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Property Management - Delegation of Duties

As I explained in the previous post, communal ownership like strata title implies duties and responsibilities of all owners. This is not quite comfortable idea for majority of property owners.

If we consider current unit/apartment prices in Sydney as an example the reasons of it would become apparent. In addition there is a particular feature of Australian lifestyle which is politely described as being laid-back.

Strata owners have to regularly contribute money into an account specific for administration and maintenance of the building and common property. Here’s where majority of property owners in such titles limit their duty and responsibility in relation with the communal well-being and problems. However this is not enough.

Some owners contribute their time to present at the meetings as an executive committee and once a year for all owners meeting, i.e. out of 28 units there are 4-5 units that consistently are involved. That doesn't mean involvement after or in between meetings. Serious issues require more than mere sitting at the meetings.

Out of those who present at the meetings maximum 2-3 units are involved in resolution of various matters. Usually it is just one unit in smaller strata titles. Bear in mind that this active people have no remuneration for their efforts.

It is clear that all owners (when their quantity is more than 3) as any other large group of people only seldom succeed in decision making that will satisfy everybody and even in producing any actionable decision in majority of situations.
This is because each strata title owner has different interests very often not correlating with others. Also in situations when some illegal or dodgy activity is being done by either members of owners corporation or external agencies that were set up prior to new owners coming into play the bigger the group the smaller the chance they are able to produce any positive outcome.

As it appears, though there are legal rules enacted and special government agency established to control the process of strata management they are of almost no help to owners or law and order in general.

Consider the following scenario. There is a building which consists of residential and commercial properties. The owners of commercial properties were also developers of the building and therefore were able to help some fellow strata management agency to become managers for it. The strata manager charged an amount of money greater than average, but provided no accountability or acceptable service. When accounts and books were requested the manager didn't respond. It took about a year to replace that person!

Here is another example. The strata manager is not responsive, doesn't do the job, doesn't provide books and accounts as requested. Owners corporation resolved to cancel the manager’s involvement in managing the building and explicitly expressed it in writing and at the meeting. However the manager refuses the termination, makes believe the meeting didn't happened, doesn't return any documentation and just disregards the owners requests. The owners corporation lodged a complaint with Department of Fair Trading, but the Department responded with some vague message without any resolution. Therefore because of the nature of owners corporation I described above, the problem has been going on for almost two years now.

At the meetings decisions are made, but nothing is being done. This is because majority thinks that if they paid money everything auto-magically happens. This is not true.

Let’s look at another example. An owner of a unit within strata title is writing an email to an executive committee member. The email says:

"Would be good to run a new defects report this year and lodge it with the developer as you suggest just to make sure all problems have been covered. It is important that the block retains the same fresh look to ensure all our properties values are maximised."

Then another email followed: "It is important to have the committee motivated and on side… I really think that the way to handle things is to have regular general meetings where everyone comes and takes part and action follows. At present I can't be on any committees here as I am … Anyway keep me posted."

Very nice, right?! The person is saying – I want everybody to do something, but I personally have an excuse. This is at least expressed in writing – which is rare. Majority don’t even bother expressing interest in their own problems.

It would be sufficient to say that even after all those emails the issues are still not resolved fully.

In order to achieve something useful owners corporation delegate their responsibilities to strata managers (agents). By this act owners assume somebody else is going to take actions and be involved with their duties and tasks, because the managers are paid by owners corporations.

The reality is looking like this though:

- Mr Strata Manager, would it be possible to provide an update on issues 1)…, 2)…? I have sent an email last week (details).
- What email? I have 200 unread emails in my inbox!

- You as owners corporation have to make decision on this issue

- We have been discussing those problems for two months now – any update?
- If we discuss something around mid-end December, forget about it until end of January next year.

Simple stuff like dispatching emails or organising to clean something or repair broken lights is going pretty good. Anything that involves more effort – do it yourself. And I indeed mean it.

Happy property ownership and investment!


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