7 June 2024

Should the ACT appoint a strata commissioner?

| Dione David
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Aerial view of housing, apartments, Bunnings, Westfield

Vantage Strata’s Chris Miller says 70 per cent of all new housing supply in the ACT will be some form of strata title property from now until forever. Photo: Michelle Kroll.

In the face of housing affordability challenges the prevalence of strata living continues to rise. With it comes a growing need for a dedicated, impartial figure to support the sector and provide adequate compliance management.

Experts are calling for the ACT to appoint its own strata commissioner, as NSW did in 2021.

Vantage Strata director of business development Chris Miller said for numerous reasons more than a fifth of the ACT’s population lived in strata-titled buildings, pointing to the important role strata property played in the Australian housing market.

“Affordability is perhaps the biggest one at the moment. Strata-titled properties, where many people utilise a piece of land, are a more efficient kind of property ownership,” he said.

“There’s also the matter of land supply. There’s no capacity to just continue to expand into new suburbs with house and land packages infinitum, so it’s an inescapable conclusion there needs to be more strata development.

“Strata-titled developments also offer access to amenities – shops and work hubs. This means pressure on municipal service and infrastructure is reduced. Every time a new suburb gets further away from employment hubs, that’s more roads required, public transport, stormwater drains – infrastructure gets less efficient the further out we go.

“Whether you subscribe to that philosophy or not, it remains that 70 per cent of all new housing supply in the ACT will be some form of strata-titled property from now until forever.”

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Mr Miller said strata regulation was currently covered as part of the broader property services industry, and that was increasingly problematic.

“Consequently, people living in strata-titled buildings don’t have particular advocacy considering their interests at the government or regulator level,” he said.

“The problems that need attention in the strata world are really unique to strata and need more specific regulation and oversight. For example, how owners seek access to support for managing building defects.

“Future issues that will arise will also have an outsized impact on strata-titled properties. For example the electrification of buildings. At a single property level that’s fairly uncomplicated. However when you consider most apartment complexes built in the last quarter of a century have centralised gas hot water services, it’s infinitely more complicated when you consider those buildings will need to replace all of that infrastructure in the coming decades.

“I can’t think of a good reason why this shouldn’t be a priority for any government. In the past you might’ve argued it was too niche to warrant the expense. That’s clearly not the case now and it will never be again, for as long as Canberra exists.”

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Owners Corporation Network ACT president Gary Petherbridge said the positive economic impact strata living had in the ACT was largely underestimated.

He estimated 160,000 ACT taxpayers were owners, non-resident investors or tenants in the 80,000 strata units, but said this was probably a conservative figure.

“High-rise developments around the town centres are the equivalent of a large new suburb where the residents continually pay for a lot of the infrastructure and all the amenities,” he said.

Mr Petherbridge called for the rates and land taxes charged by the ACT Government on strata properties to be reviewed to account for the reduced land usage, infrastructure and amenities that “vertical living precincts” provided for themselves, versus the cost to the ACT taxpayer of building new suburbs.

This was among the many issues he said would fall under the remit of a strata commissioner. Others included drumming up support for environmental initiatives, lobbying for effective legislation to improve minimum standards for strata buildings, addressing issues such as noise pollution, the equitable distribution of security resources, and the establishment of an industry emergency fund for urgent defect rectifications and resolving disputes.

“If we appointed a strata commissioner, they could address all things related to strata living and dedicate a ministerial portfolio backed by the support of a government unit,” he said.

Strata Community Association (SCA) ACT president Shelley Mulherin said the establishment of a strata commissioner in the ACT was “long overdue” and would help address issues related to building defects, maintenance and the installation of sustainable infrastructure such as electric vehicle charging stations.

“The appointment of a strata commissioner would not only benefit the thousands of individuals living in strata communities but also contribute to the overall efficiency and effectiveness of the strata industry in the ACT,” she said.

“As we approach the upcoming election, we urge all political parties to consider the importance of this initiative for the betterment of strata living in the Territory.”

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Proxy voting should be banned. Either let the property owners postal vote, or even better, let the tennants of apartments vote. They share the best interest with owner occupiers to keep strata fees down and the building functional

HiddenDragon8:10 pm 11 Jun 24

Worthwhile changes to the many problems with the ACT property sector will probably only happen if we get a Legislative Assembly with the balance of power held by real (i.e. not funded by the ACT property sector) independents.

One way or another the current parties in the Assembly look to be too close to that sector and/or inclined to do its bidding (even if, at times, some of them seem to be too stupid to realise they are being played).

The ACT property market is screaming out for 2 things from our government: 1. A return of government employed, reputable, professional building inspectors to stop the outrageous and well publicised rorts by developers of apartment complexes, and 2. Appointment of a strata commissioner to stop apartment and town house owners being ripped off once they move in. Both of these initiatives should be a top priority for the competing parties in our ACT election later this year.

Voice Of Reason12:11 pm 11 Jun 24

A strata & property services commission *could* be helpful, if it’s:

* primarily aimed at supporting residents/consumers/rate-payers in ensuring ACT has a collaborative, accountable and trusted strata & property services industry
* representative across the spectrum of property and strata service providers, owners & renters
* unbiased & evidence driven (i.e. not politically motivated)
* well funded

ACT has well on its way to 40/50% of residents currently living in strata developments, and is heading for 70% by 2040 according to the ACT planning department, so a commission would need to grow in tandem across this period

NSW has seen issues with their new similar Commission, funding, lengthy delays and increased costs/safety concerns for consumers: https://www.insurancenews.com.au/regulatory-government/nsw-urged-to-boost-strata-watchdog-funding

Yes, Yes, Yes. Owner-occupiers in strata complexes are being screwed over financially and there is very little help provided for them. Strata managers seem to have unlimited powers to raise fees without any accountability. In theory, owners can object to fee rises at so-called AGMs, but the strata manager usually has proxy voting rights for all the investor-owners (who can claim much of the strata fees against taxes – which owner-occupiers can’t) and bullies through ridiculous budgets. There is no way of getting an independent review.

I made the mistake of downsizing a few years ago and now pay more in rates & body corporate fees for a small townhouse in an outer suburb, than I paid in rates on a much larger inner-city block. My advice to people looking at downsize is to not do it.

devils_advocate9:26 pm 10 Jun 24

I’m not sure why you think yet another layer of regulation would address the problems you’ve raised

Proxy voting should be banned. Your vote should only count if you can be present at the AGM, or postal voting should be allowed. Even better: let the occupiers vote, including tennants.

devils_advocate – the current framework is not working. Strata managers are a law unto themselves and the little people (ie owner-occupiers) have no way of getting help. The biggest demographics amongst owner-occupiers are retired people downsizing & first home owners just starting out. Neither group have the financial means to challenge the voting bloc of investors.

Martin Kenseley4:46 pm 13 Jun 24

The maximum number of proxies an individual can hold is 5%, or 1 vote for every 20 units, so I can’t see how the strata manager can have all the investor votes. Also the budget is set by the owners- if you think there are items in it over specified that are not needed then propose changing them at the AGM. And you also forgot that you are no longer paying insurance costs for your property. The better comparison would be rates + insurance for your old property vs rates + Strata fees for the new.

devils_advocate3:24 pm 10 Jun 24

“ I can’t think of a good reason why this shouldn’t be a priority for any government.”

Here’s a few:
1) unnecessary regulatory burden in the absence of a demonstrated regulatory failure. There is already a unit titles act that sets out rules, remedies and dispute resolution forums.
2) imposing a new regulatory barrier for strata management. Presumably the ultimate goal is to require strata managers to register or be licensed so as to create another protected industry where none previously existed (or was required)
3) the result of the 2 points above, higher strata management fees/body corporate levies for those owners who are required to appoint a strata manager (basically all – last I checked it was unit titles with 4 or more units)

The key justification presented is management of building defects – perhaps better to focus on addressing the actual problem as opposed to regulating the bodies corporate currently saddled with dealing with it?

Just what we need, more costly bureaucracy.

Or, should the ACT Ministers grow some balls and serve the public better.

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