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The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1340 THINKING OF RENOVATING IN STRATA? WATCH OUT FOR THESE COSTLY PITFALLS!
Unlock the secrets to a seamless strata renovation process as Greg Williamson from Stedman, Williamson Hart shares his expert insights on navigating the complex world of strata living. With projections indicating a significant rise in strata arrangements by 2035, understanding the nuances of cosmetic, minor, and major renovations has never been more crucial. Discover why clear communication and proper approvals are vital to avoiding costly legal pitfalls, and learn from real-case scenarios that highlight the consequences of unauthorized work. Greg's valuable advice ensures you're equipped to handle evolving legislation and maintain harmony with strata managers.
Our conversation also turns to the often-overlooked challenges landlords, buyers, and sellers face when accessing reliable real estate information. Delve into the intricacies of the market with our guests Lee and Billy, who provide indispensable insights into effective resource sharing. This episode is packed with practical tips and compelling stories, illustrating how personal conflicts can impact the renovation approval process and how tribunals play a role in mediating unreasonable refusals. Don't miss this opportunity to gain a comprehensive understanding of strata living and the ever-changing landscape of real estate.
Okay, guys and girls, you're doing a renovation on your strata unit or townhouse and you're getting in trouble. We have got Professor Greg Jemison Greg Williamson who is a professor I'm saying he's a professor in strata because it sounds good, but this man knows everything about strata. We're going to talk about renovating. Stay tuned.
Speaker 2:Morning, Greg. Thanks for coming on.
Speaker 3:Morning Billy.
Speaker 2:That is what a lot of people need in their lives, one in seven living in strata. These days, one in seven families are living in strata. This applies to a lot of people.
Speaker 1:That's a big number.
Speaker 3:It's going to get worse 20, 35, I estimate it's going to be 50%.
Speaker 1:Wow, oh. So, ladies and gentlemen, this is a live show, so any Strata questions you want to throw at Uncle Greg, throw them at him just right into the comments. I think it's a Novak properties. Facebook will take your comments and we can have them live here so thinking of renovating this is.
Speaker 2:This is the person's book to really when. If you've got no idea where to start, Greg, just briefly give us a quick 30-second snapshot of your business.
Speaker 3:Okay, stedman, williamson Hart is a specialist strata firm. Unlike all the other strata firms throughout New South Wales, we only do compulsory management, in other words, we're ordered by the court to administer the entire owners corporation. So this um, the owners corporation's been found dysfunctional. Uh, that can be through a numerous uh aspects. We're appointed to get the building and the owners corporation back into compliance and once that's been that terms been expired and that's normally 12 months to two years we hand the building back and we don't keep going as the strata managers. So we have a very special set of skills in our firm and, as I said, we're appointed by the tribunal NCAT and we will make sure that the building is 100% compliant and then we hand the owners corporation back and then they can go and find their normal strata managers. People either do love us because we do get the building back into compliance.
Speaker 3:If the underlying issue has been just owners that are infighting, we can't fix that. We're there to fix the building and make them compliant, and the problem with Strata at the moment we deem it is now the fourth tier of government. There is so much legislation that overlays being in an owners corporation. I love that. Yeah, it keeps keeps us into the tribunal. But we have numerous contacts through the industry. You know engineers, builders, solicitors, you name it. We have to have those professionals sitting behind us because we trust them and the tribunal trusts us and the tribunal therefore trusts our contractors. But today's topic is one that, if you haven't already undertaken a renovation in your strata unit, eventually you will because they need updating. You know, people love to renovate.
Speaker 3:Yeah totally Right, Greg just a quick one what's changed?
Speaker 1:Because I have been an agent for over 30 years and doing a kitchen or a bathroom in a unit most of the time just gets shit done Absolutely. Now, if you try to pull that off, you're potentially always in trouble.
Speaker 3:In essence, potentially always in trouble In essence, well, the Act changed in 2015 and it's made it a lot more compliant on affecting renovations. When I first started in Strata and when you did a bylaw for a renovation, it may have been lot. One is authorised to do a kitchen renovation and that was the extent of the bylaw Current bylaws and the problem with that is that no one knew what that renovation meant or what that entailed. So today, a standard bathroom renovation will run probably four or five pages of terms conditions and it makes it crystal clear of what actually is happening in the unit. What people sometimes don't understand is when they've purchased the strata unit. In essence, they've purchased the strata unit. In essence, they've purchased airspace. It's I jokingly say it's the most expensive thing. You've paid for nothing because you owe the airspace. In essence, and the four walls that surround it are common property. The floors are common property. The roof is common property when you're standing in your shower and the tiles on the shower, that's common property, and that's where a lot of people start having issues.
Speaker 3:So currently in strata there's three types of renovations and they come broken down into three categories Cosmetic, and I'll go into these in more detail. So you've got cosmetic, minor and major. And cosmetic is very, very simple. It's including installing, replacing hooks or screws for hanging pitches, you know, internal painting and minor painting, and that's basically straightforward. You do not need owners' corporations approval, you know, know. You just can go ahead and do it. We do recommend, however, if you're going to do that, that you do notify your strata manager and possibly even leave a couple of notices on the notice board just advising people that you are doing cosmetic work, and get that clarified by your strata manager of the day, and because people will sit back and go what are they doing? What's happening? We're seeing trades coming in and out and you'll end up having more communications going backwards and forwards trying to justify what you're doing. And if you just put the notice on the notice board, you've spoken to the strata manager. He understands what we're doing and it's doing cosmetic work, end of story.
Speaker 3:We then move into the second category, which is minor renovations, and this is where people really can start becoming unstuck. Minor renovation is renovating a kitchen, changing your recessing, your lighting, replacing wood or other hardwood floors, installing and replacing wiring and cable to your power access points, or work involving reconfiguring walls. Now, the reconfiguring walls will have to be deemed non-structural walls. Now, the reconsidering walls will have to be deemed non-structural walls. You will need to set up a full detail of scope of works. You'll need to provide the strata manager all your detailed plans, your contractors and so on and so forth. But you don't require a bylaw. But you still require that application to go onto an agenda at a general meeting and it has to be approved by 50%, or just over 50%, of the owners who attend that meeting. Once that's done, you can start.
Speaker 3:Then you move into what they classify major works and then major works start getting a lot more complicated. You'll need a lot more detail in your plans. Your scope of works have to be completely detailed. You have to do a by-law and this again is where, with due respect to some solicitors that draft by-laws, they will draft a by-law. And this again is where, with due respect to some solicitors that draft by-laws, they will draft a by-law for the work that's involved in your unit but they fail to actually cover off.
Speaker 3:How are you going to protect the lift? If you've got lifts, lift covers requirement? How are you going to protect the common property carpet? Are you you putting runners down? Are you collecting it? How often are you cleaning? If you're chasing in walls, in other words making a hole in the wall, you're going to have a lot of dust created. You've also then got to look at how you're going to get rid of the waste material in your major works. So if you're ripping up a bathroom tile, as soon as you hear the word waterproofing, you instantly move into major works, and therefore you've got to have these bylaws drafted and they've got to be very, very specific.
Speaker 1:So, greg, I've got a bit lost there, the one between minor and major. So kitchen was minor, yes, but bathroom is major.
Speaker 3:As soon as you're doing a bathroom, you're on common property and that becomes major. So even if you decide to say I don't want to rip up the tiles, I just want to lay tiles over the existing tiles, the tiles on the bathroom floor, existing tiles, the tiles on the bathroom floor are common properties and therefore soon as you attach anything to common property it becomes common property and therefore you will require a bylaw. So a lot of people go up. It's cheaper if I just put another set of tiles over my tiles can do that, not a problem. But you will require a bylaw and you will require it to be then of major works.
Speaker 2:And so where is the pitfall here for the person doing the renovation? Is it lack of education, or they don't do the paperwork?
Speaker 3:It's the lack of education. Yeah, they don't do the paperwork or they will get a bylaw drafted. It will go to the general meeting for approval and a couple of owners say look, the bylaw is not sufficient for our protection. You haven't mentioned where the skip bin's going, you haven't mentioned enough detail in the scope of work, so the bylaw then gets rejected. You can't commence work until the bylaws actually approved, so you've got to go back.
Speaker 3:It goes back into the circle and you then go back to your contractor. So the owners corporation needs more scope. He says what I don't understand because I'm just a builder. What, what do you require? He then goes back to the starter manager. The starter manager says it's not our role to tell you what has to go into the scope of works. They attempt again. They change the go to go back to the solicitor. The solicitor then has to add more scope into the bylaw. The starter manager has to call another general meeting.
Speaker 3:All these are expenses that lot owners going to actually have to pay for and in our experience, from getting it wrong the first time or insufficient information in the documentation, you've got somewhere between five to 12 weeks of delay. So if you've got your contractor delayed for 12 weeks. You may be finding that you need another contractor because he's moved on and your window of time has gone. Now, if you've got a rental property, it's normally that you're going to do this between tenants and, as we know, sydney prices, you know if you're paying a thousand dollars or getting a thousand dollars worth of rental and you've just lost 12 weeks before you can commence.
Speaker 1:you're that's the cost of your bathroom. That's the cost of the bathroom yeah, billy, I can't hear you that loud, so if you could just talk up on your next question please can do.
Speaker 2:Um next question can you you can't rewrite rewrite the the renovation once it's been done either. So you mentioned you had a client that's tried to do the right thing. He's then gone and missed elements of his renovation and the owners corporation is now saying get it back to the original that's the issue.
Speaker 3:So it's classified as unauthorized work. So if you do anything that affects common property and, as I said, that's your bathroom if you've not been approved and go ahead with it, then the owners corporation can then seek an order from NCAT to do two things To force him to take on that responsibility of the repairs and maintenance of the bathroom or, in a lot of cases, you will get an order from the tribunal to rip it all out and put it back to its original state. Now a lot of people will then try to fight that in NCAT to rip it all out and put it back to its original state. Now a lot of people will then try to fight that in NCAT. In the case that I'm involved in at the moment it's been now running for close to 12 months only because of delays of getting an order from NCAT seeking an adjournment, getting more information. But he spent close to $35,000 in fighting the order. His own his own solicitors have now advised him that he will lose this case because of the unauthorized works.
Speaker 3:Tribunal takes a very dim view of people doing working on a strata building without approval and he's been. He will be ordered to put it all back to its original state and his whole apartment's been renovated. And he's explained that it cost him close to $75,000 to do his renovation. So he has to pull it all out, put it all back together again, then start the process again. So a very expensive exercise of not getting it right the first time. It's tripling the cost. Oh, easily. And you know. Look, this is a young couple. They've got a baby on the way, you know, so they're going to have to move out. It took them six months to do the renovation. He was doing a lot of it himself to save costs himself. He will be ordered to have it professionally removed and reinstated. So you know it is a major pitfall and NCAT is hearing these cases all the time. Wow.
Speaker 2:Where's the silver lining? Where's the good news for car owners? If they want to renovate, should they be scared? What do they need to be prepared for?
Speaker 3:No, there's no need to be scared. All you need to do and we've got quite a number of case studies on our website and we can assist owners of going through the whole process. So one of the things that we do when someone's asked us to help with a renovation is the first thing we do is say give us all your documentation. We will contact your builders, your contractors, make sure they're all licensed and compliant and actually have all the licenses and waterproofing certificates. A lot of people may be a builder and they're doing bathroom reno but they may not be licensed to do waterproofing. We'll check all that, We'll look at their scope and we will go back and say no, the scopes not sufficient. So we will then arrange for the bylaw to be specifically drafted for their building, because a lot of buildings will also have additional bylaws of. We want a deposit bond for any works to be taken. That may not be. You know, with due respect to other lawyers, they won't look at the existing bylaws of that particular building. It may also have what hours they can start, what uh, where the um, the waste bin and skip bin can be moved and how long these works have to do. So we'll set the whole package up and then present that back to the client to be able to send that to their strata manager, there won't be a problem, and they it should just get instantaneously approved.
Speaker 3:Now, in saying that there are times when there's nothing wrong with the bylaw, there's nothing wrong with the scope of works, and it happens in strata. Uh, with due respect, and I just use these terms a lot owner has a dislike to you for whatever reason. They make the bylaw fail. That's not the end of the matter. We just then advise the client.
Speaker 3:What you can then do is go to the tribunal and the tribunal application will be that my bylaw has been unreasonably refused will be that my bylaw has been unreasonably refused. The NCAT will look at the reason that the other owners have voted no, and previously you only had to say no. Tribunal now wants to know on what grounds you refused to grant the bylaw if your grounds aren't truly grounds. In other words, there's nothing wrong with the bylaw, there's nothing wrong with the scope of works. You're just trying to do a renovation, improve your asset of your own unit. Tribunal will then order that the strata manager passes the bylaw and registers it so it's removed from another vote. It will be an ncat order that the bylaw is passed greg, the strata guru, swami lisa, says uh, such awesome info.
Speaker 1:Uh, impossible to find this info anywhere. Uh, if you're looking for it online. Um, so you are a legend. Thank you so much for doing this with us today. I wouldn't mind getting, um, I wouldn't mind getting you on the show as a regular talking about some of the cases that you've been doing, because these strata cases intrigue me or they interest me. You know what people get up to and how they get themselves into bother with strata, because the more awareness out there, the less fire people are going to be walking into.
Speaker 3:I have some beautiful cases people wanting to out there. No, unless fire people are going to be walking into. I had some beautiful cases people wanting to. They buy the ground floor unit and decide to put in a wine cellar just because they wanted to go through the slab and go downstairs. You know it's. Yeah, you know. Buy the penthouse apartment in a four-storey block and decide to go into the roof and make a six-bedroom apartment. No council approval. No owner's corporation approval.
Speaker 3:But yeah there's some cases that you sit back and go really, but this is the problem. A lot of people do not understand living in an owners corporation. You know it's simple, but more than happy what if the client needs your help?
Speaker 2:what? How do they get in touch while we put your details here?
Speaker 3:put the details in and just send us an email. Because we do a lot of tribunal court work, it's always easier to send an email first, and then we'll contact the person and we'll just step them through it. Look, strata's not complicated, complicated, it's just complex what I reckon.
Speaker 1:Just to give people an idea if you're going to do a renovation and you're gonna do something in your unit, they're gonna run you. They're gonna run you guys just run the application. What's the cheapest. People would get away with the application with you guys to do it properly.
Speaker 3:Oh, look, it's Where's the start. Look, if you sit back and go, the bylaw and the whole package and our time, look, we estimate it's roughly around about two, two and a half thousand dollars. That's just not getting the bylaw drafted, re-contacting your builders making sure everyone's compliant, you know, because it's then undertaking a strata search making sure that there's other bylaws that don't overlay. Um, you know so it and we estimate that. Look, a standard bathroom renovation is going to cost you 25, 30 or thousand dollars, depending on the quality and the work you want to do.
Speaker 3:We don't look at it as an additional cost. We see that if we can save, you know, 10 weeks of downtime, you know it more than pays for itself. Yeah, the vacancy rates and getting it wrong and the delays. And even if you do get the bylaw passed and then something does happen, you don't want a bylaw that's got a loophole in it because someone's going to then find themselves back into the tribunal arguing what does this term mean versus what does the actual works done? And the next thing, you know, you can be defending a matter in the tribunal because the owners corporation takes a different view of the terms that have been set out in your bylaws. You know it, getting the paperwork right is the major consideration so thank you very much for your time, greg.
Speaker 1:Billy, what are you Getting the paperwork right is the major consideration, so thank you very much for your time, greg.
Speaker 2:Billy, what do you learn in conclusion from this? Get it right the first time. I mean it not only costs a bomb, but it will really hurt your heart having to change the organisation.
Speaker 3:It's heartbreaking, it's really heartbreaking.
Speaker 1:I mean, I feel sorry for the people that actually have got it wrong, because it's a lot of the times it's not their fault it's not like marriage yeah, get it right the first time and you're gonna have a happy life you can pay a consultant here and just get it right the first time and you're gonna have a happy life. You can pay consultant here and just get it right the first time.
Speaker 2:There's all the contact details. There's the website link. Jump on look. Thank you so much.
Speaker 1:Thank you. An absolute weapon yeah, unbelievable. I did start that it's not enough information out there, for even I know I'm amongst stuff. That it's not enough information out there for even I know I'm amongst, you know, 2 000 landlords and and thousands of buyers and sellers and stuff, and you're a heart, you're a hard animal to find yes, yeah yeah, yeah, but you're like we're here, devil.
Speaker 3:Yes yeah, thank you very much for your time, gentlemen. I'm here to assist.
Speaker 2:Thanks Lee, thanks Billy Bye guys have a good day out.