We Live Here - Our Newsletters , 2021

2021.12 Owners Corporation laws tweaked

Wed, 01 Dec 2021 02:02:00 +1100

The Victorian Government’s long-awaited amendments to owners corporation laws are now coming into force.

The government has been under pressure for some time to stamp out a number of inequitable practices indulged in by many developers for several years.

With around one in five Victorians being part of an owners corporation, strata management problems have impacted millions of people.

Ostensibly to address numerous resident concerns from this growing quarter, the government has enacted a raft of updates aimed at purging the worst excesses of an underregulated property development industry.

Is yours a Tier 1 site?

Owners Corporation law in Victoria now recognises that different size developments need different rules. Different size developments have been stratified into Tiers – not to be confused with Covid exposure site classifications!

Most inner-city apartment developments will fall into Tier 1, covering buildings with more than 100 lots, or into tier 2 which covers those with 51 to 100 lots.

Tier 1 buildings will need to conform to “higher standards of accountability”.

VCAT beware

The new laws might result in a bit more action down at Victorian Civil and Administrative Tribunal (VCAT) or the Magistrates’ Court.

In some situations, an owners corporation is no longer required to pass a special resolution to commence legal proceedings. Under the amendments, owners corporations will be able to initiate proceedings for claims up to $100,000 simply by passing an ordinary resolution.

This is surely a reform that will warm the cockles of any lawyer’s heart.

Insurance – cui bono?

Under section 23A of the new laws, an owners corporation can pass on the cost of increased insurance premiums caused by a wilful act of a lot owner. This could have enormous significance for the short-stay industry where insurers charge a premium for the increased risk associated with transient guests.

Similarly, the insurance excess for a claim for out-of-control party damage to common property can be sheeted home to the culprits rather than being subsidised by all lot owners. Certainly, the 2021 amendment makes it clear that owners and occupiers of lots are considered responsible for their guests’ behaviour.

Is this really a cui bono (“who benefits”) law to help residents recover increased costs?

In this aspect, the 2021 amendment betrays a spectacular lack of consilience with the Short-stay Amendment of 2018. These two amendments – enacted three years apart – overlap very untidily. Our fear is that this newly minted legislative ambiguity could lead to a precedent-setting court case that will only add to the contentment and felicity of lawyers, and not provide any benefit at all to residents.

Proxy farming blocked? Nope.

Long the bane of residents in developer-dominated owners corporations, bulk proxy farming is being reined in under the new legislation.

The Victorian Government says the restriction is intended to prevent the practice whereby an individual gathers as many proxies as possible and "wields an unfair and disproportionate influence."

This part of the amendment, section 89D, has a massive loophole, being a 5% limit on the number of lot owners for whom you can hold proxies, rather than a limit on lot entitlements.

Under the amendment, a lot owner could hold the proxies of just a handful of owners with large holdings and still "wield an unfair and disproportionate influence."

This part of the amendment is surprisingly regressive, favouring large land holders over individual lot owners.

Track record on reforms: not so good

Will the new rules help residents much? We’ll wait and see. The government’s track record in solving issues for apartment dwellers is, sadly, quite poor.

For example, the changes introduced in the Owners Corporation Amendment (Short-stay Accommodation Bill) introduced in February 2019 were meant to help prevent short-stay apartments being used to host unruly parties. The meagre changes supposedly permitted VCAT to:

• impose fines of up to $1100

• award compensation of up to $2000 for loss of amenity

• stop apartments that have been used for unruly parties from being rented out as short-stays accommodation for a period of time.

How has that worked out? Not well.

Firstly, our monthly reporting in this column about unruly parties – replete with coverage of drunken abuse, gross behaviour and police call-outs – has continued unabated, with short-stay party chaos defying the OC legislation and Covid restrictions with frightening energy.

Secondly, we keep checking the court records: Not in one instance can we find a case where VCAT made a finding that awarded any of the remedies to any resident.

Way past the deadline

We are now approaching the anniversary of a major deadline missed by the state government.

In 2018, the government committed to a post-implementation review of the Owners Corporation Amendment (Short-stay Accommodation Act). The government promised the review within two years of the commencement date of February 2019. That means the review was due before February 2021.

While we understand that lockdowns and restrictions have interfered with normal government operations, this review is of the utmost importance. The Act as it was enacted has been a dismal failure and an embarrassment to the government. And it needs to be fixed before the pre-pandemic problems flood back. There is an opportunity right now to learn from the disaffected stakeholders and discover how to solve otherwise intractable issues.

This is the written commitment dated 14 August 2018, from the Director of Policy and Corporate Services in Consumer Affairs Victoria:

“Thank you for your email of 27 July 2018 to the Hon Marlene Kairouz, Minister for Consumer Affairs, Gaming and Liquor Regulation, regarding the regulation of short-stay accommodation in Victoria. The Minister has noted your correspondence and asked Consumer Affairs Victoria (CAV) to respond on her behalf…

“As noted in the Government’s response to the Parliamentary Inquiry into the Act, a post-implementation review will be undertaken within two years of commencement to examine the effectiveness of the reforms (including issues raised during the Inquiry) and determine if any further legislative changes are required.”

We also asked about this promised review when we met recently with the current Minister for Consumer Affairs, Melissa Horne.

It is now nearly three years after the bill was enacted and we hope sincerely that the new Minister will prioritise this important review. Let’s make 2022 the year of change for the better.

21.11 Will short-stay infections force us into lockdown again?

Mon, 01 Nov 2021 01:54:00 +1100

With retail industry still shuttered, it beggars belief that short stay operators are allowed to endanger residential buildings with potential COVID carriers.

We found one of the most iconic buildings in Melbourne is not immune to the short-stay problem. Even before restrictions were eased, an apartment in the building was listed on Airbnb. The multinational short-stay behemoth should be fined heavily for such a blatant breach of Victoria's COVID restrictions.

The tower's furious manager emailed us in frustration: "The Vic Government can enforce its restrictions on other commercial activity, but not for this. What an absolute joke."

We need a properly considered, Covid-factored response from the government – before selfish short-stays send us into lockdown again.

Covid short-stay partygoers isolate with 1000 residents

On a recent weekend, two apartments on contiguous levels in the inner-city Platinum Tower hosted short-stay, out-of-control parties. The usual chaos ensued with the police arriving late at night, instructing some guests to leave. The ejected guests waited until the coast was clear and were buzzed back into the building, without masks and moving freely between floors.

The organiser of one party was a guest at the other and had undergone a Covid test earlier in the day. The test result came back positive after the party.

This party guest knowingly attended illegal gatherings after being tested and without isolating while waiting for the result.

More drama was to follow with the Department of Health instructing the positive case to isolate in one of the party apartments. A second party guest staying there also tested positive later and was given the same instruction. The OC challenged the department's edicts to no avail – the department insisted that the positive cases had to stay put.

The committee was incensed: "As in most highrise buildings, air moves freely between apartments on the same floor and between floors via stairwells. There are 437 apartments in this building and it is completely unsuitable to house a Covid-positive case who does not normally reside here and who clearly has no regard for doing the right thing."

When will the government understand the difficulties faced by residential apartment buildings dealing with Covid?

In this instance, one thousand innocent residents ended up paying the price in anxiety and elevated risks. And it's all because of a reckless party organiser who should have been isolating, not conducting an illegal Covid-fest.

The residents are understandably angry and frightened.

Cladding update

We have an update from Cladding Safety Victoria (CSV).

Cladding rectification has been completed on 60 buildings in Victoria, funded by CSV.

Another 140 CSV funded projects are underway, while a further 53 buildings have funding agreements in place.

CSV Chief Executive Dan O’Brien said, “We will continue to work with owners of the highest risk buildings because that is the best way to reduce risk for Victorians overall.”

The CSV report from CSV said, "Buildings with the highest level of combustible cladding risk are referred to CSV by the Victorian Building Authority or local councils. CSV then carries out its own assessment to prioritise buildings for funding. CSV also offers advice and guidance to owners of buildings that are not eligible for funding but need to take action to reduce risk."

The total size of the funding pool remains undisclosed and we still trying to find out how much is left in the kitty.

If your building has flammable cladding, let us know how your remediation is going.

Committee-stacking scandal continues

Nerrida Blashki Pohl has provided us with an update on her stoush with pleonastic property developers and an incredibly clumsy council.

"Shockingly, the resident furniture moving lift has been locked to residents for 10 years. All furniture removal goes through the front lobby and out the door to the street.

"I have had three major robberies and my Insurer refuses to cover me. I had purchased a property with secure, undercover loading on the plans. Because my OC managers denied me the right to use that access, I was in breach of my contract with the insurer.

"It was revealed at the Tribunal that the car parking indents in the footpath, previously controlled by Council, now belong to my OC. That transfer happened because Council was unable to find the appropriate documents. The super fund can try again to show that unloading property on the street to my lobby – a single glass door – can be achieved safely.

"In early 2020 I initiated an FOI request for Council Planning documents. After two unsatisfactory, redacted releases, FOI has allowed me to apply to VCAT for disclosure.

"I want to know why the Minister of Planning in 2011 took over management of the Planning Permit and allowed the developer to strike out the word ‘Resident' in so many places. Council verbally blames the Minister.

"Sadly, Council had to sign off on whatever was returned to them by the Minister for lodging the plan of subdivision.

"The committee here is controlled by a real estate agency that trades and leases apartments on my property while knowing, and failing to disclose, that the residential goods lift has actually been leased to a third party for 300 years."

Nerrida has told us that the group in control illegally limits the committee to five members. This is the type of chicanery that should be easily defeated without having to mount a massive legal challenge.

Proxy farming crackdown

One comfort for Nerrida and other disaffected residents is that the OC Amendment legislation will proscribe proxy farming and make it harder for vested interests to stack the committee.

Under the OC Amendment Act, a person must not vote as a proxy for more than 5% of the lot owners in large apartment buildings. The Victorian Government says the restriction is intended to prevent the practice whereby an individual gathers as many proxies as possible and "wields an unfair and disproportionate influence."

21.10 High-rise truck saga

Fri, 01 Oct 2021 01:53:00 +1000

Our inner-city champion whom we have lauded in this column has written in with a poignant precis of her tribulations. The outcome was ultimately a resident's victory over a cohort of developers, managers and local government officials.

It is a story of corporate inequity, and regulatory incompetence. This saga highlights the enormous challenges facing Consumer Affairs Minister Melissa Horne with the dysfunctional owners' corporation legislation and strata governance landscape.

We hope this resolute resident's testimony, quoted here in full, reaches the Minister's desk … "All I have ever asked for since moving into my new home in 2012 was safe passage onto my street through my single lobby door, without obstruction from removalists." "There is an onsite loading dock with a common property goods lift that residents must use, but in 2016 a superannuation fund paid the developer $92 million for the retail plaza downstairs from the 500-apartment tower where I live.

The sale included a 300-year lease of the onsite loading dock in favour of the retail plaza.

My residential goods lift is embedded in that loading dock." "Onsite loading was a special condition of the planning permit.

How could I be locked out from enjoying that amenity?" Last month this newspaper reported how that superannuation fund, backed by the developer, asked [a] VCAT Planning Tribunal to annexe that loading dock on behalf of the retail plaza, thereby overturning the original planning permit of 2008.

Fortunately, the Tribunal agreed that residents must be allowed to use the onsite loading facility the way it was originally designed for us.

I was the instigator of the case in which the council defended my right to enjoy the onsite loading facility, a right that was included with my property purchase.

"As a result of this Tribunal decision, the matter of enforcement has progressed from the planning department to the compliance department.

It took me more than four years to get the council to act to enforce its own planning permits. Righting this problem is slow going for the council.

There is no clear path yet for all residents to enjoy their loading dock facilities." "In this loading dock, trucks and huge semi-trailers who service the plaza shops and the huge supermarket chain are driving and parking in a system known only to themselves.

They ignore the traffic management drawings approved by the council.

The loading dock lift is still locked to residents." "Since this story was published, I have been asked why it was up to me, as just one of 500 apartment owners above a shopping plaza in this mixed-use development, to get the council to force my strata managers to comply with the planning permit.

After all, I do pay my strata managers to look after my common property interests and there is an elected committee to advise them.

The other apartment owners have no idea what I have done to try to get unimpeded access to my common property goods lift and to get any illegal contracts overturned." "Sadly, big apartment developments have very few owner-occupiers and the majority of owners are investors, who either don't know or don't care what laws are broken." "The strata manager appointed by the developer in 2011 is still in charge, and the committee has not changed since the strata manager approved their original candidacy." "I have nominated for the committee, but they keep it to five people.

Three of these five hold developer's proxy votes and have majority control." "There are so many questionable service contracts.

The group in control have appropriated the residential lounge to operate their business and their companies have been awarded the embedded wi-fi and cleaning contracts.

The behaviour of the strata manager is consistent with loyalty to the developer, not the residents and certainly contravenes the planning permit." "If the council stays on the case, then retail tenants will have to comply with the council's approved traffic management plans despite what their tenancy contracts say.

All unapproved onsite traffic obstacles, such as spare cold stores must be removed." "It must be safe for residential loading.

Once that is done, I hope to see no more furniture removalists obstructing the pedestrian lobby.

Only then will my street at my front door be safe." Nerrida Blashki Pohl If you wish to contact Nerrida, please let us know via the We Live Here website.

Cladding update We will provide an update in our November column on the slowly evolving cladding landscape.

Strata managers group makes a mess of COVID cleaning rules The Victorian chapter of a strata managers industry group, the Strata Community Australia (SCA), had to mop up a flood of confusion following its mass email propagating a supposed government COVID diktat banning cleaning of apartment buildings.

Imagine the shock suffered by building managers, perhaps contemplating a lovely spring clean! The SCA inbox must have been overflowing with acerbic advice from its own members because, the next morning, SCA rushed out a missive to "address any confusion arising from our COVID-19 update … as a result of information made available to SCA (Vic) by members responding to yesterday's email, we have updated our COVID-19 advice".

To be fair to the SCA, the information from the Victorian Department of Health and Human Services website was, unsurprisingly, a trifle abstruse.

Apartment residents, rest assured; your building is not obliged to wallow in microbiological filth during lockdown.

21.09 Resident victory

Wed, 01 Sep 2021 12:00:00 +1000

A stalwart resident at an inner-city apartment complex has reported a monumental victory over developer chicanery and council ineptitude.

"A win at last!!" she wrote, "I have won my battle to have the council defend my rights to enjoy my property according to the original Planning Permit." Since 2017, this story has shaped up as a David and Goliath battle that David might actually win.

"I had no idea that it would take up four years of my strength and time." This battle was fought at the intersection of three different jurisdictions.

Our rookie resident had to learn about owners' corporation (OC) law, about the Local Government Act, about planning law and what voids a contract.

"To cut a very long and complicated story short, after the planning permit was issued for my property, [somebody] altered the plans, removing all reference to where the trucks for residents were supposed to load." This discrepancy solidified undetected at the council's planning department – and it looks like at least one council head has rolled as a consequence.

Our citizen champion knows how it all started: "When a big industry super fund was offered an off-market opportunity to buy the enormous area of the two-storey shopping plaza and its huge truck loading bay, they saw that there was a lift for trucks servicing the residents." "The developer told the super fund not to worry, they would have the exclusive right to all that area for 300 years.

The developer had drawn up a lease to himself.

The problem was that this was in breach of the planning permit that required both residents and the retail plaza to use that area for trucks to load and unload." In the face of irrefutable facts and under relentless pressure from our resolute resident, the council eventually told the super fund that it must share the loading dock with residents.

The incensed super fund made a futile attempt to arrogate the common property by seeking to have the planning permit altered to conform with the altered and unapproved plans.

"All I want is for the furniture trucks to load on-site instead of blocking the footpath on the street outside my front door," our star resident said.

The council's planning department now has the right to enter the property to ensure the shopping plaza owners no longer lock out the residents from the loading bay common property.

It's good to know residents can beat major players who don't follow the rules! OC managers blocking information requests Perhaps everyone is suffering cabin fever with rolling lockdowns – how else can you explain a spate of incidents where OC managers have failed to comply with fundamental obligations under the OC Act? You would think a request for an OC certificate would be honoured relatively quickly.

After all, providing certificates is a staple of every garden-variety OC manager contract.

Not so, it seems, if you have a disagreement with the OC manager on an unrelated matter.

We know of one OC manager who must feel that certificates do not have to be provided to owners who ask awkward questions.

How about requesting an inspection of financial records? That should be easy for any OC manager who takes the requisite Act along to all meetings.

Evincing either incompetence or something more malignant, one OC manager has insisted that the committee must pass a resolution to have the right to inspect documents. No, that's not how the law works. Every lot owner has the right to request inspection of OC documents.

Another cute ploy is to claim "confidentiality" as a reason for denying access. Again, no, that's not a legally valid reason for denying access to inspect an invoice from a supplier for example.

OC managers beware. The practice of hiding documents from lot owners creates very bad "optics".

We quote the Owners' Corporation Act, Part 9, Division 1, Section 146 (1), which states that the OC manager, on request by a lot owner … "Must make the records of the owners' corporation required to be kept under this Division available to that person for inspection at any reasonable time, free of charge." Quite straightforward, right? Apparently not, according to our reluctant and irony-challenged OC manager who replied to an emailed request, "I don't plan on replying to your email." Continuing their non-reply, the document-denier went on to tell the lot owner to try their luck with getting the information from the previous committee! But if a manager is desperately intent on looking foolish, why would they rest there? Our stonewalling strata manager went on the offensive, alleging financial malfeasance by the previous OC managers with the cognisance of the previous committee, unabashedly naming names. In writing. In an email to a lot owner.

Handing up Exhibit A, Your Honour.

Having been unsatisfied with merely looking like a goose, this OC manager just might have waddled into the oven.

Notwithstanding the above, advice from Consumer Affairs is that aggrieved owners can take their complaints to the Dispute Settlement Centre of Victoria (1300 372 888), or Victorian Civil Administrative Tribunal (VCAT, 1300 018 228).

You can also complain to Strata Community Association Victoria (9416 4688) if your OC manager is a member of that group.

Readers, please do let us know about your tribulations with OC managers.

21.08 High-rise, high-risk

Sun, 01 Aug 2021 01:52:00 +1000

The build-to-rent high-rise towers proposed for the Marvel Stadium precinct could become high risk ghettos for short-stays.

It is disappointing that Lord Mayor Sally Capp has been quoted as supporting the 28- and 30-storey developments on a dormant La Trobe St site – without any safeguards in place to prevent a short-stay takeover.

If approved by Minister for Planning Richard Wynne, we could have a good proportion of nearly 700 apartments thrown onto the grossly under-regulated short-stay market.

The Lord Mayor harbours the forlorn hope that the development will bring "much-needed diversity" to the housing mix in Melbourne.

There is little chance of diversity Lord Mayor; this development will be a magnet for the worst type of short-stay opportunists – unless you or the Minister take action to prevent this otherwise certain eventuality.

Cr Capp admitted that the council knew "renters in Melbourne are among the most stressed cohort within our population".

And yet this cohort will be lumbered with all the high-risk and anti-social behaviour associated with living adjacent to short-stays.

Without proper regulation, imagine the utter chaos of two new short-stay dominated towers with interstate visitors arriving from COVID hotspots around Australia.

We can suggest an apt name for the new council-sanctioned project: COVID-Central.

Let's talk about planning schemes Local planning schemes control the use, development and protection of a particular area; these came into being long before high-rise residential developments overtook Melbourne and surrounding suburbs.

It's time for an overhaul.

The National Construction Code NCC has no provision for short-stays in Class 2 buildings.

The NCC is managed by the Australian Building Codes Board (ABCB).

In 2018 the ABCB set out to "discuss and seek feedback on the effectiveness of the voluntary Industry Code of Conduct" – referring to the Holiday Rental Code of Conduct developed by short-stay operators in Docklands.

The ABCB discussion paper The NCC and short-term accommodation in apartment buildings, included these definitions: "In simple terms, Class 2 buildings are apartment buildings.

They are typically multi-unit residential buildings where people live above and below each other." "In simple terms, Class 3 buildings are a common place of long term or transient living for a number of unrelated people." This ABCB discussion paper exposed the myopia of the review process, skewed by placing commercial interests above resident safety.

For example, take fire safety.

Class 3 buildings have a range of safeguards to deal with the transient nature of guests who are not aware of fire exits or where fire equipment is located, plus management protocols for at-risk residents such those with health or mobility issues.

While the ABCB review readily identified the fire risks of having short-stays in Class 2 buildings, one of the solutions it canvassed was to "include additional fire safety features in Class 2 buildings".

Revealing the influence of the almighty dollar, the ABCB review offered this startling value judgement: "A disadvantage of this option is costs for owners of short-term accommodation." Moving along to the nexus between "bylaws", Consumer Affairs and Planning.

Unlike NSW body corporates, Victorian owners' corporations cannot make rules or bylaws about the use of lots because the OC Act 2006 - according to Justice Riordan - was not written in "clear and unambiguous language".

The craziest thing is that the state government excluded "Section 8 – Rules of the Owners' Corporation" from its review of the OC Act – with the indolent excuse that the components needed to be addressed in the context of the applicable planning schemes! It is time for an overhaul, not for sweeping the issues under the carpet.

We need to have Planning and Consumer Affairs at the same table to get meaningful change.

COVID normal? When restrictions are lifted, and we return to some semblance of normality – whatever that is –we will be emerging into a new landscape – one created by COVID.

How we live and work could be vastly different from what we have known in the past, and we must use the opportunity presented to us to see this happens and we get it right.

The new norm for accommodation in Melbourne must include proper provision for everyone: students; those needing social housing or medium-priced housing; owner occupiers, long-term tenants; business visitors and tourists.

When the pandemic is under control and we start to move into this new landscape please can the city planners create a vision that will accommodate all those who live, work and play here so we once again can reclaim the title of the most liveable city in the world? Let's have proper regulations established to prevent short-stay ghettos before the Marvel Stadium towers disaster is foisted upon us. Now is the time to act.

We need to start afresh with input from all stakeholders – there will never be a better opportunity do it.

Stop short-stays? There's an app for that!

If you are tired of seeing key safes all over the city, there is an app that can make them disappear, sometimes quite quickly! Absentee short stay operators often leave apartment keys in key-safes attached to parking signs, bike racks or other council property – which, unsurprisingly, is illegal.

To witness magic in action, download the Snap Send Solve app for Android or Apple. This is an app that lets you notify the council of issues in your community.

Take a picture of the offending key-safe that you found attached to council property and submit the image on the spot via the app under the heading of "Road Signage", for example. The app will include the exact location, saving you the trouble of describing it.

It only takes a few seconds to submit a report and the council will send the bolt-cutter crew in due course, possibly the next day.

Thanks to the reader who sent in this tip! Keep those texts and emails coming in!

2021.07

Thu, 01 Jul 2021 01:50:00 +1000