Posted by Grant Beaumont on January 10, 2019

How prepared is your Strata Manager for a Disaster?

 

As we return to work after the Christmas and New Year holidays, many of us would be aware and would have reflected on the terrible situation facing the owners and residents at the Opal Tower at Homebush. What a disaster that is for those affected at such an inopportune moment (just before Christmas, and only months after moving into a brand new building). One imagines the excitement that new residents and owners must have felt when starting on a new adventure and the disappointment when disaster struck. Much has been said for the role of the building developer, builder and certifiers and it is not my intent to comment further on that here. Rather, my interest is from the strata management perspective.

As a strata manager, I consider how the team would react to the management of such a catastrophe. Of course, such a situation is not unique to the industry and certainly not to us (albeit, fortunately, not to the same scale). Situations of varying degrees happen from time to time: whether this be storm damage, fire, malicious damage, builder defects or similar. But what level of support should an owners corporation expect from their strata manager?

The answer to the question might vary depending on the nature of the relationship between the owners corporation and the strata manager. The Act allows for the functions of the owners corporation to be delegated to the strata managing agent. These basically fall into the categories of:

  • > Financial management
  • > Maintaining books and records
  • > Repairing common property
  • > Enforcing by-laws
  • > Insuring the building

The Act allows for some/all of the responsibilities (with some exceptions) of the owners corporation duties to be delegated to the strata managing agent. The instrument by which this is done is the management agency agreement. Most strata managers have been established as an administrative functionary and so often do not have the skills, capacity, capability or experience to handle an extraordinary situation as the one faced by the strata managers at Opal Tower.

Handling media requests, owner/tenant enquiries in relation to their own alternate accommodation needs, resolving disputes with the developer/builder in relation to private property/access, coordinating legal advice and an exceptionally complex building insurance claim is well beyond the general gambit of strata management services.

While at Opal Tower, given it had only just been constructed (and therefore within warranty periods), the developer has (as I understand it) taken initiative to handle media, owner and tenant issues. This would not be case for an established building that faces some sort of catastrophe.

In such a situation, it is likely that the owners corporation, via its strata committee would look to its strata manager for guidance and support. Regrettably, my experience is that a lot of owners corporations seek out the lowest cost strata manager, rather than the most qualified. Generally, these firms may not have the resources nor offer the necessary training to manage these types of incidents. Importantly, an agency that loads their strata manager(s) up with a huge volume of managements, and operates only as an administrative function, will simply not have the capacity to assist an owners corporation in desperate need if/when the time comes. In that situation, it would fall to a (usually) under-prepared strata committee to deal with all the potential interested parties:

  • > Owners
  • > Occupants (tenants, including the Tenants Union)
  • > Government interests
  • > Insurance company and assessor
  • > Contractors / repairers
  • > Original developer / builder / certifier
  • > Fire engineer
  • > Media

Coordinating all the interested parties in a timely, clear and concise manner can be an extremely time-intensive responsibility; however, effective communication (and protocols surrounding that) is paramount to making a bad situation tolerable.

Does your strata manager have a plan to handle a disaster? Perhaps you should ask.

 

If you enjoyed this article, please feel free to share or give me some feedback.

Grant Beaumont | Director | Beaumont Strata Management

About the Author, Grant Beaumont

Grant Beaumont

As Director of Beaumont Strata, Grant is passionate about the management of Commercial & Industrial Property. With an enthusiastic attitude toward innovation, and adoption of modern practices, the businesses have significantly developed in terms of the internal processes, creating business efficiencies and enhancing the customer experience for clients and customers. In addition, he handles much of the administration side of the businesses, comprising legal, accounting, human resources and office matters.

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1 Comment

  1. Yes Grant a good article and how glad you must be not to do the strata management for that building

    Lorraine Young -

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