Stateline Transcript Calls For Change To Strata Laws Broadcast: 14/11/2008 Reporter: Claire Moodie With Perth's population tipped to double by 2050, higher density living looks set to be the way of the future. The need to cram more housing into less space has led to a proliferation of strata developments, many with a mix of homes, offices and shops under the one roof. But how well prepared is WA for what the planners call infill development? Claire Moodie reports on calls for tougher regulations to deal with the fast-growing strata industry. CLAIRE MOODIE: There are more than 50,000 of them in WA and plans for at least another 100 are being lodged every month. Strata schemes are not only popping up everywhere, but they're also getting bigger and more complex. Joan Charles is one of many retirees who have downsized from a large suburban block to inner city living in the heart of east Perth. JOAN CHARLES: I just like the look and the feel of it. I thought it was very picturesque. I could see myself going for long walks. It just had a sort of neighbourhood feel about it. CLAIRE MOODIE: But since moving in she's had to learn to live with others who share the same building but not always the same standards. JOAN CHARLES: Because I'm pretty fastidious, as you can probably see around this place, and my children all reckon that I need to take a bottle of Detol or Pinoclean with me everywhere. But I find it's rather disturbing when people don't respect other people and leave rubbish around and you know they just dump everything. CLAIRE MOODIE: She's also inherited the equivalent of a part-time job overseeing the resident strata council which decides how the shared areas of her complex are managed and disputes are sorted out. JOAN CHARLES: It's a lot of work and it's a lot of your time, a lot of money, you know. You would be surprised at how many phone calls you have to make. CLAIRE MOODIE: But not every strata development has a Joan Charles on hand. Many people who buy strata properties have no idea what they're getting into and they're not interested in finding out. KAREN RICHARDSON, RICHARDSON STRATA MANAGEMENT: Very common comment at meetings is that's the strata's company problem. That is not my problem, the strata company should fix it. And you get this magic word "the strata company" and you ask them, "Who do you think the strata company is?" And they are like, "You." "No, actually, you." CLAIRE MOODIE: This veteran of the strata industry is frustrated by the lack of public awareness. Karen Richardson is a strata manager, a profession that's been in growing demand since strata development started in the '60s. She helps owners run their strata companies and manage the funds they raise through levies. KAREN RICHARDSON: One that comes up all the time is floor coverings - people pulling out carpets, putting in wooden floorboards. That's a nightmare. They just believe it's inside my house and I can do what I like. I can pull down a wall... I can put stuff where I want to put and that's not the case. KAREN RICHARDSON: (speaking on phone) There is no by-law in place that says you can't have a dog at the complex. CLAIRE MOODIE: Karen Richardson is one of many who is calling for changes to resolving the many disputes in strata schemes simpler. Under the existing system, disputes are heard at the State Administrative Tribunal, where managers say about 90 per cent are resolved through mediation. The real problems arise when no-one is prepared to back down. In one recent case, the tribunal has ordered residents not to smoke on their own veranda, because it's disturbing the neighbours. ANDREW CHAMBERS, STRATA TITLES INSTITUTE OF WA: Now that is a good order to bring down but the enforcement and the policing of the order is where the problem lies. Who enforces it? Who polices it? And if somebody breaches the order then you then have to apply to a higher court to have the order actually enforced. CLAIRE MOODIE: Not surprisingly it often takes the services of a lawyer at significant cost to sort out the more acrimonious stand-offs. Mark Atkinson specialises in strata law. He says the focus of any changes to the industry needs to be on strata managers who are currently unregulated. MARK ATKINSON, STRATA COMMERCIAL LAWYER: I guess the worry comes from the size of the money that's involved. Many schemes in the bigger schemes have budgets in excess of $1 million a year. So the course of the year strata managers will be managing vast sums of money. There are no controls over what they do with that money. CLAIRE MOODIE: It's a problem that Payam Golestani, a real estate agent in Perth, is keen to a highlight. He alleges he paid fees to a strata manager who then claimed the money never arrived. PAYAM GOLESTANI, REAL ESTATE AGENT: Ultimately, they have a lot of power and responsibility and really no checks and balances. None whatsoever. CLAIRE MOODIE: He believes there needs to be greater scrutiny of those starting up in the strata management industry. PAYAM GOLESTANI: If you have a computer, if you have a printer, and if you have some forms of software, you can start from tonight. After 27 years in the business, Karen Richardson maintains the industry is honest but she says there is certainly room for mandatory auditing and improved standards. KAREN RICHARDSON: Regulation of the industry would be great. It would be great to make sure people get some education before they decide that they're a strata manager. CLAIRE MOODIE: And the peak industry body agrees that the existing Act, which barely mentions strata managers needs to be urgently updated to include, among other things, mandatory professional indemnity insurance for managers. ANDREW CHAMBERS: With the licensing system, of course, there is cost and inevitably the consumer is going to end up paying for that cost. CLAIRE MOODIE: There have been two reviews into WA's strata laws over the past six years but neither has led to any changes. Now the industry is calling on the Government to bring the legislation up to date to cater for the explosion in strata developments. With an estimated $1.5 million more people to house in Perth by 2050, it's a style of living that is not going away. The Government says it's considering amendments to the Act to address the concerns of industry which in turn is launching its own best practice guide for managers and owners. KAREN RICHARDSON: People spend millions of dollars in some cases buying into properties and they have no idea really what they're buying. So I find that a problem. CLAIRE MOODIE: Joan Charles would have preferred to have gone in with her eyes open. JOAN CHARLES: I probably should have listened to one of my daughters who told me that you should go and rent for six months and, yeah, I didn't. But she's adjusting to the inner city lifestyle and for the moment at least there are more benefits than drawbacks. REBECCA CARMODY: Claire Moodie with that report.