have your say

52 Fullarton Road, Norwood
PO Box 4040, Norwood South
South Australia 5067
P: 08 8333 5200 F: 08 8333 5210
e:mail@unitcare.com.au

Strata & Community Titles

Proposed changes - have your say

Consultation extended until March 9th 2009

The Attorney General of SA has drafted changes to the Strata & Community Titles Acts.

" Broadly speaking, the purpose of the proposed reforms is to improve consumer protection for the buyers and owners of community lots and strata units". (quote from government website)

Link to Attorney General's documents

Link to UnitCare's submission

(Attorney General's 2003 Discussion Paper: If you would like a printable copy of the Attorney Generals 2003 discussion document (pdf version - 244KB) please Click Here)

His department is seeking submissions from body corporate managers and unit owners. Submissions need to be in by March 9th 2009.

Whilst we agree with many of the proposed reforms we have compiled a list of concerns. You may share some of our concerns. If so please feel free to use them in your submission.

Just click on this email address stratabillcomments@agd.sa.gov.au and copy and paste our content as needed. Add your own concerns and send your email to the Attorney General by March 9th 2009.

Note: BC = Body Corporate, BCM = Body Corporate Manager, AG = Attorney General, OCBA = Office of Business & Consumer Affairs.

Concerns:

Advisory &Education Service & Tribunal: UnitCare Submission:

We are extremely disappointed that this has been omitted from the draft legislation.

The draft legislation makes no proposal to take BC disputes away from the Magistrates Court. We are extremely disappointed that this has been omitted from the draft legislation.

Tribunals are used extensively interstate (NSW, Victoria, Queensland, Tasmania). Currently the SA Government provides no publications, information unit or education for South Australia’s unit owners or BCMs. A Tribunal would have value ..

In reducing time to hear matters, some strata related court cases take 18 months to settle.

Providing accurate information to unit owners, prospective owners and mangers.

Reduce the cost to the public purse – remove from Magistrates Court

In establishing a set of public rulings on BC matters – example of Queensland rulings in 2008 is attached.

Funding – use the Land Agent & Property Managers model, that is direct the $1 million + interest earned on BCMs trust accounts to OCBA to provide services and publications.
A quick, easy, inexpensive and user-friendly dispute resolution mechanism needs to be developed. (The Victorian V. C.A.T. model seems to work well in other fields but it may not suit local South Australian conditions). In South Australia, the Residential Tenancies Tribunal could be modified to serve this function.

Possible Clause(s) for your submission:

I currently have nowhere independent to turn for help regarding my rights and responsibilities as a unit owner.

Should I stand for my group's management committee, how will I know what my duties entail. Can I be sued if something goes wrong?

I am in a self managed group. Where do we go for training so that we can run our group properly.

Who is going to publicise your proposed changes to the law if and when they come into effect?

Where can I go for training as an officer or committee member?

Where do I turn if I have a dispute with my fellow owners. Who will help us mediate or arbitrate the matter? I want a friendly easy to use and accessible service, not have to go to Court.

I understand that we are the only mainland state in Australia that does not provide a government advisory service for unit owners.

I strongly request that the South Australian Government provide an education & advisory service and tribunal for all us unit owners as is the case in many other states. That this be funded in a similar fashion to the Residential Tenancies office.

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Licensing Body Corporate Managers: UnitCare Submission:

We are extremely disappointed that this has been omitted from the draft legislation.

This assumes unit owners know their rights and that the BCM has provided proper and timely advice.

Relies on unit owners bringing legal action if OCBA declines as is commonly the case. No evidence of OCBA currently enforces statutory audit requirements in relation to BC Managers.

AG acknowledged the many complaints to government agencies in his 2003 discussion paper - Possible Regulation of Body Corporate Managers.

NSW, Victoria, Queensland and the NT all have some form of licensing or registration of managers. Victoria and the NT have only recently introduced their new legislation.

The AG does not address the education of managers. This is critical as many complaints to OCBA and other government agencies including the Courts centre on poor or misleading advice and assertions from BC Managers. Interstate education is commonly part of the licensing or registration requirements. There is now a nationally accredited TAFE course for BCMs.

Funding – use the Land Agent & Property Managers model, that is direct the $1 million + interest earned on BCMs trust accounts to OCBA to provide resources. Charge managers and firms an annual registration fee.

Who will check that the BCMs have professional indemnity insurance?

Who will ensure that the accounts they manage are in order?

Possible Clause(s) for your submission:

How do I know if our manager is qualified to provide advice and services?

What is to stop 'bad' managers continuing to practice and how will unit owners get to know they are unwise to appoint them?

Why are there no minimum training requirements for managers when they look after units owners money and property? This applies to my local builder and accountant.

How do I know if our manager is providing accurate and timely advice?

Who will be checking that our manager has insurance to cover the risk of stolen monies?

Where do we turn if our manager is uncooperative and unhelpful?

Where do we turn if we have a dispute with our manager?

I strongly request that the South Australian Government ensure that all people providing a strata management service be registered and that they must meet minimum education standards in order to continue practicing.

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Body corporate managers should not be able to operate Trust Accounts: UnitCare Submission:

The proposal will impose extraordinary costs on BCMs as they will have to arrange and hold in some cases many hundreds or thousands of bank accounts in place of their existing single Trust Accounts. This will see millions of dollars leave local bank accounts as managers seek BPay and Credit Card facilities for each of the bank accounts many of which will contain less than $2,000. Currently Maquarie Bank (Sydney) is one of the few offering such facilities.

The paper provides no evidence that individual accounts will provide improved security for owner’s funds. We have been informed by our bank that they do not check signatures or the number of signatories in their clearing houses except where the amounts exceeds $10,000.

This major and serious change was not canvassed in original 2003 discussion paper and we are unclear as to the objective of this change.

The largest theft of funds by a strata manager was some $400,000+ by Bill Longworth (see newspaper article attached).. The bank passed his cheques with one signature despite two being required. He was one of the signatories. He was not using a trust account.

Please note: UnitCare's latest Audit Report can be viewed on our website.

Possible Clause(s) for your submission:

Our group receive many $100s / annum in interest from our manager's Trust Account. I understand that we will lose most if not all of this by operating an individual cheque account, is this true?

I understand that an officer at our group will need to counter sign all cheques. This will be onerous on a volunteer.

I understand that banks do not check to make sure that the signatures match those required unless it is over the counter or more than $10,000.

I understand that currently managers must have their Trust Accounts audited. Is this enforced? How do I know if our manager has undertaken an audit and can we see the report. Shouldn't Consumer Affairs be checking for compliance and reporting failures on its website and in the press.

Will our group be faced with increased management and bank fees if Trust Accounts are outlawed?

Will I be able to pay my levies using BPay or my credit card as I can with our manager's Trust Account?

I strongly request that the South Australian Government ensure that all managers are properly managing their client's money, that they undertake random audits, that managers be permitted to operate Trust Accounts and that all managers be obliged to provide officers with a monthly report on all transactions for their group.

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Managers permitted to chair meetings: UnitCare Submission:

We strongly believe that the manager as chair should always be put to a vote of the meeting and that the manager should not be permitted to use proxies in their name unless the proxy explicitly is in favour of the manager chairing the meeting. Having the Presiding Officer decide the matter could see owners pitted against the PO in what could be seen as a vote of no confidence. This would be unfortunate. All those present should vote on manager as chair.
Matters where a conflict of interest may occur should see the manager vacate the chair and if requested vacate the room. Examples are a vote on management services or any other pecuniary matter pertinent to the manager or their firm or related businesses.

Possible Clause(s) for your submission:

Our manager always chairs the meeting and uses proxies to their advantage. How do we stop this happening?

If our officers received some training I believe they would be far more confident in chairing our group's meetings.

I strongly request that the South Australian Government provide help for officers so that they can confidently chair and manage their meetings and that managers can only chair a meeting if the majority of those present vote so. Managers must not be able to use general proxies in this matter.

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email submissions to stratabillcomments@agd.sa.gov.au