OC and then between the OC and roofer. In your case it appears to not be proceeding as crisply and successfully as it should? Documenting everything in writing and keeping a file is good practice, especially if the leak results in loss.

This membership organisation might be helpful in offering advice

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An informative Q&A on how strata managers can go and how some charge for their ‘valuable services’.

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Just a warning to any strata, please do
Not use Civium Strata ( based in North Strathfield, NSW). Their service is absolutely woeful. We are paying top dollar for a service we never actually receive, including not returning phone calls and emails, or advocating on our behalf for best insurance. Our insurance in the fin year 21/22 saw a 50% increase, which we questioned and our concerns were effectively dismissed. We have a 2 units which are retail and therefore our entire block of 6 apartments are now considered commercial for the purposes of insurance. I’d be very appreciative of any one else’s experience with Civium and/or this type of insurance matter. Thank you

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@JJIW, welcome to the community.

While I can’t comment on whether the reclassification of insurance to commercial, which could be seen as the highest risk use on the property, you can always seek a second opinion in relation to insurance by approaching an insurance broker.

Insurance premiums generally based on the highest risk activities which occur. There are threads in the community which highlight this such as carrying out business activities at domestic premises.

One avenue to explore is to negotiate the weighting of the premium so the landlords for the retail units pay a higher proportion than those for dwelling units. This might be a fair outcome and place higher proportion of the insurance costs on higher risk activities.

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welcome to the community.

I have moved your post to a relevant existing topic. If you would care to look back at the preceding posts you will see that the problems with strata management businesses are more common that you may think.

I suggest that you could do research on alternative insurers, and if you find a better deal (starting at the next renewal date), then let the executive committee of the owners/body corporation know. They may be able to direct the strata manager to use a different insurer.

In the bigger picture, if you are unsatisfied with the strata manager, lobby the other owners and get them to vote against retaining the strata manager for another year at the next AGM.

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As a small strata how well acquainted are the owners with each other? I’ve experience of two smaller group titles one purely commercial and one residential.

Are the issues raised being raised by several owners and are the elected management committee involved? Whether Civium are good, bad or indifferent, your contracted strata management provider should be responsive to the owners elected representatives.

Apologies if you are well versed in Strata ownership and responsibilities. For NSW the Govt offers a number of resources that may help explain what is expected. EG https://www.nsw.gov.au/housing-and-construction/strata

As an owner if it has not been provided you should have a full copy of the current insurance policy and related documents. I’d expect as also noted by @phb the assessment and costs related to the commercial lots should be separately identified. Civium likely used a broker and should have obtained quotes from more than one insurer. My experience is there would be a written assessment and recommendation to the owners (committee?) for approval. Perhaps that is not required in NSW for your Strata.

There are other Strata Management services providers out there. Changing is always an option assuming the other owners are supportive.

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Thanks you Mark m and Meltam,

-Yes, our 6 owners are involved and on very good terms. We agree on all matters before proceeding.

  • Civium do use a broker for insurance and each of their preferred suppliers have indicated they are not able to offer separate insurance quotes for commercial and residential.
  • at our last AGM, given promises by our strata manager their service would improve, we verbally agreed to go to continue with Civium. Unfortunately, improvement has not occurred.
  • it isn’t only about the insurance, it is every element of service.

Certainly agree, lack of service and responsiveness seems a huge problem across states. Thanks again

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For buildings is unlikely they will split insurance between domestic and commercial areas, as it will be difficult/impossible to delineate boundaries between the two uses (e.g. walls, ceiling, roof, services, common areas). Building and legal liability insurance, like that which would have been sought, would cover all the building. They won’t split it as it then could open a situation where two different insurers/underwriters insure same parts of the building…or don’t insure these parts to remove their own liability. A situation no one would want to be in.

We have a situation similar to your own where we have both domestic dwelling and commercial buildings at the same premises. A few years ago, our insurance, due to change in activities, was reassessed from residential use to commercial use. This resulted in an over doubling of the premium (for building, contents and business insurance). Our own broker has indicated that it is impossible to split premium costs associated with the dwelling and commercial uses as there is many areas where there is an overlap of or common uses. When insurance is assessed, it is based on the replacement value of all the assets and legal liability risk. There could also be legal, windows and other provisions within the premium. Some of these applying to dwelling units, and some to commercial activities.

As outlined above, the insurance (particularly for legal liability) will be based on the highest risk. The highest risk will be retail/commercial activities. The premiums will reflect this risk. It won’t be possible to separate out legal liability risk as the commercial risk includes the domestic risk. They aren’t calculated separately. This is why I indicated to see if

negotiate the weighting of the premium so the landlords for the retail units pay a higher proportion than those for dwelling units.

A broker might be able to provide a rule of thumb type metric to be used for such purpose. Assigning weightings so commercial pay a higher proportion of the premium to reflect higher legal liability risk would need agreement of all landlords and also agreement in relation to the metric used.

Note: It would be possible to get separate contents/business insurance, but this is an individual choice of each unit occupier. But this isn’t the insurance at hand.

Just in relation to cost of the insurance. If they have used a good broker, it is unlikely going alone you will get much of a better deal using your own broker. We have found ourselves that the brokers tend to go to the same underwriters and premium costs are very similar.

Where you may save money is not having to pay for the strata managers service fees for arranging the insurance. Depending on this fee, it may be reasonable if you need to spend your own valuable time getting quotes, preparing questionnaire and responding to queries. A unit owner would also need to nominate their responsibility to do this on behalf of all unit owners.

There has also been much media about the increase in 2022 to insurance premiums. This is partly due to natural disasters which have occurred and increased building costs (labour and materials). I haven’t received a quote for next years insurance, but we anticipate a significant increase in the 2022 premiums.

Is this documented in the AGM minutes and actions agreed to what improvements were required? This should be done if one wants improvement as it provides a measure to compare performance against. Where actions are not fulfilled, it gives grounds for termination… including breaking a service agreement.

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As residential owners have you approached any of the insurers directly?

  • Strata properties that contain more than one type of use are not rare or uncommon. Many inner urban combine retail or business on lower levels with residential above and behind. An insurer should be able to explain the assessment of each portion.

  • A further point is to clarify what the strata policy is covering. Does your strata policy include business related risks and compensation for losses that are not applicable to the residential occupancy? I’ve noted on some policies that the insurer provides for loss of rent to landlords, or loss of income to a business. These and other covers are extensions to the basic cover for damage or loss of the building. Loss of rent, business disruption costs when included are an added burden on owner occupiers for no benefit. They are able to be separately assessed and covered, but can prove difficult to agree to.

  • Similar questions concerning public liability and additional risks to the property depending on the nature of the commercial use are relevant to the basic building insurance policy. It’s worth considering reducing the risks covered in the common policy to a minimum. It may or may not be possible for the Strata to require any commercial operation to provide independent additional indemnity through policies the strata require the owner/occupier to take out at the businesses expense. Hopefully your Strata Manager and broker have considered that option, and NSW legislation is open to that approach. It’s not uncommon in larger enterprise for a principal to require additional insurances and indemnities through commercial agreements. It’s an area that may have been covered in your current policy and tenancy agreements for the strata. It is worth asking what is in place. It’s unreasonable for 4 of the owners to cover the variable risks arising from commercial occupancy of the other 2 lots.

It’s likely others in the broader community would appreciate hearing what you discover.

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Two recent issues - pitfalls of owning a strata titled property. One has been lying low for sone years.

To the outrage of owners and advocates, it appears the company’s conduct has been permissible under NSW law.

The revelations form part of a new ABC investigation into the national strata management industry that is launching on Thursday.

The investigation is calling on the Australian public — owners, industry insiders, regulators and others — to share their own strata stories with the ABC.

Of note the majority of strata titled properties owners representative committees appoint a third party specialist strata management company to carry out the daily functions. The companies are profit making enterprises. They have formed an industry representative body SCA.

Whose interests are being served?

The SCA has awarded Netstrata “strata management company of the year” for four of the past five consecutive years.

Netstrata is the Manager mentioned in the ABC report.
Anyone can be one a Strata Manager?
Qualifications for Strata Managers | Ace Body Corporate.

The second issue. Each states/territory regulations provide mechanisms for the Body Corporate, Owners Corporation etc to enforce bylaws, recover unpaid fees, and levy owners. There has been a trend arguably started by the Strata Management businesses to encourage owners representatives to support delegating recovery to third party debt collectors. How it can end up, one’s strata property is not one’s castle?

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