Thursday, May 04, 2017

Too many cooks in the kitchen?

It is common for investors to purchase units, townhouses or apartments as these types 
of properties offer quality rental returns, with little to no upkeep.

However, what this does mean is there is often another party involved with the management of the property... Body Corporate.

Property Managers work very closely with these bodies and it works well... most of the time.

What can be challenging, for everyone involved, is the extra steps in the process when something goes wrong at the property. Three parties are involved - the Agent/Landlord, the Tenant and the Strata Manager, and they are all trying to fix the issue. Often it is the Presiding Officer who must give the approval for works, not the Strata Manager - adding yet another person to the mix. All parties have the best intentions to resolve the issue, but it is the convoluted process, and uncertainty around responsibilities, that often delays the process.

As the saying goes, too many cooks in the kitchen spoils the broth.

What is the impact on Landlords?

If there are significant delays, and a Tenant wishes to claim compensation, it is the Landlord that can find themselves in the Tribunal, not the Body Corporate. If it is identified that the delay was caused by the Body Corporate, not the Agent or Landlord, then the Landlord is left to initiate a separate claim against the Body Corporate, this time in the Magistrates Court. Currently in South Australia there is no government agency to oversee or resolve disputes with strata and community titles.

Just this week, there have been two stark examples where the Landlords have been disadvantaged for reasons that are completely out of their control. We are seeking clarification on the Tribunal ruling as well as confirming 
the responsibility for the Body Corporate to meet deadlines for important works.

Reviewing the current Body Corporate framework is something that is being looked at across the country. Late last year NSW introduced 90 new strata laws to benefit Owners, Tenants and Property Managers, to help streamline processes and 'bring the laws in-line with current thinking'.

From what our team are seeing, we believe Landlords could benefit greatly from having the framework looked at. There has got to be a better way for all parties to work together and achieve a favourable result for the Owner of the property. In the meantime, we have put our Innovation Lab to work to see if they can come 
up with a solution for this industry issue.

We believe small changes could go a long 
way and help ensure a fair outcome is achieved 
for Landlords here in our state.

No comments: