Tenancy Agreements Help Keep the Peace in Strata Properties 20/01/2007 For the tens of thousands of people currently living in strata titled properties, communal living can have its up-side. Sharing costs amongst owners can see people enjoying a higher standard of living than might otherwise be possible. But sharing can have a downside too, with non-compliance with by-laws a problem, particularly with tenants.
But help may be closer than many owners think. Strata property owners who rent out their property have much to gain by having a tenancy agreement in place as this detail can prove highly helpful in maintaining peaceful co-existence amidst all who inhabit a building.
The director of New South Wales Strata Management, Mr Richard Tooker, says that by-laws are what spell out the dos and don’ts of strata title living.
“They are the rules and regulations that the owners have agreed upon, and these will stipulate what is acceptable and what is not. The by-laws are the holy grail of this style of living.”
New South Wales Strata Management is amongst the State’s largest strata titled manager and is an ideal position to see all sides of the issue.
As Mr Tooker notes, owners can sidestep potential difficulties by making compliance with by-laws a condition of any tenancy agreement. This small but important step, he said, can clear up the most common issues.
“By-laws as set by the owners corporation can set such common issues as parking, noise and the keeping of pets. This sets them out in the open for all to see and to adhere to. State legislation provides standard by-laws but each buildings individual executive committee, acting on behalf of the owners corporation, can suggest by-laws that can be agreed upon in accordance to what the owners want.”
Mr Tooker said an important alteration has been introduced in New South Wales that impact upon the need for long term financial management. The new law requires the owners corporation to produce a ten year forecast for sinking funds, the amount of money set aside to cover regular maintenance and longer term attendance to common areas.
“This change has been made to ensure that upcoming expenses have been catered for long into the future. This prevents surprise levies being called for and provides a much needed safety value for owners.
“The problem in the past has been that sinking funds were often insufficient to cover urgently needed repairs. This fund is money kept in reserve by the owners corporation to pay for needed maintenance much further down the road; ten years in fact according to the revised legislation.”
He said that proper attention to such reserve funds is an important part of sustaining a property’s longer term future. Prospective buyers, with the future in mind, would want to review existing records of reserve funding and would be well predisposed to buy into a plan that exhibited good administration.
“This is where a quality strata manager can make an all important difference.”
He said it is important too to realise that the role of the strata manager is one of oversight, a role that can provide the exact level of service that an owners corporation may require.
“A good strata manager does not dictate what actions to take. Instead it provides the professional oversight to see that the details of the Strata Act are adhered to according to law. They will advise the building’s owners corporation and executive committee where actions need to be taken.”
The role, he says, provides the building owners with maximum freedom whilst ensuring that those duties which have been seconded to the strata manager are fulfilled both professionally and lawfully.
Mr Tooker said corporation members wishing to investigate the cost-benefit of using professional services can contact New South Wales Strata Management direct on 9890 1841.
New South Wales Strata Management (formerly Gilmour Strata Management) commenced business in early 1991, as a member of the highly respected J A Gilmour & Sons group of companies. Licensed solely and specialising only in strata management services, the company has steadily grown to become one of the largest such organisations in New South Wales.
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