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Owners Corporation Law

11 Apr 2018

The values that underpin a vertical community

Sometimes balancing the competing interests of owners and residents can be a daunting prospect for owners’ corporation committees.

The microcosm that makes up an apartment building contains many moving parts and shifting sands and the owners and residents each have differing characteristics: commercial businesses and retail lots, owner-occupiers, families, renters and investors, baby-boomers and first-home buyers alike.

Take a simple example – say, for instance the committee of the owners’ corporation was faced with a decision about whether to renew the concierge’s agreement.

Now, the owner-occupiers and renters would most likely be in favour of the renewal, in order to maintain the building’s high level of cleanliness and service quality and to ensure continuing high levels of amenity, security and privacy.

Investors on the other hand, might favour the concierge agreement being removed or scaled back, in order to lower operating costs, which would maximise rental yield and re-sale prospects.

How on earth then, should a committee approach decision-making when these differing interests collide?

The Owners Corporation Act 2006 places a duty on committee members to act in the best interests of the owners’ corporation and without regard to self-interest. In reality though, this is the beginning and not the end of the question.

Some buildings might not know what the percentage split is between owner-occupiers, renters and tenants are. In order to find out, the OC manager could take a look at the roll to get a rough idea based on the names and addresses for service.

Another option might be for a survey to be commissioned by the committee to find out about its own building.

Ensuring that the numbers on the committee represented by these different percentage splits is advisable, however it rarely ever happens in my experience.

What might be most useful for committees is to develop a manifesto, or a mission statement. Such a set of values can greatly assist a committee in making decisions and can improve accountability and consistency in decision making by applying the blowtorch to each decision made to ensure that it does not breach the mission statement.

Governments do this all the time when they are bound by a constitution and any decisions made that go against the constitution can be judicially reviewed.

Now, I’m not suggesting that owners’ corporations make their mission statements a legally binding document – this is more informal and internal – but it would remain a very important decision-making tool.

For instance, an owners’ corporation might decide that its mission statement is to be a technologically-advanced building with high conservation values and to be an early adopter of new technological means and with an interest in making sure that its building stands for technological progress and a reduced carbon footprint.

This might mean that the building focuses on new products for electric car charging stations, smart homes and smart locks, LED lights, solar panels, batteries and timers for VSD drives.

Another building might decide that its mission statement is to make sure that the community is inclusive and tight knit and to make a real effort to bring the community together for events and to share common amenities by holding rooftop concerts, social sports team events, games nights, communal vegetable gardens or beekeeping.

In whichever way your community forms together, it will be very important for committees to be aware of not just the financial dynamics and the administration of the building, but also the societal impacts of living in high rise.

There must be a recognition that lives can be improved, whether through technology or through friendships and inclusiveness and I’m sure that, in time, there will be a reckoning where Australians must truly embrace apartment living.

At that time, the “early adopters” will pave the way for the new way of living in Australia and around the world.

Tom Bacon

Principal - Strata Title Lawyers

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