Apartment owners could be protected from “rogue” operators, mismanaging millions of dollars, if the country’s first strata property body can help push through further reforms to the government‘s Unit Titles Act review.
Strata Community Association (NZ) will be using the review to push for greater regulation of strata managers. Industry leaders say it is a measure that is well overdue for the country’s $50 billion sector.
“When you have no professional benchmark for individuals and companies in such a huge sector, things can go rogue dramatically, and that’s what we’re aiming to change through the proposed reforms,” Strata Community Association (NZ) president Joanne Barreto says.
Six significant changes have been suggested by the government:
- Better disclosure rules at the time of purchase
- strengthening body corporate governance
- increasing professionalism of body corporate managers
- ensuring proper maintenance plans
- variable compliance requirements relating to complex size
- improving the accessibility of dispute resolution
“Unfortunately, body corporate ‘professionals’ acting up is a familiar a story for some strata property owners,” Ms Barreto says.
“In a recent incident, Auckland apartment owners received invoices for hundreds of thousands of dollars’ worth of body corporate fees that were not genuine.
“We are particularly alarmed about the way some managers look after funds, about the way they report back to body corporate committees or to other owners, as well as undisclosed conflicts of interest in the industry,” she says.
“There is not much to stop dodgy strata managers from running off with a body corporate’s funds.”
Ms Barreto believes it is a minority of managers that need to be targeted but greater protection under the regulations is needed urgently.
She says the proposed reform’s focus is mostly spot on but, going beyond cuts to red tape and revisions to planning schemes, the most valuable progress will be to usher in an era of “professionalism” for the sector nationally.
Ethics and training
“Strata property owners deserve some assurances that ethical, trained professionals are in charge of their properties and funds, often worth millions,” she says.
“As it stands, anyone can become a strata manager, without needing any training and that’s opened the door to some cowboys joining the fray and looking to take advantage of their position.”
The association says the sector is begging for better professionals and a legitimate, accredited employment pathway and it intends to roll out an accreditation course for body corporate managers. “This area deserves some undivided attention from government heavyweights,” Ms Barreto says.
“Mandatory education and training for industry professionals would reshape the sector not only in terms of the trust and confidence but also regarding the jobs and careers available. Despite its voluntary nature at the moment, it is important for owners that strata managers upskill and better educate themselves.”
