This article about life at strata apartments has been supplied and written by David Byers, Abacus Strata.
What are some common trends in Strata Communities
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Many of the trends we are seeing in strata living are coming about due to the rapidly increasing number of people choosing strata living. While there are many reasons for the increase in strata living, the desire for comfort, security and quality living is a constant between strata and non-strata owners.
Committees need to be aware of the trends impacting strata living and the demands of owners in order to maintain the community to the level that owners are now seeking. Significant trends such as solar power, car ownership, technology and risk are all impacting on decisions that affect strata living.
It is no secret that the efficiency of solar technology keeps increasing while the cost of hardware is decreasing. Any strata community that has common power consumption would benefit from considering whether installation of solar power would benefit them. Of course, that is in addition to the benefit that many owners would get from installing solar power for their own use.
The decreasing cost of battery storage means that solar power generation and storage solutions are likely to become an integral part of communities in future. If you haven’t already done so, you may want to consider forming a solar sub-committee to look into solar power generation and storage and get some up to date information.
The days of expecting an untrained committee to successfully run a business with millions of dollars in assets are slowly drawing to a close. As well as the training that committee members get from their strata manager, the national body that represents approximately 80% of strata managers, SCA (Strata Community Association), have launched a training course for committee members.
When you consider the length of time many committee members stay on the committee and the value of cashflow and assets under their control, the question should not be “Is it ok to learn on the job?” it should be “How soon can I get some training?”
A focus on finances
It will come as no surprise that community finances become more important as the size of communities increase and the value of the levies collected climbs. Instead of focusing on just planning and reviewing spending, the importance of a long-term maintenance plan becomes vital. Strategic plans are becoming more common and the role of embedded networks and negotiating long-term contracts with suppliers are gaining prominence. Ensuring that work is completed and signed off in accordance with the works order, only approved contractors are allowed on site and safety standards are complied with all having financial consequences.
Managing finances in a large community is turning into a specialised role and can often require a representative from the committee to maintain contact with the strata manager to ensure that the committee receives the regular reports the owners need. Financial reports should be more than just a summary of income and expenditure. Financial reports should fulfil two roles:
- Firstly, the reports should enable owners to ensure the funds have been spent as agreed in the annual budget.
- Secondly, the reports should help the owners make better future decisions.
Many issues in communities revolve around finances. More input and interest from committee members will help the strata manager determine what financial information the owners want.
No review of trends in strata would be complete without a look at parking. While the trend in car ownership for strata owners in cities appears to show a decrease, until we are a totally carless society the issue of parking is likely to remain. From no parking in new developments to a lack of visitor spaces to large vehicles and more recently to car stackers, the number of issues that arise in relation to parking seems never ending.
One of the first steps that can be taken towards managing the parking issue is to have clearly communicated community rules that are able to be enforced. Committees grappling with parking problems or seemingly impossible situations are well advised to speak to a lawyer to see what by-laws have been working in other communities. The keys are enforceability and practicality. Education and voluntary compliance is generally seen as delivering a better result than a heavy-handed approach.
Committee members insurance
The days of blind trust in committees are also coming to an end. Committee members are taking out insurance to cover themselves for claims against them by other lot owners. Even if a claim has no merit the emotional, reputational and financial cost to a committee member can be substantial.
Most committee members join a committee with the intention of making a positive contribution to the management of the community. To be threatened with legal action for acting in what they thought was the best interests of the community can come as an unpleasant surprise for any committee owner. As a consequence, many strata managers are advising committee members to consider including appropriate insurance in the insurance policy.
If you are on the committee and do not have some type of indemnity cover for decisions you make in your capacity as a committee member it is worth speaking to your insurer or broker to consider your options.
There is some amazing technology available. Did you know you can now install sensors linked to hot water cylinders that can detect a breach and shut off the water flow, containing the spill to less than 20 litres? Imagine the positive impact this type of technology could have had in those properties where a broken pipe or hot water cylinder allowed thousands of litres of water to spill through multiple lots. As more technology of this type becomes available you can expect communities to insist on its installation. You’ll also find your insurance company supporting these initiatives.
One of the best ways to find out what sort of practical and cost-effective solutions there are available would be to speak to your insurance company or strata manager. Some insurance companies will be happy to offer a reduction in your insurance premium as a recognition that you are taking positive steps to reduce the risk of loss.
Thanks for reading. I’d be keen to her your thoughts on trends that are not covered here or your experiences with any of the trends above. I’d be especially interested to hear about any recent technology installed in your community.
P: 1300 ABACUS
This post appears in Strata News #151
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