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Is your scheme’s communication affecting your property value?

Is your scheme's communication affecting your property value?

In our August 2018 article, I discussed emails. I emphasise, as with any communication in relation to Strata Schemes, they are the owners corporation’s records. When you read the content of some emails, sometimes you would not believe that to be the case due to the tenor of the language used. Unless these communications are the subject of legal professional privilege, they are available to those who search the owners corporation’s records. These emails are often the gateway to what’s going on in a scheme which few searchers access. They can reveal the patients taking over the asylum. The authors seem to fail to recognise these may be read by third parties and interpreted by tribunals and courts. Maybe they do know but don’t care. Be careful what you say and write. For the ignorant, the laws of defamation and libel are alive and well.

Be wary of keyboard warriors…..they usually have an agenda that is either right in front of you or hidden between the lines.

Craziness also affects values.

Beware of those who don’t want to share communications…using such excuses as ‘you don’t need to Cc #’. Another goody is Bcc-ing others. Really!!!!

Be wary of so called informal meetings……they are not legally binding and are sometimes a red light to an agenda preferred not to be part of a formal meeting. They are meetings which lack statutory compliance.

Well run schemes keep their records fastidious, are compliant with the law and their records are crystal clear. Why wouldn’t they be? Schemes are not fiefdoms, they are statutory co-operatives where all residents – be they lot owners, tenants or lenders – are entitled to know what is going on in the engine room of the Scheme.

Let’s embark on the ins and outs of strata searching.

When I think of the number of schemes I have managed over the years and the number of section 118 and now, under the new Strata Schemes Management Act 2015, section 22 certificates issued – these far outweigh the number of searches carried out by prospective purchasers. I am not sure why they are disproportionate, considering for the average person, the purchase would be one of the biggest expenditures one makes in a lifetime.

What I have also noticed is that when searches are carried out, they rarely involve looking through emails and communications especially to, from and between the strata committee members. I find this fascinating that they are so often overlooked as they are the window to what is going on in the scheme.

Notes or emails about what people call informal meetings. I discourage informal meetings… they have something to hide or is the committee being penny wise, pound foolish by not having the strata manager attend? The answer is usually yes. Then the further question that flows from that answer is why is it necessary to hide something? The answer to this may be because someone or more people don’t want others to know, particularly if it is believed that they won’t be able to do something if is made public.

Buying off the plan or during the Initial Period
I think thorough searches should be mandatory if you are buying off the plan. Sometimes the interests of the developer and incoming purchasers are different particularly during the initial period. Here are some examples of queries you may wish to make about do’s and don’ts during and shortly after the initial period:-

· Any alteration to common property or erected structure on common property – Section 26(1)(a)

· Debts exceeding amount available for repayment – Section 26(1)(b)

· Appointing a strata manager for a period beyond the holding of the first annual general meeting – Section 26(1)(c) 

· Borrowing of money or giving of securities – Section 26(1)(d)

· Has there been a change in the by-laws conferring a right or obligation on one or more people but not all owners – Section 140 (1)

· Make sure the first annual general meeting was held within 2 months after the ending of the initial period – Section 14(1)  

· If the initial period ended not later than 12 months after the completion of the building work, did the developer appoint a qualified person as a building inspector to carry out an inspection of and report on then notify the secretary not later than 14 days after making the appointment – Section 194 (1)(a) 

· If the initial period didn’t end within 12 months after the completion of building work, did the developer give the secretary notice – Section 194 (2)  

· Did the original owner give inadequate estimates and levies – Section 89(1)

· In relation to estimates to be prepared of contributions to the administrative and capital works fund – Section 79

· Did a building inspector, not later than 14 days after completion of an interim or final report, give a copy to the developer, the owners corporation, secretary and builder – Section 202(1)(a)-(d) 
· Did the owners corporation give written notice to owners of the receipt of an interim or final report – Section 202(2) 

In conclusion, a well run owners corporation, which includes proper and informed communications as well as statutory compliance influences potential purchasers and by extension, the value of your property, whether it be your home or an investment.
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