Brisbane’s Storm Season Recovery Information

Queensland’s most recent storm on the 27th of November was considered one of the most damaging storms in recent times, with a clean-up cost that is now reaching approximately $800m. This was only the first of many storms that have and will continue to occur over the storm season. Here at Strata Dynamics, we experienced first-hand the extent of damage caused by Brisbane’s supercell storm. We have done our absolute best to work through every request and to achieve an outcome that is desirable for all members of bodies corporate.

The Queensland Government website has written a very informative article on storm damage and how it pertains to community titles scheme. This article includes; damages covered by insurance, safety of building after damage, how long lots will take to be fixed, costs incurred from damage repair and more. We encourage members of the community to browse this article if they have any concerns regarding damages sustained from storm weather. If you wish to speak with one of our team members directly, please call us on (07) 3299 1985 and we will do our best to assist your with your questions.

Please click here to be taken to the Queensland Government website.

Painting the Building

One of the biggest and most expensive projects a body corporate undertakes is the painting of a building. Buildings are generally painted as part of their initial construction and the body corporate (assuming it is a Building Format Plan scheme) then takes on the responsibility of maintaining the external paint of the scheme. We have teamed up with our friends at Rochele Painting to bring you some relevant information on painting.

The importance of painting

It is not uncommon for us to hear people say things like, “the building doesn’t look too bad” or “the paint hasn’t faded that much”, which may be a fair comment, however, it is important to note that painting plays a bigger role than just making the building more aesthetically pleasing. Paint protects and maintains the substrate (concrete, timber, brick, etc); choosing the right paint, depending on the surface, can help prevent things like concrete cancer and rusting. Ideally, painting the building shouldn’t be deferred, considering that the exterior of a building is completely exposed at all times and is therefore subject to rain, heat, bird and bat excrement, pollution, and other harsh conditions. These elements can be quite corrosive and over time, as a result, paint will fade, lose its vibrancy and appear dull. Additionally, the paint will peel off and degrade the building substrate. Bearing this in mind, it is important to consider how to achieve a long long-lasting, healthy, paint on a building. Firstly, choosing the right paint is imperative. Paints that are washable are likely to last the longest; this is because they allow stains to be removed easier during building wash downs. Building wash downs are an effective way of removing built-up surface dirt and exterior markings, however, are usually used in conjunction before and after a professional repaint. While they are a cheaper alternative to a building re-paint, they are not a substitute and in some cases where buildings are approaching the 7-8 year mark since build, a wash down may do more harm than good. Best practice is to have building wash downs every 2-3 years, however, depending on the size, style, location and substrate of your building, it may require more frequent treatment. Taking care of these steps will help to increase the longevity of your paint and as well encourage a positive impression for visitors, customers and patrons alike.

How much does it cost?

Painting a building isn’t cheap; from the painting materials to the hired labour, it is often one of the highest capital outlays a body corporate faces. Costs range from tens, into the hundreds of thousands for bigger schemes. To ensure that the building has enough money when it comes time to paint, it is important that the body corporate has had a good sinking fund forecast that accounts for all expenses. Bigger buildings may want to consider having their sinking fund forecast updated more frequently to ensure they are still on track. Failing to raise enough money for painting of the building means the scheme either has to call a special levy from owners or, the works need to be deferred.

The Process

Scope of works

Choosing the right contractor for your needs is obviously important, however, beforehand, the site should be inspected as a committee. This way you can take note of issues that need addressing later on. Before seeking quotes, have a specification done. This will ensure that when you go to tender, you will understand what you’re being priced for.

A number of painting contractors will be able to provide you with the specification they quote on which can be given to any other painters quoting to ensure you have like for like quotations.

You can also have professional consultants prepare the scope for you which can be provided to the contractors for quoting.

Put the works out to tender

Once you have your scope of works they can be put out to tender for comparable quotations. Speak to your Strata Manager about which contractors they have received positive feedback from in the past. Given the size of the project you will want to put it out to tender with at least three reputable contractors. .They should have the capacity to handle the scope of the painting project, have an understanding and know-how about the type of building (commercial/residential) they will be working on and as well, have a solid reputation It may also be important to include a deadline for the tenders to be submitted by. That way you can keep everyone working towards a planned timeline.

Having a consultant compare the quotes

Even with the set scope of works, painting quotations can be difficult to compare. Occasionally, there are variations in the scope of works from different painters. Some painters will include areas of the building as additional options while others may include those areas as part of their quote so the tenders need to be read very carefully in conjunction with the scope of works. This can be a time-consuming process and we have noticed a lot of buildings are starting to use painting consultants to review the quotations on the body corporate’s behalf and to then provide them with a detailed breakdown of what they actually can expect to pay.

How can we be sure to cover our warranties on the paint

The paint supplier will usually provide a warranty on the paint but it can be void if it is not applied per the specification and appropriately maintained following application. It is a good idea to speak with your painting contractors about warranties and what steps need to be taken to ensure the warranty is upheld.

Get the owners’ approval

If you are planning to change the building’s colour scheme, it’s a good idea to get the proposed colour scheme included into the same general meeting and obtain the owners approval to change the colours. You usually need to seek owners’ approval for the cost of the works which will vary greatly depending on the building’s size, building damage, time frame, specifications and more. For a small body corporate of 6 blocks of units, costs can range approximately from $10,000 – $15,000, whereas, a large body corporate of 50-100 units may cost in the range of $100,000 – $200,000. Some of our clients have opted for payment plans, these plans allow for the building to be painted on time but for the payment to be made over several years. These plans are flexible and tailored to suit the particular needs of the body corporate. This may not be available through all contractors so it is best just to make sure before proceeding if it is something the body corporate requires.

Should we hire a project manager?

After awarding the job, someone needs to manage the project. Some contractors will offer project management, though, at a cost. Their responsibility, as project managers, will be to oversee deadlines, ensure project specifications are met, site safety and environmental management plans, obtaining the relevant council approvals and more.

Conclusion

As you can see, there is plenty of work that goes into the painting of a building. From the cost, the operation itself and obviously the time spent on the project, it is a substantial undertaking. Our strata managers have guided many bodies corporate through this issue and are only a phone call away if you have any questions.

Managing Arrears in your Body Corporate

A friend of mine recently asked me to take a look at their Body Corporate documentation as they were being hit with a $700.00 special levy and she wasn’t sure what it was all about.

After a brief review of their Annual General Meeting documentation it was clear that the building was a scheme of 6 and needed to raise around $4,200.00 in legal costs for pursuing one of the lot owners for unpaid levies. The unpaid levies were further impacting their Body Corporate as they were struggling to meet their day to day expenditure. The unit ended up being sold at a Bailif sale and the Body Corporate was paid out the majority of their costs. In the interim however those costs had to be covered by the owners until it could be resolved.

But why did it get that far in the first place and what could have been done to manage the debt better?

Here’s what we suggest to our clients:

1. Penalty Interest

Consider introducing penalty interest for levies that are outstanding. The body corporate can introduce a penalty to be paid by owners should their levies not be paid on time. The maximum rate of interest that can be charged is 2.5% simple interest for each complete month that the debt remains outstanding[i]. This helps the body corporate motivate the owners to pay on time and also penalises those who don’t pay on time rather than penalising the other owners who have to carry the body corporate’s costs. If there are no penalties for late payment the body corporate levies will receive the lowest priority.

2. Discount for paying arrears on time

The body corporate can allow a discount for levies paid by their due date. This has to be accounted for in the budget of course but it ultimately motivates the owners to ensure levies are paid on time. The legislation permits the body corporate to provide a discount of up to 20%[ii] which most owners in a scheme are keen to take advantage.

3. Follow up outstanding debt and keep an eye on it

Legally under Qld Legislation, the Body Corporate is only obligated to send a debt to debt collection once it has been outstanding for two years.[iii] It is best practice though to keep on top of these debts and address them as soon as possible. The longer these debts are left the more they mount up and the harder it becomes for the owner to pay. In our office we issue the owners with notice 30 – 45 days before the levy is due for payment. Owners are then sent a reminder 14 days after the due date. 14 days later the if it is still unpaid they are issued with a notice that the debt remains unpaid and 14 days after that they receive a final notice. If the debt remains unpaid after that period we will try to contact the owner by phone or email. Finally we will approach the Committee to see if they want the matter to be sent to debt collection. If it is sent to debt collection, the collection costs are on charged to the lot owner in question along the way.

4. Become known as a no nonsense Body Corporate who is firm but fair

Remember that there are sometimes owners who may have extenuating circumstances. On occasion persons may not have been in debt before and are unsure of how to deal with it. Some people resort to shutting down and not communicating with the body corporate. The body corporate should show empathy and try to resolve debts where possible in a timely and fair manner. However, the committee it should not let the body corporate be taken advantage of. The most effective solution in our experience is where the owners agrees and commits to a payment plan that addresses the arrears while keeping ahead of levies that become due.

– Henry Wheeler

Click here to read the Body Corporate and Community Management (Accommodation Module) Regulation 2020.

Click here to pay your arrears

Insurance for Carpets in Units

Why does the Body Corporate’s Building insurance not cover carpets in my unit?

The Body Corporate has a responsibility to take out sufficient insurance to cover the building however, under the relevant legislation pertaining to Bodies Corporate in Queensland [i], carpets are specifically excluded from the definition of “Building”. As a result when a building insurance policy is taken out the insurers do not account for the carpets within the individual units. Carpets within individual units are classified as contents and should be insured under the lot owner’s contents insurance policy.

This issue comes up from time to time where there may for instance be a flood within a unit from the lot above or storm damage to a roof. The building insurance policy generally covers the resultant damage to the building such as walls and ceilings but carpets are not taken into account. It is therefore imperative that owners have sufficient contents insurance in place to protect their individual unit contents including carpets.

On occasion we have been asked why the building insurance covers carpets in a foyer for instance but not within a unit. The reason being that usually the Body Corporate insurance will include contents cover for the Body Corporate which owns the contents of the common areas only.

[i] By way of example see S174 Body Corporate and Community Management (Accommodation Module) Regulation 2008

If you would like to know more, click here to speak with one of our strata professionals.

Common Misconceptions and FAQS (Levies)

Common Misconceptions and FAQs about Body Corporate Levies

Is Strata Dynamics the Body Corporate?

Strata Dynamics is not the Body Corporate.

A Body Corporate is a legal entity comprised of all owners in the complex. Every owner of a lot in a community titles scheme is automatically a member of the Body Corporate.

Strata Dynamics is not a Body Corporate. Strata Dynamics is a Body Corporate Manager. We are an administration company here to help Bodies Corporate with their administrative and financial management.

Does the Body Corporate Manager set the levies?

The Body Corporate Manager does not set the levies.

Each year, the Body Corporate Committee agrees on a budget of projected expenses. The Body Corporate contributions (levies) are then calculated to meet the projected requirements as set out in the proposed budget. Levies and the budget are then considered each year at the Annual General Meeting (AGM), at which each Lot Owner has the opportunity to vote on the levies.

Prior to the AGM each Lot Owner is provided with an AGM Notice, which is an invitation to vote on matters affecting the Body Corporate. The AGM Notice includes voting papers along with financial reports and budgets so that each owner can make informed decisions when voting.

If an owner is unable to attend the AGM, completed voting papers can be submitted to Strata Dynamics by email, post, or fax to be counted at the meeting. After the meeting, a copy of the AGM Minutes is issued to each owner detailing the levies agreed upon for the next financial year.

Strata Dynamics encourages all Lot Owners to vote on matters affecting the Body Corporate.

Is the Body Corporate Manager the Committee?

The Body Corporate Manage is not the Committee

Each year at the Annual General Meeting (AGM), a Body Corporate must elect a committee of at least 3 and no more than 7 Lot Owners (different rules apply to schemes registered under the Small Schemes Module) to implement the decisions of the Body Corporate and act on certain issues in regard to the day to day governance of the Body Corporate. The Body Corporate Committee is made up of volunteer owners and the positions are Chairperson, Secretary, Treasurer, and Ordinary Committee Member(s).

Are levies paid to the Body Corporate Manager?

Levies are not paid to the Body Corporate Manager.

All owners are required to pay Body Corporate contributions into both the Administrative Fund and the Sinking Fund. These contributions are collected in order to cover daily and ongoing costs for your Body Corporate.

The administrative fund is used to meet day to day expenditure of the Body Corporate. Examples of administrative fund expenditure might include lawn mowing, electricity, insurance, and other routine items. The sinking fund is used to provide for future capital expenditure. Examples of sinking fund expenditure might include mandatory repairs such as painting of common property and replacement of fixtures on common property. Only a very small portion of the administrative fund levy goes towards the administrative services provided by Strata Dynamics.

As Body Corporate Managers we administer a bank account in the name of your Body Corporate. The Body Corporate contributions must be paid into this account and the Body Corporate expenses are paid from this account. The financial viability of the Body Corporate is therefore dependent upon the Body Corporate setting appropriate levies and Lot Owners paying their levies on

Can the Body Corporate Manager set up an Automated Direct Debit for me?

Neither the Body Corporate nor the Body Corporate Manager is authorised to set up automated payments on your behalf. If you would like to set up an automated direct debit, we recommend contacting the below third party companies that may assist you with automated payments:

StrataPay

Phone: 1300 135 610

www.stratapay.com

Please note Strata Dynamics does not have access to the conditions or payment details of any automated payment arrangements you may enter into with third party.

Depending on the financial structure of your Body Corporate, levies will be issued 2, 3, or 4 times a year and are usually due on the first day of the levy period. Levy periods and amounts are listed in the AGM Notice and

Can levy notices be posted to my Property Manager?

Yes. If you would like Strata Dynamics to send future body corporate notices to your Property Manager, please email info@stratadynamics.com.au with your body corporate name and a request that your billing address be changed.

Can I access my Body Corporate Information Online?

Yes. Information about your Body Corporate is available to you at www.stratadynamics.com.au by selecting ‘Owners’ from the main menu. This owners portal provides access to Body Corporate records such AGM Minutes, Community Management Statements, Building Plans, Committee Resolutions, Insurance Documents, and Sinking Fund Forecasts. You can also update your details online and check over your account ledger. If you do not have a login please request your Stratamax Login by emailing info@stratadynamics.com.

Why have my levies increased?

It’s not uncommon for individual levy amounts to increase or decrease through the year. Depending on how often your levies are issued, the first (and sometimes second) contribution(s) of the new financial year need to be pre-approved at the previous AGM. This is done so that the first levy of the new Body Corporate financial year can be issued without delay to ensure steady cash flow for the Body Corporate. When the new budget is calculated for the following AGM, any pre-approved levies are subtracted from the budget required and then divided between the remaining contributions periods. You will see evidence of any fluctuations in the levies by referring to the AGM Notice and AGM Minutes. Increases in your levies might also be caused by an increase over the previous year in unforseen

Why is my invoice due later than I expected?

The levies are voted on at the AGM, which is usually held around the same time each year. On occasion, however, the AGM date might be later than usual. This sometimes means that levies might not be approved in time to issue for the usual due date. In order to provide you with enough time to pay your levies, the Body Corporate will sometimes need to delay the due date to the 1^st of the following month.

Why are the levy figures on the AGM Notice different to the amounts on my invoice?

The levy figures listed on the AGM Notice and AGM Minutes are usually listed on a per lot entitlement basis. Lot entitlements are set by the developer when the Community Titles Scheme is established and are set out in the Community Management Statement (CMS). Each owner can then calculate their own levies based on the figures listed in the AGM Notice.

Why does my invoice include a Special Levy?

Just like administrative and sinking fund levies, special levies are also decided at a General Meeting and details of any special levies will be included in the Meeting Notices and Minutes sent to all owners. If your Body Corporate requires a special levy to be struck, the details with supporting material will be included in your Notice and discussed at the meeting. The most common reasons for special levies are to make a correction to deficits in the funds of the Body Corporate or to undertake a significant and unforseen capital project of the Body Corporate.

I’m a new owner. Why does my invoice include levies dated prior to settlement? I only just bought the property.

When you take ownership of a lot within a Body Corporate, you become liable for any and all outstanding Body Corporate levies.

Please note that neither the Body Corporate nor Strata Dynamics are directly involved in the purchase process. If you have any queries regarding amounts levied before you took possession of the Body Corporate property we encourage you to contact the solicitor who handled your purchase as they should have made adjustments at the time of settlement to cover payment of any outstanding levies.

I’m a new owner. Why is the due date on my invoice so soon? / Why has the due date already passed?

Please note that the original levy notice would have been issued to the owner recorded on the Body Corporate Roll at least 30 days prior to the due date. However, either due to the timing of your purchase or receipt of your contact details, we were not able to send your levy notice to you at the usual time of issue. A levy notice was sent as a courtesy upon notification of your purchase.

What is the Body Corporate Financial Year?

The financial year period for your Body Corporate may not necessarily line up with the 1 July – 30 June Australian fiscal year. The financial year for your Body Corporate is based on the date of registration of the Body Corporate. For example, if a Body Corporate is registered during the month of October, then its financial year will be from 1 October to 30 September the following calendar year.

For further information about any of the topics included in this information sheet, please email info@stratadynamics.com.au or, head to our contact-us page.

Wooden Flooring in Units

Replacing carpet with timber flooring is a popular option for many owners renovating their units but before you embark on this project we recommend you do some homework to ensure your renovations don’t cause unnecessary disruption to your neighbours (particularly the ones below). The adjudicators can order lot owners to replace flooring with carpet or redo the insulation if it can be proved that there is unreasonable noise transference from a lot that has hard floors installed, often at great expense.

Before you go ahead with an installation, we recommend you:

Read your body corporate’s by-laws and see if there are any rules about installation of hard flooring;

Speak to your installer about the appropriate amount of sound installation under the floor;

Speak to your neighbor and see what sort of noise currently emanates from your current flooring; and
If you feel it necessary, have an acoustics engineer perform an inspection and provide you with recommendations (some bodies corporate require this as part of their by-laws).

Once you have had the installation completed be mindful that you could potentially be creating more noise than usual. The body corporate commissioner’s office suggests the following measures to reduce noise transference.

Floor rugs and carpets, with insulated backing in high traffic areas;

Felt pads under furniture legs;

Soft closers on cupboard doors;

Removing shoes when inside the apartment

Minimising noisy activities such as keeping volume on electronic devices as low as possible.

– Henry Wheeler

If you would like more information, click here to get in touch with our team.

Pets in Bodies Corporate

In recent times we have seen an increase in occupants wanting to keep pets within their lots (specifically dogs) and thought it is timely to give owners some suggestions and information on this process, it is important when considering introducing a dog into your environment that you do your research and follow proper process with the Body Corporate. This can help avoid any disputes with the Body Corporate down the track.

Do Your Research Before You Adopt

It is important that some research be done before considering introducing a dog into a building. Here are some things to look into:

What breed of dog would be appropriate for your unit complex?
Is that breed of dog a barker or digger? And how will you manage this?
Do you have the time to spend training the dog to ensure it won’t cause nuisance to other occupants in the building?
Is the dog a suitable size for the size of your unit?
Will the dog need to be walked daily and/or does it require an outdoor area such as a courtyard?
How will the dog’s waste be dealt with?

Follow proper process

Once you’ve considered all of the above you will need to follow proper process to obtain approval from the Body Corporate to keep a pet in the lot. Too often we have seen disputes within schemes where an occupant has not applied to the Body Corporate Committee to keep pets in the scheme or adopted the animal before applying for permission to keep it within the scheme. We would recommend ensuring you have approval in place before introducing an animal into the scheme. We have detailed the process for you below:

Contact your body corporate management company and request a pet application form; (if your body corporate is managed by us you can complete this form on our website here).
Complete the form and submit it to the body corporate managers with all relevant supporting information as required;
The form is then submitted with a motion to the Body Corporate Committee to vote on whether or not they will approve the pet to be kept within the scheme;
The turnaround time for the Committee to vote on the matter can depend on their availability but is usually not longer than two weeks;
The Committee will generally put strict conditions in place that will need to be adhered to and it is important to consider if you will be able to be comply with all of these conditions.

If you are still unsure, click here to contact us for additional information.