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             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.

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

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.

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

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.

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