The public and various authorities have been calling for Strata commissions to be banned for years. We continue to see Strata Management companies with conflicted relationships plague the industry. This needs to end now.
“We call for the supply of tobacco to be immediately banned in buildings, or adjoining buildings to where people live,” Promnitz said.
“Until the Victorian government brings the crime crisis under control, this presents an unacceptable risk to peoples’ lives.
“Allowing that risk directly beneath people’s bedrooms presents an unacceptable danger to residents’ lives and homes.”
Co-founder of the Strata Owners Alliance Adam Promnitz said it is unfortunate that innocent Australians are paying the price for Victoria’s tobacco wars.
“No owner should be subject to the majority making their home substantially worse and then handed the bill for it as the cherry on top.”
Co-founder of the Strata Owners Alliance Adam Promnitz told nine.com.au that, while democratic decisions are a part of strata living, “it is not a licence to bypass basic standards of fairness”.
“It is remarkable NSW’s protections in cases like this are so poor given NSW has a reputation as the state which [is] the most difficult and expensive for owners to perform basic renovations in strata,” he said.
“NSW strata legislation has the balance all wrong."
Is your strata manager trying to evade the banning of payment surcharges and trying to now claim it is a direct expense for the strata despite this being a service provided by the manager?
If so, we want to hear from you as this is diretly going against the banning of payment surcharges and simply trying to backdoor it onto owners.
Unless the strata has a direct agreement with the payment provider, and the management agreement does not allow it - in many cases these charges cannot just be charged without a new contract. In most of these cases the payment provider is provided via the manager and not directly which means the manager is responsible for absorbing those charges.
We are disappointed to find that segments of the industry are trying to evade the intent of the new laws, signifying their intent to charge the strata instead where they may not lawfully be able to.
The indsutry should have learnt from the reputation damage of its poor behaviour in recent years.
This is why Strata Owners don't get a fair go. The industry has a level of entitlement and arrogance which needs to be called out.
SCA Vic’s own SWOT analysis says the quiet part out loud. This was reported in the Guardian's recent article - https://www.theguardian.com/.../unit-owners-stratas....
In the same table, it lists:
“Owners Groups” as a threat.
“Insurance transparency” as a threat.
“Strong relationship with Government” as a strength.
That tells ordinary owners everything they need to know. Any industry that refers to its clients like this has significant problems.
In their OC Act review submission, they also wanted mandatory managers for any scheme with more than 10 lots - talk about protectionism of their own self interest!
When owners organising for themselves are treated as a threat, and transparency around insurance is treated as a reputational risk, it is no wonder the system keeps favouring the industry over the people paying the bills.
And when the industry lobby sees its relationship with government as a strength, while owners are still fighting just to be heard, the playing field is clearly not level.
“It’s self-evident to everybody but the industry how much of an issue there is with the industry,”
"While it’s now a registered charity, for many years the alliance was a humble Facebook group – which is how I found it. I was looking for something like a DIY handbook: how to self-manage your building, perhaps a checklist of tasks to set everything up. But no such thing existed – neither in the depths of Consumer Affairs Victoria’s labyrinthine website, nor in my search feeds. Promising sources that looked independent almost invariably turned out to be businesses angling for contracts."
Strata Committees – The Art of the Imperfect but good ones ALL have one thing in common…..
The reality is no committee is perfect. No two committees we come across are the same. A common misconception we hear is when committees describe themselves as being “like a board”, with committee members acting as “board members”. This could not be further from the truth, and it usually leads to poor outcomes. Every high performing committee we come across directly communicates with the owners. If an Owner wants to be on the committee they need to understand this comes with the obligation they are directly accessible to the other lot owners they own shared property with – never mind neighbours.
The same principles apply whether a block of 4 units with a shared driveway or a 15 storey building.
The primary role of a committee is not the be perfect – it is to be fair. Especially when it comes to hard decisions one of the lines we love using is “we aim to disappoint all owners equally”. This phrase reflects a pragmatic reality that when dealing with the management of shared ownership of property, sometimes the best you can achieve in adversity is to be fair to everyone and this is the essence of the role of a committee in managing common property.
No two committees we come across are the same. Some are highly organised. Some are inexperienced. Some communicate well. Some struggle. Some are trying to repair years of neglect. Others are simply trying to keep costs under control in a difficult environment.
Another common theme is disputes between owners and the committee. Another common source of conflict is confusion about the role of the strata manager and the committee. Committees are supposed to be directly accessible by owners. The manager is not meant to be the person who keeps owners away from the committee. The manager is there for administration and support. They are not a decision maker and they are not there to buffer.
A committee can delegate some tasks but the committee still needs to understand what is being done, why it is being done, and whether it is in the best interests of the owners corporation. When committees over delegate, the manager can become the de facto decision maker. That is not healthy governance and the committee becomes detached from the people they are supposed to represent.
What about when there is a dispute? Fairness matters more than popularity. At the end of the day, someone needs to make a decision (within the legislated powers they have) and that’s the committee. While some owners may not always like the decision the committee should be prepared to communicate their decision and why. Sometimes it has to pursue unpaid levies. Sometimes it has to enforce rules. Sometimes it has to prioritise essential repairs over cosmetic improvements. Sometimes it has to say no. Committees have to sometimes make hard decisions and have hard conversations.
Sometimes you also see some committee members are more engaged than others – or a de facto leader who the committee takes leadership from. This is human nature and provided the committee is open and transparent about the decisions being made that is ok.
Strata committees need to be intuitively sensitive to the fact that decisions are being made for neighbours who live in close proximity are neighbours and need to see and live with each other in close proximity while still making hard decisions.
Good committees can do this, communicate with all owners and build the trust.
NSW DBP Updates appear to have made rectification works financially crippling and impossible for owners. We are keen to hear stories.
Based on our assessment, balcony rectification works have increased from approx $1000 per square metre to $3000-$5000 per square metre making it financially crippling for many owners. We are keen to hear from owners who are in this position.
We note that unlike other groups we DO NOT take sponsorships or any form of funding from the building or defect rectification industry.
Executive Director of Consumer Affairs Victoria Nicole Rich was on ABC 774 this morning with Raf Epstein. It is clear that the industry players have had undue influence given how many of Nicole's answers were tone deaf to the real issues plaguing owners. The fact we can't even get a genuine meeting with Consumer affairs leadership despite various stakeholders in the industry (including those who take sponsorships) gloating about the influence they have had.
Consumer Affairs Victoria have been asleep at the wheel and clearly been startled when the Executive Director suddenly gets on the radio after years of radio silence.
Listening to the first caller highlight unlawful late charges was an eye opener to hear Nicole completely non committal on this clearly predatory practice. We wonder if Consumer Affairs Victoria really should be renamed Industry Affairs Victoria?
Promoting payment plans (which we support) but with little consideration for the impact a single owner can have on the financial sustainability for small OCs is a real issue. It is like Consumer Affairs can't tell the difference between renters and Strata owners.
Consumer Affairs repeated the misnomer that they do not have the power. The fact is, Consumer Affairs have the delegated power to prosecute under section 203 of the act however haven't taken any actions in over 5 years despite so many complaints against managers.
Paid promotional placements? No thanks. How conflicted is this industry?
Our position is simple: If we advocate for owners, we should be funded by owners and nobody else. So far we run on an absolutely miniscule budget.
Recently, the Strata Owners Alliance was approached with an opportunity for paid advertising and promotional placements from one of the largest contractors in the Strata industry. The email we received should be eye opening to every owner out there how conflicted the entire Strata industry is.
When owners receive information, recommendations or advocacy, they should never have to wonder:
- Who funds this organisation?
- Are there commercial relationships behind the scenes?
- Could those relationships influence what is being said?
Other advocacy groups accept industry funding, we don't. We see them as fundamentally incompatible with the role of independently advocating for owners.
While the company approaching us (and their PR agent) has done nothing wrong, the question is, how has it been considered normal that an organisation claiming to represent owners would accept money from the very industry it is commenting on, scrutinising or recommending?
We have a hardline stance against any sponsorships or paid promotions from the industry. From the day SOA was established, we made a conscious decision that we would not accept sponsorships, advertising revenue, placements, commissions or any other form of industry funding.
Only 11% of survey respondents believes the OC Act in Victoria ensures Managers act honestly. This speaks to the incredibly low level of trust Owners and Committees have with the Strata management industry in Victoria.
Over the coming days we will be sharing select highlights from the report in the review of the Owners Corporation Act 2006.
We met the Minister today.
Today we met with Victorian Minister for Consumer Affairs, Paul Edbrooke.
As an independent registered charity representing strata owners, we want to assure all owners that we did our very best to convey the issues you are facing every day.
Fairness, transparency and integrity were the themes of the discussion, along with the reality that the odds are often stacked against ordinary owners trying to navigate a complex and unsympathetic system.
We believe the minister was genuine and candid in discussion.
Following the media coverage over the past week, the Strata Owners Alliance was granted the opportunity, at short notice, to sit down with the Minister and discuss the reality facing strata owners across Victoria.
While we won't be sharing the details of that conversation, it was an important opportunity to explain what life is really like on the ground for many owners: rising costs, a lack of transparency, difficulty obtaining accountability, and the challenges of standing up to well resourced industry interests.
One thing is clear: the concerns of strata owners are now being heard in the halls of Parliament. The minister had a genuine interest.
For too long, owners have felt ignored. Today, their voices were represented directly at the highest levels of government. We told you we want to change the Strata Ecosystem and this is how it starts. This isn't a partisan issue.
This is how deck is stacked against the average owner trying to get transparency and fair treatment in Strata.
"In a statement PICA Group denied it had attempted to conceal its position to the public, but declined to release its submission to The Age."
The public deserves to know what other questionable claims were made in that submission without scrutiny. What else was said that influenced the government?
When Australia's largest strata management company whose boss used to head up the largest insurer (CHU) is defending insurance commissions with submissions kept secret from the public, we should all be concerned.
The strata management industry lives in an alternate reality to the rest of us. Everyone except the strata management industry thinks these insurance commissions are unacceptable. We haven't found an owner yet that thinks they should be allowed.
Excerpts: "Australia’s largest strata company was granted secret permission by a government-backed review panel to privately lobby against a proposed ban on lucrative insurance kickbacks."
"PICA’s intervention was kept from the public domain in a “confidential submission” to the review panel carried out by former Labor consumer affairs minister Marsha Thomson, economist Karen Chester and prominent strata lawyer David McKenzie."
"Adam Promnitz, founder of the grassroots advocacy group Strata Owners Alliance, said it appeared there had been “classic closed-door lobbying from the strata industry’s big end of town”.
“Transparency matters, and the influence of the big end of town in strata should not be hidden from public view,” he said. “We disagree with the 70 per cent claim completely and have never seen credible evidence to support it. It feels like scaremongering to protect their interests.”
In a statement PICA Group denied it had attempted to conceal its position to the public, but declined to release its submission to The Age."
"PICA Group chief executive Bobby Lehane was formerly the chief executive of strata insurance company CHU underwriters."
How Did the Victorian Government Get Strata So Wrong?
All of these are Owners Corporations. The government and the review needs to start again and go back to basics. It got it so wrong.
The problem is that the recent review largely treated strata as though every Owners Corporation was a large, complex development. 90% of Victorian strata has 15 lots or fewer. 98% are less than 50 lots (according to planning data). The reason the Strata Owners Alliance has been so successful is we have been a place the 90% of smaller ones have a resource as well as accomodating the bigger ones.
So how did the review and government completely fail to acknowledge this and get this so wrong?
The Victorian Government (actually all governments around Australia) need to realise that All apartment blocks are strata schemes but not all strata schemes are apartment blocks (not even the majroity).
The problem is that the recent review failed to acknowledge that most strata is really simple - often as simple as a shared commonly owned driveway.
The result of the review that failed to recognise this?
❌ Failed to eliminate consumer harm (insurance commissions and unlawful fee rorts)
❌ More compliance
❌ More administration
❌ More complexity
❌ More costs
When government talks about strata, they often picture the big apartment block. The reality is, that's approximately 2% of all strata in Victoria (note: Victoria has 30% more strata schemes than NSW and the average size is substantially smaller).
That's the compelxes which VCAT hears. They are the OCs with the resources and funds to afford lawyers. They are the cases that appear in the media.
The review failed to even define what strata is properly. Strata is simply the ability to have common ownership of some property.
The 90% that are getting ripped off daily - they don't make a nice sexy image in the paper. Boring ground level blocks dont make catching images so when you see strata in the paper, you almost always see someone standing in front of the 98%.
The review and Government should have started by asking "What does the average Victorian Owners Corporation actually look like?" but they focused on the ones they only ever hear about.
The Age has published their view of Victorian Governments response to the Owners Corporation Act review. It is damning
Listen to our Interview with ABC Radio Melbourne's Charlie Pickering on how the Victorian Government is now the Strata Industry's best friend and screwed over owners which will lead to higher costs for Strata owners.
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The Strata Industry's best friend is the Victorian Government Minister right now. The Victorian State Government listened to the Strata Industry a lot and the owners not so much.