Griffith Uni Presentation 040815
- 1. Strata building performance as a lottery: If I hadn’t bought into my new building 10 years ago, what would be it’s standing today? Gerry Chia Vice Chair, Owners Corporation Network Chairman Pacific Place Community Association Secretary Epica Owners Corporation
- 2. Epica, completed 2005, by Mirvac Chatswood, Lower North Shore Sydney http://www.pacificplacechatswood.com/ •
- 3. Chatswood NSW • “Epica” 31 storey new Mirvac apartment building • Completed 2005 • 1 of 4 strata plans in a Community Association • Chatswood, Sydney lower north shore
- 4. 2005 Pacific Place Community Association B2E 64 Low rise units 2003 Altura 138 high rise units & 5 commercial 2003 Epica 221 high rise units & 8 commercial 2005 Future construction Shared facilities Pools Gyms Grounds
- 5. 2007 Pacific Place Community Association B2E 64 Low rise units 2003 Altura 138 high rise units & 5 commercial 2003 Epica 221 high rise units & 8 commercial 2005 Cambridge 132 high rise units & 2 commercial 2007 Shared facilities Pools Gyms Grounds
- 6. EPICA
- 7. Very complex building with multiple plant and machinery • 3 high rise and 2 small lifts • Centrally supplied water cooled air conditioning, 2 cooling towers • Centrally supplied gas fired and solar assisted hot water consisting of 3 separate systems for low / mid / high rise
- 8. Very complex building with multiple plants and machinery • 30,000 litre drinking water supply tank • 20,000 litre fire sprinkler supply tank • Fed by pumps at street level • Fire sprinklers throughout the building • CEBus lighting control system
- 9. Very complex building with multiple plants and machinery • Strata manager did not consider plant and machinery breakdown insurance cover necessary! • Office bearers liability insurance $1m
- 10. ISTM Strata Agency Agreement • 3 years, with 3 year auto rollover • Annual retainer, 5% annual increase • Schedule B disbursements uncapped • 18% Commission on strata insurance
- 11. On Site Building Management • Likely to be 3 years, but could be up to 10 years under NSW Strata Legislation • No opportunity to review contract • No KPI’s
- 12. Motions at Inaugural AGM • Appoint strata manager for 6 months • Appoint building management firm for 1 year • Increase office bearers liability to $5m
- 13. Strata Management • Went to tender late 2005 • Fixed fee based on scope of works • No schedule B disbursements • No insurance commissions • Minutes and agendas sent electronically
- 14. Strata Management • 1 year appointment, monthly rollover after that • Major amendments to ISTM contract • Many of our changes now in SCA NSW 2012 agency agreement
- 15. 2006 Extraordinary General Meeting • EGM to appoint new strata manager organised by volunteer owners • Printed over 3000 sheets for EGM agenda, all collated and posted or inserted by owners • New strata manager appointed March 2006. Still with same strata manager 9 years on
- 16. Insurance Original cover arranged by the strata manager: • Property insured value $110m • Public Liability $20m • Office Bearers liability $1m • No plant and machinery cover • Premium $93,000pa
- 17. Insurance In 2006 I combined the buying power of the 3 completed stratas and community association and went to tender for a broker, then to market for our insurance
- 18. Insurance 2015 • EPICA property insured value $190m • Public Liability $50m plus additional $50m shared across all entities • Office bearers liability $20m • Plant and machinery breakdown plus loss of rent as a result of breakdown
- 19. Insurance 2015 • Fixed brokerage fee • Epica Premium of $120,000 • Combined property insured value of 4 stratas and community association of nearly ½ billion dollars
- 20. Take home message: Owners must involve and take control of their affairs. In our case combining our immense buying power has given us top tier insurance cover at a very competitive rate, with excellent service backing. Without my involvement perhaps none of this might have occurred. It takes a champion to push to obtain the best result
- 21. Shared facilities under community association in 2005: • 25m outdoor pool, spa, kids wading pool • BBQ • Several acres of gardens • Gym and sauna
- 22. Inadequate Levies • Opening levy 2 bed apartment on an upper level with ocean views $880 per quarter • On site building management • Sinking fund $45,000 pa
- 23. Levy $880 per quarter
- 24. Levy $880 per quarter
- 25. Compared with 2 bed 3 storey walkup block of 6 units, $600 per quarter
- 26. Epica • Sinking Fund Survey we commissioned in 2005 recommended a levy of $300,000 PA • No assistance or recommendation from original strata manager on sinking fund survey • First year many maintenance items were included in the supply contract, so no charge to owners corporation for year 1
- 27. Epica • Second AGM increase levies by 71% • My 2 bed premium aspect now $2,100 per quarter
- 28. Taking care and reinvesting in the asset • A healthy and robust sinking fund is essential to ensure the proper maintenance of the asset • Many capital items require replacement or refurbishment • For example major painting in 10-15 years, and lifts 20 years
- 29. Taking care and reinvesting in the asset Without a robust sinking fund, the owners corporation would need to strike special levies or leave the asset to deteriorate and progress into a downward spiral, which is the case in many buildings
- 30. Taking care and reinvesting in the asset Insufficient levies cause buildings to deteriorate, rents and resale values decline, and eventually the buildings may become economically unviable and unsafe.
- 31. UPPING THE ANTE Epica in the first year • Appointed new strata manager • Got high performing on site manager • Increased levies by 71% • Combined and marketed our insurance requirements for the whole site
- 32. CREATING A HOME AND COMMUNITY: In the beginning…. • Residents in the lifts pushing close buttons even though others trying to catch the lift • Residents pushing into lifts before passengers have had time to alight • Cigarette butts, some still burning, thrown from balconies
- 33. CREATING A HOME AND COMMUNITY: In the beginning…. • Visitor parking chaos • Residents renting out their allocated car spaces to outsiders contrary to DA • Teenage residents with no parental supervision behaving badly
- 34. CREATING A HOME AND COMMUNITY: In the beginning…. • Coles trolleys brought into building and left on resident floors
- 35. CREATING A HOME AND COMMUNITY: In the beginning…. • Many lights out • I checked external doors each night to secure them after trades and residents had propped them open • I checked lights out in garden, and put fluro colour dots to indicate to building management to change globes
- 36. THE ACTION PROCESS: QUALITY SERVICE PROVIDERS • Epica a new high performing on site manager • The Community Association contracted permanently assigned on site security guards to have round the clock on site presence
- 37. QUALITY SERVICE PROVIDERS Look after, acknowledge and motivate good people • $3000 bonus pa for building manager • Xmas bonus for long term guards • Xmas cash gift card for strata manager
- 38. QUALITY SERVICE PROVIDERS Look after, acknowledge and motivate good people • Pay peanuts !!!!!! • But being charged more may not equate to quality service if you don’t have the right firm and right people
- 39. BUILDING A COMMUNITY CULTURE • I purchased and installed a community notice board for Epica • Held lift doors open for people • Rebuked people pushing into lifts
- 40. • Greeted other residents in lifts etc. • Got to know neighbours on my floor • Left welcome gift for new neighbours moving in next door BUILDING A COMMUNITY CULTURE
- 41. Residents year end get together November 2006 • Organized residents’ end of year BBQ • 2006 volunteer residents cooked and prepared food • 60 attendees
- 42. Now for all the Pacific Place Community • 380 residents attend from all 4 buildings • fully catered
- 43. Pacific Place Community Petting zoo Santa calls with gifts for kids
- 44. Pacific Place Community • Face painting
- 45. Pacific Place Community Special guest at Community End of year event
- 46. Other Community initiatives • Tai Chi group • Mothers group
- 47. Other Epica Initiatives • Christmas tree • Defibrillator • Trolleys for residents use
- 48. Other Epica Initiatives • Christmas tree • Defibrillator • Trolleys for residents use
- 49. Other Epica Initiatives • Christmas tree • Defibrillator • Trolleys for residents use
- 50. Other Epica Initiatives • Christmas tree • Defibrillator • Trolleys for residents use
- 51. Other Epica Initiatives • Car jump starter • Car wash bay industrial grade vacuum cleaner and hose reel, upgraded lighting on movement sensor
- 52. Other Epica Initiatives • Car jump starter • Car wash bay industrial grade vacuum cleaner and hose reel, upgraded lighting on movement sensor
- 53. BEEFING UP THE BY LAWS • Parking enforcement • Short term lettings • Overcrowding
- 54. BEEFING UP THE BY LAWS • Emergency powers in event part of the building becomes unable to be occupied as per Bondi Junction Eastgate Gardens gas explosion • Timber floors standards to protect neighbours • Renovations • Smoke drift
- 55. INVESTING IN THE ASSET EPICA • 2007 CCTV Security cameras in all public areas, entrances and 6 basement car parks • Upgraded 72 fire stair door locks and lift control locks to high security Bi locks
- 56. INVESTING IN THE ASSET EPICA • 2010 Retrofitted all basement and fire stair lights to LED, assisted by $25,000 grant from Willoughby Council • Now 98% all common area lighting LED • Installed variable speed drives • Reduced monthly consumption by 30,000kWh • Improved power factor to .92
- 57. INVESTING IN THE ASSET EPICA • Reprogrammed CEBus system for better efficiency • Installed Satellite TV dish and upgraded TV reception cable infrastructure to enable residents to receive over 100 pay and free to air satellite TV services
- 58. INVESTING IN THE ASSET- EPICA • 100Mbps download internet access via Telstra HFC (Hybrid Fibre Coaxial Cable), and very soon NBN Fibre to Basement • Plan to install fibre backbone • Main lobby update to stay ahead of newer buildings in the area • Continuous program of refreshing common areas
- 59. Investing to Improve the Community Asset: • Constructed a community room • Expanded the gym • Purchased additional gym equipment and 5 flat screen TV’s
- 60. Investing to Improve the Community Asset: • Constructed a community room • Expanded the gym • Purchased additional gym equipment and 5 flat screen TV’s
- 61. BUYING INTO STRATA IS INDEED A LOTTERY • Will the building, which is your home, become a de facto hotel of serviced apartments, or student accommodation? • Is there overcrowding?
- 62. BUYING INTO STRATA IS INDEED A LOTTERY • How secure is your building? Certainly serviced apartments can reduce your standard of security and house keeping compared to if it was only used as full time residential • Does the building have unresolved or hidden defects?
- 63. BUYING INTO STRATA IS INDEED A LOTTERY • Do you know how your levies are spent? • Do your service suppliers do quality and fairly priced work? Do they care about you as a client?
- 64. BUYING INTO STRATA IS INDEED A LOTTERY • Is your executive committee transparent and committed to ensuring the well being of the building and those who live there, or are they just in it for their own agendas? • Does the committee have an effective policy of quality maintenance and investing in the asset?
- 65. ENSURING STRATA WILL BE A QUALITY LIFESTYLE: I challenge you all here today to incorporate at least 3 things To those of you who conceive and design apartments let’s make them a community. Give us better design, energy efficiency, ventilation, natural light and community facilities.
- 66. ENSURING STRATA WILL BE A QUALITY LIFESTYLE: To those who build, give us buildings that properly conform to building standards, and don’t leak, and have the correct fire safety systems in place
- 67. ENSURING STRATA WILL BE A QUALITY LIFESTYLE: To those who shape the legislation: make builders and developers accountable for defective buildings
- 68. ENSURING STRATA WILL BE A QUALITY LIFESTYLE: To those who shape the legislation: Give us greater powers to deal with those who abuse our community. What if I came and parked in your house carport and went off to do my shopping because you lived close to the shops, and you had no powers to deal with me
- 69. ENSURING STRATA WILL BE A QUALITY LIFESTYLE: To those who manage our assets: give us greater accountability and transparency, and guide us how to maximize our assets and create a community. Don’t just see us as a means of income
- 70. ENSURING STRATA WILL BE A QUALITY LIFESTYLE: To those in academia: I hope you will take further the concepts I have touched on in your research and studies, as strata living is now the lifestyle of choice of many living in our cities, so quality of life is a key element
- 71. ENSURING STRATA WILL BE A QUALITY LIFESTYLE: And to those of you who live in strata help make it a house proud community. It is after all your home.
- 72. “Strata building performance as a lottery: If I hadn’t bought into my new building 10 years ago, what would be its standing today?”
- 73. Today I have given you a glimpse into the major things we have done in Epica and Pacific Place Community Association I leave up to your imagination where we would have been had I not bought into my scheme 10 years ago