- Building successful strata communities starts with the developer
- When owners know who is responsible for what, friction is reduced
- There are efficient strategies for educating new owners in strata developments
Strong foundations are fundamental to any project’s success and property development is a great example of this truism. A property development is full of foundations, from checking that the approved design covers all bases to ensuring the poured footings are sturdy, stable and suitable.
But this concept of strong foundations applies to the strata community you’re establishing as well. Strong strata communities support harmonious living and ownership, which translates into better outcomes in terms of prices, rentals, management and liveability.
So, what steps can you take as a developer in the initial stages of a project that will help establish an enviable strata community?
Communication
In our advisory role, we help developers work through strategies for creating extraordinary strata communities. The most successful of those understand that educating new owners via thoughtful communication yields excellent outcomes.
This requires discussions detailing what being an owner in a strata community involves and the best times to do this is during the settlement process and just after they take ownership.
For example, many owners don’t realise that when they purchase a strata-titled property, they possess more than their unit or townhouse.
They also own a portion of the “common area” in the complex. New owners need to understand they’ve acquired a percentage of the complex’s shared improvements such as landscaping and ancillaries, staircases, lifts, foyer area, BBQ gazebo – whatever facilities are accessed and utilised by all the owners in that building.
They must also realise that their proportion of ownership is recorded in a community title document which quantifies their rights and liabilities in relation to those common areas.
For many, this may feel intimidating. They’ve got to help pay for the management and operation of all sorts of improvements and assets beyond the four walls of their apartment.
This is where we as an industry can step up and help deliver key learnings.
Education
So, what are some of the most crucial elements to share with those new owners?
Mostly, it’s understanding the management structure of a strata setup and describing who is responsible for which functions. There’s also benefit in detailing the by-laws. These are the rules that owners must comply with as part of a strata arrangement.
Armed with this knowledge, an owner can approach the right individual when things need to get done.
Here’s a guide on the information you can impart about the major players in a strata complex:
Owners corporation and committee
This collective will go by different names depending on where your property is located. For example, in Queensland it’s called a body corporate, but in Victoria it’s an owners corporation.
The owners corporation comprises all the individual allotment owners in a complex. There are processes in place for the owners corporation to make collective decisions about the operation and upkeep of the complex, specifically around any common property.
An owners corporation will elect people to a committee who will be in charge of the administrative and day-to-day running of the body corporate. They can also make decisions and take action on behalf of the body corporate.
The committee will include roles such as chairperson, secretary, treasurer and committee members.
The chairperson calls and runs committee meetings, advises on rulings and compliance and declares body corporate vote results.
The secretary manages communication with the owners and ensures all necessary compliances are in place for meetings, such as ensuring a quorum, collecting proxy votes or managing committee member nominations.
The treasurer sets out and manages the financial position of the body corporate by producing reconciliation statements of all body corporate accounts.
Strata (body corporate) manager
The strata manager is usually an external professional appointed by the owners corporation. Their role is to ensure smooth decision making and implementation of owners corporation resolutions.
The responsibilities of the strata manager include:
- Coordinate and manage committee meetings and AGMs
- Issue strata levy notices on behalf of the owners corporation
- Manage insurance claims
- Prepare and distribute agendas and minutes
- Arrange payment of invoices
- Prepare and manage the annual budget
- Enforce by-laws
Building manager
The building manager is engaged by the owners corporation and is involved in the day-to-day running of the building or complex. In many instances, they live on site.
Responsibilities of the building manager include:
- Create and manage the asset register and preventative maintenance schedule
- Organise and co-ordinate repairs and maintenance (to common property)
- Issue work orders and verify invoices
- Periodic site inspection of all common property
- Be an on-site contact for owners, residents and contractors
- Help identify by-law breaches for escalation
Property manager
A property manager is appointed by each individual lot owner to specifically manage their unit or townhouse.
Responsibilities of the property manager include:
- Manage move outs, bond evaluations and evictions
- Show and lease vacant apartment/lot
- Manage the set-up, collection and adjustment of the rent
- Arrange and manage non-common property repairs and maintenance on behalf of the lot owner
- Keep apartment/lot access devices such as keys, swipes and remotes
- Liaise between the tenant and lot owner / property owner
Why choosing a strata manager is so important
Selecting a strata manger is more significant than many owners realise.
A strata manager is the key to helping proprietors harmoniously enjoy their ownership. Strata managers also ensure the owners corporation complies with all requirements around legals, scheduled and emergency meetings, record keeping, accounting and financial matters, as well as insurance and safety requirements.
Great strata managers operate ethically and objectively so dealings among owners are without bias and are reasonable.
Strata managers help resolve issues, especially contentious ones, before they get out of hand. For example, they may arbitrate body corporate by-laws.
Strata mangers also contribute to the annual general meetings and special meetings so that all matters can be appropriately considered by the collective.
By running the financial arrangements of the strata community, strata mangers safeguard compliance. They have a responsibility for ensuring insurances are kept up to date and contain the appropriate terms and conditions.
Also, strata mangers are on hand to provide guidance and counsel on body corporate matters to all owners.
Additional developer responsibilities
As well as understanding the structure, strata project developers need to have a process in place for discussing the nuances of strata participation with their new owners. This should include an induction about how the body corporate’s by-laws are applied and interpreted, when levies will be due and what will occur if special levies are required.
For their part, the developer should ensure they are fulfilling their responsibilities to the owners corporation as well, including the timely repair of any construction defects for example, or immediately addressing any concerns of the owners corporation relating to the development.
The developer also needs to make sure the right structures are in place early. For example, they must ensure levies are appropriately set for the first and second year of the development’s occupation.
It’s also beneficial to give a “handover pack” to owners. This will be full of useful information including how to connect to utilities such as the NBN, information about insurances, helpful information about common facilities (e.g. door codes, pool use times) and even a list of great local restaurants and cafes.
Educating owners in order to build outstanding strata communities can be a complex task when tackled solo – but taking the time to do this properly is as important as ensuring any of the development’s physical foundations are up to scratch.
