Sacked SM given total power over new scheme

COMMENT:

With the announcement of the appointment of Rentals Commissioner Trina Jones, we await the anointing of the proposed new Strata Commissioner, whoever that might be.

And the recipient of that poisoned chalice has at least one Herculean task ahead of them – making sense of and untangling the whole mediation and tribunal strata dispute fluster-cluck which is hamstrung by having two key bodies that won’t communicate with each other or, it seems in one case, internally.

Overstating the issue?  How about a strata manager who’s been kicked out of two buildings over serious mismanagement being handed total control over another scheme?  Yes, TOTAL control; the owners have no say in the running of their own building.

For years we have bemoaned the lack of communication between Fair Trading, which comes under the Customer Service ministry, and the Civil Administration Tribunal (NCAT) which falls under the aegis of the Attorney-General’s office.

Right now, if you go to Fair Trading with an issue and ask what your chances of success at the tribunal are, they can’t or won’t tell you.  Instead you get steered into a mediation – compulsory if you want to take the next step to the tribunal – often with respondents who don’t even turn up.

The intention is to resolve issues before they get to the Tribunal; a laudable ambition, except it doesn’t take into account the fact that many disputes are based on right and wrong, that there is pretty much only one side to many stories and – proof of the pudding – the Tribunal is clogged with a logjam of unresolved cases.

Getting back to the lack of communication between these symbiotically linked bodies, if we in the media had a question about a case at NCAT, Fair Trading would tell us to ask the A-G’s people. When you did call them, they’d say “oh, that’s strata – ask Fair Trading, not us.”

However, as if that wasn’t bad enough. It seems NCAT doesn’t even communicate within its own walls.

Take the case of a small strata management firm which we will call “Toxic” for defamation insurance purposes.  If there really is a company out there called Toxic Strata Management, let us know and we’ll change the name pronto (although I might suggest you change yours).

Toxic was strata manager of a couple of buildings that had a large number of overseas investors. Toxic exploited this by using a popular social media app to spread misinformation about the building, the resident owners, other investors and – significantly – to hide clear evidence of serious building defects, so as to stay in the developers’ good books.

Why would they do that?  Because assisting developers with setting up their strata schemes is a big part of strata management business. Get your company on that gravy train and your business is on solid ground.

Toxic also allegedly used favoured contractors who charged inflated fees (kickbacks, anyone?) and misused strata funds, not least when they charged back to the strata scheme tens of thousands of dollars in legal fees spent in defending their position against owners who were trying to get them removed at NCAT.

Eventually, NCAT believed the owners and replaced Toxic with compulsorily appointed strata managers at two buildings which they managed.

This is standard practice. When a scheme wants rid of a poorly performing strata manager, rather than removing the strata manager and allowing the owners to chose a new one, NCAT usually recognises that the owners may be at least part of the problem, so it terminates the contract and appoints a compulsory manager who’s given a year or two to sort things out.

So far, so routine. Except the appointment of a compulsory manager can have a profound effect on a community, especially one that’s only just emerged from under bad management.

For a start, the strata committee and the Owners Corporation has zero powers.  The compulsory manager has total control.

In most cases, this is precisely what’s required and the strata manager acts responsibly and diligently within two parameters – strata law and the strata scheme’s by-laws. 

That can have a downside as many strata managers and committees will allow each other a little wriggle room in the running of their blocks. Compulsory managers may feel they have to follow the letter of the law rigidly, regardless of local concerns.

Now, we hear, the resident owners at the first two blocks are happy with the replacement strata managers; how Toxic performs at their new block remains to be seen.  Maybe they have seen the error of their ways and cleaned up their act. Or perhaps they can’t believe their luck and are lining up the kickbacks and favours right now.

In any case, someone in power need to be asking how things like this can happen. How can a strata manager who is found to be incompetent in two buildings be appointed to a third? And where was Fair Trading in all? So much for its disciplinary system (if such a thing even exists).

We also need someone with the power to change things to ask why the strata dispute system continues to be in such disarray and what can be done to fix it once and for all.

It’s easy to criticise – all too easy – but is there a solution. Well, we’ve come up with a plan that is at least worth a trial run. As mentioned in this week’s podcast what about this idea?

Oh, wait a minute, it would require Fair Trading and the A-G’s office to talk to each other and for each to cede a little power. Hmmm.  Ain’t gonna happen.