This post and Q&A about record keeping and strata defects has been provided by Michael Ferrier, Eyeon Property Inspections.
Question: Our minutes only include the decision taken, with no background. Are they leaving out information regarding strata defects and anything which may disadvantage the sales of units?
If SC meetings are held with only an agree/disagree/abstain reply, how can owners know the background?
The only minutes reflect the voting and there is no real information on what is happening or anticipated to be done in the building.
I have read an article recently (below) that information is not being filed in strata records by some Strata committees with regards to strata defects and anything which may disadvantage the sales of units. Current our Strata Committee of 7 is made up of 3 non resident owners.
Answer: If you think the records are sub-standard in your building, put some pressure on the SC and strata manager to do a better job.
It’s very common for SC minutes (and AGM/EGM) to only include the decision taken, with no background. As a result, there’s a gap in the information available to owners, but also to potential owners.
This doesn’t mean they are looking to hide anything, but are probably just cutting corners on keeping complete records. Background is more likely found in emails between SC members and the strata manager.
If you are looking at records, I recommend you focus on correspondence files to see what’s there. If you still can’t find what you are looking for, you’ll need to speak to the strata manager. Some are more helpful than others, but it’s really the only way to find out what’s going on in many cases.
This fact highlights a big problem. If the strata manager changes, that knowledge can disappear with them. If you think the records are sub-standard in your building, put some pressure on the SC and strata manager to do a better job. You are entitled to complete records, so raise it at the next general meeting or email the SC and strata manager with your concerns..
This post appears in Strata News #273.
Property buyers are now well aware of the building defects disasters seen in Opal Tower and Mascot Towers. But the reality is that any building could hide big issues from potential buyers, meaning that people could land in a nightmare scenario, even if they had carried out all possible checks.
2 Sept 2019: ‘Soil-filled water’ the cause of Mascot Towers’ trouble – Wake Up Australia with Michael McLaren
While Owners Corporations are obliged by law to keep records, the law doesn’t say that they have to be complete, accurate or true.
Right now, Owners corporations are outsourcing their record keeping to strata managers, and in many cases the record keeping is poor. There are no consistent standards, and records often disappear when they are transferred from one strata manager to another. The industry should be doing something about it, and laws need to be tougher.
In recent inspections of strata records, EYEON Property Inspections has seen the following examples of altered and incomplete records:
- Strata committee altering general meeting minutes to change decisions made by a majority of owners
- No information provided in records of the status of building rectification works
- Recent records of building defects “lost” on transfer from the previous strata manager.
In the property podcast, The Elephant in The Room, a Sydney Strata Manager said she comes across a Strata Committees who doesn’t want certain information to be included in the minutes because it would negatively affect property values.
She said that if she isn’t comfortable with the minutes or disagrees with the included information, she won’t include her logo on it. She knows the minutes are wrong but is powerless to ensure the correct information goes in the records. She can’t stop the owners from creating false records.
Strata records need to be better. Strata managers should have consistent record keeping systems and the transfer of records should be audited. Owners corporations should always have their own copy of all records. There should be severe penalties for non-disclosure of information.
Otherwise, how can property buyers trust the information they are provided?
The bottom line is that if there are gaps in records or the detail about current issues is sparse, buyers need to be cautious. These issues should be red flags and buyers should consider making lower offers or walking away from a property if the strata records are poor. In some cases, current owners might be trying to get out of the building before major issues become public knowledge.
- Do NSW buyers have a right to up-to-date information when purchasing strata?
- QLD Q&A Alarm Bells: Doctoring BC Records to Hide Building Defects
- Terrible strata records and strata stoushes all too common
- A bigger problem than building defects
This post appears in Strata News #264.
If you have a question about record keeping and strata defects, some tips or something to add to the article, please leave a comment below.