The OCN is
made up of Owners Corporation executive committee members representing
Sydney’s larger strata title residential developments and over 5000 individual
property owners.
The role of
the OCN is to facilitate the ongoing improvement of living in and/or investing
in large strata title buildings. The OCN will focus on facilitating necessary
changes to government policy and legislation. Furthermore, the OCN strives to
educate Owners Corporation Executive Committees and individuals through sharing
experiences and disseminating information from relevant documentation and
related organizations.
Other building related issues and concerns
Defect
rectification within strata titled residential buildings
OCN
recommends that the necessary legislation be amended to provide owners in new
strata residential developments with better protection from the building’s
developer and builder.
The OCN recommends that the following changes be implemented:
1.
The Home Building Act 1999 be amended to state the developer and builder
are jointly and severally liable for building defects.
2.
The developer and builder should be held liable for rectifying all
defects that are discovered in the building within the period of 36 months after
initial settlement for non-structural defects, and seven years after initial
settlement for structural defects.
3.
The developer and builder shall assume responsibility for all subsequent
owners. At present, only the original purchaser and not a subsequent owner has a
contract with the building developer. This becomes an issue when a
strata-titled property is on –sold prior to completion or sold prior to any
homeowner’s warranty period.
4.
That, where appropriate, an Owners Corporation
may represent all owners in a class action. For example, when defect presents
itself in many apartments but is not classified as a common property defect.
There is a recent case where all individual owners have been required to make
application to the Dept Fair Trading to fix a common defect within the
development. This has resulted in extensive delays in the processing of these
applications.
Additional
Strata Scheme Legislation Amendments
The OCN would like to see the Strata Schemes legislation amended to protect the rights of owners in large residential developments during the initial period of occupation.
The OCN recommends that the following changes be implemented:
a)
LIMIT
the developer's ability to appoint/enter into a building management agreement
with a building manager to not more than 12 months after first occupation.
b)
LIMIT
the developer’s ability to do (a) with an associated entity.
c)
LIMIT
the developer’s ability to enter into a Strata Management Contract to not more
than 12 months after first occupation.
d)
REQUIRE
that effective dispute resolution and termination clauses be contained within
all contracts.
e)
ENSURE
that owner’s corporation voting proxies cannot be sold or negotiated by way of
the sales contract where a conflict of interest may arise.
f)
REQUIRE that all candidates for election to the Executive Committee
declare any financial links to the developer, builder or any of the other
contractors working in the building before an AGM or EGM election.
For example, that would include being a shareholder, having
the developer as a business client or any other financial link with the
developer and builder.
a)
SUGGEST that separate corporate governance regulations be considered for
buildings that will raise revenue above a nominated figure e.g. $750,000.
b)
SUGGEST
the constitution of the Executive Committee for buildings with revenue greater
than $750,000 meet specified criteria. This may require that an individual
elected to an executive position must meet certain competencies.
a)
REQUIRE the developer to leave on site a full set of building approval
and as-built construction documents, including maintenance manuals and list of
warranties including the warranties themselves, and building Certifications.
b)
REQUIRE a greater onus on builder/developers to notify owners of
conditions and time limits for certifications and warranties, and to clarify
when the responsibilities pass from the developer to the owners.
c)
REQUIRE that responsibility be placed on builder/developers to prepare
and budget a maintenance and management schedule for the building and to hold
them responsible if the budget is inaccurate or cannot be met. They should
be financially responsible for the first three years if their budgets are
inaccurate or misrepresent the cost of running the building and Owners
Corporations should have a right to chase them for damages. This will prevent
any misrepresentation of the projected budget at the time of sale.