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MARCH 2016

Do you have “unknown unknowns”? PAGE 14 Digital Disruption - Threat or Opportunity? PAGE 17 What is happening out there in StrataLand PAGE 22










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Contents Reports President’s Report


CEO’s Report


SCA National ConveNTion 2016


Chief Executive Officer Kim Henshaw Ph: 02 9492 8252 E: kim.henshaw@stratacommunity.org.au Web: www.stratacommunity.org.au SCA National Office Level 1, Suites 101 & 102 845 Pacific Highway Chatswood, NSW 2067

Features Defect Drama You can win your construction defects case


Do you have “unknown unknowns”?



New Year’s Resolutions: Managing 16

Contractors on Site in 2016 Digital Disruption Threat or Opportunity?


Things to consider when updating hardware for your office


What is happening


Editor: Jessica McCabe Production Controller: Yvonne Okseniuk


out there in StrataLand

Business Development Manager: Trish Riley Sales Manager: Peter Bunn

State Pages New South Wales






Western Australia


Australian Capital Territory




National partners

Business supporters



March 2016

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President’s Report REPORTS

SCA National President’s Message The 2016 year has commenced and we are off to a great start.

Our Team at Head office has remained stable and we now welcome Sarah Cha, Administrative Support Officer to the team. As a profession we continue to make great inroads into meeting the challenges arising from rising consumer expectations, digital disruption and more covering the broad scope of our work.

Erik Adriaanse FCPA National President Strata Community Australia

We are working hard to complete the task of becoming a truly national body and we are well on the way to having our dedicated Strata educational qualifications recognised nationally. We are also introducing a tiered Accreditation System that gives consumers comfort they are getting the services from professionals and not “cowboys”. In each of our State roundups we are becoming aware of the changes to the State Legislative Frameworks. Whilst a lot of the changes are perceived as beneficial the various stakeholders that SCA looks after may feel they have benefitted to different degrees. If a pipedream were in sight we may one day see consistent Australia wide legislation. This would then make the Strata Profession considerably much easier to participate in and with it geographical boundaries would loosen.

At the end of February your National Board, State and Chapter Presidents plus other Committee members will meet to discuss our ongoing vision and the actions necessary to achieve the strategic priorities. We will also assess what our members and stakeholders are likely to want into the future against a rapidly changing backdrop. I personally am looking forward to our session and I feel confident we will be able to share our new and old strategic objectives with you in the next edition. As you would have heard by now, registration for the SCA National Convention is open. Held in Alice Springs 25-27 May, we will take a moment to look towards the future of what is to come in strata. I encourage all members to attend this spectacular educational and social event. Further details are found in this issue. Lastly I am very pleased with the way the Chapters are now engaging with their membership and the public by running very successful events with the help of our National and State Offices. I hope you will all have a happy and successful 2016.

March 2016



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SCA National CEO’s Message

I’d like to continue my series of articles on the implementation of SCA’s 5 agreed priority areas and talk to you in this issue about Professional Standards for Strata Managers.

Australia’s Professional Standards Council provides the following definition of a profession on their website:

Kim Henshaw Chief Executive Officer Strata Community Australia

A profession is a disciplined group of individuals who adhere to ethical standards. This group positions itself as possessing special knowledge and skills in a widely recognised body of learning derived from research, education and training at a high level, and is recognised by the public as such. A profession is also prepared to apply this knowledge and exercise these skills in the interest of others. In pursuit of the recognition of Strata Management as a profession, SCA has designed and is delivering a range of initiatives that directly address this definition. They include; ww A Code of Conduct for Strata Managers that defines their responsibility to act ethically and fairly ww New, nationally recognised qualifications – Certificate III, IV and Diploma in Strata Community Management ww A 4 step Accreditation pathway that recognises Managers’ commitment to the profession by requiring a combination of formal qualifications, Continuing Professional Development and work experience



March 2016

In actively pursuing these Professional Standards initiatives, SCA seeks to achieve two ends. First and foremost our vision is that in the years to come the SCA accreditation gained by Strata Managers will be viewed in our industry in a similar way that the CPA accreditation is considered in the accounting world. Secondly, and closely allied with the first objective, is that strata scheme owners and their committees include as an important part of their selection criteria proof that their proposed manager has SCA Accreditation. By doing so, and by SCA rigorously enforcing the Professional Standards and Code of Conduct required for Accreditation, owners and their committees can feel confident that their assets are in the best possible hands.

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The SCA National ConveNTion 25-27 May 2016 Alice Springs, NT The SCA National ConveNTion 2016 will be held in beautiful Alice Springs in Australia’s Northern Territory 25-27 May (inclusive). Held under the theme great southern strata land, we celebrate our beautiful country and our growing industry in strata.

Morris Miselowski Business Futurist

Educational program We have a sensational line-up of local and international speakers who are leaders in their fields. Morris Miselowski, the man with your future in mind is confirmed as one of the keynote speakers. Morris Miselowski is the full-stack Business Futurist possessing a powerful combination of experiences, successes, networks, insights, traits and skills that have for the past three decades made him incredibly adept and eerily accurate at navigating the rapidly evolving and shifting technological, business and social landscapes. Another one to watch is Tom Skiba, the CEO of the Community Associations Institute. Coming from Washington, USA to speak about their Community Next program.

Social functions We have planned some exciting social functions, which allow you to explore some of Alice’s top destinations. The Old Telegraph Station is the location where you’ll be welcomed with a lovely outdoor cocktail party. You’ll wine and dine under the stars at Ooraminna Homestead, entertained by another quality Australian band with a very Australian theme, boots and black tie! The closing cocktail party will be held at Simpsons Gap, another remarkable natural location with plenty of photo opportunities. Registration and Further details If you’re interested in learning more about the convention, exhibiting or sponsoring, please contact SCA National on convention@stratacommunity.org.au. Don’t forget to check out the event website, which includes discounted accommodation rates, registration details and more. Head to the SCA website and click on the ‘National Convention’ tab.



March 2016

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FEATURE Construction Defects

You can win your construction defects case. Just beware of poor excuses, misconceptions about filing claims and confusion about warranties. By Jeffrey S. Youngerman, Esq. Reprinted with permission from Community Associations Institute’s Common Ground TM magazine, September/October 2015

Common-interest community leaders need to arm themselves with information about construction defects. Yes, it is an expensive, complicated, time-consuming and draining process. But board members and managers don’t need to fear it as much as they do and shouldn’t be so hesitant to file claims. When they are deployed under the proper circumstances, claims can be a valuable tool to defray substantial repair costs. Construction defects are so common today—and many associations and residents are weary of filing claims— because of the recent boom-and-bust housing market. During the construction boom that began in 2000, developers couldn’t keep up with demand and quality control suffered. The Great Recession followed, which resulted in myriad insolvent developers and contractors. Left in the wake was a sea of new communities with substantial defects. Major repair projects on old and new buildings also were plagued with deficiencies. Whether in new or existing buildings, defects can cover pretty much any element of construction—from facades, windows and doors, roofs, garages, retaining walls, parapets and soil compaction to HVAC, soundproofing, balconies, peeling paint, stairs and railings. Generally,



March 2016

Construction Defects FEATURE

It’s not me, it’s you. The developer or contractor sometimes refuses to accept responsibility for a defect. Let’s say a window or door starts to leak. The developer or contractor responds by saying it’s not a defect and blames the leak on the association’s failure to maintain the building. Usually, they offer a minimal-cost solution, such as caulking. Guess what? The only time I’ve ever seen caulk as part of a legitimate repair is when the developer didn’t use caulk in the first place. As a general rule, if it comes out of a can, it’s a bandage, not a solution. A forensic engineer once told me, “There’s no magic in a can.” I couldn’t agree more.

The designer made me do it. The developer offers a repair drastically different from the one your construction professional detailed after performing a substantial investigation. The developer’s solution is backed up by a report from its expert. When this happens, call the developer’s bluff. Say you will consider accepting the repair provided by his expert so long as the developer personally guarantees it and his expert becomes the designer of record who prepares and stamps the repair drawings. Typically, the developer withdraws the solution. Opposing experts can and will say nearly anything so long as they have no liability for the outcome. Chances are they will never agree to serve as a designer of record and put their stamp on drawings when they know it’s not a real solution.

If it ain’t leaking, it ain’t nothing.

these deficiencies are due to factors like design, materials or workmanship. Design defects often include failing to specify proper materials, to meet applicable building codes, to be specific in drawings and measurements, or failure to conduct a site inspection in a professional manner. I’ve observed several defects in materials, including various synthetic exterior facades, windows and doors that don’t meet manufacturing standards or applicable building codes, improperly compacted soil, and various prefabricated exterior cladding systems. Workmanship defects amount to shoddy construction and can occur anywhere on a property. Unfortunately, many of these deficiencies take years to manifest. That’s why it’s so important for an association to hire a skilled forensic construction professional shortly after taking control of the community. These experts will increase the likelihood of discovering problems before damage is done and while the association is still within its legal time limit to file claims against the responsible parties. I like to think I’ve seen it all in the more than 25 years I’ve been handling construction defects claims: the developer’s poor excuses; boards’ misconceptions about filing claims and what it takes to win; and confusion about what warranties entail. Let’s clear up a few things.

Developers and contractors often like to define the extent of a leaking problem by the specific places where leaks have been reported. While this data has some value, it’s actually more likely to provide misinformation. The best consultants treat interior leak data as information you can’t ignore but never use it to read the scope of a problem. Leak data is underreported by owners too often, fails to account for concealed defects and doesn’t accurately indicate how the building is functioning. ASTM International, which develops and publishes voluntary consensus technical standards, takes a different approach to defining a leak. Standards indicate that a leak is essentially uncontrolled water or vapor in a place where it does not belong. That means the seldom reported water or vapor in a wall, which can damage building materials but not be detected from inside a unit, is a leak. A building’s overall behavior is a far more important diagnostic tool than leaks reported from inside units.

There’s no point pursuing a claim because the developer went bust. Insurance companies for developers, contractors, architects and engineers often fund substantial settlements. Typically, there’s some form of coverage even if a business goes bust. The law for insurance covering construction deficiencies is changing drastically in favor of owners. Initially, commercial general liability (CGL) insurance policies, typically held by developers and contractors, didn’t cover property damage caused by faulty construction. However, in the late 1960s, the insurance industry recognized the demand and introduced a property damage provision that could be added to a CGL policy. The provision became so popular by the mid-1980s that it was added to most CGL policies. Courts have been slow to recognize this evolution, but a series of decisions by several states’ high courts have determined that current CGL policies provide developers and contractors with coverage for damage caused by faulty construction.

March 2016



FEATURE Construction Defects

Meanwhile, architects and engineers typically carry errors and omission insurance, which provides robust coverage when they are sued for defects in design. Also, some jurisdictions, such as Illinois, allow owners to bring claims directly against the parties who caused the defects when the developer is insolvent. Even despite the Great Recession, more times than not, insurance carriers pay substantial sums to settle cases.There’s actually reason for optimism.

The side with the best lawyer wins. Many people joke that a jury is 12 people deciding who has the best lawyer. While the best lawyer certainly helps, in the world of construction defects litigation, the party with the best expert often wins. Associations should be careful to hire experts who specialize in the field of the defect. While there are many knowledgeable contractors, all too often, owners seek advice from contractors about needed repairs. Not all have the proper understanding of building science to solve the real problem. This can result in multiple fixes for the same problem. I know an association that replaced a roof twice because the contractor failed to diagnose that the water entry was actually from the parapet, not the roof.

If you file a lawsuit, you cannot make repairs while the lawsuit is pending. So long as you provide the potentially responsible parties an opportunity to observe the conditions prior to or during repairs— and take steps to document the original conditions—making repairs actually puts you in a strong position during litigation; some opponents will argue that if the defects were substantial, the association would have made the repairs. However, keep in mind that the building in question is essentially an exhibit in the lawsuit. If it is altered without notice and you don’t give the responsible parties an opportunity to inspect it, you may be accused of destroying evidence. That can lead to losing some or all of your case or having your expert barred from testifying.

When you file suit, throw in the kitchen sink. Most people, even some lawyers, believe if you file a claim, you should file for every defect no matter how small. The problem with throwing in the kitchen sink is that you must have experts to support each of your claims, which means you could be hiring multiple experts to pursue relatively minor defects. You can end up spending more money on experts than the cost to repair a minor defect. You are far better off spending your time and money focusing on the substantial and more costly defects.

The builder warranty will cover any substantial defect in your new home. Unfortunately, the builder warranty is usually called the builder limited warranty. All too often, it amounts to nothing more than a marketing tool for the developer; a warranty can be riddled with exceptions.

For example, consider the following warranty exclusions I’ve seen: ww It only applies to work for which the builder received a warranty from a contractor. ww It doesn’t apply to any damage from water infiltration. ww It doesn’t cover building code violations. Builders also like to make it difficult to enforce the warranty. For example, the builder may require notice of common area defects within one year of substantial completion of a building, which can make timely notice nearly impossible. Other warranties may contain procedural restrictions regarding when notice must be given, which I jokingly believe requires a keen understanding of an obscure lunar calendar.

The building is out of warranty after one year. In some jurisdictions, such as Illinois, the one-year builder warranty doesn’t expire until one year after the last sale of a condominium unit. This often results in a surprisingly long warranty period, which means the builder is obligated to repair all common property defects long after owners take control of an association. Additionally, most jurisdictions also recognize some form of implied warranty, which doesn’t have a one-year time limit and provides far broader protection against defects. Before you blame yourself for not buying a single-family home, keep in mind that they suffer the same fate. The only difference is that single-family homeowners generally pay more for their repairs due to lack of purchasing power and don’t have the ability to spread the cost among other owners. Moreover, unlike condominium and townhome communities, singlefamily homeowners may not have the ability to secure a loan to pay for expensive repairs.

Jeffrey S. Youngerman is a principal of Flaherty & Youngerman law firm in Chicago. Resources | Construction Defect Litigation: The Community Association’s Guide to the Legal Process. By Ross W. Feinberg, Esq., and Ronald L. Perl, Esq. Members: $29.95. www.caionline.org/shop © Community Associations Institute (CAI). The above article is reprinted with permission from Common Ground™ magazine, published by CAI. Further reproduction and distribution is prohibited without written consent. CAI is an international membership organization dedicated to building better communities. Go to www.caionline.org for more information.



March 2016

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FEATURE Insurance

Do you have “unknown unknowns”? As Donald Rumsfeld famously quoted “the ones we don’t know we don’t know…tend to be the difficult ones” Perhaps you have to arrange insurance for a property that is close to the water. Is there use of and responsibility to insure a jetty or similar? Is the jetty shown on the Strata Plan, or is there an agreement with a local council that allows the Owners use of the jetty under a lease? Is the Owners Corporation responsible for the upkeep of the jetty and if so does the Public Liability cover extend to jetty maintenance as part of the business description? Does your Strata Insurance policy provide full cover for the jetty and associated liability risks? You might need assistance with marine hull and liability risks as a cost effective solution to these questions and provide peace of mind for your Owners Corporation. Maybe you have responsibility to insure property in an area prone to Cyclone damage? You may find the Strata Insurance policy you take out comes with a significant excess for Flood or Named Cyclone. Do you know how to access a reduced Named Cyclone excess for such properties with a Deductible Buy Down cover? Have you been caught in the drama of a complex claim negotiation? For instance a dispute as to whether a property has been rendered uninhabitable by an insurable event. The main cause of a heated dispute in these circumstances is perception and definition; is the property uninhabitable in the true sense of the word? Each party may have a different viewpoint! Having an adviser and advocate for the Insured’s best interests on your side will lessen the drama.

claims from injured tenants of properties looked after by a Strata Manager. A growing area of risk is arising through complex cost sharing allocation disputes. Even in those cases where the Strata Manager has done everything in their power to assist an owner, is clearly acting in an administrative capacity only, there may still be significant costs incurred in mediation or defending the claim. A tailored PI policy should also offer you the significant benefit of positive cover for Strata Managers and their employees while acting as Authorised Representatives and Distributors of General Insurance products on behalf of Australian Financial Services Licence (AFSL) holders. Given the increase in the number of AFSL companies entering the Strata sector recently, the

choice has never been more complex. If you act for a number of AFSL companies what are the types of advice you might be called on to provide to owners? Are you able to respond appropriately to questions from the Insured on the various options and agencies and insurers providing them to you? Providing owners with no comments or guidance at all is unlikely to protect you from possible recourse in the event of a disputed claim.

Seek advice from a Specialist By partnering with an appropriate specialist you will get access to advice across a wide range of insurers for your owners. You should also get specialist advice to protect you and your business. Don’t take the risk with any unknown unknowns!


What about protection for your own business? Have you reviewed your Professional Indemnity cover recently? Is your policy specifically tailored to protect Strata Managers from the costs associated with defending various professional negligence claims? These claims can range from spurious or vexatious claims from disgruntled owners to slip and trip This article was kindly supplied by BCB



March 2016

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FEATURE Maintenance

New Year's Resolutions: Managing Contractors on Site in 2016 A New Year presents us with the opportunity to improve some of the more challenging aspects our jobs and do things better and smarter. One of the ways that can add value to your strata property is by refining how operations are taken care of, more specifically property maintenance. Here’s how we suggest you improve the managing contractors on site this year:



One of the areas that can lead to uncertainty and conflict is communication – or more specifically a lack thereof. When managing contractors on site this year, ensure that clear and thorough communication is your top priority. The more concise you are about what needs to be done and how, the more accurate the outcome will be. When everyone, including the tenants, are in the know, you greatly decrease the chances of any unexpected mishaps or safety threats.

Managing contractors on site is no easy feat, but gathering evidence that proves their worth before employing them can prevent (costly and time-consuming) headaches further down the line. Always ask for a reference list. If the contractor is not willing or able to provide one, move along. Should you have any queries or concerns about certain aspects of their work ethic, especially when conducting maintenance in a strata property, pick up the phone and call their previous customers. Entering into an agreement with eyes open goes a long way in ensuring your expectations are met.



Along with improved communication comes investigating the finer details of outside contractors you allow onto the strata property. Creating a safe, sustainable environment for tenants effectively becomes their responsibility, which means you have to choose carefully. Don’t be afraid to ask what their processes are and, more importantly, what products they use, as it’s the tenants that will ultimately suffer the consequences of below standard quality maintenance work.

If it’s not in black and white, you have no way of backing up the terms that were agreed upon before the contractors set foot on the strata property. A solid service level agreement (SLA) is the best way to avoid a ‘he says she says’ situation from quickly escalating out of control. Make sure that every aspect of the maintenance agreement, from the price to the predetermined timeline, is covered in the SLA. Knowing that there is a paper trail to back you up eliminates a lot of the stress and risk associated with managing contractors on site.

Improve the line of communication with tenants and contractors working on the property

Be more inquisitive about the materials and products used by contractors


Get a guarantee of the standard of the contractor’s previous work

Draw up an agreement that provides protection for both you and the contractors


Find a contractor that understands and respects your unique environment

Last but not least, choosing to work with a maintenance contractor that agrees to your unique terms and has some experience working in similar environments is a big plus. At Higgins we understand the challenges of managing contractors on site, especially in the strata property setting. We have decades of experience in conducting building and painting maintenance in properties across Australia, and as a family-owned business we are dedicated to doing our work in the most respectful and efficient manner possible. Our certifications meet the highest standards in the building and painting maintenance industry, and we have a long list of positive testimonials, making Higgins a preferred provider. Contact our team of experts with any questions you might have, or request a quote.

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March 2016

Insurance FEATURE

Digital Disruption – Threat or Opportunity?

Over the past few years, the concept of Digital Disruption has received a great deal of media attention. But do we understand what Digital Disruption is? And furthermore do we understand the implication for the Strata Industry?

Bobby Lehane Chief Executive Officer, CHU Underwriting Agencies

A simple definition might be that Digital Disruption is the change that occurs when new Digital technologies and business models affect the value proposition of existing goods and service providers in an industry. Prior to joining CHU, my career was heavily focused on technology and business transformations, this often involved responding to digital disruption, with roles at Microsoft, Commonwealth Bank, Multiplex and Zurich, so it’s a topic close to my heart. Like you I have witnessed radical changes in a number of high profile industries such as media, hotels, retail and taxi services and the speculation across all industries that Digital Disruption is on its way, is only natural. Therefore the question we need to ask ourselves within the Strata Industry is “How will the emergence of the Digital economy impact our businesses?”

Let’s take a look at the much publicised Digital Disruptor Uber. As you will no doubt have read Uber - the on demand car service is operating within the Australian Taxi Industry and is generally considered a good case study of the impacts of Digital Disruption. It is important to note, the Digital component of Ubers disruption is only part of the impact Uber has had on the wider taxi industry.The larger impact has been to awaken customers to the fact that they do not have to merely accept poor experiences from taxis; there is now an alternative. To understand the success of this new entrant into the taxi market it is important to outline a couple of key statistics. Uber was formed in 2009 by 2 colleagues in San Francisco. Uber is now the largest Taxi Company in the world operating in 50 countries and providing more than 1 million trips worldwide per day. Uber is now valued at over $50billion, but owns no vehicles (source: Forbes Magazine – 28 interesting facts about Uber)

March 2016



FEATURE Insurance

“Disruption is not always a threat to an industry, indeed the threat of disruption can force us to innovate and become better as a result.”

Dr Ken Hudson PhD. published an article in the Sydney Morning Herald on the 5th September 2015 analysing the “Uber Impact” on taxis. In this article he outlines 3 elements key to the success of a disruptor. 1. Consumer Frustration 2. A leap of Imagination 3. A digital Solution Let’s explore these elements a little further to understand their implications to the strata industry. 1. Customer frustrations: for Uber this was the general frustration of consumers at the way the Taxi industry appeared to operate. Poor service levels, expensive, unreliable and generally not meeting the consumers’ expectations. 2. A leap of imagination: The 2 founders of Uber met at a conference in 2009. They discussed the challenges they had at finding a taxi and started one of those “imagine if” discussions. Imagine if we could set up a system where it would be easy to get a ride because there were hundreds of cars on the road. Imagine if it was simple to book and pay for the ride.



March 2016

Imagine if we could reward good drivers and good passengers. 3. Digital Solutions: Australia has the 3rd highest subscriptions for mobile devices per capita in the world (source: Australian Advertising and Media Research 2015) with 85% of our population or 19 million people utilising a connected device. Uber seized on this global phenomenon and focussed their energies on digital interactions and not the traditional voice channel utilised by most taxi companies. Uber’s Rideshare App revolutionised the way we think about booking a ride. No longer will customers tolerate long waits on hold waiting for an operator to pick up your call, they look for immediate confirmation that a car is booked and want to see how far away the car is on their map. It is plain to see the Taxi industry was ripe for disruption and disruption has had fairly devastating consequences for the business owners and investors, but arguably very positive impacts for the customers. In most states within Australia, perpetual taxi licenses were highly regulated. In 2012 Victoria took

steps to reform the industry as a result of Ubers entry into the market. Prior to the reform a taxi licence cost more than $500,000. Post the reforms, a one year licence from the Taxi Services Commission in Victoria is worth $22,000. So with all of the growth statistics in the media relating to Strata and the above case study in mind, do we think the Strata is susceptible to the entrance of a disruptor? The best defence to the entrance of Disruptor is to ensure we are addressing the 3 conditions Dr Hudson outlined for success. We need to challenge ourselves and ask the hard questions. How does the Strata Industry compare? Strata is an extremely challenging sector. We need to assess “are we meeting the growing expectations of our customers?” Is there an opportunity for strata to do things better? Let’s challenge ourselves to imagine a system making it easier to communicate with our lot owners. Imagine if there was a way to ensure all jobs are done on time with improved service levels. Imagine if we could

Insurance FEATURE

Uber on Demand Car Service

achieve more with less stress. Most Strata Managers talk about the Tsunami of emails so the question is, “are we looking at digital solutions?” From my first 12 months at CHU, it is evident this is one of the biggest strategic challenges the industry faces. Disruption is not always a threat to an industry, indeed the threat of disruption can force us to innovate and become better as a result. CHU was founded on the premise of innovation to the Strata Sector, taking a complex problem (insuring strata complexes) and providing a simple solution for all stakeholders. We are again looking at the complex problems the industry faces and working on simple solutions. Over the next 12 months, CHU will be releasing a number of new initiatives to follow in Ubers footprints and revolutionise the way we think about service in the Strata Sector. We are looking to enhance our ability to interact digitally and simplifying many of the cumbersome processes inherent to

insurance. No longer will you need to wait for office hours to submit a claim or get a quote for insurance. You can be served when, where and how you want by multiple channels. An exciting example of this innovation, is the release of the CHUniverse App for smart Phones. This first release will provide the ability to submit a claim and receive updates on the progress without the need to fill out lengthy forms. There will also be the opportunity for building occupants to receive updates keeping them informed of progress and minimising follow up calls made to our distribution partners. While this is only a small example of CHU’s ongoing digital transformation it signals our clear intention to remain committed to the premise of taking a complex problem and providing simple solutions.

CHUniverse App Home Screen

So a question we should all be asking ourselves is “Are you ready for the future?”.

This article was kindly supplied by CHU

March 2016



FEATURE Technology

Things to Consider when Updating Hardware for your Office.

Reducing downtime and lost productivity


Having staff sitting around while their computers are being repaired or just waiting as the computer slowly processes the data input is not desirable and often leads to user frustration.

One of the greatest fears of business owners today is having their technology fail resulting in loss of productivity and even worse the loss of data. Even though there is high risk, planning and budgeting for IT infrastructure is often overlooked. We posed the question: When should you update your hardware? The following figures are fairly consistent across suppliers when talking about replacing hardware. ww A desktop computer 3-4 years – updating a desktop computer within these timeframes allows you to maintain the latest operating systems including the most up-to-date security patches. ww A laptop 2-3 years – laptops are more prone to wear and tear so tend to have a shorter life than a desktop. ww A server 3-5 years - the life of a server is both hardware and software dependent so best to keep replacement in the same timeframes as other hardware. Here are some reasons why you should replace your hardware within these timeframes.



March 2016

Newer PCs support newer applications By upgrading your PCs you are also able to update software applications. New software brings enhanced features, improved usability and better performance, which ultimately points to better productivity.


Technology FEATURE


The price of replacement Computers, both servers and workstations on average have become less expensive and more powerful year on year for the past decade and allow your employees to be more productive.


Older equipment may not be covered by warranty Most computer manufacturers will give five years as the ‘end of life’ of server hardware but warranties are normally one to three years and extending these timeframes is usually quite costly and replacement parts will become less available.


Replacement hardware becomes obsolete Once the lifecycle of a computer or server has expired you run the risk of prolonged downtime trying to find spare parts or they may become prohibitively expensive.


Cheaper electricity costs You can reduce running cost with newer equipment as newer servers are designed with the latest technology, which consumes less electricity while giving you higher performance.

While all computing environments are different and requirements for replacing computers and servers may differ, the need to plan for their ultimate retirement should be taken into account by creating a technology roadmap which should include planning and budgeting for replacement computers and servers. Not only will this proactive stance prevent costly maintenance and downtime in the event of a crisis but it will allow for greater productivity and happier users.

This article was kindly supplied by StrataMax

March 2016



FEATURE Corporate Law

What is happening out there in StrataLand Now and then we have to stop and pinch ourselves to make sure what we are seeing is really happening. Strata and Bodies Corporate law is becoming the focus of many Courts and Tribunals across all States and Territories. In this industry update we review two of those interesting cases that create “StrataLand”.



March 2016

Your not reasonable I am! (or is the Court the reasonable one?) On 6 November 2015 the Queensland Court of Appeal decided a case on whether opposition to exclusive use grant was reasonable. The work was to extend a deck into common property and the airspace was valued at no more than $20,000. A group of dissenting owners opposed on a number of grounds, including that the extended deck would adversely affect the amenity, privacy and view from other lots, it would be inconsistent with the original architectural design intent for the development, and no compensation was offered for the land being acquired.

An Adjudicator found those grounds to be unreasonable. In an appeal to the Queensland Civil and Administrative Tribunal (QCATA), it decided that those grounds were reasonable. Upholding the further appeal, the Court of Appeal reinstated the Adjudicator’s decision on the basis that there was no legal error in it, even though the Court acknowledged that QCATA’s views on the grounds for opposing the exclusive use grant could also be reasonably held. The Court held: “…the Adjudicator is not limited to determining whether the … opposition to the motion could have been reasonably held. She was required to reach her own conclusion after considering all relevant matters.”

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FEATURE Corporate Law

The Court then went on to find that: “As the reasons of both the Adjudicator and QCATA demonstrate, views as to what was reasonable or unreasonable involved value judgments on which there was room for reasonable differences of opinion, with no opinion being uniquely right. Had QCATA’s views as to unreasonableness been the views of the Adjudicator, and had the Adjudicator made no errors of law, that finding would have been unassailable…” This means that while the views of the Adjudicator and QCATA were different, the Court considered them both to be reasonable. However, an appeal against an Adjudicator’s decision is limited to legal errors. The Court held that an Adjudicator’s views as to unreasonableness are reached by making findings of fact, not law. That means they are generally not open to appeal.

Implications of this decision The approach taken by the Court may cause concerns for bodies corporate, committees and lot owners across the industry. It permits an Adjudicator to impose their own value judgment on what is reasonable in the circumstances of a particular scheme, as opposed to

simply determining whether the grounds for the body corporate’s decision were reasonably held and allowing the stakeholders involved to form their own value judgments on what is appropriate for their scheme. Hypothetically, one group of owners could hold a reasonable view in support of a proposal, another group could hold a reasonable view opposing the proposal, and the Adjudicator may very well hold a different view entirely and impose that view on the community.

What’s that smell? - A messy end to sewerage blockage The Victorian Civil and Administrative Tribunal (VCAT) recently found that an owners corporation was not liable to the damages to a lot owners property because of sewerage entering the lot from common property pipes. In this case a lot owner noticed stains on the ceiling within the lot and made representations to the owners corporation to repair the problem. On investigation the issue related to the sewerage pipes which were blocked and sewerage leaking out and into the complainant’s lot (and subsequently into their lots). The cause of the blockage was

found to be a range of inappropriate articles being placed in the sewerage system and flushed down toilets (read between the lines on what these fun things would have been) The complainant claimed damages of $9,494 and penalties against the real estate manager, body corporate manager and the manager himself for not taking appropriate or urgent action.

In making its decision to dismiss the application VCAT found the following: 1.

That the sewer stack and all piping was common property. 2. That there was no history of problems with the sewer stack. 3. That the owners corporation didn’t fail to maintain the common property. In making this finding VCAT held that the owners corporation was not required to monitor the maintenance and state of repair of the sewerage system (following a NSW case of Ridis v Strata Plan No 10308 [2005] NSWCA 246). 4. That the issue was what was the cause of the problem and not necessarily the failure to maintain the common property (and found that the cause was not the fault of the owners corporation). In making this finding relying on comments made by an expert that: “routine inspections of the pipes, even if conducted by the owners corporation, would not have avoided the incident from occurring, unless it was within minutes of the culprit or culprits having flushed the foreign object down their toilet….” 5.

That the owners corporation didn’t breach their duty of care to the lot owner. VCAT found that there was no reasonable foreseeability that the sewerage stack would be blocked and that to prevent such an incident would require daily inspections and regular flushing of the sewer lines and in his view this would be an unjustifiable expense.

Know. Act. Resolve

This article was kindly supplied by Grace Lawyers



March 2016


New South Wales

NSW President’s Message We achieved a lot in 2015 and by the time you read this it will already be a quarter of the way into 2016. Welcome to my first column for the year and what a year it will be. We have many events, education and networking opportunities planned so please stay in touch with your member organisation, Strata Community Australia (NSW). Our most important achievement during the past 12 months was being a part of the legislative review, which finally saw new strata laws passed in the second half of 2015. The draft Regulations are to be made available at the end of March and we will have four weeks to review and comment on these. Until this is done we are not in a strong position to assess the “mechanics” of how the legislation will work. We will need time to prepare and that includes ensuring our training package aligns with the industry requirements. To that end SCA (NSW) has been lobbying for the legislation to take effect from 1 September 2016. This is essential as it is our view that neither the industry nor Fair Trading will be ready to roll out training material to strata managing agents and strata owners. We understand the NSW Government has agreed to this delay. One of the challenges we face this year will be developing templates for compliance and transparency and we understand that the software companies may not be able offer programs that are compliant in some areas such as electronic voting. We are not sitting back, SCA (NSW) has already agreed with Fair Trading that we will do road shows together to present the changes to the strata industry across NSW.

Never has it been a better time to be a member of SCA (NSW) and reap the benefits of an industry association, which can guide its members through the coming changes. Being in the position we are enables SCA (NSW) as an organisation to drive consistency and therefore continue to build professionalism. One of the newest changes, if you haven’t noted already, is the switch to a financial year based membership renewal. Notices were sent out at the end of 2015 and renewing your membership can be done online. I encourage you to renew your membership and spread the word to those you know are not members to come and join as the benefits are great. A benefit of being an SCA (NSW) member is our accreditation offer. Members only have until 30 April 2016 to seek Level 3 Accreditation based on the criteria listed on our website. After this date, to apply for Level 3 Accreditation, you must have been a licensed strata manager in NSW for a minimum of five years, have not had any disciplinary action taken against you as member of SCA (NSW) and completed the Diploma in Strata Management. No consideration of degree qualifications or experience as a licensee-in-charge will be considered. Accreditation is an excellent way of standing out from the crowd. Gaining any level of accreditation demonstrates to your stakeholders that you are a professional in your field. To apply, download the application form online at nswstratacommunity.org.au. And if you need help our friendly Secretariat staff are only too happy to provide you with assistance. Welcome to 2016, we have a lot of work to do!

Greg Haywood SCA (NSW) President

March 2016



STATE NEWS New South Wales

New training package to meet new challenges SCA (NSW) is well-known for providing excellent education and information across the strata industry and offering it to members and non-members alike. It should therefore come as no surprise that we have been busy putting together a training package to assist the industry in preparing for the changes the new legislation will bring. As Greg Haywood, SCA (NSW) President says in his column, the draft Regulations are not yet available so the package as it is at the moment will evolve to incorporate the new regulatory requirements. The training package developed for SCA (NSW) will focus on meetings, agendas, by-laws, renovations and management agreements. As mentioned it has only just been developed and will evolve further. Here we have tried to summarise what we can bearing in mind more information may be available by the time this is published. Strata managers are best advised to start looking at the changes and consider how they will incorporate them into their business practices. The three main areas to look at are meeting procedures, debt collection procedures and the new meeting agendas. There are also new insurance commission requirements that strata managers must also be familiar with.

orders and remove strata managing agents where the agent has refused or failed to perform their duties to an acceptable standard in line with their agreement.” Our advice is to go and check your various agreements and make sure that you’re delivering to your owners everything that you said you would. Strata managers who follow their agreements to the letter and communicate effectively with their owners are less likely to end up in a meeting with NCAT. On the issue of insurance commissions, Fair Trading says “The strata reforms contain measures regarding third party commissions. At each AGM, the strata managing agent will be required to disclose whether any third party commissions have been paid to the agent for the previous 12 months. The disclosure will be recorded in the minutes of the meeting.” At the AGM, the manager is obliged to advise the owners corporation that the strata managing agent has received commissions in the past (and the amount) and what they may receive for the next year (an estimate). The manager must then later advise the owners corporation if that estimate was incorrect. If an agent fails to disclose commissions, NCAT will be able to make an order that any commissions accepted in the previous 12 months be repaid to the owners corporation.

There are other changes but these are a good place to start as the legislation and regulations will impact on everything strata managing agents do.

Ensure your agendas and meeting minutes are accurate and up-to-date records of the AGM and other meetings. Take care with meeting procedure’s and again ensure you communicate effectively.

We also checked with NSW Fair Trading to see what it was saying and how strata managers can meet their new requirements. Fair Trading says that “Changes will give the NSW Civil and Administrative Tribunal greater powers to make

SCA (NSW) will advise members when it launches the training sessions. Until then stay in touch with what’s going on through our newsletters, communications and website: nswstratacommunity.org.au

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March 2016

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2016 Events Calendar Victoria Major Events

Full Day(s)

Symposium and Awards for Excellence, Melbourne Park

19 August

Principals Retreat, Intercontinental Fiji

20 – 23 October

Education Seminars Repairs & Maintenance

19 Feb


Building Resilience Workshop

18 March


Contract of Appointment

15 April


OC Security & Privacy

13 May



17 June


Current Industry Challenges

15 July


Go to Whoa

23 Sep


Media Messaging Workshop

18 Nov


Owners Corporation Certificates

2 Dec


All education seminars to be held at the Manningham, 1 Thompsons Road, Bulleen (unless advised otherwise)

Round Table Discussions (RTD) North

8 March


South East

5 April



7 June



29 July


RTDs are free member only open forums (max. 40 attendees) Venues vary per event, refer website for details.

Special Interest Groups (SIG) Niche Market Managements

2 March


Suppliers’ Chapter Breakfast

11 May


Rising Star

17 May


Principals of Strata Mgmt. Companies*

21 June


Women in Strata*

19 July

12 noon-2:00pm

Young Professionals

4 Oct


Support Roles in Strata

8 Nov


SIG discussions will be held at different venues, please refer to website for full particulars*fees apply

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March 2016

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QLD President’s Message The Board’s strong Government Relations strategy has had a big impact on the Attorney-General’s decision to release the next Issues Paper in the ongoing Property Law Review. As part of our endeavours we had the opportunity to liaise with the Department of Justice and the Commissioner for Body Corporate and Community Management frequently throughout the year, putting our desire to move ahead with the review firmly in focus. As a result, we now hope for a fast review of the submissions and draft legislation within this year. In a small lunch meeting with the Deputy Premier, it became clear that Planning and Infrastructure are a major concern of the government which provides open ears for strata community sector issues. To support our increasing workload at Board level as we look at refining member services, we have been blessed with two new Directors: Kay Trimble, elected by members at the AGM and Kelly Roberts, appointed by the Board as independent Director. I have thanked the Board for giving me another two year mandate as the President as it will enable me to see the review through and commence our new education program. Featuring a structured approach to learning and new webinar technology, our professional development opportunities will four fold for the members outside of Brisbane. Although we have seen increasing member participation rates in 2015, the focus is on quality and more intense sessions. All of our programs, including the Conference as much as each of the individual educational sessions is developed by our education committee, ie strata managers. They are best able to identify the gaps in their staff and colleague’s knowledge and therefore instigate professional development that fills these gaps.

Simon Barnard SCA (Qld) President



March 2016

From left to right: Commissioner for Body Corporate and Community Management Chris Irons, SCA (Qld) President Simon Barnard and Shadow Attorney-General Ian Walker at the SCA (Qld) Annual General Meeting, 20 October 2015

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STATE NEWS Queensland

Queensland Government reviews strata legislation

SCA (Qld) Highlights from 2015

The release of the new Issues Paper “Procedural issues under the BCCM Act” at the end of last year was welcomed by our sector, knowing there are 89 questions raised directly concerning the administration of bodies corporate. This paper follows strata law review initiatives in NSW and Victoria and comes after some discussions between SCA (Qld)’s President Simon Barnard, Advisor Patrick McGuire and SCA (Qld) General Manager Katrin Schmidt and local politicians and State Government.

SCA (Qld)’s education program consisted of 27 professional development seminars, a Leadership Forum, and a two day Conference. Just under 1,200 registered along with another 116 players to the Golf Day and 250 attendees at the Christmas Networking functions. With a representation of 278,069 lots, SCA (Qld) members represent 66% of all registered lots in Queensland (whether managed or unmanaged).

This is the second Issues Paper addressing governance in strata and the Queensland Legislation Committee held two workshops with members to prepare a substantial submission reflecting practical experience. As members administer around 80-90% of all managed schemes in Queensland, the roundtable was reflective of the complexities of the real strata world and as such many case studies were addressed. In principle the Queensland submission reflected a democratic approach, self governing principles and retaining the powers of the body corporate.

The biggest achievements were SCA (Qld)’s advocacy and media work. For the first time in history SCA (Qld) featured on National Television in July 2015. Senior Vice President James Freestun reported on Concrete Cancer on Channel Ten’s THE PROJECT, and President Simon Barnard was interviewed for Channel 7 in relation to smoking in strata schemes.

SCA (Qld) also met with the owners and the resident managers associations, OCN and ARAMA to find common ground for a joint submission.

Leadership Forum convenes in North Queensland Early November Hamilton Island was the destination for 29 delegates and platinum partners for the 2015 Leadership Forum. The third consecutive Forum put people, performance and profit in the spotlight, discussing the characteristics of leaders and ways to develop a team cost effectively. Three networking opportunities rounded off two days of exchanging ideas and sharing knowledge between 20 firms. The 2016 Leadership Forum is anticipated to move into late August/early September.

2016 Events Calendar Events SCA (Qld) Annual Conference Twin Waters (Sunshine Coast) Standard vs Part 5 Agreements Breakfast – Brisbane 360 on QCAT – Brisbane (& webinar) Standard vs Part 5 Agreements Breakfast – Sunshine Coast Compliance Seminar – Sunshine Coast Standard vs Part 5 Agreements Breakfast – Gold Coast

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March 2016

Dates 2 – 4 Mar 16

5 April 16 12 April 16 5 May 16 5 May 16 12 May 16

Compliance Seminar – Gold Coast

12 May 16

Finance Seminar - Brisbane

24 May 16

Strata Starter – Brisbane (& webinar)

28 June 16

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Western Australia

Western Australian government puts strata on the fast track Perth and some of Western Australia’s biggest cities are set for massive new strata sector building activity. SCA (WA) Inc. has commended the State Government on paving the way for the future of property in the west, creating potentially thousands of new jobs. A recent announcement that drafted reform measures have been approved by Cabinet has been the talk of the town in recent days, and hundreds of thousands of stakeholders wait to hear details of the proposals, particularly those concerning the future flexibility and affordability of WA property. It’s estimated that nearly 700,000 WA residents now live in strata properties and the reforms set to be introduced in parliament later this year, will allow for suburbs of Perth and every region statewide to go through much needed urban renewal. While we know there is still work to be done, our initial expectations are that this reform will see the gap between WA and the eastern states in the growth of apartment living to reduce over the next decade. SCA (WA) Inc. applauds the State Government on what we consider to be game changing legislation that is finally set to deliver our sector into the 21st century. Beyond the imminent development growth, this is an important first step in delivering modern necessities like sustainability, diversity and affordability to an ever expanding stakeholder base, and we’re pleased to have a clear commitment from the State Government to this goal.



March 2016

A priority of the Western Australian strata sector has been to communicate the importance of sustainable property, especially as the cost of living increases, and these reforms embrace the need to go green perfectly. We expect there will be a huge change on the cards for many strata title properties throughout the state, with sustainable inclusions like solar panels, water tanks, energy efficient lighting and many more now an option. We know that sustainable property inclusions make the running a strata community more affordable, whilst minimising the environmental impact of hundreds, if not thousands of residents, so we hope this specific reform sets a precedent for every State Government around the country to follow. The reason why elements of sustainable home design haven’t always been a reality for many strata title property owners is because of existing legislation demanding that any changes to common property must be met by a unanimous vote from all other owners. We’re excited that this may be the end of the “one vote means no” system that has the ability to seriously affect the way the majority of communities want to live.

Western Australia STATE NEWS

WA Stakeholders aren’t settling for the home among the gum trees dream anymore; they want more options and we’re hopeful reform measures around the types of developments possible statewide will mean greater property market activity. The sheer amount of outdated legislation that requires an overhaul is going to mean a big job for the State Government, but we are pleased that Landgate has given us a commitment to consult with us as the draft bill is developed. When we say these proposed reforms are a good first step, we mean it; the job is not done yet and we’re confident that organisations like our own can play an instrumental role in ensuring that this reform is comprehensive. We were hoping that issues like strata manager licensing or registration would be considered a priority by Cabinet, but we’re confident that these proposed reforms will at least provide a platform for future reform in the area of strata manager regulation. The indication from Landgate is that the draft bill will likely be introduced into Parliament in the second half of this year. High density living is the way of the future and for that to be viable, all strata stakeholders need to have the freedom to make sustainable choices.

The strata sector is set to continue as a major player in Western Australia’s property market and we’re very pleased with the forward thinking approach taken by the State Government.

With the “one vote means no” system potentially dead and buried, there could be much greater diversity in the overall housing of WA.

We’re confident the State Government shares the same vision for the strata sector in WA as we do, and we look forward to working with them constructively on the outstanding aspects of this strata reform.

Development growth must be encouraged if we’re to grow as an economy and the proposed reform measures around housing diversity go a long way to ensuring there will be greater options for home buyers/developers moving forward.

Rachel Cosentino SCA (WA) President

State partners Platinum



March 2016




Australian Capital Territory

ACT Annual General Meeting The ACT Chapter held its Annual General Meeting in December 2015 at which a new Chapter Executive was appointed. Some familiar faces were re appointed and I was humbled to be confirmed as ACT President for a second year, assisted by our Vice President Tim Maly. Sally Shaw was also a welcome re appointee and we were equally pleased to welcome back Erik Adriaanse to the ACT Executive who continues with his dual role as National President. We have certainly set a full agenda for 2016 with a commitment to hold a number of quality events during the year. The Executive will be meeting during February in order to ratify our ambitions events calendar and we look forward to providing full details to our members and sponsors in the near future. It is with great pleasure that I confirm the appointment of Shari Ujdur to the position of Executive Officer assisting the Chapter. Shari comes to us with a great deal of experience in marketing and public relations which will be of great benefit in achieving our forward goals.

Territory partners



March 2016

The Chapter wishes to acknowledge the hard work of our outgoing Executive members and in particular we wish to record our tremendous gratitude for the contribution of founding member Jan Browne has decided to stand down from the Executive for 2016 due to her significant commitments elsewhere.

Building Regulatory Reforms The Environment and Planning Directorate (EPD) has announced new dates for public workshops and community forums on the options to improve the ACT building regulatory system in the Minister for Planning’s discussion paper. The workshops and forums are designed to help the community participate in the current consultation on building regulatory reforms, discuss options in more detail and allow stakeholders to hear a range of views. People are invited to attend any or all of the sessions in a workshop. Minimum numbers are required and this wishing to attend are requested to RSVP to ConstructionPolicy@act.gov.au

A simple solution to Key and Access Management for rental and strata managers The replacement of lost keys, rekeying of locks, cutting additional keys or even providing emergency access to tradesmen are an expensive component of key management in any rental or strata management. Airkey is a simple access control system that will provide a solution to this problem and provide you with total control of who does and does not access the properties under your control.

The user accesses the lock with either an access control card or fob or if they have a compatible android NFC enabled phone, the actual phone can be their access card. You can also manage the system, the users and your locks with this type of phone. The solution is perfect for rental properties, holiday rentals, plant rooms and common access areas in strata managements.

Airkey is an electro-mechanical cylinder that requires no wiring and replaces the existing cylinders. Once the cylinders are in place you can use a website or an app to manage the system. The app or website can be used to add and delete users and provide access for a single use, a day, a week or virtually anytime frame that is required.

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SCA (Tas) Report By the time you are reading this, we would have completed the SCA (Tas) 2016 CHU Symposium. The event consisted of our welcome cocktail party held at Peppers Seaport, the symposium, our gala dinner and awards ceremony at QVM Art Gallery and the local food and wine event, Festivale. In its second year running, over 40 Strata Managers and suppliers to the industry from across Australia attended our symposium. But we couldn’t have done it without the support of CHU Strata Insurance, our naming rights sponsor. We would also like to thank our platinum partner Longitude Insurance who sponsored the strata community awards held at the gala dinner. We thank our other platinum event partners, Programmed Property Services and ThyssenKrupp Elevators, as well as our event partners BCB Strata Insurance Brokers and StrataMax for generously supporting our symposium.

State partners



March 2016

Delegates benefited from learning about strata reform from Tim Tierney, from the Law Society of Tasmania, the upcoming business opportunities in strata by Alan Ferre from CHU and the future of SCA and the strata industry from SCA’s CEO, Kim Henshaw; just to name a few. For event photos, please visit the SCA (Tas) website. SCA (Tas) says goodbye to Mike Steele, the former Tasmanian President. Mike spent countless hours planning and running the 2013 and 2016 symposiums. His dedication to SCA and the strata industry as a whole has been greatly appreciated and we wish him all the best in his future endeavours. On behalf of our members, we thank Mike for all his efforts and achievements.

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2016 SCA Inside Strata March  

Strata Community Australia is the peak association supporting the strata sector and is well positioned to produce this, Australia’s premier...

2016 SCA Inside Strata March  

Strata Community Australia is the peak association supporting the strata sector and is well positioned to produce this, Australia’s premier...