The NSW Strata Magazine | October 2022

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The NSW

How do we maintain the building when we can’t get contractors? Page 6 | Sedgwick
STRATA MAGAZINE OCTOBER 2022 Should large complexes have bigger committees Page 22 | The Strata Collective Can the Strata Manager do whatever they want and get away with it? Page 4 | Williamson Lawyers Pty Ltd

About Us

LookUpStrata is Australia’s Top Property Blog Dedicated to Strata Living. The site has been providing reliable strata information to lot owners, strata managers and other strata professionals since 2013.

As well as publishing legislative articles to keep their audience up to date with changes to strata, this family owned business is known for their national Q&A service that provides useful responses to lot owners and members of the strata industry. They have created a national network of leading strata specialists across Australia who assist with 100s of the LookUpStrata audiences’ queries every month.

Strata information is distributed freely to their dedicated audience of readers via regular Webinars, Magazines and Newsletters. The LookUpStrata audience also has free access to The LookUpStrata Directory, showcasing 100s of strata service professionals from across Australia. To take a look at the LookUpStrata Directory, flip to the end of this magazine.

Meet the team

Nikki began building LookUpStrata back in 2012 and officially launched the company early 2013. With a background in Information Management, LookUpStrata has helped Nikki realise her mission of providing detailed, practical, and easy to understand strata information to all Australians.

Nikki shares her time between three companies, including Tower Body Corporate, a body corporate company in SEQ, and is currently in her third term on the SCA (WA) Education and Professional Development Committee now known as the Industry Understanding Committee.

Nikki is also known for presenting regular strata webinars, where LookUpStrata hosts a strata expert to cover a specific topic and respond to audience questions.

Liza came on board in early 2020 to bring structure to LookUpStrata. She has a passion for processes, growth and education. This quickly resulted in the creation of The Strata Magazine released monthly in New South Wales and Queensland, and bi-monthly in Western Australia and Victoria. As of 2021, LookUpStrata now produce 33 state based online magazines a year.

Among other daily tasks, Liza is involved in scheduling and liaising with upcoming webinar presenters, sourcing responses to audience questions and assisting strata service professionals who are interested in growing their business.

Learn more here → https://www.lookupstrata.com.au/about-us/ You can contact us here → administration@lookupstrata.com.au

Disclaimer: The information contained in this magazine, including the response to submitted questions, is not legal advice and should not be relied upon as legal advice. You should seek independent advice before acting on the information contained in this magazine.

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Contents

4 Can the Strata Manager do whatever they want and get away with it?

Shane Williamson, Williamson Lawyers Pty Ltd

6 How do we maintain the building when we can’t get contractors?

Bruce McKenzie and James McIntosh, Sedgwick

8 Can I claim tenant relocation costs for a bathroom membrane repair?

Tyrone Shandiman, Strata Insurance Solutions

10 Who repairs lot property that’s been damaged by rising damp?

Pierrette Khoury, Khoury Lawyers

12 Can we leave the fire doors on the stairwell open?

Rob Broadhead, 2020 Fire Protection

14 Can residents park two cars in the one bay?

Leanne Habib, Premium Strata

16 Is managing Strata Meetings easier today with Technology? Urbanise

18 Can small schemes conduct an internal audit of their financial records?

Rod Laws, TINWORTH & CO

20 Can an owner offer to pay more than their share towards a special levy?

Tim Sara, Strata Choice

Should large complexes have bigger committees?

Rod Smith, The Strata Collective 24 What is the average caretaker management agreement in NSW?

James Moir, Madison Marcus Lawyers

Duty of owners corporation to maintain and repair property

SCA (NSW)

Common property defects discovered during owner renovations

James McIntosh, Sedgwick and Leanne Habib, Premium Strata

The NSW LookUpStrata Directory

Thanks to our sponsors

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Can the Strata Manager do whatever they want and get away with it?

Despite the Management Agency Agreement limiting a Strata Manager’s liability, can they still be found liable?

In reading many Strata Service Management Agreements (The Contract), I noticed most have a clause that says “The Agent is not liable to the Owner, including without limitation for breach by the Agent of this Agreement, (except as otherwise required by law..”

It all sounds like Strata Managers can do whatever they like and get away with it.

In reading this, I cannot think of any way the Agent can “breach” the contract.

Are there cases where Strata Management Agency breach the contract?

Fiduciary obligations are strict obligations which cannot be avoided.

Despite there being provisions in the contract which seek to limit the Strata Manager’s liability, the Strata Manager may still be found liable to the owners corporation, or a lot owner, in some circumstances.

As an agent, a Strata Manager has fiduciary obligations to the owners corporation. For example, as an agent, the Strata Manager must:

• only act within their delegated authority;

• not act in a manner which conflicts with the interests of the owners corporation;

• not obtain an undisclosed benefit as a result of the agency.

www.lookupstrata.com.au4

Fiduciary obligations are strict obligations which cannot be avoided.

The Fiduciary obligations are imposed on the Strata Manager under the Property and Stock Agents Act 2002. This law is administered by NSW Fair Trading.

The Strata Manager owes the owners corporation a duty of care. The delegation of functions and authority to the Strata Manager creates responsibilities and a duty of care which may result in liability.

The more functions and authority a Strata Manager has, the greater its duty of care. The owners corporation should consider any limitation of liability in the context of the duties being delegated and the representations made by the Strata Manager in relation to its experience and knowledge and how the duties will be fulfilled.

For example, a Strata Manager could be liable if someone is injured on the common property if the Strata Manager did not take reasonable steps to address the issue causing the injury. Some Strata Managers provide assistance in resolving building defects, in such circumstances, there is a duty of care to ensure the owners corporation is correctly informed of its recovery rights.

In 2017 the NSW Court of Appeal found a Strata Manager partly liable for the collapse of a balcony. In the case of Libra Collaroy Pty Ltd v Bhide [2017] NSWCA 196, Libra Collaroy Pty Ltd was the Strata Manager, Bhide was an owner of a lot which had its balcony collapse due to a lack of maintenance. The Strata Manager provided quotes to the owners corporation to repair the balcony but the quotes were rejected. The Court found that the Strata Manager should have specifically recommended expert advice be obtained from a building consultant. The Strata Manager was found to be 50% liable.

Division 2 and Division 3 of Part 4 of the Strata Schemes Management Act 2015 sets out the functions and accountability of Strata Managers.

The case referred to above does not concern a breach of contract however in summary, taking into consideration all of the above, it is not quite the case that the Strata Manager can do whatever they want and get away with it.

READ MORE HERE

How do we maintain the building when we can’t get contractors?

How do we comply with NSW Legislation to maintain the building when either the weather is too bad to carry out the repair or we can’t get contractors?

A recent article on the LookUpStrata site by JS Mueller & Co states:

“… an owners corporation cannot delay any repairs that need to be carried out to fix defects in the common property that are causing water to leak into a lot. Even if it is impossible to find contractors who are available to repair those defects, that does not provide an owners corporation with a lawful excuse for delaying any necessary repairs to common property.”

We have been advised of a leak into a ceiling of a unit, however, we cannot get a contractor to attend ‘immediately’ due to current severe weather conditions so as to inspect and carry out any replacement of roof tiles that may have been damaged and causing water to penetrate. The roof was inspected about 12 months ago and any

damaged tiles were replace then, ridge capping re-pointed and gutters checked for debris.

Our Strata Manager has attempted to locate a roofing contractor but there is a current backlog and attendance is not practicable ‘immediately’. Does this mean that the Committee (all in their 70s) have to climb onto a three storey building’s roof to replace tiles themselves?

We have the funds available to effect any repairs needed but cannot get a contractor ‘immediately’. If bad weather and lack of contractor availability is not a valid excuse, then the law, as you explain, it not practical.

I’m sure ours is not the only Strata Committee in this situation.

You should contact your local state emergency service.

In New South Wales, new Legislation called the Design and Building Practitioners Act 2020 commenced in July 2021.

www.lookupstrata.com.au6

being experienced

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7 READ MORE HERE BUILDING CONSULTANCY • Defect reports & forensic engineering • Scope of works • Dilapidation & risk surveys • Dispute mediation and expert witness • Contractor procurement and cost validation • Construction management • Capital Works Funds/Maintenance Plans • Digital Capability REPAIR SOLUTIONS • Emergency make safe • Fire water damage restoration • Leak detection • Contamination response • Building repairs • Cost validation services • Digital Capability Supporting Owners and Strata Managers with tailored remediation and repair solutions 1300 735 720 sales@au.sedgwick.com 1300 654 599 sales@au.sedgwick.com It sounds like your question is more about a contractor availability issue. This is not just
in the strata management industry, it’s
generally. The whole construction industry is really struggling at the moment with trade and material availability. In this
you
your local state emergency service.
act
to
the emergency situation. However, Sedgwick
be
corporation to access contractors, trades and
like through our network of suppliers.
bruce.mckenzie@au.sedgwick.com

Can I claim tenant relocation costs for a bathroom membrane repair?

Our tenant had to move out for the duration of common property works. Shouldn’t the OC cover any reasonable costs such as alternative accommodation for the tenant?

Bathroom repairs had to be undertaken in a tenanted one bathroom apartment due to water membrane failure. This was deemed common property.

The tenant had to move out for the duration of bathroom works. The Owners Corporation has refused requests to cover the tenant’s relocation costs.

As the bathroom repair has been deemed common property, shouldn’t the OC cover any reasonable costs such as alternative accommodation for the tenant?

We would recommend first seeking to make a claim for damage along with any loss of rent with your strata insurer and get a formal response.

In this instance, the insurer will not cover maintenance costs associated with finding and fixing the damaged membrane due to exclusions applying (such as lack of maintenance, rust, oxidation, wear & tear, corrosion, gradual deterioration, developing flaws, building defects, rectification of faulty workmanship etc.)

However, water damage resulting from the leak can be considered provided the damage is sudden and accidental. If the property becomes uninhabitable due to the insured damage, the policy can also consider loss of rent cover.

We would recommend first seeking to make a claim for damage along with any loss of rent with your strata insurer and get a formal response.

Should the insurance claim not be successful, it would fall on the lot owner demonstrating the owner’s corporation are legally liable for the loss.

If you are seeking the owners corporation to make payment for your loss because you believe they are legally responsible, to start with you will need to send a letter of demand which outlines the circumstances, why you feel the owners corporation are responsible and the amount you are seeking compensation for. Alternatively, you can visit the fair trading website for further information on resolving disputes.

READ MORE HERE

9

Who repairs lot property that’s been damaged by rising damp?

If a problem like rising damp causes damage to paintwork on internal walls inside the lot, is the Owners Corporation responsible to repaint?

Most of the lots on our complex have been affected by rising dampness. It has been advised the paintwork inside the affected lots is the responsibility of the lot owner. If a problem like rising damp causes damage to paintwork, is the Owners Corporation responsible to repaint?

If the affected area is inside the lot, i.e. on the internal walls, is it the Owners Corporation’s responsibility for the damage?

This will depend on the source of the rising dampness. If the source is from a common property related area, it is potentially the Owners Corporation’s responsibility. It is best the source is investigated and a contractor attend to inspect where it is coming from.

Khoury |

Lawyers

www.lookupstrata.com.au10
Pierrette
Khoury
pierrette@khourylawyers.com.au READ MORE HERE

Can we leave the fire doors on the stairwell open?

Our lift is not working. The fire stairwells have fire doors. Can these doors be left open to allow easy access for residents until the lift is functional again?

Fire doors cannot be left open as this destroys the compartmentalisation between levels.

Fire doors cannot be left open as this destroys the compartmentalisation between levels. This means that if a fire occurred on level 1, the smoke would fill the stairs, blocking safe egress for all other residents. A highly dangerous situation.

In this situation, we would recommend one of the following:

1. Have a locksmith temporarily change the doors to non-lockable (they must still close and latch) and the fire rating of the door should not be impacted.

2. If the building has a smoke detection system fitted, magnetic door holders could be fitted to the doors allowing them to remain open, but close automatically on fire or smoke. This means the doors can remain open whenever you want for egress. The down-side is that it would not be cheap.

www.lookupstrata.com.au12
READ MORE HERE
Rob Broadhead | 2020 Fire Protection rob.broadhead@2020fire.com.au

Can residents park two cars in the one bay?

Initially, we would recommend you ask your neighbours to exercise more consideration, and, if they persist, you could seek the involvement of your strata manager if the cars protrude outside the line markings of the car spaces.

153 Owners, occupiers and other persons not to create nuisance

1. An owner, mortgagee or covenant chargee in possession, tenant or occupier of a lot in a strata scheme must not:

a. use or enjoy the lot, or permit the lot to be used or enjoyed, in a manner or for a purpose that causes a nuisance or hazard to the occupier of any other lot (whether that person is an owner or not), or

b. use or enjoy the common property in a manner or for a purpose that interferes unreasonably with the use or enjoyment of the common property by the occupier of any other lot (whether that person is an owner or not) or by any other person entitled to the use and enjoyment of the common property, or

Are there any parking laws preventing residents from parking 2 cars in a single car space?

Are there any parking laws to stop 2 cars from being parked in a space for 1 car.

New neighbours moved in and are parking 2 cars in their 1 car space. This leaves my car at risk of being scratched due to access problems. I have to park my car right up close to the wall and it makes it hard for my children to get in and out of the vehicle.

c. use or enjoy the common property in a manner or for a purpose that interferes unreasonably with the use or enjoyment of any other lot by the occupier of the lot (whether that person is an owner or not) or by any other person entitled to the use and enjoyment of the lot.

Note: Depending on the circumstances in which it occurs, the penetration of smoke from smoking into a lot or common property may cause a nuisance or hazard and may interfere unreasonably with the use or enjoyment of the common property or another lot.

2. This section does not operate to prevent the due exercise of rights conferred on a developer by the operation of section 82 of the Strata Schemes Development Act 2015.

Your neighbours are causing you a nuisance in breach of the Strata Schemes Management Act, 2015 (NSW) – see Section 153 Owners, occupiers and other persons not to create nuisance. You could make application to NCAT for orders that your neighbours refrain from parking more than one car in their car space (attempted mediation is a precursor).

Note: Division 1 of Part 6 contains provisions about the circumstances in which owners of lots may carry out work that affects common property.

Leanne Habib | Premium Strata info@premiumstrata.com.au

READ MORE HERE

www.lookupstrata.com.au14
If your neighbours are causing you a nuisance, you could make an application to NCAT.

One of the cornerstones of strata management is the management of Committee and general (all owners) meetings. All major decisions made by a strata association rest on the professionalism and timeliness of the meeting process.

MEETING DOCUMENTATION

urbanise

IS MANAGING STRATA MEETINGS EASIER TODAY WITH TECHNOLOGY? urbanise

With the meeting tools available today a strata manager can prepare a draft agenda with a few clicks and can often produce and issue meeting minutes at the end of the meeting instantly with a push of a button.

No more manual drafting and redrafting from templates that have to be manually checked to ensure dates and locations and all the other little details are correct. In fact, transcribing errors are almost impossible to do nowadays as key motions such as for levies or for insurance are populated directly from the strata system to ensure accuracy.

AUTOMATING SUPPORT

We all remember our first large scale Annual General Meeting. In addition to the strata manager running the meeting we would see a small army of people supporting the process by taking attendance, tallying and retallying floor votes and voting papers, assisting with the election ballot process and so on. Add to this the complexities of secret ballots and the like and there are a lot of moving parts that need to be managed to ensure decisions are made correctly and thus enforceable.

EASY MEETING ATTENDANCE

Shaun Meyrick

So how is technology improving the meetings experience for both the manager and the owners? The below are my top 4 takeaways on how technology has improved the meeting process.

URBANISE STRATA:

URBANISE STRATA:

MOST COMPREHENSIVE STRATA MANAGEMENT SOFTWARE IN THE CLOUD

Achieving Quorum, being enough people in attendance to open and run a meeting, has been an ongoing challenge since the first formal meeting was held. With the ease of interstate investment and the proportion of owner occupiers continuing to decrease over time, one can mistakenly believe it is harder to get a quorum in today’s world.

Thanks to technology, with a little push from COVID this is not the case. Online and hybrid online meetings have made strata meeting attendance more convenient than ever. Whether through a major communication platform like teams or zoom or through a dedicated meeting app with inbuilt video and voting features, the standard meeting experience is now digital. And with a glass of wine in hand, owners can participate from their lounge room in the management of their properties rather than driving across town or submitting a voting paper and missing out on important discussions.

ELECTRONIC VOTING

Voting tally sheets were once a literally big deal. I used to bring A3 pages taped together (for the big AGMs) and would be furiously updating pre-voting paper tallies, proxies and other special voting arrangements just as the meeting would be about to start. Add to this that unfinancial (and thus not able to vote) owners who would often raise their hand or otherwise cast votes from the floor and these had to be watched for. This made vote management very exciting. Get a close vote and someone would demand a poll vote (requiring a recount with weighted votes) and many a meeting could get bogged down while the strata manager and their assistants are crunching the numbers on the fly.

FUNCTIONS IN STRATA MANAGEMENT 1 3 0 0 8 3 2 8 5 2 m a r k e t i n g @ u r b a n i s e . c o m w w w . u r b a n i s e . c o m . a u Urbanise is a Corporate Member of SCA NSW
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T me s a prec ous commod ty especia ly or strata managers W th recent nnovat ons n technology and automat on the average strata manager and support team members have become much more ef ic ent now compared to 20 years ago At ts core the Urban se Strata so ut on is a soph st cated strata accounting and operat ons platform wh ch a ows strata managers to automate the r work and opt m se ef ic ency t is provided as Software as a Serv ce (SaaS) of er ng to c ents W th nnovat ve ead ng edge strata management so tware p atforms your data sits n the cloud a lowing rea t me access to remote team members and cl ents Custom sed con igurat ons a so g ve you fu l control over your team member s access leve mak ng remote work ng easy to set up and eff c ent whi st protect ng sens t ve business data Invo ce processing A number of prov ders offer support serv ces for invo ce processing (e ther at p ecemeal or per hour rates) for what s e fect ve y bas c data entry Th s work has become part cu arly cost e fect ve w th bu k Account Payab e process ng software us ng learning algorithms capab e of data entry W th Urban se Strata, c ients can turn on the QuickAP ntegrat on wh ch automat cal y d g t ses the data rom nvo ces rece ved and beg ns processing them P ease click here to down oad the Qu ckAP brochure Collections W th a sol d po icy and process n p ace an outsourced prov der can hand e th s for you by access ng the data d rect y from Urbanise Strata and updat ng the records w thout any need to send or rece ve/reconc e data with the strata manager nbui t auto esca at on too s a ow the p atform to hand e esca at on commun cation automat cal y, a lowing your team to better ut ise their t me on other co lect on act vit es Accounting You may not need a fu t me accountant in most strata bus nesses There are accountants and ormer strata spec al sts that can access your system remote y and ass st with th s There are a so tools such as an auto ournal ng too that automat ca ly d v des a mult per od invo ce across the respect ve months S mp y se ect a start and end date when upload ng an invo ce and th s tool automat ca y works in the background Collections
Shaun Meyrick
Business De e opment Manager Urban se S ra a ema shaun mey ck@urban se com mob e +61 412 360 666 C O N T A C T U S F O R M O R E I N F O R M A T I O N
AUTOMATING SUPPORT FUNCTIONS IN STRATA MANAGEMENT 1 3 0 0 8 3 2 8 5 2 m a r k e t i n g @ u r b a n i s e . c o m w w w . u r b a n i s e . c o m . a u anise is a Corporate Member of SCA NSW
THE MOST COMPREHENSIVE STRATA MANAGEMENT SOFTWARE IN THE CLOUD T me s a prec ous commodity espec a y for strata managers W th recent nnovat ons in techno ogy and automat on, the average strata manager and support team members have become much more e f c ent now compared to 20 years ago At ts core the Urban se Strata so ut on s a sophist cated strata account ng and operat ons p atform wh ch al ows strata managers to automate the r work and optimise e f c ency t s prov ded as Software as a Serv ce (SaaS) o fer ng to c ients W th nnova ive eading edge strata management software p at orms your data s ts n the c oud a ow ng rea time access to remote team members and c ents Custom sed conf gurations a so give you fu contro over your team member s access eve mak ng remote work ng easy to set up and eff cient wh lst protecting sensit ve bus ness data Invoice process ng A number of providers of er support serv ces or nvo ce process ng e ther at p ecemea or per hour rates for what s effect ve y bas c data entry This work has become part cu ar y cost effect ve with bu k Account Payable processing so tware us ng earn ng a gor thms capab e of data entry W th Urbanise Strata c ents can turn on the Qu ckAP ntegration which automat ca ly digit ses the data from nvo ces rece ved and beg ns process ng them Please cl ck here to download the QuickAP brochure Col ect ons W th a so id po cy and process n place, an outsourced prov der can hand e this for you by accessing the data d rect y from Urban se Strata and updat ng the records w thout any need to send or receive/reconc e data w th the strata manager Inbu t auto esca at on too s al ow the platform to handle esca at on commun cat on automat ca ly a ow ng your team to better ut se the r time on other co ection act v ties SCA Nat ona Me bourne Co Persona assista There are many ta d g t s ng copies o ema enqu r es Software has auto by a person wh e Business Act vi y S m nutes creation, processes/tasks c StrataVote meet By u y integrat ng Agendas m nutes automat cal y w th ta y too s to ensur P ease click her Mail room Integrated solut on other than setting the event of an em the ma l room to s automat c w th no P ease click her I you wou d ke to p ease fee ree to former head of str Austra a, Shaun s Connect w th Sh Shaun and the tea come by and say Account ng You may not need a ful time accountant n most strata businesses There are accountants and former strata specia ists that can access your system remote y and ass st w th this There are also too s such as an auto ourna ing tool that automat ca y div des a mu t period nvo ce across the respect ve months Simp y select a start and end date when up oad ng an nvo ce and this too automat cal y works n the background Col ections
Bus ness Deve opment Manager U ban se Stra a ema : shaun meyr ck@u ban se com mob e: (+61 412 360 666 www urbanise com/strata C O N T A C T U S F O R M O E I N F O R M A T I O N

Shaun Meyrick

About

Shaun Meyrick is a former head of over 10,000 unit strata business with extensive consulting experience in improving efficiencies and profitability for strata firms in several countries.

He is now the Business Development Manager for Urbanise Pty Ltd, the easy-to-use strata software, helping Strata Managers save time.

Modern tech allows voting papers to be vetted and tallied automatically. Some applications even allow owners to vote from the floor (or their living room) by clicking a button on their phone. These are tallied automatically and tools ensure that all votes are recorded once (no double counting). New tools even allow for secret ballots and specialised motions to be handled as per the various state legislations in a fast and accurate manner.

REDUCING THE ENVIRONMENTAL FOOTPRINT

Anyone who has owned an apartment over the years has looked at their strata budget at some point and asked, “What are all these outlays?” Physically printing and posting correspondence, particularly large AGM packs, was a huge exercise. The boxes of mail that we would issue for a single large meeting was truly mind boggling.

Technology, with the support of legislative changes by the regulators and owners’ green expectations has pushed digital solutions in this space to be almost completely paperless. Voting papers do not need to be printed, filled in and scanned to email back (yes kids, this was how everything used to get filled in when received by email). Owners can follow along in meetings with digital copies of their agenda. Ballot papers don’t need to be actual paper and secret ballots don’t need to be double enveloped if submitted digitally (yes, again kids we used to put the ballots inside an envelope inside another envelope).

The above are my key take aways for technology in this space. To find out how Urbanise Strata can help make running Strata Meetings easier, get in touch.

the author
urbanise.com urbanise.com Invo ce Processing
Business Development Manager, Strata Urbanise Invoice Processing Convention (Austral a & NZ 31/05/2022 to 01/06/2022 nvent on Centre nce and general administration sks that can best be descr bed as genera Everyth ng rom f f les to updat ng supp er records and respond ng to s mp e mated many processes and requ res on y the occas ona check everyth ng e se s done automatica y Processes inc uding Statements c ent invo c ng evy generat on meet ng agenda and task generat on, report creat on and ssuance, and many other an be set up to be done automat ca y ing module w th the industry eader n meet ng management StrataVote and other mportant meet ng documents can be generated m n mal r sk of human error Owners can vote electron cal y and e that there s no wa t whi e po votes are counted e to down oad the StrataVote meet ng modu e brochure ns such as ePost can remove the need for any user nvo vement the system up nvo ces reports and the ike can be checked n ma bounce f there is no ema an automat c instruct on s sent to end a phys ca p ece of ma After set up th s can be done 100% human invo vement n the process e to down oad the ePost brochure o earn how automat on can he p you w th strata management, contact Shaun Meyr ck at shaun meyr ck@urban se com As a ata management n the M dd e East and w th exper ence in a ways happy to share experiences n th s space aun on L nkedIn here m w l a so present Urban se at the upcom ng events p ease he o

Can small schemes conduct an internal audit of their financial records?

In the last AGM, the owners corporation for out 8 lot strata decided on an audit to check the financial records. As we are a small strata, can we conduct internal audits?

We are small strata of 8 houses. In the last AGM, the owners corporation decided to perform an internal audit to check the financial records. Can we do that on our own rather than through external auditors? I put my hand up to do it as I am a retired financial manager with experience in the field.

Given the size of our small strata, is it ok for us to conduct internal audits?

The Act provides discretion to non-large strata schemes on whether to appoint an auditor or not.

The Strata Schemes Management Act provides discretion to non-large strata schemes on whether to appoint an auditor or not. If the Owners decide not to appoint an external auditor but decide to conduct their own review, this is OK. I understand the Strata manager would treat

this as a search or inspection of records and charge the respective fee to the owner.

As a rule of thumb, I recommend all payments are approved by the committee, as a fundamental control, prior to being paid. This way the owners are aware of all expenses incurred prior to the supplier being paid.

Rod Laws | TINWORTH & CO

www.lookupstrata.com.au18
RodLaws@tinworth.com READ MORE HERE

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Can an owner offer to pay more than their share towards a special levy?

Can one owner offer to pay more towards a special levy than the rest of the Owners if they are wanting a common property renovation to proceed?

Can one owner offer to pay more towards a special levy than the rest of the Owners if they are wanting a common property renovation to proceed?

I thought that anything for common property that cannot be covered by the capital works fund has to be split among the owners based on their lot’s allotment/entitlement.

The Act requires all contributions to be levied in accordance with the unit entitlements of each lot.

Section 83(2) of the Strata Schemes Management Act (‘the Act’) requires that all contributions be levied in accordance with the unit entitlements of each lot.

An exception to this lies within section 144 of the Act, however that only applies to maintenance and upkeep of common property that is specifically referred to in the common property rights by-law. Section 144 allows the by-law to provide another way of apportioning costs for maintenance and upkeep of that common property.

Tim Sara | Strata Choice

www.lookupstrata.com.au20
tsara@stratachoice.com.au READ MORE HERE

When you finance your strata project with Lannock, you are dealing with the industry experts. Having operated for nearly 20 years, our friendly team have the knowledge and experience to deliver the funds you require.

We finance capital works for owner corporations and body corporates around Australia including repairs, renovations, cladding rectification, defect rectification, strata asset renewal, professional services, litigation and re-development.

21

Should large complexes have bigger committees?

In our large complex of 15+ unit blocks with 400+ lots, we have a committee of 7. How can such a small committee run such a large complex?

I am in a large complex comprising of over 15 unit blocks with over 400 units. We only have a single committee of 7 people, a Building Manager and a Strata Manager.

I would have thought that a complex of this size should have a larger committee with at least one team member from each apartment block. Is that necessary at all?

Can you explain how such a small committee works in such a large complex?

www.lookupstrata.com.au22

9 members is the maximum number of members that are allowed.

Great question. The act says that the number of members to be appointed to a strata committee for a large scheme (one with over 100 lots excluding utility lots) is 3-9 members. 9 members is the maximum number of members that are allowed.

In many instances, large strata schemes have poor owner participation and it is difficult to attract active and suitable strata committee members.

In my experience, seven members is a typical number of committee members that we would expect to have on a building this size. I would think that the ideal mix of members for your strata scheme would be a variety of representatives from across the buildings.

One option that you could consider is to establish an informal sub-committee comprising of one member from each building that could meet a few times a year with the strata committee. This could provide a forum for each building to bring up any matters that they are facing so that the Strata Committee can prioritise building and compliance items and make sure that all buildings are being equally and fairly treated.

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The Strata Collective. Where People Matter.

The Strata Collective was formed with a simple goal –to provide a professional strata management service to clients who want a close, personal relationship with their Strata Manager.

We are a next generation Strata Management business that you can count on.

Find out more about our award-winning services at thestratacollective.com.au

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What is the average caretaker management agreement in NSW?

Our management rights operators have asked for a 10 yr extension on their agreement. This will result in a 25 yr agreement. What is the average management agreement in NSW?

We live in a holiday accommodation/motel-based strata complex. Our caretaker lives onsite.

The management rights were bought 6 yrs ago. They have asked for a 10 yr extension. This will result in a 25 yr agreement. This seems a very long time!

Is the manager setting up to sell halfway through their term and trying to make it a better deal for themselves? The

caretakers will not last another 25 yrs, so new people will come in and we have no say!

What is the average caretaker management agreement in NSW? In this situation, what options do we have?

You should check what the contract says about assignments.

1. Under the current laws (since November 2016), the maximum period a strata manager can be appointed is 1 year at the First AGM, and 3 years after that. A 3-year appointment is normal.

2. The maximum period for a caretaker/building manager is now 10 years, unless they had already

been appointed for a longer period before 30 November 2016. Some older agreements were grandfathered. For some coastal motel-style units, longer periods happen, also where building managers have “purchased” a contract. It sounds like this was an older agreement for > 10 years.

3. For both strata and building managers, it can sometimes be appropriate to appoint them for a shorter “trial period” (eg 1 year), to see if they lift their game, or to allow the owners corporation to go to market and get tenders.

4. Leasing rights are different, and might be tied to the lease of the common property area

www.lookupstrata.com.au24

they use. That is simply up for negotiation with no statutory limits. It is common and economical for one person to do both.

5. If you fear the current caretakers (whether the onsite workers are employees or owners of the caretaker company) are looking for a longer contract beyond the expected working life of the current operators, it could well be they are looking to increase the value of the contract and on-sell. That is the logical explanation. You should ask them why they want such a long contract in

these circumstances. It sounds like you have a fair relationship with the current on-site managers but if the current contract still has a long time to run, I wouldn’t be recommending extending it this early on.

6. You should check what the contract says about assignments to new purchasers. Usually it says the owners corporation cannot unreasonably refuse but in this case, you might either agree to the extension with full discretion to refuse assignments, or simply refuse the extension.

7. One other point to raise could be this. Mention to the caretaker that under the new laws, the maximum period is 10 years. So as they already have a contract for that or more, it seems inconsistent with those laws to extend it further. Those new laws give you an excuse to refuse the extension (refer to section 68(1)(b) of the SSMA.

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PETS?

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READ
L
AW F I R M
SYDNEY | PARRAMATTA | MELBOURNE | BRISBANE | ADELAIDE | PERTH | SHANGHAI BE EMPOWERED Purchasing a strata property is exciting, but failure to read the relevant bylaws could mean leaving your fury or scaly friend behind or making alternative arrangements. Bylaws vary from property to property and even more drastically between state and territory. Involve a Strata specialists lawyer to help you navigate complex and confusing bylaws today before they impact you later in life. Find out what we can do for you and your business. Liability limited by a scheme approved under Professional Standards Legislation.

WE ARE

DUTY OF OWNERS CORPORATION TO MAINTAIN AND REPAIR PROPERTY

An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation. Lot owners may now recover a loss as damages for breach of statutory duty.

WHAT DO YOU NEED TO KNOW?

S106(5) of the Strata Schemes Management Act 2015 (SSMA) allows lot owners to recover a loss from the Owners Corporation (OC) for breach of its statutory duty to maintain or repair the property as required by S106. S106(5) requires that the action must be within 2 years of the owner first becoming aware of the loss.

WHAT DOES THIS MEAN?

An OC can still determine by special resolution that it is inappropriate to maintain, renew, replace or repair the property provided.

• This decision must not a ect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.

This decision may inadvertently increase the liability exposure for the OC, as a lot owner now has the right to sue for damages for breach of statutory duty. For example, the decision may result in a loss of rent or a decrease in the value of a lot owners property.

WHAT DOES THE OWNERS CORPORATION NEED TO DO TO ENSURE THEY ARE NOT EXPOSING THEMSELVES OR THE SCHEME TO INCREASED LIABILITY?

• The decision that it is inappropriate to maintain, renew, replace, or repair the property must be made by special resolution, however the OC must factor in:

The safety and detracting from appearance of any property.

need to obtain expert advice regarding safety in making the decision.

potential increased risks or liability to

making a decision not to maintain

common property

(S106

OC

www.lookupstrata.com.au26
• Any
• Any
the
when
or repair. • Consider any
memorandum or rights under the schemes by-laws
(7). WHO
The peak industry body for Strata and Community Title Management in NSW. WHAT WE DO We are a professional association and consumer advocate for strata managers, strata owners and suppliers to the sector. WHY IT MATTERS We raise strata industry standards and provide members with professional recognition and a competitive advantage. BECOMING A MEMBER IS EASY.... To access exclusive benefits such as 9 Credibility and recognition of being an accredited professional member 9 Continuing Professional Development 9 Strata specific education courses 9 Industry awards recognition 9 Networking events 9 Access to resources and templates JOIN SCA ( NSW ) TODAY

• Potential tension and legal action by disgruntled lot owners regarding the decision.

• Impact on insurance claims – will it lead to a claim being denied for items in disrepair or resultant damage/ consequential loss? Ensure adequate liability cover is in place and meet the current minimum legislative requirement ($20 million liability cover in NSW from 30 November 2016).

WHAT DO STRATA MANAGERS NEED TO DO?

• As the strata manager, you do not want to be brought into any potential legal action so:

• Act quickly on instruction to repair.

• Have documented processes and procedures in place for maintenance and repairs.

• Recommend relevant safety checks and maintenance programs.

• Ensure your Strata Management Agreement limits your liability.

• Warn the OC of potential liability and dangers if they wait until ‘someone else’ fixes it.

What are the changes to the Strata Schemes Management Act which a ect the duty of the Owners Corporation to maintain and repair property?

SSMA 1996

Section 62 What are the duties of an Owners Corporation to maintain and repair property?

1. An Owners corporation must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the Owners Corporation.

2. An Owners corporation must renew or replace any fixtures or fi ings comprised in the common property and any personal property vested in the Owners Corporation.

3. This clause does not apply to a particular item of property if the Owners Corporation determines by special resolution that:

a. It is inappropriate to maintain, renew, replace or repair the property, and

a. It’s decision will not a ect the safety of any building, structure or common property in the strata scheme

or detract from the appearance of any property in the strata scheme.

SSMA 2015

Section 106 Duty of owners corporation to maintain and repair property

1. An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation.

2. An owners corporation must renew or replace any fixtures or fi ings comprised in the common property and any personal property vested in the owners corporation.

3. This section does not apply to a particular item of property if the owners corporation determines by special resolution that:

d. It is inappropriate to maintain, renew, replace, or repair the property, and

e. Its decision will not a ect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.

4. If an Owners Corporation has acted against an owner or other person in respect of damage to the common property, it may defer compliance with subsection (1) or (2) in relation to the damage to the property until the completion of the action if the failure to comply will not a ect the safety of any building, structure or common property in the strata scheme.

5. An owner of a lot in a strata scheme may recover from the Owner’s corporation, as damages for breach of statutory duty, any reasonably foreseeable loss su ered by the owner as a result of a contravention of this section by the Owner’s Corporation.

6. An owner may not bring an action under this section for breach of a statutory duty more than 2 years a er the owner first becomes aware of the loss.

7. This section is subject to the provisions of any common property memorandum adopted by the by-laws for the strata scheme under this Division, any common property rights by-law or any by-law made under section 108.

8. This section does not a ect any duty or right of the Owner’s corporation under any other law.

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nsw.strata.community(02) 9492 8200 membership.nsw@strata.community

Common property defects discovered during owner renovations

We recently purchased a rooftop apartment and had approval for terrace works. The renovations uncovered defects with the tiles and efflorescence. Who pays for the repairs of the defects?

We bought our rooftop apartment in Sydney around 12 months ago. On the terrace, there were a lot of timber tiles laid by the previous owners some years ago, and pot plants they had left behind. At our last AGM, we applied for outdoor renovations that included removing the temporary timber tiling. We were given permission to proceed with this work.

When we removed the old timber tiles we discovered two significant problems:

1. The original ceramic tiles underneath the timber tiles have all been permanently stained with what looks like a bleaching effect from efflorescence, and

2. The tiles themselves are showing distinct signs of water penetration, lifting up, grout & silicone damage. Our complex is 12 years old.

Rectifying this cosmetically and structurally will cost from $42,000 to $112,000. Who is liable for this cost? Is it the previous owners, the owners corporation, the new owners?

Taking a patch and repair approach can lead to issues with the contractor providing warranties, particularly when you are dealing with waterproofing components.

James McIntosh, Sedgwick:

A comprehensive repair, down to the substrate of the balcony, doors out, balustrade walls wrapped etc is what is required.… not an isolated repair as the lot owner indicates is their preference.

We would also note that taking a patch and repair approach can lead to issues with the

contractor providing warranties, particularly when you are dealing with waterproofing components (e.g. waterproofing membranes), full replacement is what would be required in most instances for a contractor to provide warranty of the works.

Leanne Habib, Premium Strata:

Subject to any notations on the strata plan and any special by-laws applicable to the scheme and provided that the tiles were in situ at the time of the registration of the strata plan, usually, the ceramic tiles and what is beneath them (eg waterproofing) is common property and therefore the responsibility of the Owners Corporation.

In terms of whether you may recover any costs from the previous owners for “latent” defects, you will need to consult with the conveyancer/ lawyer who acted on your purchase.

James McIntosh Sedgwick Building Consultancy division james.mcintosh@au.sedgwick.com

Leanne Habib | Premium Strata info@premiumstrata.com.au

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READ MORE HERE

High five, Sydney! We’ve recycled 1,000 tonnes of food scraps

Recycling food scraps does more than just lighten our rubbish bins.

Residents in the City of Sydney council area have:

• generated 64,447 kWh of energy. Enough energy to power 11 average households in our area for a year.

• created almost 8 tonnes of fertiliser and 420 tonnes of compost to nourish soil in gardens and parks.

• avoided the equivalent of 1,735 t of CO2. That’s the same as taking 416 cars permanently off the road.

“I’ve also been using it for my coffee grounds. I’m really happy about that because they were going in the bin or down the drain.”

If you are in the City of Sydney council area, register your interest for your apartment building to start recycling food scraps.

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Maggie – Food scraps champion
“The more neighbours get involved and the more ownership they take ... the more everyone feels at home.”
Fiona – Food scraps champion

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keeping your buildings legally compliant and safe

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Delivering 360° engineering solutions for strata

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Body Corporate Report Specialists

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Quality Reports On Time, Every Time!

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A Strata Remedial Consultancy

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EYEON Property Inspections

Buy and Sell with More Confidence

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BIV Reports

Specialist in Strata Compliance Reports

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Covid19 Safety Plans for Strata

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Find the Strata / CT Manager for your property

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Specialised Legal Advice for Strata

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Be Empowered

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Effective, resource, clear.

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Australia’s leading strata law experts

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Client focused, Results Driven

P: 0415 459 486

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Williamson Lawyers

A construction and strata lawyer ready to listen

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Bannermans Lawyers

High Quality Specialist Legal Services

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Know. Act. Resolve. W: https://gracelawyers.com.au/ E: enquiries@gracelawyers.com.au

Speirs Ryan

P: 02 9248 3400

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Watson & Watson Lawyers

“when experience matters”…..

P: 02 9221 6011

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Premium Strata

Diamond-Class strata management agency

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The Strata Collective

A next generation strata manager. People matter.

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Bridge Strata P/L

The bridge between you and your corporation

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Bright & Duggan

Strata Professionals

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Civium Communities

When you build trust, you build a community

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Providing a superior customer experience

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Efficient & Effective Strata Management Solutions

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Network Pacific Strata Franchise

Join our successful team

P: 03 9999 5488

W: www.networkpacificstratafranchise.com.au/

E: networkpacific@franchisedevelopments.com.au

Windowline Pty Ltd

Replacement window and door specialists

P: 02 8304 6400

W: https://windowline.com.au/

E: info@windowline.com.au

The Window Guy

Don’t choose any guy, choose The Window Guy!

W: https://www.thewindowguy.com.au/

E: info@thewindowguy.com.au

Select Window Installations

Windows & door replacement specialists

P: 02 9938 1500

W: https://www.selectwindows.com.au/ E: sales@selectwindows.com.au

SUSTAINABILITY

Humenergy

People, innovation and value sharing

P: 1300 322 622

W: https://www.humenergy.com.au/ E: Info@humenergy.com.au

The Green Guys Group

Australia’s Leading Energy Saving Partner

W: https://greenguys.com.au/ E: sean@greenguys.com.au

LIFTS & ELEVATORS

Innovative Lift Consulting Pty Ltd

Australia’s Vertical Transportation Consultants

P: 0417 784 245

W: https://www.ilcpl.com.au/ E: bfulcher@ilcpl.com.au

ENERGY

Arena Energy Consulting Pty Ltd

Independent Embedded Network Consulting Services

P: 0452 411 247

W: https://www.arenaenergyconsulting.com.au/ E: joseph@arenaenergyconsulting.com.au

Strata Energy Services

Simplifying Energy For Strata

P: 1300 060 111

W: http://www.strataenergyservices.com.au/ E: info@strataenergyservices.com.au

37
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Groundfloor™

Australian parcel, mail, and refrigerated lockers

P: 03 9982 4462

W: https://groundfloordelivery.com/

E: ask@groundfloordelivery.com

PROJECT MANAGEMENT

Valen Project Services

Client-Side Project Management Specialists

P: 02 8542 4293

W: https://valenprojects.com.au/ E: enquiries@valenprojects.com.au

CONSULTING

Strata Solve

Untangling strata problems

P: 0419 805 898

W: https://stratasolve.com.au/ E: chris@stratasolve.com.au

Insight Resolutions

Reconcile and rebuild through mediation

P: 0413 334 633

W: https://insightresolutions.com.au/ E: vad.mediation@gmail.com

StrataLoans

The Experts in Strata Finance

P: 1300 785 045

W: https://www.strata-loans.com/ E: info@strata-loans.com

Lannock Strata Finance

The Leading Strata Finance Specialist

P: 1300 851 585

W: https://lannock.com.au/ E: strata@lannock.com.au

Austrata Finance

Pay Now or Pay Later: It’s Your Choice®

P: 1300 936 560

W: https://austratafinance.com.au/ E: info@austratafinance.com.au

sharonbennie – Property Recruitment

Matching top talent with incredible businesses

P: 0413 381 381

W: https://www.sharonbennie.com.au/ E: sb@sharonbennie.com.au

MARKETING

Ki Creative Design

Purposeful Design Solutions

P: 0451 541 006

E: kiara.mcilroy@gmail.com

Marketing for Strata

Building Brand Authority & Thought Leadership

P: 0425 232 394

W: https://www.marketingforbusiness.com.au/

ROOFING

www.lookupstrata.com.au38 LIST MY BUSINESS
E: janette@marketingforbusiness.com.au Apt Roofing Pty Ltd Everything Roofing! P: 02 9666 7373 W: https://www.aptroofing.com.au/ E: admin@aptroofing.com.au Tinworth & Co Chartered Accountant & Strata Auditors P: 0499 025 069 W: https://www.tinworthaccountants.com.au/ E: caren.chen@tinworth.com Matthew Faulkner Accountancy Strata Auditing specialists P: 0438 116 374 W: https://www.mattfaulkner.accountants/ E: matt@mattfaulkner.accountants QUATRIX PTY LTD Intercoms, Access Control, CCTV, Data, etc. P: 02 9554 3487 W: https://www.quatrix.com.au/ E: info@quatrix.com.au Lock, Stock & Barrel Locksmiths Pty Ltd P: 0411 700 072 W: https://www.lsblocksmiths.com.au/ E: info@lsblocksmiths.com.au RECRUITMENT SERVICESDELIVERY & COLLECTION SERVICES SAFETY & SECURITY PRINT YOUR DIRECTORY HERE STRATA LOAN PROFESSIONALS ACCOUNTANTS

Actualised

Lifestyle Clotheslines

Advertise with LookUpStrata

VIEW OUR MEDIA KITS

CLICK HERE

As

CLICK HERE

39 CLEANING / CLEAN AIR CLOTHESLINES LIST MY BUSINESS
Contact administration@lookupstrata.com.au PRINT YOUR DIRECTORY HERE
of April 2022, The Strata Magazines received a national audience engagement of around 20,000 views within one month of their release. For the Strata Magazine Media Kit LookUpStrata’s Newsletters have a national audience of over 15,000 subscribers. For the National Newsletter Media Kit
Industries A breath of fresh air P: 1300 728 760 W: https://www.actualisedindustries.com.au/ E: admin@actualisedindustries.com.au
Clothesline and washing line supplier & installer P: 1300 798 779 W: https://www.lifestyleclotheslines.com.au/ E: admin@lifestyleclotheslines.com.au

Attention

NSW Strata Service Professionals Join our printable Strata Services Directory Listings are $199 + GST p.a. Click here to join today! → Get Listed → Get Noticed → Get Business

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The NSW Strata Magazine | October 2022 by LookUpStrata - Issuu