Grace Lawyers Expands Strata Legal Services in Victoria with New Melbourne Team

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Grace Lawyers is excited to announce a significant expansion of its strata legal services in Victoria with the appointment of a new Melbourne team. Starting from 1 August 2024, the firm will be bolstering its presence in Victoria with the addition of a highly skilled team led by Leila Idris, a distinguished specialist in strata law. This expansion marks a new chapter for Grace Lawyers, reflecting their commitment to delivering comprehensive legal services across the Australian legal landscape.

Introducing our Melbourne Team

Grace Lawyers’ Melbourne office, located at Level 5, 447 Collins Street, Melbourne, will be spearheaded by Leila Idris and her experienced team. Over the coming weeks, the Melbourne team will grow to include six lawyers and a senior paralegal, bringing a wealth of expertise to the strata and community titles industry in Victoria.

Leila Idris, who brings over 15 years of specialised experience in strata law, will lead the new team. Her background includes substantial expertise in transactional and advisory matters, dispute resolution, and owners corporation litigation. Her leadership promises to enhance Grace Lawyers’ already robust offerings in Victoria, catering to the diverse needs of strata and community titles clients.

A Dream Realised

Colin Grace, the Founder of Grace Lawyers, expressed his enthusiasm about this significant development. “While we have been operating in the Victorian market for years, it has been a dream of mine to expand and provide a full suite of services to our clients here. With Leila and her team joining us, and the launch of our new office, this dream has now become a reality. We are thrilled to welcome the team to the Grace family and look forward to offering our clients an even more comprehensive range of services.”

Managing Partner Daniel Radman also shared his excitement. “Leila was the perfect fit to lead and grow our experienced owners corporation team in Victoria. She is warm and genuine. She is also a powerful motivator and leader who is embraced and respected by staff and clients for her legal work and management style. Leila and her team will make Grace Lawyers a leading provider of legal services in Victoria, specialising in owner’s corporation law. I look forward to sharing the journey with Leila, her team and meeting our Victorian clients over the course of the next year.”

A Commitment to Excellence

Leila Idris expressed her gratitude and enthusiasm for the new role. “I am honoured to join Grace Lawyers as a Partner and to contribute to the firm’s esteemed legacy of legal excellence. Along with my team, I am excited to embark on this journey and remain dedicated to delivering strategic counsel and unwavering support to our clients. This opportunity represents a significant milestone in my career, and I am grateful for the support from Grace Lawyers, our clients, colleagues, families, and friends. We look forward to making a positive impact and building lasting relationships in the strata community and beyond.”

About Grace Lawyers

Founded in 2005, Grace Lawyers is Australia’s leading specialist strata law firm, recognised for its comprehensive legal services across the strata, community, company, and bodies corporate title sectors. With established offices in New South Wales, Victoria, Queensland, and the Australian Capital Territory, the firm has a strong presence in the Australian legal market.

Grace Lawyers is dedicated to the relentless pursuit of perfection in every aspect of their practice, which is embodied in their core value:

“The relentless pursuit of perfection in everything we do.”

This commitment to excellence is reflected in their high standards of legal practice and their dedication to fostering enduring client relationships.

The firm’s expansion into Victoria underscores its ongoing commitment to enhancing its service offerings and meeting the evolving needs of a diverse client base. Whether in strata and property law, building and construction, insurance, or levy recovery, Grace Lawyers continues to set the benchmark for excellence in legal services.

For more information about Grace Lawyers and their services, please call 1300 144 436.

The Essential Role of Strata Managers: Supporting New Strata Owners Navigate Their Property Investment

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NATIONAL

Why would a solicitor write an article about the importance of strata managers relationship with new owners?  The answer is simple, to save me the time doing it time and time again!

Over many years, we have seen many disputes and conversations around who does what in strata and “why didn’t someone tell me” discussions.  A lot of it comes down to a general misunderstanding of peoples roles when they but in or want to move in.  So, here goes…..

Purchasing a strata-titled property marks an exciting milestone for many individuals. Whether it’s an apartment in a bustling urban centre or a townhouse in a suburban neighbourhood, owning a piece of real estate within a strata scheme offers numerous advantages. However, along with the benefits come responsibilities and complexities that can be overwhelming for new strata owners. This is where the expertise of a strata manager can help. In this article, we’ll explore how a strata manager can assist new strata owners in navigating their property investment journey.

Understanding Strata Regulations and By-Laws:

Strata regulations and by-laws govern various aspects of living in a shared community, covering issues such as noise levels, pet ownership, renovation guidelines, and the use of common facilities. For new strata owners unfamiliar with these regulations, a strata manager serves as a knowledgeable guide, explaining the rules and ensuring compliance. By providing clarity on what is permissible and what isn’t within the strata scheme, the strata manager can help new owners avoid potential disputes and penalties.

Financial Management and Budgeting:

Strata schemes operate on a budget funded by levies collected from individual owners (and no the strata manager doesn’t keep all the levies for themselves). Understanding the financial aspects of strata ownership, including levy contributions, reserve funds, and budget planning, can be challenging for new owners. A strata manager assists in managing the financial affairs of the owners corporation, preparing budgets, collecting levies, and overseeing expenditure. By offering transparent financial reporting and guidance on budgeting, the strata manager helps new owners navigate the financial responsibilities associated with strata living.

Maintenance and Repairs:

Maintaining the building and common areas is essential for preserving the value and functionality of the property. However, coordinating maintenance tasks and addressing repair needs can be complex, especially for new owners. A strata manager takes charge of organising routine maintenance, obtaining quotes for repairs, and working with contractors to ensure timely and cost-effective solutions (in consultation with the committee).

Dispute Resolution:

Conflicts and disagreements can arise among residents in any community living arrangement. When disputes occur within a strata scheme, they need to be addressed promptly and effectively to maintain harmony within the community. A strata manager plays a crucial role in facilitating dispute resolution processes, providing information to the committee and schemes. Despite what a lot believe, strata managers try to remain a neutral and impartial perspective and tries to preserve positive relationships within the strata community.

Compliance and Legal Matters:

Strata schemes are subject to various legal requirements and regulations, ranging from building codes to strata legislation. Navigating the legal landscape can be daunting for new owners, particularly when it comes to compliance obligations and legal responsibilities. A strata manager stays abreast of legislative changes and ensures that the owners corporation complies with all relevant laws and regulations. By offering guidance and assisting with compliance procedures, the strata manager helps new owners avoid potential legal pitfalls and liabilities.

Effective Communication and Community Engagement:

Communication is key to fostering a cohesive and vibrant strata community. A strata manager acts as a central point of contact for residents, facilitating communication channels between owners, the owners corporation, the committee and external stakeholders. By disseminating information, coordinating meetings, and encouraging community engagement, the strata manager promotes transparency and collaboration within the strata community. For new owners seeking to connect with their neighbours and actively participate in community initiatives, the strata manager provides a valuable point of contact.

Access to Professional Expertise:

Strata managers possess specialised knowledge and expertise in managing strata-titled properties. By leveraging their experience and professional networks, strata managers offer valuable insights and resources to new owners. Whether it’s advice on property maintenance, guidance on legislative compliance, or referrals to trusted service providers, the strata manager serves as a trusted advisor and resource for new owners navigating the complexities of strata living.

Naturally, in strata there are committees and strata managers don’t need to be inundated with requests and questions, but it is important to understand that they are a fountain of knowledge that new owners may be able to access.  They can, with involvement of the committee members provide guidance on many issues affecting your strata scheme and play a multifaceted role in supporting and empowering owners and the committee.

 

 

Navigating Strata: What You Need to Know About Living in Strata

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Living in a strata-titled property can offer numerous benefits, from shared amenities to a sense of community. However, it also comes with its own set of rules, responsibilities, and potential challenges. Whether you’re considering purchasing a strata property or already reside in one, understanding the ins and outs of strata living is crucial. Here’s what you need to know:

Understanding Strata Title: Strata title refers to a form of ownership where individuals own a portion of a property, typically an apartment or townhouse, along with shared ownership of common areas such as corridors, gardens, and parking spaces. The property is managed collectively by all owners through a body corporate (QLD) or owners corporation (NSW).

By-Laws and Regulations: Each strata scheme operates under its own set of by-laws, which outline rules and regulations governing the behaviour of residents and the use of common property. These by-laws cover various aspects such as noise levels, pet ownership, renovations, and the use of common facilities. It’s essential to familiarize yourself with these by-laws to avoid any conflicts or misunderstandings.

Levies and Fees: Living in a strata property entails ongoing financial obligations in the form of levies and fees. Levies are regular contributions collected from owners to cover expenses such as maintenance, repairs, insurance, and administrative costs. It’s important to budget for these levies and be aware of any special levies that may be imposed for unexpected expenses or major repairs.

Strata Meetings and Committees: Owners have the opportunity to participate in strata meetings and committees, where decisions regarding the management and maintenance of the property are made. These meetings provide a platform for discussing issues, proposing changes, and voting on important matters affecting the strata community. Active involvement in these meetings can ensure your voice is heard and your interests are represented.

Building Maintenance and Repairs: As a strata property owner, you share responsibility for the upkeep and maintenance of the building and common areas. This includes routine maintenance tasks as well as repairs necessitated by wear and tear or unforeseen damage. It’s essential to report any maintenance issues promptly and contribute to the collective efforts to maintain the property’s condition.

Insurance Coverage: While the owners corporation typically arranges insurance for the building and common property, individual owners are responsible for insuring their own belongings and any improvements made to their unit. It’s advisable to review the insurance policy to understand what is covered and consider additional coverage if needed.

Resolving Disputes: Conflicts and disputes can arise in any community living arrangement, and strata living is no exception. Whether it’s a disagreement with a neighbour, a dispute over a decision made by the owners corporation, or an issue with a service provider, there are processes in place for resolving disputes within the strata framework. These may involve mediation, adjudication, or seeking assistance from the relevant Tribunal/Court in your area.

Renovations and Alterations: If you’re considering making alterations or renovations to your strata property, it’s essential to understand the approval process outlined in the by-laws. Depending on the nature and scale of the proposed changes, you may need to seek approval from the owners corporation or obtain relevant permits from local authorities. Failure to comply with the approval process can result in penalties or legal action.

Community Living Dynamics: Living in a strata property means sharing common spaces and amenities with your neighbours. It’s important to be considerate of others and respectful of communal areas to foster a harmonious living environment. Building positive relationships with your fellow residents can enhance your overall strata living experience.

Seek Professional Advice: If you’re unsure about any aspect of strata living or need assistance navigating complex issues, don’t hesitate to seek professional advice. Property lawyers, strata managers, and real estate agents with expertise in strata properties can provide valuable guidance and support tailored to your specific situation.

In conclusion, living in a strata-titled property in NSW offers a unique blend of communal living and individual ownership. By understanding the rights, responsibilities, and dynamics associated with strata living, you can enjoy the benefits of this lifestyle while effectively managing any challenges that may arise. With proactive engagement, clear communication, and adherence to rules and regulations, strata living can be a rewarding experience for residents.

Understanding Strata Disputes: Unravelling the Complex Web

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NATIONAL

Introduction:

Living in a strata-titled property has become increasingly common in urban environments, providing a sense of community along with shared responsibilities. However, the utopian vision of harmonious communal living is often disrupted by disputes that can arise among strata residents. These disputes, ranging from seemingly trivial matters to complex legal battles, are rooted in a variety of factors that reflect the challenges of shared living spaces.

Differing Perspectives and Expectations:

One of the primary reasons for disputes within strata communities is the diverse range of perspectives and expectations among residents. Each individual brings a unique background, lifestyle, and set of values into the shared space, leading to conflicting opinions on matters ranging from noise levels to the use of common areas. Misaligned expectations often result in tension and disagreement.

Communication Breakdown:

Effective communication is the backbone of any successful community living, but it is also a common trigger for disputes. Misunderstandings arise when residents fail to communicate openly and transparently. Issues left unaddressed can fester, escalating into more significant conflicts. Inadequate or ineffective communication can lead to disputes over shared expenses, maintenance concerns, or changes in community rules. The modern reliance on emails for communication can exacerbate disputes. Emails have a tendency to be misinterpreted. It is very hard to convey tone in an email

Financial Matters:

Finances often become a source of contention within strata communities. Decisions related to budgeting, maintenance costs, and special levies can lead to disputes if residents perceive the financial burden as unfair. Differing opinions on how funds should be allocated and concerns over transparency in financial matters contribute to tensions.

Use of Common Areas:

Strata living involves shared spaces, and conflicts often arise regarding the use and maintenance of these areas. Disputes over parking spaces, communal gardens, or recreational facilities can become heated when residents have conflicting expectations about access, cleanliness, or rules governing these shared spaces.

Maintenance and Repairs:

Maintenance issues are a common flashpoint for disputes in strata communities. Disagreements may arise over the responsibility for repairs, the timing of maintenance work, or the quality of the services provided. Differing opinions on whether certain repairs are necessary or if they justify a special levy can lead to disputes that may require legal intervention.

Rule Violations:

Strata living involves adherence to community bylaws and regulations. Violations of these rules, whether intentional or inadvertent, can lead to disputes. Issues such as noise complaints, pet regulations, and alterations to individual units without proper approval can create friction among residents.

Lack of Mediation and Conflict Resolution:

In some cases, disputes escalate simply because there is no effective mechanism for mediation and conflict resolution in place. Strata communities that lack a structured process for resolving conflicts may find that minor issues snowball into more significant problems that require legal intervention.

Conclusion:

Living in a strata-titled property offers numerous advantages, but it also presents challenges that require a delicate balance of cooperation, communication, and compromise. The diverse backgrounds and expectations of residents, combined with financial and lifestyle differences, contribute to the inevitability of disputes. To mitigate these issues, strata communities must prioritize effective communication, establish transparent financial processes, and implement robust mechanisms for conflict resolution. By fostering a culture of respect and understanding, strata communities can transform disputes into opportunities for growth and communal harmony.

Written by Colin Grace, Partner

Navigating the Currents: Challenges for Electric Vehicles in Community Titles Schemes

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As the world transitions towards a more sustainable future, electric vehicles (EVs) are playing a pivotal role in reducing carbon footprints. However, the adoption of EVs in strata communities comes with its unique set of challenges. From charging infrastructure to legal considerations, the path towards integrating electric vehicles into strata living is a complex journey.

Charging Infrastructure:

One of the primary challenges for EVs in strata communities is the establishment of adequate charging infrastructure. Unlike standalone homes where residents can install personal charging stations, strata properties often lack the necessary infrastructure for multiple charging points. The installation of charging stations requires careful planning, coordination, and financial investment, which can be challenging for strata committees.

Cost Implications:

While the long-term cost savings of EVs are evident, the initial investment can be a deterrent. Installing charging stations and upgrading electrical systems within a strata complex can be costly. Strata committees may face challenges in allocating funds and convincing residents of the long-term benefits. Striking a balance between affordability and sustainability is a delicate task.

Legal and Regulatory Framework:

The legal landscape surrounding EVs in strata communities is not always clear. Strata by-laws may need to be updated to accommodate the installation and usage of charging infrastructure. Legal considerations, such as shared ownership of common areas and the distribution of electricity costs, add complexity. Navigating the regulatory framework is essential to ensure compliance and avoid legal disputes.

Space Constraints:

Strata living often involves limited parking spaces, and dedicating areas for charging stations may be challenging. The competition for parking spaces within the complex may create conflicts among residents. Balancing the need for EV infrastructure with other essential parking requirements requires careful planning and community cooperation.

Balancing Individual and Community Interests:

Strata communities thrive on cooperation and shared resources. The introduction of EVs raises questions about how to balance individual interests in adopting sustainable technology with the collective interests of the strata community. Striking a balance that promotes both individual choices and communal well-being is a challenge that requires effective communication and compromise.

Educational Barriers:

The adoption of EVs in strata communities may face resistance due to a lack of understanding or misinformation. Educating residents about the benefits of EVs, dispelling myths about charging infrastructure, and providing information about the long-term advantages can be a significant challenge. Overcoming educational barriers is crucial for fostering a positive attitude towards EVs.

Technological Advancements:

The rapid pace of technological advancements in the EV sector poses a challenge for strata communities. Installing charging infrastructure is a long-term investment, and there is a risk of technology becoming outdated quickly. Strata committees need to carefully consider future-proofing the infrastructure to accommodate evolving EV technologies.

Community Engagement:

Successful integration of EVs into strata living requires community engagement and collaboration. Convincing residents of the benefits, addressing concerns, and involving them in decision-making processes are vital. Lack of community support can hinder the implementation of necessary changes and infrastructure.

Resale Value Considerations:

Residents may be concerned about the impact of EV infrastructure on the resale value of their properties. Strata committees need to communicate effectively about the long-term benefits and increasing market demand for EV-friendly properties. Balancing the immediate concerns of residents with the future resale value is a delicate task.

Maintenance and Management:

The ongoing maintenance and management of EV charging infrastructure present operational challenges. Strata committees need to establish clear protocols for the maintenance of charging stations, address technical issues promptly, and manage the distribution of electricity costs associated with charging.

Conclusion:

While the road to integrating electric vehicles into strata communities may be challenging, it is not insurmountable. Addressing these challenges requires a collaborative effort between strata committees, residents, and relevant stakeholders. By fostering clear communication, updating regulatory frameworks, and investing in sustainable solutions, strata communities can pave the way for a future where electric vehicles seamlessly coexist with the principles of communal living. As the demand for sustainable living continues to rise, overcoming these challenges will not only benefit the environment but also enhance the overall quality of strata living.

Where to in 2024?

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Wow – what a crazy couple of years……  thankfully, the world didn’t collapse because of Covid and StrataLand just keeps on giving. As we move into 2024 I wonder about what the new year brings as challenges.

I read the book into the history of strata title by John Coleman “From the Ground Up”. I started to read it (after of course checking to see if I was in there – I was…woohoo) and there it was, page 29, the first set of statistics in strata on disputes (1980)… the three major areas of dispute before the Strata Commissioners office were:

  1. Breaches of By-laws;
  2. Poor construction of buildings; and
  3. Faulty meeting procedures

I cried with laughter, here we are 43 years later and what are the hot topics, the same 3… 😊, I emailed my friend in Canada (a strata lawyer) and she replied, OMG, same 3 here… we are not alone!!

Everyone I talk to says “AI” is the biggest thing, so I thought (armed with my profound knowledge from John), why don’t I ask AI what it thinks and see if it agrees with my top 10 (and yes, I did my top 10 first). The results are in with an excuse from AI that it doesn’t have enough information.

ChatGPT

I don’t have access to information beyond my last training data in January 2022, so I can’t provide specific challenges for 2024. However, based on common issues that strata communities face, here are some potential challenges that could continue to be relevant in 2024:

Maintenance and Repairs: Aging buildings and infrastructure may require extensive maintenance and repairs, and funding for these projects can be a significant challenge.

Budgeting and Finances: Balancing the budget to cover ongoing expenses, planned maintenance, and unexpected repairs can be a constant challenge for strata communities.

Legislative Changes: Keeping up with changes in strata laws and regulations, which can vary by state and territory in Australia, can be complex and time-consuming.

Disputes and Conflict Resolution: Resolving conflicts among residents, between residents and the strata committee, or with neighbouring properties can be a significant challenge.

Aging Population: Strata communities may face challenges related to an aging population, including accessibility issues and the need for special accommodations.

Insurance Costs: Rising insurance costs, especially after events like natural disasters, can strain strata budgets.

Sustainability and Energy Efficiency: Implementing environmentally friendly practices and energy-efficient technologies can be a priority for many strata communities, but this may come with initial costs.

Technology and Security: Adapting to new technologies for access control, surveillance, and communication systems can be both a challenge and an opportunity for strata communities.

Short-Term Rentals and Airbnb: Balancing the interests of owners who want to rent out their properties on platforms like Airbnb with the concerns of other residents can be a contentious issue.

COVID-19 and Health Concerns: Ongoing concerns about health and safety, especially in shared spaces like elevators and common areas, may continue to be a challenge for strata communities.

Colin’s Crystal Ball

OK, so where did I land? I agreed with a lot of the above as being relevant but to me AI did miss a few or constructed them differently.

Technology – technology is taking over our lives. If you can’t get it instantly it isn’t worth having. In managing buildings this will be an ever-increasing challenge as technology moves at a rapid pace.

Legislative review – stop the train! The difficultly is that each state/territory have their own views on title structures, procedures and dispute resolution. With businesses now crossing borders more this creates opportunities for harmonisation of laws. However, having “harmony” in laws is something I gave up on a long time ago I think we stick with, “just love the one your with”.

Construction – there are so many facets to this topic that you could write volumes, but developers/builders need to have confidence in the market and consumers need to feel that what they are purchasing won’t fall down around their ears (seems to be a theme from at least 1980!).

Certification of building construction and the ensuing construction defects will continue to be a major impact of all those in the industry from owners through to managers and suppliers.

Lot owners – owners are becoming more involved in the daily activities of their buildings. They ask more, listen more and want to be involved in the decision-making process. Going hand in hand with that they are now more demanding of service from providers.  Trying to find the balance between service and expectations will continue to be a challenge to all of those involved in the industry.  So, meetings will continue to be fun (2 down from 1980).

By-law breaches – everyone is having a go at this little gem. Not everyone should live in strata, let’s be honest. Compliance with a set of rules that you don’t make is hard, even harder when you want what you want and stamp your feet to get it.

Committees will continue to struggle to balance reasonable by-laws versus the expectations of an ever-increasing diverse group of owners. The balance will always be as to how to regulate them, so they don’t unfairly interfere with anyone else’s lives. We need tough regulation, powers to enforce them, steep penalties and a regime to allow the good ones to get on with business/living (no 3 from 1980 covered).

In conclusion, in 2016 I said in an article, it was to be “the beginning of the fastest rise in the strata industry for a while to come”. And in 2018 I said we were running as fast as we can because of it.  In 2022 I said, “here it comes – 2022 with a vengeance!!” So, now here comes 2024 – run as fast as you can.

Estate Planning – It’s Not All About the “End”

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Recently I gave a seminar on basic estate planning for managers (both business owners and staff) and I was surprised on how many people either didn’t have a will or hadn’t even thought about these things and were leaving it to others to deal with later.

Estate planning is in financial management, often associated with personal assets and family wealth. However, it is equally vital for businesses. Effective estate planning deals with transition of ownership, minimises tax liabilities, and safeguards the legacy of the business.

Business Planning

  1. Clear Business Structure

Start with a clear and well-defined business structure. Whether it’s a sole proprietorship, partnership, or corporation, each structure has its own implications and understanding the specific legal and tax implications of your business structure is essential for making informed decisions.

  1. Succession Planning

One of the central objectives in business is to ensure a smooth transition of ownership and management. This is crucial for family-owned businesses where multiple generations may be involved. Establishing a clear succession plan helps avoid conflicts and ensures that the business remains viable and successful in the hands of the next generation.

  1. Buy-Sell Agreements

Buy-sell agreements are contractual arrangements that stipulate what happens to an owner’s share in the event of retirement, disability, or death. These agreements are important for ensuring an orderly transition of ownership. They provide a framework for valuing the business and outline the terms and conditions for the share sale.

  1. Valuation of the Business

Business valuation is important to determine fair market value and can ensure that assets are distributed equitably. It also helps in estimating potential estate tax liabilities. Professional appraisers can provide an objective assessment of the business’s value, taking into account factors such as financial statements, market conditions, and industry trends.

  1. Tax Planning

Taxes can significantly impact the value of a business passed down to others. Effective tax planning involves utilizing strategies to minimize the tax burden. This may include utilising exemptions, trusts, and gifting strategies. Consulting with tax professionals can  help navigate the complexities and implement strategies that align with goals.

  1. Asset Protection

Asset protection is critical to estate planning. Strategies to shield business assets from potential risks and liabilities ensures that the value is preserved for future generations. This may involve the use of legal structures like trusts, limited liability entities, and insurance policies.

  1. Continuity Planning

If something happens, such as death or disability of a key owner or partner, a well-prepared estate plan ensures the continuity of business operations. Establishing contingency plans and appointing successors or key personnel helps maintain stability and prevents disruptions to daily operations.

Personal Planning

Personal estate planning allows individuals to manage and distribute their assets in a manner that reflects their wishes, also minimising potential tax liabilities.

  1. Clear Definition of Assets

Have a clear and comprehensive inventory of assets. This includes real estate, investments, bank accounts, retirement accounts, personal property, and any business interests.

  1. Will vs. Trust

Deciding between a will and a trust is a critical aspect of estate planning. A will outlines how your assets will be distributed, while a trust allows for greater control over the distribution and management of assets, often offering benefits like avoiding probate and providing for specific needs of beneficiaries. Understanding the strengths and limitations of each is essential for tailoring your estate plan to your needs.

  1. Beneficiary Designations

Ensuring that beneficiary designations on accounts, such as life insurance policies, retirement accounts, and bank accounts, are up-to-date. Failing to review and update beneficiary designations can lead to unintended consequences, such as assets going to unwanted beneficiaries.

  1. Guardianship for Minor Children

For parents of children, appointing a guardian is important and involves choosing a trusted individual or couple who will assume responsibility for the care and upbringing of your children if you pass away. This decision is not only legal but profoundly personal and requires careful consideration.

  1. Healthcare Directives

Estate planning is not solely about financial matters; it also encompasses healthcare directives. Documents like a living will and a healthcare directive outline your preferences for medical treatment and appoint a trusted individual to make healthcare decisions on your behalf if can’t.

  1. Long-Term Care Planning

Long-term care is an important consideration and planning for potential assisted living or nursing home care, and financing, is a critical component and may involve exploring options like long-term care insurance or medical planning.

  1. Tax Implications

Understanding tax is essential for preserving the value of your assets for your beneficiaries. Strategies such as gifting, trusts, and exemptions can help minimise estate taxes.

Conclusion

Estate planning is not a one-time task, it is an ongoing process, especially in the face of major life events like business growth, marriages, divorces, births, and deaths. Keeping your estate plan current ensures that it continues to align with your wishes and financial situation.

Or, you could just live forever…..

Beware – Changes to Unfair Contract Terms

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Unfair contract terms (UCT) refer to provisions in a contract that create a significant imbalance between the rights and obligations of the parties, to the detriment of one party. These terms are often found in standard form contracts where one party, usually the larger or more powerful one, dictates the terms without allowing the other party to negotiate or make changes.

In Australia, UCTs are governed by the Australian Consumer Law (ACL), which is a part of the Competition and Consumer Act 2010. The ACL applies to businesses that supply goods or services to consumers.

Under the current UCT regime, if a contract is deemed to contain unfair terms, those terms will be considered void and unenforceable by the court. The rest of the contract, however, will continue to bind the parties if it is capable of operating without the unfair terms.

In determining if a contract term is unfair, the following factors are considered:

  • The term causes a significant imbalance between the parties’ rights and obligations.
  • The term is not reasonably necessary to protect the legitimate interests of the party advantaged by the term.
  • The term would cause detriment (financial or otherwise) to a party if it were applied or relied upon.
Changes to the UCT regime will come into effect nationally from 10 November 2023. These changes are significant, and this date looms large for businesses who must be prepared and aware of the large penalties. The key changes include:
  • UCTs are illegal and attract penalties. Proposing, applying, and relying upon UCTs may attract significant monetary penalties imposed by the courts. Each UCT in a contract is an individual contravention. Previously, UCTs were merely void and unenforceable.
  • Further detail on ‘standard form contracts’. In addition to the existing factors courts may take into consideration when determining if a contract is a ‘standard form contract’, courts must also consider whether the party that prepared the contract has used the same or similar contracts before.
  • Expanded definition of ‘small business’. The UCT regime applies to ‘standard form contracts’ with ‘small businesses’. A ‘small business’ now means a business with 100 employees or less (this has been increased from 20 employees), or a business with an annual turnover of less than $10 million in the previous income year. The expansion of the definition means that more businesses will be protected by the UCT regime.

Ethics in Strata

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Recently I attended the SCA National Conference in Darwin and was charged with the responsibility of doing a session on Ethics in Strata Management. Giving a solicitor such a topic is dangerous!  Many things are said about solicitors, some of which isn’t very good (and in some cases well founded) but we are one of the most regulated industries in our Country.

Due to the role we play in business and peoples personal lives, our “ethics” need to be at the highest level.  Anyway, enough about me, what about strata management?

Despite what others may think, ethics is an integral part of strata management and in my view it is no different to that of solicitors. It defines the principles that govern the decisions and actions taken by strata managers in promoting the interests of the owners and residents of a strata scheme. However, like any other profession, strata management is not immune to ethical pitfalls, and managers must be aware of these pitfalls to avoid them.

In my presentation I spoke about many things but briefly the overarching issues were:

Conflict of interest. Strata managers must ensure that their decisions are impartial and are not influenced by personal interests. For instance, if a strata manager also works for a company that provides services to the scheme, such as cleaning or maintenance services, they may be tempted to prioritize that company’s interests over the interests of the owners and residents. Strata managers must avoid such conflicts of interest and disclose any potential conflicts to the owners corporation.

Transparency. Strata managers must ensure that they are transparent in their dealings with the owners corporation and residents. They must keep accurate records of their activities and decisions and make them available to the owners corporation upon request. A lack of transparency can lead to mistrust and suspicion among owners and residents, and damage the reputation of the strata manager and the owners corporation.

Lack of professionalism. Strata managers are expected to conduct themselves in a professional and ethical manner at all times. They must be respectful and courteous in their interactions with owners and residents and maintain a high standard of professionalism in their work. A lack of professionalism can damage the reputation of the strata manager and the owners corporation and can lead to conflicts and disputes.

Lack of confidentiality. Strata managers must respect the confidentiality of owners and residents and ensure that any personal information is kept confidential. They must also ensure that sensitive information, such as financial records, is not shared with unauthorized persons. A breach of confidentiality can damage the trust and confidence of owners and residents and can lead to legal action.

Lack of understanding of ethical principles. Strata managers must have a clear understanding of ethical principles and how they apply in the context of strata management. They must be able to identify ethical issues and apply ethical principles to make decisions that promote the interests of the owners and residents. A lack of understanding of ethical principles can lead to poor decision-making and damage the reputation of the strata manager and the owners corporation.

To avoid these ethical pitfalls, strata managers must adopt ethical practices and ensure that they are adhered to at all times. The following are some best practices that strata managers can adopt to promote ethical behaviour:

  1. Adopt a Code of Conduct: Strata managers should adopt a code of conduct that outlines ethical principles and standards of behaviour. The code of conduct should be communicated to all owners and residents and should be regularly reviewed and updated. Luckily SCA (National and States/Territories) have worked on the “Respect Pledge” and Codes of Conduct that we can all access and adopt.
  1. Provide Regular Training and Education: Strata managers should provide regular training and education to owners and residents on ethical principles and their application in strata management. This can help to promote understanding and awareness of ethical issues and promote ethical behaviour. This is very relevant for Committee members to understand their role in life.
  1. Establish Clear Communication Channels: Strata managers should establish clear communication channels with owners and residents to ensure that their concerns and feedback are heard and addressed. This can help to promote transparency and build trust and confidence.
  1. Ensure Impartiality: Strata managers should ensure that their decisions are impartial and are not influenced by personal interests. Any potential conflicts of interest should be disclosed to the owners corporation.
  1. Respect Confidentiality: Strata managers should respect the confidentiality of owners and residents and ensure that any personal information is kept confidential. Sensitive information, such as financial records, should be shared only with authorised persons.

If for any reason you find yourself in an “ethical dilemma” then look for help. Seek assistance from your manager, colleague, SCA or the relevant Government Department, or if you are desperate – call a solicitor…

Bullying and Harassment in Schemes

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By Colin Grace, Partner – Grace Lawyers Sydney

At the recent SCA Principals Night Off (April) that I attended we discussed the many changes and challenges since COVID 19, including bullying. In Jason Carlson’s articles and seminars about “Keyboards don’t have feelings” an issue that keeps arising is the bullying and harassment of managers by clients, or individuals within schemes.

Bullying and harassment in a scheme can have serious consequences for the affected individuals and the wider community. As we know, schemes are wide and varied and can be residential, commercial, retail, industrial, or mixed-use communities. As management of these schemes is overseen by a committee, it is a difficult task to have a harmonious community all the time. Then adding in the overlay of a manager the issues get interesting…

Unfortunately, incidents of bullying and harassment are not uncommon in schemes across the Country (and probably the world). As lawyers, we see disputes constantly, and assume that managers see it more than anyone, especially the rise of the “keyboard warrior”.

These behaviours can take many forms, including verbal abuse, physical intimidation, exclusion, and cyberbullying. Bullying and harassment can occur between residents, between residents and the committee, or between different members of the committee and finally the manager who can get it from all sides.

The impact of bullying and harassment can be severe. Victims may experience feelings of fear, anxiety, and depression, which can impact their quality of life and mental health. Bullying can also damage relationships between neighbours and create a toxic living environment. Additionally, bullying and harassment can create legal issues, particularly if the behaviour constitutes discrimination or breaches scheme by-laws.

In all States and Territories, schemes are governed by legislation, which sets out the rights and responsibilities of residents and the committee. The legislation also outlines procedures for resolving disputes and addressing breaches of scheme by-laws/management statements. If a resident or owner believes they are being bullied or harassed, they can report the behaviour to the committee or the police if it is a criminal offense.

Naturally, to prevent bullying and harassment, it is important to promote a culture of respect and inclusion. The committee can play a vital role in this by developing clear policies and procedures for dealing with complaints, and ensuring that all residents understand their rights and responsibilities. Communication and transparency are also essential, as residents should be kept informed of any decisions or actions taken by the committee. The problem is that sometimes the committee may be the bully…

Now, all this sounds fine, but what about practical implications?

There seems to be prevalence of schemes being treated as work places. This is irrespective of whether the scheme is the “employer” of various persons conducting work on site or the scheme is a purely residential one. If the scheme employs people, clearly the Fair Work Act 2009 applies to the treatment of those workers – that is a discussion for another day.

Generally, schemes do not directly employ any workers, but instead, enter into a number of contractual relationships with other third-party businesses to provide services (like managing agent, building managers and concierges). In all of the above, each of your building managers, concierges, managing agents, and any other contractors engaged by the schemes will be deemed to be “workers” for the purposes of the Fair Work Act 2009 (Cth) – this is due to the Fair Work Act adopting the broad definition for “workers” contained in the Work Health and Safety Act 2011 (Cth).

This wide definition even covers volunteers and people running businesses from a lot or common property.

However, we may be saved!! Or are we… In the decision [2021] FWC 6575, the Fair Work Commission found an owners corporation was not a “constitutionally covered business” as its principal activities were not of a financial or trading nature and as a result the legislation did not apply –phew… So we are not covered…

So, whilst this helps the schemes from not being the defendant in any claim, a worker can commence legal proceedings and obtain orders against individual owners and/or occupiers in respect to their behaviour (if they were part of the committee, the scheme may be “roped in” in any case by office bearers, insurance in some cases or just being responsible for the legal bills for a defence). This is on the basis that the scheme (and in some instances lot property) is a workplace to the extent that the worker works on the common property.

So, if the committee does behave badly, workers can do something about it. Putting that into a “manager” context. If you are receiving the 100 emails a day from the lot owner (either on behalf of the committee or not) making accusations, claims and bullying, then there are some problems for the scheme, the person doing the bullying and the management company managing the scheme (if you don’t act quickly).

“Bullying at work” is defined broadly and involves repeated behaviour towards a worker or group of workers that creates a risk to health and safety. In relation to the concept of “risk to health and safety”, causing unreasonably stressor affecting the mental health of a worker (including losing sleep) can constitute bullying for the purposes of the Fair Work Act 2009 (Cth).

These are some examples that have resulted in the Fair Work Commission making orders against an individual:

  • An individual repeatedly making belittling or disparaging comments about another lot owner (who owned and operated a retail lot) in emails and at meetings. This included talking over the other lot owner at meetings, accused her of lying or being dishonest, and copying other people into rude or abusive emails.
  • An individual acting in an intimidatory way whilst on the common property, for example letting doors close in the face of an individual as she approached, staring at the individual, and mumbling under his breath.
  • Deliberately and without justification withholding the payment of invoices to cause financial and/or mental distress.
  • Sending multiple emails to a contractor about their work performance, the frequency, tone, timing, and content of which was unreasonable.

What Orders can be made? 

The Fair Work Commission has a very broad power to make orders designed to stop the bullying behaviour.

  • Restricting or stopping altogether any communication or interaction between the persons involved.
  • A requirement that the persons involved agree to a communication protocol/process to ensure communications are conducted in a reasonable and respectful manner at all times.
  • Attendance at anti-bullying training.

If a stop bullying order of the Fair Work Commission is breached, a person can be subject to a monetary penalty of up to 60 penalty units (up to $16,500.00).

What should the schemes do?

The main thing committees and managers need to do is make everyone aware of the implications of bullying and harassment, including that of what constitutes, as it is wider than what most people think. Schemes should have codes of conduct for meetings, emails, written communications, and guidelines for owners to follow. These may even extend to by-laws/management rules. Attending meetings with the SCA Pledge is a great place to start, it opens the conversation around respectful communication and sets the standard for a set of behaviours to be adhered by.

Managers need to be ever vigilant in ensuring that committees and owners/occupiers do not bully or harass their staff and have within their agreement policies that schemes must follow in dealing with their staff.

In conclusion, bullying and harassment in schemes is a serious issue that requires attention by the industry as a whole. By promoting a culture of respect and inclusion, enforcing scheme by-laws, and addressing complaints promptly and effectively, we can create a safe and harmonious living environment for everyone in the community