The WA Strata Magazine | November 2023 by LookUpStrata

The WA

STRATA MAGAZINE NOVEMBER 2023

Who pays for an EV feasibility study? Page 16 | Energy-Tec

Can the council of owners use owners’ money to purchase alcohol and snacks?

Can the strata company fine us for a noise breach after a party?

Page 20 | Empire Estate Agents

Page 24 | Realmark

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. 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.

Nikki Jovicic Owner / Director

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.

Liza Jovicic Sales and Content Manager

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

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Contents 4 Who pays for the maintenance of exclusive use areas? Khaled Moukadem, Rawlinsons WA

6 Building repairs: realising your investment

22 CCTV in strata: Are we required to have signs? Jordan Dinga, Abode Strata

24 Can the strata company fine us for a noise breach after a party? Luke Downie, Realmark

Edwina Feilen, Sedgwick

8 If renewing strata insurance doesn’t warrant a strata meeting, what does? Tyrone Shandiman, Strata Insurance Solutions

10 Can we charge a resident for not cleaning the BBQ? Luke Downie, Realmark

26 Insurance Replacement Valuations Rawlinsons WA

28 If one of our three council members resigns, do we need to replace them? Marietta Metzger, magixstrata

30 Valuers are valuers: building insurance valuations

12 Sustainability in Strata

Wal Dobrow, BIV Reports

Energy-Tec

14 Enhancing your property’s insurability by improving bushfire risk rating Tyrone Shandiman, Strata Insurance Solutions

16 Who pays for an EV feasibility study? Damien Moran, Energy-Tec

18 Council of owners say I breached a by-law….. 8 years ago

32 If our unit entitlements are unfair, can they be updated? Shane White, Strata Title Consult

34 Essential tips for communicating with your strata manager Strata Community Association (WA)

36 The WA LookUpStrata Directory

Eduard Ferreira, Douglas Cheveralls Lawyers

20 Can the council of owners use owners’ money to purchase alcohol and snacks? Jamie Horner, Empire Estate Agents

Thanks to our sponsors

Who pays for the maintenance of exclusive use areas?

A portion of our lot owners have exclusive use areas that include assets such as the sewerage systems and rainwater tanks. Does the reserve fund plan pay for the maintenance of the special-use land?

Costs related to common property ‘exclusive use’ areas need to be grouped separately so only the 12 special lot’s owners contribute to their maintenance.

We are aware of the requirement for a 10 Year Plan. For our 15 lot strata, 12 lot owners are beneficiaries of an exclusive use by-law. The assets of the exclusive use area include the sewerage system, two rainwater tanks and water supply pumps, laundry room, overflow parking, driveway, lighting, security system and garden.

Costs related to the common property for that is the ‘exclusive use’ areas, need to be grouped separately so that only the 12 special lot’s owners contribute to their maintenance. All 15 owners, including special lots owners, will maintain the remainder of the common property. You don’t need two reserve fund forecasts, although this might be cleaner. You just need to ensure the costs related to these ‘exclusive use’ areas are apportioned solely to the special lot’s owners.

A 10-Year Plan (The Plan) has been adopted at the AGM. The Plan does not separate the two classes of common property and ignores Strata Titles Act Section 43 Exclusive Use By-Laws, with particular reference to Clause (3), that states:

The existing reserve fund can be used for the special lot maintenance although it must be clear that the amount apportioned is contributed by the special lot owners. The nonspecial lot owners should not contribute to the maintenance of these areas.

Subject to the terms of Exclusive Use ByLaws, the obligations that would, apart from this subsection, fall on the strata company under section 91 (1)(c) in relation to the special common property, falls instead on the individual owners of the special lots.

Khaled Moukadem | Rawlinsons WA info@rawlinsonswa.com.au

There are two reserve funds. Does this mean the reserve fund for the strata company can be utilised to maintain the special-use land? Or will individual lot owners need to pay for the upkeep separately from levies and without access to the reserve fund? 4 www.lookupstrata.com.au

READ MORE HERE

Strata Insurance Premiums Surpass General Inflation.

+40% increase

+15% increase

for buildings with known defects

for buildings with no identified defects

Lannock’s Insurance Premium Funding offers total peace of mind you maintain your cover and gain the ability to spread the expense. Be confident managing rising insurance costs with an Insurance Premium Funding Facility from Lannock.

Speak with our strata finance specialists today to discover how Lannock Insurance Premium Funding can relieve your Owners Corporation from worry about your insurance being cancelled, lump-sum payments, special levies and budget constraints. 1300 851 585

lannock.com.au/IPF

Building repairs realising your investment Edwina Feilen, building consultancy division, Sedgwick Australia November 2023

Now more than ever, it is essential to understand the role and obligations of an owners corporation (OC) when a building requires any sort of repairs, maintenance or capital works. ‘By definition an OC manages the common property of a residential, commercial, retail, industrial or mixed-use property development.’ The role of an OC is to make important decisions about building repairs and the budgeting and/or financial investment associated with such projects. In Australia, there are different regulatory requirements OC’s must abide by across states and territories to ensure the adequate maintenance of built assets. Not only does this involve the upkeep of a building, but also its longevity, performance, financial sustainability and, in most cases, its appreciation in value. It is important that owners recognise that such an approach requires investment from both a time and cost perspective. Realising your investment should not be understated. The flow on effect will result in the OC spending more time and money to achieve the desired result. When it comes to building works of any nature, there are several core fundamentals that should be considered: • Define the objective and extent of works to be done.

What do you want to achieve?

• Do your research - engage reputable providers with

the correct qualifications, licensing and insurances. • Ensure the extent of works and costs are balanced

with the benefits. • Check the warranty/guarantee of the works being provided. • Cost verification – to ensure costs are fair and reasonable.

Experts such as quantity surveyors can assist. • Receive expert assistance to manage the works as a

third party; this will save time and money. Construction management is not a strata manager’s area of expertise. Whilst the above may seem simple, strata building works can be complex with multiple stakeholders and personalities to manage. Coupled with environmental factors such as labour shortages, cost of materials and supply chain issues, realising your investment requires careful planning right from the start. These challenges may be further compounded if an OC takes a significant period of time to progress building works. The introduction of new regulations may tighten compliance requirements and broaden scopes of works. Inevitably costs will increase, and therefore, so will the size and cost of the overall project. It is critical that OCs make timely decisions to progress

• Forensic investigations - identify all underlying issues.

building works. The industry is seeing delayed jobs being

Only addressing symptoms on the surface will be more

re-quoted at higher amounts due to the increased costs

costly in the long run.

of doing business. This is why it's imperative owners

• Scope it correctly - a detailed specification outlines

all works required. • Obtain quotes based on the same scope of works

(like for like).

caring counts | sedgwick.com

understand that realising their investment may not be immediately seen or felt. However, experience shows that when you don’t invest time or money wisely, it will cost more in the long run.

4 KEY CRITICAL ITEMS You need it to be all inclusive

You need it to conform with the current statuaroty requirements

You need a warranty or guarantee

You need it to ensure the extent and costs are balanced with the benefits

S E D GW I C K B U I L D I N G CO N S U LTA N C Y S E RV I C E S We have provided expert building consultancy services for the past 20 years. As the largest home warranty consultancy specialist team in Australia, Sedgwick has extensive capabilities in forensic building consultancy, technical inspection service (TIS), policy assessments, preparation of scopes of work, tender validation processes and construction management. Our specialty is the management of remediation work within the residential, multi-storey residential and mixed-use strata complex landscapes.

Contact us if you require assistance with your building repair issues, planning and/or associated costs. Edwina Feilen | Business solutions manager,

Building consultancy division, Sedgwick Australia

To learn more about our

P. +61 424 750 900

strata solutions, click here

E . sales.au@sedgwick.com

caring counts | sedgwick.com

If renewing strata insurance doesn’t warrant a strata meeting, what does?

Does the decision to renew building insurance, made by the committee behind closed doors without a compliant strata meeting, fulfil the requirements for sufficient disclosure and transparency? Does the decision to renew building insurance, made by the committee behind closed doors without a compliant strata meeting, fulfil the requirements for sufficient disclosure according to John Trowbridge’s Strata Insurance Disclosure Handbook? Insurance is a significant item of expenditure with serious ramifications if not executed correctly. If renewing strata insurance doesn’t warrant a strata meeting per the SSMA, then what does?

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Providing full disclosure to the committee and subsequently incorporating this information into the strata records is a reasonable and acceptable approach. While strata legislation across Australia imposes conditions on the approval of certain decisions at a general meeting for strata buildings, it’s important to note that decisions related to insurance are not explicitly included in this requirement. The owners typically elect a committee to take on the responsibility of making certain decisions on behalf of all owners, and buying decisions on insurance is part of the function and mandate of a committee. In the context of John Trowbridge’s recommendation, the disclosure proposed should undoubtedly be integrated into the owners corporation’s records. These records should be accessible to all owners, ensuring transparency and accountability within the community.

Although I cannot speak on behalf of John Trowbridge and his specific findings, I personally hold the perspective that providing full disclosure to the committee and subsequently incorporating this information into the strata records is a reasonable and acceptable approach. This approach aligns with the principles of informed decision-making and promotes a well-informed committee that can act in the best interest of all owners. John Trowbridge, Trowbridge Consulting has recently developed a Disclosure Handbook User Guide outlining the intended use of the material within the Handbook. Tyrone Shandiman | Strata Insurance Solutions tshandiman@iaa.net.au READ MORE HERE

Can we charge a resident for not cleaning the BBQ? A resident refuses to clean the communal BBQ after use. They state they pay levies, so the professional cleaners employed by the complex should handle the cleaning. How do we respond? I reside in a 146 lot strata complex. We have a BBQ in our common area, accessible to residents via a booking system. Despite clear signs instructing users to clean the BBQ after each use, this is not done. We have identified the responsible individuals, but they persist in leaving the BBQs dirty even though we’ve made multiple requests. The council of owners has written to the resident responsible, but a resolution hasn’t been reached. They respond that professional cleaners employed by the complex should handle the cleaning since they pay their strata fees for this service.

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If the strata company has a water tight by-law for cost recovery, it would be reasonable for the strata company to on-charge the cleaning cost. Charge them for their sausages! If the strata company has a water tight by-law for cost recovery, it would be reasonable for the strata company to on charge the cost of cleaning of the common area BBQs to the end user. Without such a by-law, the strata company may choose to on-bill but may not be successful in recovery. Luke Downie | Realmark ldownie@realmark.com.au READ MORE HERE

We’re going to need a bigger trophy cabinet. WINNER. 2023 REIWA Awards for Excellence: Strata Management Agency of the Year.

WINNER.

2023 SCA (Australasia) Strata Community Management Medium Business Award.

WINNER.

2022 REIWA Strata Management Agency of the Year.

WINNER

2022 CHU SCA (WA) Strata Community Management Medium Business Award.

WINNER

2022 CHU SCA (WA) Support Team Member Award.

Whilst weʼre absolutely delighted to win awards, we judge ourselves only on our strata ownersʼ satisfaction. Our clear commitment to managing strata properties goes beyond the everyday practicalities and compliance of property management. It is to work with the community of strata owners and advise them on how to achieve the best of outcomes. To learn more on how Realmark can help create a better result for strata owners, simply get in contact with Luke Downie Head of Realmark Strata Management on 0479 095 889 or 9328 0909.

REALMARK STRATA

www.realmark.com.au/strata-management

Sustainability in Strata November 2023

Western Australia has over 325,000 strata properties comprising multi-unit dwellings, high rise apartments, townhouses, and units, both new and old. Despite the magnitude of WA strata properties, renewables; such as solar is surprisingly limited. Statistics show only 9% of strata schemes nationwide have installed solar and the figures are far lower in WA. So, we must consider why is this the case? Especially when solar take up has boomed in the “green title” residential sector. Over one third of Strata’s suburban neighbours now have solar installed and in 2021/2022 generated approximately 24% of the energy consumed in the south west grid. Many residential scheme owners may be unaware of their own environmental footprint having never measured their buildings efficiency. But our neighbours in the commercial office space, have had NABERS energy ratings since 2008 which has driven excellent efficiency gains ever since. The first step to understanding a buildings environmental footprint is being able to accurately measure

and account for energy consumption via appropriate sub-metering infrastructure. This is the fundamental tool that can empower the owner to analyse and manage their usage within the areas they can control. Without appropriate metering, lot owners will see increased costs where EV charging is rolled out unchecked, as the scheme will inherit the electricity bill via their common areas. Most people are not aware that EV’s use as much energy in a day as most Lots will. This will also directly impact the schemes environmental footprint.

So why does Sustainability matter? Because we need to take responsibility for the energy we consume! In July 2022 the Federal Government legislated Australia’s greenhouse gas emissions reduction target. A 43% reduction, as measured from 2005 levels, by 2030 and net zero by 2050. Concurrently, the WA government is regulating to shift our generation sources to renewable energy over the next 7 plus years via an Energy Transformation Strategy, which is in full swing, and culminates in the decommissioning of the carbon intensive state-owned Coal generation

plant, located in Collie. The States strategy is to electrify our economy encouraging a monumental shift from the petrol bowser to the power point with EV take up. And the property sector is impacted by the strategy. Based on current prices, charging an EV with electricity is 1/6th of the cost, compared to filling a car with petrol. This means our privately-owned carparks will need to become the EV charging stations of the future if we are to play our part in the electrification transition. This shift will require preparation, provisioning, planning….and funding. So, having outlined all of this, shouldn’t we ask ourselves:

“Why is there such limited “take up” of, renewables and environmental ratings by the Strata sector in WA”? With renewables, is it because we don’t have suitable roof structures and adequate space? Potentially, but many schemes have plenty of roof space and carpark shading structures to deploy Solar. Or does the complexity of strata decisionmaking hinder the approvals process? Possibly, but there are feasibilities and roadmaps that can simplify decision making with equitable pathways and solutions. Is it because strata schemes aren’t aware of the benefits derived from measuring building efficiency using environmental ratings such as “NABERS for Apartment Buildings”?

Maybe, but the sector can benefit hugely from committing to measure energy and rate the emissions as a first step to driving reductions. The trends are showing a growing social conscience regarding our environment and many people want to see more being done, however strata owners possibly don’t understand where to start. We need to start to act now, as the “energy in property” space is about to change significantly over the next 7 years. Largely due to the impacts the Electrical Vehicle “take up” is having on our society. Change starts with knowledge. If your scheme wants to better understand sustainability; Energy-Tec can help you with: • The accuracy and condition of your properties metering/sub-metering infrastructure; • The energy rating at your complex; and • Renewable (Solar and Battery) and EV Charging feasibilities and solutions. We can help inform and support you in making sustainable investments; funded in many cases, with minimal out of pocket expenses.

Contact Energy-Tec to find out more today

Enhancing your property’s insurability by improving bushfire risk rating

Our strata plan is in a bushfire prone area. Should we consider the appropriateness of our building materials?

Given that our strata plan is in a bushfire prone area, this prompts considerations about the BAL rating and the necessary repairs for the common property. It also raises questions about appropriate materials and who should oversee these matters. Should the control rest with the strata manager, the committee, individual lot owners, or perhaps a collaborative effort involving all three parties?

Failure to comply can expose owners corporations to liabilities associated with noncompliance.

Compliance with relevant building and fire codes is a paramount consideration for any strata building, as failure to comply can expose owners corporations to liabilities associated with non-compliance.

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From an insurance perspective, insurers rate more favourably on buildings with 100% non-combustible materials. The most favourable ratings are for properties with brick or concrete external walls. Insurers also rate based on the property’s location, including proximity to bushland, and will consider fire safety and risk engineering factors. In cases where neither the insurer nor local authorities require a change in materials, the decision to upgrade building materials to reduce the property’s risk rating falls to the owners corporation. This proactive step can potentially enhance the property’s insurability by improving its risk rating. Nonetheless, such a decision requires careful consideration and consultation, ideally with a qualified insurance broker. Before embarking on any material upgrade project, seeking advice from an insurance adviser to understand the benefit to the owners corporation is highly advisable. Tyrone Shandiman | Strata Insurance Solutions tshandiman@iaa.net.au READ MORE HERE

Who pays for an EV feasibility study?

Our strata plan is interested in conducting an initial feasibility study for EV chargers. Who should pay for this when most lot owners are not considering purchasing an EV? It is recommended the scheme consider paying for the feasibility. It is recommended the scheme consider paying for the feasibility for the following primary reasons: 1. A n EVC Feasibility is also a risk mitigation strategy to prevent disparate, unplanned EV charging approach by individuals. a. E lectrical capacity, safety & fire mitigation & planning. b. Preventing EV charging attributable to common areas, hence common energy costs borne by the scheme. 2. I ncome generation: The scheme has the option and opportunity to generate an ongoing income stream from on-selling the electricity for EV charging. Damien Moran | Energy-Tec damien.moran@energy-tec.com.au READ MORE HERE

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Council of owners say I breached a by-law... 8 years ago

I’ve been served a by-law breach for building a small structure on my survey strata lot eight years ago. Is it too late for any enforceable action? Is the breach notice valid? What is the time limit on a breach notice issued for an alleged by-law breach? My strata council claims I committed a by-law breach well over eight years ago by building a small structure on my survey strata lot. Until recently, no objection has been made. Is it too late for any enforceable action? Is the breach notice valid?

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It was a breach eight years ago, but it continues to be a breach today. If the breach consists of a structural alteration on your lot, the breach of the by-law is likely a continuing breach. It was a breach eight years ago, but it continues to be a breach today. The six-year period is counted from today because you are in breach of the bylaw today, and the breach notice would not be out of time. It is different from a breach of a by-law concerning excessive noise that you breached eight years ago at your 2014 New Year’s Eve party. It would be too late for your strata company to act on that breach today. It was a once off breach and not a continuing breach. However, the fact that your strata company has done nothing about the breach for eight years may provide you with other defences against a breach notice.

In JTA Le Roux and The Owners of Bunker Bay Resort Strata Scheme [2023] WASAT 13 an owner made structural alterations to their lot in breach of a by-law requiring that the residence be constructed according to plans approved by the strata company. The owner applied to the State Administrative Tribunal for an order that the strata company must be taken to have approved the structural alteration with a resolution without dissent and was successful on the facts in that case. You may also have other defences, but it is difficult to deal with them without knowing the nature of the by-law breach, the wording of the by-law and the relevant history of the matter over the past eight years. Eduard Ferreira | Douglas Cheveralls Lawyers eduard@dclawyers.com.au READ MORE HERE

Can the council of owners use owners’ money to purchase alcohol and snacks?

Some key items need to be noted concerning the council of owners using strata company funds for food/drinks at their meetings. The council of owners can hold their meetings in a venue that is suitable for them, including a public venue. Generally, however, it is best that the Annual General Meeting is held in a neutral location, such as the strata manager’s offices or a meeting room, to allow for privacy and other voting methods (e.g. electronically or remotely). Some key items need to be noted concerning the council of owners using strata company funds for food/drinks at their meetings. The council of owners must: 1. act honestly, with loyalty and in good faith. 2. exercise a degree of care and diligence. 3. not make improper use of their position to gain advantage or cause detriment to the strata company. 4. inform the council in writing of any direct or indirect conflicts of interest and refrain from voting under such circumstances.

Our council of owners meets at a bar and, without approval or knowledge of owners, uses owners’ funds to purchase alcohol and snacks. How is this ethical? What approval is required? Our council of owners meets without a strata manager at a public venue with a bar. Without owners’ knowledge and approval, they purchase alcohol and snacks during the meetings using owner’s strata company funds. How is this ethical? Is it permitted for the council of owners to use owners’ money to buy alcohol during meetings?

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If the council of owners is using strata funds for personal food and drinks instead of covering venue booking costs, it raises a concern about their adherence to the above guidelines. Furthermore, if there are any plans to allocate allowances or funds to the council of owners as an honorarium from the strata funds, this should be formally proposed at the Annual General Meeting (AGM) with specific amounts and approved through a vote at the meeting. This means it should be put forward for discussion in advance and receive approval before any disbursement is made. Jamie Horner | Empire Estate Agents JHorner@empireestateagents.com READ MORE HERE

Does your strata manager tick ALL these boxes... Are they fully licenced, trained, qualified and abide by the laws governing licenced agents? Do they have Fidelity Fund Guarantee? Do they have independent Trust Account audits? Can they offer No Lock-in or No Fuss contracts? Do they have great reviews and reputation? Do they posess experience impossible to match? Is their approach hands-on, personalised & dynamic? If there’s a few boxes unticked give us a call or drop us an email and we would be happy to chat Feel free to speak to our Licensee

Jamie Horner - 9262 0400 - jhorner@empireagents.au

Mastering the Art of Strata Management 966 Albany Highway, East Victoria Park, Western Australia 6101 E: reception@empireestateagents.com W: www.empireestateagents.com Government of Western Australia

Department of Mines, Industry Regulation and Safety Real Estate & Business Agents Licence 81794

CCTV in strata: Are we required to have signs?

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If our strata company installs CCTVs, are we required to display signs to indicate CCTV is in use?

Strata companies are generally required to inform residents and visitors about the presence of CCTV cameras through appropriate signage.

In Western Australia, the use of CCTV cameras on strata common property is subject to the Privacy Act 1988 (WA) regarding collecting, handling, and storing personal information. This act outlines the principles related to privacy and personal information, including the use of surveillance cameras.

5. P roperty-Specific Bylaws: It’s crucial to refer to your property’s specific bylaws, as they may contain additional rules and guidelines related to the use of CCTV within your strata complex. These bylaws can vary from one strata complex to another and may include specific requirements related to surveillance. Compliance with both the Strata Titles Act, the WA Privacy Act, and property-specific bylaws is essential to ensure that the use of CCTV in strata complexes is in accordance with legal, privacy, and property-specific requirements. For specific guidance and up-to-date information, it is advisable to consult with your strata manager and or seek legal advice. Jordan Dinga | Abode Strata abode@abodestrata.com.au READ MORE HERE

Key considerations include: 1. Notification: Strata companies are generally required to inform residents and visitors about the presence of CCTV cameras through appropriate signage. This notification is not only a legal requirement but also a privacy principle to ensure transparency. 2. Legitimate Purpose: The use of CCTV should be for legitimate and lawful purposes, such as security, safety, and protection against unlawful activities. 3. Data Handling: Strata companies must handle the recorded footage in compliance with privacy laws, ensuring that personal information captured by the cameras is stored securely and not misused. 4. Consent: In some cases, consent from residents or visitors may be necessary when their personal information is collected through CCTV cameras. This can depend on the circumstances and the specific content of the recordings.

STRATA COMPLIANCE REPORTS

READ MORE HERE

INSURANCE REPLACEMENT VALUATIONS WHAT IS INCLUDED/EXCLUDED FROM THE VALUATION REPORT? An Insurance Replacement Valuation should INCLUDE the following costs:

The following items are USUALLY NOT covered in an Insurance Replacement Valuation:

Capital Construction Costs of Building, External Works and Services Construction Contingency Demolition Costs Professional Fees Development Application Fees Escalation during the Design and Documentation Period Escalation During the Lapse Period

Loose furniture, fittings and equipment (contents) Tenancy fit out costs Loss of revenue/profit Temporary accommodation costs during the re-building phase Legal fees Financing costs

WHY RAWLINSONS? Rawlinsons was established in Perth, Western Australia in 1953 and is currently situated in Rivervale. With 70 years of experience, we have played a pivotal role in developing the Western Australian builtISenvironment, and we are dedicated to providing ongoing for the economic WHAT THE APPROPRIATE INSURANCE VALUE FORsupport THIS HOME? growth of Western Australia as a whole. Many homeowners underestimate the replacement value of their property, which can lead to hidden As thesuch creators and editorsfees, of the extensively circulated Rawlinsons costs as professional demolition works, and escalation beingAustralian overlooked.Construction An accurate Handbookreplacement and Rawlinsons Construction Cost Guide, we maintain thethat mosttheir comprehensive and insurance valuation can give homeowners peace of mind property is fully current library construction information and data sources Australia. publications are covered in the of event of loss orpricing damage. This valuation ensures thatinthe propertyOur is covered "like-forcirculated nationally by a vast number of professions and trades within the construction like" in terms of both and size utilised and quality. industry. It's recommended to review replacement values on an annual basis. Moreover, in case of any asset improvements, refurbishments, or extensions, updating the value is essential to ensure full coverage.

WHO IS QUALIFIED TO ESTIMATE A PROPERTY'S REPLACEMENT VALUE? A professional Insurance Replacement Valuation requires a deep understanding of construction costs, local legislation, and insurance requirements. The most suitable people to perform this task are professional Quantity Surveyors, who have a broad range of skills and experience. They are skilled at measuring building areas, estimating construction costs, evaluating current market conditions, and have a technical understanding of construction techniques.

Are Your Strata Properties Adequately Insured? Rawlinsons Insurance Replacement Valuations www.rawlinsonswa.com.au

WHAT IS INCLUDED/EXCLUDED FROM THE VALUATION REPORT? An Insurance Replacement Valuation should INCLUDE the following costs:

The following items are USUALLY NOT covered in an Insurance Replacement Valuation:

Loose furniture, fittings and equipment (contents) Tenancy fit out costs Loss of revenue/profit Temporary accommodation costs during the re-building phase Legal fees Financing costs

Are Your Strata Properties Adequately Insured? Rawlinsons Insurance Replacement Valuations www.rawlinsonswa.com.au

If one of our three council members resigns, do we need to replace them?

For our complex of 10 units, one of our three council members has resigned. Do we need to replace the member before the next AGM?

For our complex of 10 units, we have a council of owners with three members. I am a lot owner and a council member. One other council member has advised he will no longer serve on the council, effective immediately. As the two remaining council members form a quorum, can we carry on without filling the vacancy until the next AGM, or must we call an EGM to re-elect a third council member?

As long as the two remaining council members form a quorum, they can carry a vacancy until the next Annual General Meeting, where a new council will be elected.

The requirements under Standard Governance Bylaws 5 in Schedule 1 set out the provisions of the election of the council at a general meeting.

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If, at the general meeting, a resolution was determined that the number of persons the council is to consist of is three, then the quorum of the council to make decisions is two (Governance Bylaw 4 sub-bylaw 11). That means that even if a third member of the council resigns and two remaining council members remain, those two remaining council members still constitute a quorum and may act as the council of the strata company. Governance Bylaw 4 sub-bylaw 12 states that the continuing members of the council may act even if there is a vacancy in the council, but so long as the number of members is reduced below the number fixed by these bylaws as the quorum of the council, the continuing member or member of the council may act for the purpose of increasing the number or member of the council or convening a general meeting of the strata company, but for no other purpose. So, in short, in our opinion, yes, as long as the two remaining council members form a quorum, they can carry a vacancy until the next Annual General Meeting where then a new council will be elected. Marietta Metzger | magixstrata marietta@magixstrata.com.au READ MORE HERE

VALUERS ARE VALUERS BUILDING INSURANCE VALUATIONS

By Wal Dobrow - Director

Wal Dobrow has been a valuer for over 35 years and is one of three people appointed by the Coalition of Australian Governments (COAG) to determine the qualifications, training and experience of all Valuers in Australia; he has a Meritorious Service Award from the Australian Property Institute (API); wrote the majority of the Expert Witness Technical Information Paper and Resource Kit; and currently serves on the API State Board.

SPECIALISED FIELD Building Insurance Valuations for strata and community schemes is a very specialised area. Each State has differing requirements, ranging from ‘obtain a valuation’ (VIC), ‘full replacement value’ (QLD), ‘replacement value’ (SA + WA), NSW has an error in the legislation which should be limited to replacement value (as in the earlier Act) and not include reinstatement, and each vary in the description of the improvements with some specifying what other items need to be included.

leave the lot owners exposed. If requested with items outside of professional scope of a Valuer, it can force a significant cost burden upon lot owners to obtain other specialist reports, before the Valuer can be instructed. The Valuer IS NOT responsible now and into the future for any calamity, change in Council policy or town planning; unforeseen construction costs increases; or whether the property will be affected by bushfire, flooding, or landslip and the extent thereof; any future acquisition by any acquiring authority; or whether the property would somehow have restricted access in the future; or make allowance for some unknown future catastrophic event. A Valuer is not a clairvoyant.

There is confusion and concern amongst many within the strata profession about incorrect information requested by an insurer regarding the instruction of a Valuer for building insurance valuation purposes. Despite them stating it is ‘best practice’ and ‘standard operating procedures’, it is not endorsed by any industry body.

The purpose of this article is to create clarity in the engagement of a valuer for the purpose of insurance in strata and community schemes.

All of the above risks are generally assessed by actuaries and others within insurance and underwriting companies. It is NOT up to the Valuer to somehow guess to what risk the insurer would be exposed. Simply put, it is the insurers’ role to assess risk, and measure against the type of policy that they utilise.

A valuation report ‘must’ include items that are within the professional scope of a Valuer or it would recklessly breach typical Valuers’ professional indemnity insurance requirements and

In the extreme, it is as absurd and as fanciful as requesting that the Valuer predict when and how the property would be damaged or destroyed in the future, and provide the date and time of that event.

ISSUE

RESPONSIBLE PROFESSION

IS IT THE VALUER?

Town Planning

Town Planner

Not the Valuer

Future Planning

Strategic Urban Planner

Not the Valuer

Flooding

Flood Engineer

Not the Valuer

Bushfire

Bushfire Consultant

Not the Valuer

Heritage restrictions

Heritage Consultant

Not the Valuer

Future acquisition

Clairvoyant, Planner

Not the Valuer

Future costs increases

Clairvoyant

Not the Valuer

Deterioration of insulation

Occupational Hygienist

Not the Valuer

Paint lead levels

NATA accredited lab

Not the Valuer

Composition of dust

NATA accredited lab

Not the Valuer

Determine Replacement $

Valuer

Yes, the Valuer

WHO IS RESPONSIBLE

REINSTATEMENT

The Valuer cannot predict the future, ie • what delay may occur in a development application • who might object to a proposed development • the delay in settling matters in Court • changes in town planning

Where the improvements are damaged but not destroyed. Reinstatement would include using similar materials to the existing improvements, ie calcil bricks, blue stone, etc, rather than a ‘new for old’ basis.

The Valuer must check the measurements of improvements on site identify the different building cost components adopt appropriate rates m2 for each of those components check those rates adopted against ‘real world’ costs calculate the replacement cost of the improvements

Where the improvements are destroyed, ie the site is cleared and improvements are rebuilt (from scratch) in modern materials and to current construction and compliance standards.

• • • • •

Improvements typically include all buildings, footpaths, driveways, fences, services, landscaping, other common property such as pools, tennis courts, bbq areas.

WHY MODERN MATERIALS Simply because it is practical and cost effective, and the quality and specifications are generally known (you wouldn’t engage a convict to re-create ‘new’ old convict bricks).

REPLACEMENT CONCLUSION A Valuer in strata properties is a professional who can help you to determine the proper replacement cost of your improvements. However, it is important to understand that the Valuer’s Report does not include the value of the land, any tenant’s fixtures or fittings, or any environmental or town planning constraints. If your insurer is requesting that Valuers provide information outside the scope of a Valuer’s professional standards and thereby putting your Lot Owners at risk, then consider using another insurer.

Wal Dobrow, Director, BIV Reports 1300 55 18 30 The above information is not legal advice and has been provided as a guide only. Legal advice should be obtained for your particular circumstance. © Wal Dobrow 2023

If our unit entitlements are unfair, can they be updated? Q

Our unit entitlements were determined 20 years ago. About five years ago, a property carried out significant extensions. What’s the process to update our unit entitlements?

Our North Fremantle strata scheme has seven properties. There are three stand-alone houses and four that are semidetached. Our unit entitlements were determined 20 years ago. About five years ago, one property carried out significant extensions, which changed the value of the property considerably. The unit entitlements were not updated. Soon after, the property changed hands. One owner wants the unit entitlements reviewed as they pay higher levies than the house owners with the extension. Who pays for the review of unit entitlements, the strata body or the new owners? Including the resurvey fees and the cost of the Landgate plan lodgement fee, we’ve been quoted $5000 for the review.

Do all the owners agree? I know it’s a silly question, but I have to put it out there.

Without a copy of the strata plan, I can only give a generalised explanation. It might be that the strata scheme was registered prior to the Strata Titles Act 1985. If so, all the land outside the buildings shown on the strata plan is common property.

32 www.lookupstrata.com.au

If the strata scheme was registered under the 1985 STA then the land around the building may be shown as a Part Lot but would still require approval from the strata company. The situation gets more involved from here, as the previous owner has either built on the common property land or has built the extension on the Part Lot land, which is owned by that proprietor. So, if we do a summary so far, the unit entitlements (assuming that they were done by a valuer under the 1985 STA) are based on the capital improved value of the land. The value of the building is a capital improvement as opposed to a vacant lot. Section 37 of the 1985 STA

37. Schedule of unit entitlements 1. T he schedule of unit entitlements for a strata titles scheme must — a. a llocate a whole number (a unit entitlement) to each lot in the strata titles scheme; and b. state the number that is the sum of the unit entitlements of all the lots in the strata titles scheme. Note for this subsection: The unit entitlement of a lot determines — • the interest of the owner of the lot in the common property in the strata titles scheme: see section 13; and • subject to the scheme by-laws, the contributions payable by the owner of a lot in the scheme: see section 100; and • the voting rights that attach to the lot: see section 120.

This will mean that the original unit entitlement (UE) values done by the valuer when the strata plan was registered will now be incorrect. The lot with the extensions will be worth more, and its UE value should increase, causing the other lot UE’s to go down. Here comes the tricky part. Do all the owners agree? I know it’s a silly question, but I have to put it out there… Updating the strata plan will result in a Type 4 re-subdivision – a surveyor will be required to draw up the new boundaries for the lot – see Section 35(1)(c)(i) a unanimous resolution will be required, plus more expense for the surveyor. The new owner should have been aware of what they were buying or had the strata plan explained to them, as the lot purchased would not be the same as on the strata plan.

Consent from mortgagees will need to be obtained. In some cases, there may be an error in the UE figures. Provided there is a difference greater than plus or minus 5% supported by a new valuers schedule of UE, a change in the UE can be made. The motion to amend the UE will require a resolution without dissent. See section 38 STA. It may not win any friends, but if there is a dissenting vote at the General Meeting, an application to the State Administrative Tribunal (SAT) can be made. Shane White | Strata Title Consult shane.white@stratatitleconsult.com.au READ MORE HERE

Documents will also need to be prepared for lodgement at Landgate.

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C h a m b e r s F r a n k ly n STRATA MANAGEMENT

wa.strata.community

admin.wa@strata.community

There is no doubt that strata managers play an important role in the day-to-day management of strata communities and their agenda. first step to ensuring there is effective They work to coordinate the affairs of the lot communication between strata managers and the owners, to achieve consensus in decision community. Introducing yourself, attending making, all whilst assuming important andTIPSstrata ESSENTIAL FOR meetings and collaborating in a calm and consequential responsibilities. Importantly, strata COMMUNICATING respectfulWITH manner will go a long way in building managers are professionals, who possess the trust and an overall positive connection. knowledge and skills toSTRATA facilitate the operation MANAGER YOUR of the community in accordance with a complex Clear Communication wa.strata.community admin.wa@strata.community legislative environment. Strata managers receive hundreds of emails There is no doubt that strata managers play an important role in the day-to-day day, and as such can only spend a limited However, sometimes it is important to put intoand theira agenda. management of strata communities time with each email and matter. By outlining context that individual strata managers are often first step to ensuring there is effective They work to coordinate the affairs of the lot communication between strata and managers and the owners, to achieve consensus decision of your communication as clearly specifically responsible for overseeing the inmanagement strata community. Introducing yourself, attending making, all whilst assuming important and meetings andincluding collaborating in a calm consequential responsibilities. as possible, your strata planand number, multiple communities alongsideImportantly, yours, whichstrata may respectful manner will go a long way in building managers are professionals, who possess the address, subject andpositive urgencyconnection. level, your span hundreds, or even thousands, lots. trust and an overall knowledge and skills to facilitate the of operation of the community in accordance with a complex Clear Communication manager may be able to quickly process legislative environment. Strata managers receive hundreds of emails As such, in some instances it may take some athe day, andand as such can only limited However, sometimes it is important to put into issue effectively takespend action.a Over time to address your concerns. Rest assured, time with each email and matter. By outlining context that individual strata managers are often your communication clearly and specifically responsible for overseeing the management of communication may as serve to confuse your your manager is not ignoring youryours, inquiries, as possible, including your strata plan number, multiple communities alongside whichand may manager,subject and make process takeyour longer than address, andthe urgency level, span hundreds, or even thousands, of lots. is instead doing their best to allocate their time in manager may be able to quickly process As such, in some instances it may take some if youissue wereandto effectively engage in take simpleaction. communicative the Over time to address Rest assured, the most efficientyour andconcerns. effective manner possible. communication may serve to confuse your your manager is not ignoring your inquiries, and measures. manager, and make the process take longer than is instead doing their best to allocate their time in if you were to engage in simple communicative The following are some tips that you may follow the most efficient and effective manner possible. measures. Types of issues The following are some tips that to help your communication with you yourmay stratafollow Types of issues to help your communication with your strata Strata managers will always try to resolve Strata managers will always try to resolve manager, manager, and and assist assist inin guiding guiding your your experience: experience: matters matters as as quickly quickly as as possible, possible, however however will will often often need to prioritise all the matters they engage in Establishing a positive relationship based urgencyall and Building a positive relationship is an important need toonprioritise theimportance. matters theyEmergency engage in Establishing a positive relationship 2 based on urgency and importance. Emergency Building a positive relationship is an important MAZING MGZ

MAZING MGZ

OVERCOMMUNICATION MAY CAUSE CONFUSION AND CAUSE THE PROCESS TO TAKE LONGER issues arise every day that strata managers must deal with. Therefore, when considering contacting your strata manager about a matter, it is important to ensure that you are differentiating between issues that are non-urgent, urgent and an emergency: Non-urgent: Most matters will fall under the umbrella of a ‘non-urgent’ issue, and may include concerns relating to account inquiries or administrative actions, for example. These issues are best raised with a strata manager via email, with an expected response time of 3-7 business days. Urgent: Matters that are urgent should be advised as such, and raised either via email, or through the strata manger’s preferred communication channel if otherwise indicated. These issues may include facility outages, security issues or utility failures (to name a few), and you should expect a response time of 1-3 business days. Emergency: If a matter is an emergency, then phoning your strata manager is your best bet. Most of the time, matters of emergency will relate to imminent safety issues and dangerous circumstances. As always, if emergency services are required, they should always be your first contact point.

Document Everything

When contacting a strata manager with an issue, ensure that you are documenting and providing photos, locations, dates/times, descriptions, and access details.

The more information that the strata manager has access to (and that stays on the record of communication), the less the manager has to piece together and confirm, and ultimately the less time it will take to rectify a given issue.

Follow-ups

Like all of us, strata managers are human, and are not always available, or may in some rare cases accidentally have missed your inquiry. Similarly, the reason for a delay in response may be that your strata manager is waiting on information, quotes or a response from a third party. Whilst your manager will always try to keep you informed, if you’ve reported an issue and haven’t received a timely response, you shouldn’t hesitate to follow up with your manager. Polite and persistent follow-ups will ensure that your manager is not missing your inquiry, and that they are keeping you in the loop. When following up, make sure you attach your previous correspondence, or use the same email chain, to assist your manager in assessing the history of the matter and increasing efficiency. Additionally, when communicating with your manager, asking for an update by a specific date may help in establishing a concrete timeline for rectification. At the end of the day, remember that your strata manager is here to help you! Maintaining patience and courtesy with your strata manager will always lead to more positive outcomes.

3 MAZING MGZ

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