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The following was originally posted as a comment to our piece on why investors should get more engaged with the apartment blocks in which they own properties.
Our sponsors Strata Answers responded with this question: why do we allow absentee investors to freeload off the hard work and goodwill of the residents and other owners who get involved, do …
https://www.flatchat.com.au/absentee-freeloaders/The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
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Jimmy I agree that it is unacceptable that investors do nothing to contribute to the running of a multi-million dollar asset, and the workload falls on the shoulders of a few. As an owner occupier I want my home and surroundings to be a pleasant place to live, my motivation are not dependent on getting any thanks which is almost never forthcoming. In fact, I have in the past had some ingrates making demands of me saying that “I should do my job” thinking that I was somehow paid. Although truly pissed off at the attitude, I was pleased to be able to point out that ” I am just a volunteer”. This gives me the reprieve to undertake my duties without anyone making unreasonable demands on time, since I already have full time employment as well being the primary contact for the building. Paying monetary sums will change the nature of the contribution I make, and I fear that the expectations will need to be managed, which is just more work! As a alternative, what about a financial contribution from the non-active? A levy on non-contributors? On average I would spend at least 2 hours per week on Strata business. The dollar amount ascribed by ABS to volunteer labour is $41.72/hr. Give investors the option contribute an hour a week of your time or pay the levy. What do you think, would it fly?
Wow, so nice to see this article clearly expressing this conundrum and for me, crisis of conscience.
I do indeed feel begrudging sometimes, particularly when as Ester69 says, facing any implication of being absolutely required to go beyond the call for particular demanding owners above others. Guilty.The conundrum and conscience are born of the very same fact that it is a voluntary role and a choice, so … suck it up.
I spend easily 60 hrs a week, fulfilling all three executive roles as well as onsite building manager of a very large complex, and also taking up many of the Strata Manager’s trad duties. Believe it or not, while still maintaining my own usual profession (albeit in a highly reduced financial capacity) Some here will understand why this has had to come about.
Many assume you are being paid (particularly when they often spot you down a muddy hole with a plumber trying to stop a mains geyser with your hands or similar). When you tell them different, they are enormously thankful, implore that you should be paid and get quite angry on your behalf.My steady pony speech is not that I’m a volunteer so it’s my choice, or that I’m not required to ‘do my job’ – but that anything else would be a huge conflict of interest. Yes I agree I should be paid, but in my position, I could be creating my own work orders and signing off on my own cheques. When that sinks in, there is usually an even greater outpouring of gratitude. But no money. Therein lies the conundrum.
I know I’m doing this for the explicit purpose of financial rescue of the building and to provide the best services possible to owners. I have great support from the vast majority who say they trust me to give myself a job so they’d be all for it, but that’s not the point.
I won’t always be here, and setting up a system which is open to any sort of manipulation or even corruption, could take us back to the dark ages and then I’ll have truly have wasted my time and finances.
Truth is, if you pay invisible peanuts, you’re lucky if you don’t get do-nothing, care-less monkeys, or those who’s skills are nil and payment is self aggrandisement and power. These are not the people you want running your home or your managing your investment.
Those who aren’t either of those, will soon tire of ingrates and sometimes even abuse and go back to being paid properly for their expertise or just plain living in peace.
If anyone can, or already has come up with an equitable and airtight solution to this strata-wide problem, taking submissions right here thanks.
Thanks Jimmy. I gather any rules of the role would have to be in the form of by-laws to give them any muscle.
Looking at them, I think the requirements of a committee as a whole would first need to be to set. For instance, given the legislation doesn’t demand any meetings be held, it’s easy not to miss too many when there are none. Previously I’ve served in years like that.
I think that brings back the title of the original article, which was pointing to disengagement, not necessarily just money. If you run a closed shop, you can’t expect customers.
We are over 80% investor, but I found with direct engagement many of them were very interested, but there was nothing to get involved in. Not even discussion.
Out there in Investorland, there is talent. Although perhaps not having the time or inclination to be on a committee, some have become valuable consultants. Business owners, analysts, lawyers, engineers.
Career investors have useful comparative knowledge. One of their buildings is run like this, another like that. This is good, that is bad. All is a help to us.
Anyways, back to your point. That does seem to be an answer. Set the structure, then KPIs, now let’s talk money. I have long thought about enshrining committee governance but not in any relation to payment.
I’ll talk to the SM. There must be other OC’s who have brought their committees to a more professional level. That’s the most important thing to us – but in a way which doesn’t exclude those good folk who just want to help – we don’t want a cold board of directors scenario either. As you say, avoid extremes.
I’m involved in two properties. One is a older, less than ideal run property with a body corp that’s welded on, does little, and achieves much less than they think, and the other a new lux affair that I don’t even know the body corp as it’s run so well there is zero need to engage with them. Having slaved away both on and off the committee and been undercut by the old chooks on the older property I’m over it and them.
The legislation says keep the joint well maintained so someone needs appointment to do just that, usually these are contracted out but often not to then be micromanaged by inexpert volunteers whose key role is to primarily administer decision making. And if you can’t get volounteers just pay up and get a professional to do it all. As is, some members will slave away and some will contribute little other than pursue only their agenda or stop creating value or enjoyment for others. I no longer feel the obligation to contribute. Many don’t and it’s not legislated. If they want my opinion or action I’ll happily give it 110%, but if they don’t they will soon enough be met with adjudication. Life goes on with the less stress the better, as it should without being intruded upon by idiots.
I echo most of the comments made by the others here, in particular about the skills and levels of expertise that are needed to keep a building in good stead. Ours is just 3 years old and has 60 units in a 4 story building, so no heavy maintenance needed just yet.
Whilst not spending 40 hrs and up per week as FDH does, I do spend about 4 hrs/week.
We do have a very hands on Building Manager who does a lot of the smaller maintenance jobs like changing light bulbs and the like, but we only employ him for 10 hrs/week.
This does not give him enough time to keep up with everything that we put on his plate and I have been doing that for the past 3 years. My position on the committee is as Technical Advisor/Secretary.
Occasionally the other committee members say that I should be paid, but that brings about the question of how. I am retired and would loose some of my benefits if I were to receive payments and would need an ABN for the Strata to be able to pay me.
I spoke to our Strata Manager about all of this and he told me that in a majority of cases, where payments are made to committee members, is by way of not paying their levies. This avoids the need for Invoicing by the committee member and Strata requiring that to be accompanied with an ABN. It also does then not become an income for the committee member, but the financial benefits remain the same.
In my case this would work out at about $4000, but equates to about $20/hr. Out BM is paid $55/hr, so less than half the rate, but this doesn’t bother me. It’s a token of appreciation which I’m happy with.
We are yet to bring this matter up at our next AGM where we will have to vote on this. I’m sure that this method of payment must be happening elsewhere, so I’m interested to hear from others if there was a change in attitude towards a committee member after he/she received some remuneration.
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