The Strata Committee

Support Forum

Ask the Strata Industry

Hybrid Loan
13 October 2023
Question for The Strata Committee from: Chris Gray
Location: Sydney, New South Wales
Category: General
If we have a project and there’s not enough money in the sinking fund, what are our options to pay for the project?
Support answer supplied by: Phil Bottomley
From: Austrata Finance
Profession: Strata Finance
As a group of owners, you have the following options available:

  1. Approve a one-off special levy, whereby all owners pay their share of the required amount to your strata scheme. Prior to signing a building contract, typically a builder will need to see enough cash in your strata scheme’s bank account, meaning the special levy will need to be paid by all owners before the building contract can be signed.

  2. Use a standard strata loan; whereby your strata scheme takes out a loan to pay the builder and other suppliers. Loan repayment levies are charged to all lot owners over the life of the loan, the proceeds of which are used by your strata scheme to pay off the loan

  3. Exclusively offered by Austrata Finance is the Austrata Hybrid Loan®, which provides CHOICE to each lot owner. To pay your share of the project cost, you can either use your own money, akin to a special levy, or you can use borrowed money, akin to a standard strata.

How does the hybrid loan work?

  1. Austrata funds the project works, meaning there are no funding delays and the project can start as soon as you’re ready.

  2. At the end of the project, when every owner’s share of the actual cost is known, every owner has the opportunity to refinance their share of the Austrata loan by making a loan to the strata scheme.

  3. The total loan amount doesn’t change, for example instead of there being a loan from Austrata for say $1m, there might be a loan from Austrata for say $600k and a loan from one or more Self-Funding Owners for $400k.

  4. To pay back the total loan amount of $1m, all lot owners are charged loan repayment levies, as is stipulated by strata legislation.

  5. The secret sauce of the hybrid loan is that the loan repayment levies that are charged to Self-Funding Owners are perfectly offset by the loan repayment credits the Self-Funding Owners receive.

  6. After the Self-Funding Owner pays their loan amount to the strata scheme, they have no more to pay.

What are owners and stakeholders saying about the hybrid?

  • Strata managers are calling it the circuit breaker to balance the needs of all owners.

  • Owners love the fact that the financing decision rests with them and that they are not forcing anyone into a majority decision.

  • The industry has embraced the Hybrid with Austrata Finance recently achieving recognition at the NSW SCA Awards as finalists in the service to strata category.Suffice to say, the Hybrid is very popular.

Website: Austrata Finance
Telephone 1300 936 560
We’ve Dealt With Cladding, But What About Prefabricated PVC Walls?
20 September 2023
Question for The Strata Committee from: The Strata Committee
Location: NSW
Category: General

We’ve Dealt With Cladding, But What About Prefabricated PVC Walls? Ignorance Is Not Bliss!  

Support answer supplied by: Chris Gray
From: Grays Rescue
Profession: Investigative Building Management

If general building defects were not enough to contend with, the recent highly publicised building industry concerns about combustible building cladding, is very much the new black, and a blight on our industry is due to this non-compliant cladding.

We all watched in horror as the fire spread throughout non-compliant cladding at London’s Grenfell Tower. What owners corporations need to remember is that in a fire disaster, the smoke will get you long before the fire does. Therefore, it is critical that life preservation and risk management are immaculate in every structure.

What about pre-formed PVC walls now that the industry is confronting cladding? I feel Ignorance is not bliss and steps to mitigate this threat are lost in the conversations of mitigation against risks in the event of a major emergency.

As a former plumber, I spent my apprenticeship suffocating on the fumes while burning out plumbing fittings. The fumes from PVC are extremely poisonous and overpowering. There are pre-formed PVC walls as far as the eye can see in many of the buildings I work on, and this is fine but non-compliant cladding isn’t?

Pre-formed walls line carparks, however many fire stairs lead to carpark egress (in part), and poisonous fumes from PVC pre-formed walls are a problem that is not getting the attention it deserves for owners escaping a fire event.

Grays Rescue would like to have pre-formed walls reviewed and discussed in terms of HSE in a big fire event and the possibility of owners succumbing to their poisonous capabilities.

Should pre-formed PVC walls be prioritised for mitigation? Is firecheck sufficient to protect against this product? It’s time we addressed pre-formed PVC walls and added this to the conversation.
Verbal Engineering Reports, Buyer Beware
31 January 2022
Question for The Strata Committee from: Shane
Location: Brookvale
Category: General
Is it reasonable to accept a verbal report instead of an expensive written report from an engineer?
Support answer supplied by: Chris Gray
From: Grays Rescue Building Management
Profession: Investigative Building Management

Working closely with engineers, you quickly learn the consequences of a report and its content. Yes, reports are expensive, and yes, some engineers relish in providing report after report; suddenly, you can find yourself $200,000.00 down in capital works funds with not a lot to show for it, well so you may think!

Let's look at this same situation six months down the road. Say your engineer has provided a verbal report and the owner's corporation act on the advice. Where is your evidence? What if suddenly, during the investigative works, you have discovered it's now a two-million-dollar scope of works. What if something just goes wrong?

Those of us that work in this sector of the industry know what can go wrong, and know what happens down the line, when we all have to justify our actions. How does a strata manager justify the owner's corporation acted on a verbal report?

Now in advising this, there are times when a commentary email response is justified from an engineer to an owners corporation. However, this engagement should be limited to initial site visitations and pre investigative actions. It is justifiable for an engineer to provide commentary without a full-blown report. Still, for me, this is only when an engineer is advising of future actions to achieve an evidence-based report.

We all understand how tempting it can be and the lure of a verbal report. I do know that Grays Rescue Building Management will never request one and would encourage you to consider the chain of evidence.

Changing Management
23 November 2021
Question for The Strata Committee from: Nelson
Location: Sydney NSW
Category: General
May I inquire about the best protocol to mitigate against the loss of records when considering changing strata management for our strata scheme? We have lots of data over many years that are vital we are retaining.
Support answer supplied by: Brendan Cleaver
From: Cleaver Strata Consulting
Profession: Strata Consultant

Changing Strata Manager can often be a daunting time & there is always the chance that during the handover of management records that the well-documented history of the scheme may get left behind or even worse destroyed or misplaced during the process. Prior to the decision being made to formally appoint a new strata manager it would be prudent for the appointed Strata Committee to take an inventory of key records to their knowledge that are vital to the history of the building & also check the exact detail of records handed over to the new strata managing agents. A further step to reduce the risk of loss of records could also be to engage a professional strata inspection company to conduct a strata inspection for the purpose of copying, scanning & transposing a copy all key documents for the Strata
Committee so they have a backup copy to prevent the possible risk of loss of any records.

It is common practice that the outgoing strata managers provide a hand over list plus trust account transfer details to the newly appointed strata managing agents. The hand over list should be thoroughly checked by the newly appointed strata manager & be verified by a strata committee member to validate that all required records have been handed over. Also, as strata companies often use different types of software programs to hold cloud-based records for ease of management it would be beneficial to ask for a USB Copy or Cloud access to the strata plan records database prior to handover of available.

Although most strata management records these days are only generally required to be kept for 7 years maximum key documents including minute books, title documents & registrations are usually held for longer periods or archived my most licensed strata managing agents. It’s important for the Strata Committee to be aware of any crucial documents that are not to be destroyed even though at a general meeting may be proposed & resolved to destroy records older than 7 years.

They key to reducing the loss of records during strata management handover process is for the Committee to be proactively aware of the records held by their strata managing agents & to ensure all steps are taken to preserve the history of the strata scheme. It is not uncommon when viewing records in my 20 plus years of conducting strata records inspections to find missing documents from strata management books & records. The usual response provided when asking for missing records to be provided is that there were not handed over by the past strata managing agents.
When Should a Building Manager Publicly Disclose Their Interest
2 November 2021
Question for The Strata Committee from: Tim Cameron
Location: Sydney NSW
Category: General
Our building care taker seems tied to some of the owner's corporation contractors, this has not been declared. Do they have to do so?
Support answer supplied by: Chris Gray
From: Grays Rescue Building Management
Profession: Investigative Building Management

Our industry has some great building management companies. Just like my company, they are highly ethical, process-driven professionals who instil consumer confidence. Every industry has bottom feeders, and everyone could share their own stories.

In the end, as an owner’s corporation, you need to distinguish whether your contractors are performing outstanding works or not.  It is understandable that some owners become suspicious when they see relationships form between building managers, strata managers, and contractors.

Let's consider my company as an example. As a defect facilitator, it is my responsibility to bring in the best contractors for the job. I know all of them very well, and that is how I know who the best is, and who are the right people for the specific job. Maybe, your building manager is working with the same mindset and is already engaging outstanding contractors for you as a client. With that, we all build relationships within our industry.

Red flags are when a company is tied to a contractor, which is often pretty evident to everyone. For sure, there are your dodgy operator, and they are easy to spot if you do your homework. Some of the signs and things to note are:

  • How many operations managers have that company had in the last five years? Problem building management starts at the top.

  • Review the website of the company. Are the buildings being promoted current clients? An extensive portfolio looks excellent in a proposal, or on a website to attract businesses. It is usually a bad sign if the company finds the need to promote clients and buildings from where they have been removed.

  • Talk to the strata managers of the other buildings that your building management represents. Do they feel the same or have the same issues?

Our strata industry is highly ethical. Most of the players strive to be as ethical as possible. Yes, every sector within the industry needs to declare its interest with other parties. Outside of the few unethical practitioners, most relationships are built on the right people for the right job, according to my experience.

Subsill, Flashings and Waterproofing!
13 October 2021
Question for The Strata Committee from: Chris
Location: Sydney
Category: General
When remediating a subsill and flashing, the adjacent waterproofing area seems to be remediated differently from contractor to contractor. The minimum size I have seen is 600mm of waterproofing reinstalled. Is this generally enough coverage to work?
Support answer supplied by: Vadim Topolinky
From: TOP Consulting Group (NSW)
Profession: Structural Engineer

There are two schools of thought on the subject matter. One promotes that partial patch rectification is sufficient and the other dictates that a wholesale rectification is required.
Historically, partial rectification had been promoted by insurers underwriting building defect repairs and promoted by the consultants engaged by those insurers. The main purpose was to reduce the cost and, hopefully, provide a rectification solution that would last for the term of Statutory Insurance purposes.

In truth, some waterproofing membranes can be successfully lapped with adjacent waterproofing installations. This depends as much on the type of the existing waterproofing installation and type of finishes installed over these installations, as it does on the compatibility of a new flashing/subsill waterproofing system. This is, at times, a complex issue that requires substantial destructive investigation and testing with very limited positive outcomes.

The answer applicable in most rectification scenarios should be that a lapped reinstatement system is not the long‐term solution. Wholesale coverage of works would be required.

If you require further advice or assistance please contact us directly.

Treating the symptom, not the cause of a leaking slab?
7 October 2021
Question for The Strata Committee from: Richard
Location: Sydney NSW
Category: Common Property, Engineering, General
When a developer indicates the intention to rectify a leaking car park slab with trays to capture the leak, what is the long term effects of treating the symptom, not the cause of a leaking slab?
Support answer supplied by: Ayman El Tantawy
From: ALJ Consulting Engineers
Profession: Structural Engineer

That’s a very good question touch in a repetitive sensitive matter in the residential buildings with leaking basements floor slabs.

To answer this question, we need to expand on the effects of water on structures.
Normally the basement carparks are structure concrete slabs made of conventional
reinforcement concrete, post-tensioning concrete, or composite (steel beam + reinforced

From the structural design perspective, all concrete structures are designed as cracked sections except limited cases which non for residential buildings. The cracked concrete section allowed water to propagate through the concrete section, of course with a very slow and limited rate, depend on the concrete quality and design specifications.

Once the water reaches the confined reinforcement steel rebars inside the concrete section, the rebars start to corrode over time and cause concrete cover delamination and reinforcement deterioration. That commonly known as concrete cancer.

Therefore, it is conceptual, from a structural engineering perspective to prevent water from coming to contact with concrete sections in residential buildings unless there will be
protective measures to isolate the concrete such as waterproofing.

So, back to the question; what is the long-term effects of treating the symptoms, not the cause of the leaking slab?

The long-term effect of having water running continuously over a concrete slab is reinforcement corrosion and concrete deterioration. The determination of the term “long-term” could be surprisingly few years or maybe months depending on the slab concrete quality, nature of the leaking water, and the exposure frequency.

In the end, we identify this practice as wrong practice, from a structural engineering perspective, and argue all involved stakeholders to take proactive measures to solve the
leak source and prevent continuous water contact with concrete structures.

Access denied! 3rd party parking space rentals.
17 September 2021
Question for The Strata Committee from: Haider
Location: Sydney NSW
Category: General
For the last year, I have been renting a car space in a city apartment block close to my work; the building manager continues to deactivate the remote I am using, claiming it is a secure parking lot. I am not parking in the visitors parking; I am parking in a private lot. Can she legally disconnect a remote if I paid rent for the privilege and bought the remote.?
Support answer supplied by: Chris Gray
From: Grays Rescue Building management
Profession: Investigative Building Management
The appeal of renting an unused car space for cash is understandable; however, the bigger picture can have some genuine consequences.

Many strata living residents may not be aware that in many instances, a class 2 strata building insurance policy will not likely cover damage caused by a third party vehicle entering past "secondary" secure gates. This usually excludes a service vehicle performing maintenance that requires access past the gates; however, this does not include third party vehicles servicing a private lot. These private service vehicles should utilise the visitor parking if your private lot parking is beyond secondary security gates.

Some buildings insurance policy contains this condition; any damage caused to a building structure will not be covered if the secondary security parking gates are breached from third party cars accessing this secure area.
For this reason, the strata management, building management, and owners corporation are likely correct in not permitting your access. The lot resident should never have provided you with the opportunity to access this area without seeking written approval from the owner's corporation.
Remember, strata managers and building managers are only working to protect the integrity of their client's assets.
Installing a lattice or plant hedge on my balcony area
17 September 2021
Question for The Strata Committee from: Ichiro
Location: Point Clare
Category: General
I intend to install a lattice and plant hedge on my balcony area. I live in a level 4 apartment and have a toddler that climbs. Our buildings Strata Management won't allow us to install it. What are my options without going to NCAT? It is common sense to protect my child from climbing the railing
Support answer supplied by: Chris Gray
From: Grays Rescue Building Management
Profession: Investigative Building Management
Understandably you are concerned with a child climbing a balcony railing; this is one of the more scary concerns of raising children in a high rise building. There are three primary considerations for you below:

1 - Unfortunately, depending on how you are looking to install this, you cannot legally attach anything to the common property; your building management and Strata Management will insist you move it and comply.

2 - You will need to also consider access for the fire brigade in the event of a fire. You cannot block access to your balcony, preventing emergency services from accessing your apartment from outside during an emergency. A hedge or lattice will prevent/ hinder this, you will be provided with no option but to move it.

3 - Other neighbours may take exception to your hedge. They have a right to voice their concerns if your hedge is not keeping within the aesthetic look of the building and may request it be removed if it offends them.

A strata manager would provide a complete list of reasons your intention to install lattice will likely result in an instruction to remove it.
We have seen many great ideas that do comply. It usually involves large branchy like plants that have been maintenances to a reasonable level above the railing, preventing a child from getting close enough to a railing to climb it.
Installation of digital door lock on my unit entry door
2 September 2021
Question for The Strata Committee from: Scott
Location: Chippendale
Category: Fire Compliance, General
I would like to install a digital door lock on my unit entry door. This would be wonderful for my younger children but my building management will not let me install it and has advised there is no possibility to negotiate due to fire restrictions. Is this correct?
Support answer supplied by: Rob Broadhead
From: 2020FIRE
Profession: Fire Services
Agreed, electronic smart locks are awesome for children and not precluded from being used on fire doors to apartments; however, you must consider two things before choosing to change locks:

1. The Fire Door & hardware including the existing lockset are common property & permission must be granted from strata before proceeding;

2. All fire doors, including their hardware (e.g. closer & locks), must be type tested as a new lockset may not be compliant.

Type testing means – during the approval process for any door, it gets burnt in a furnace to check the fire door and attached hardware meets the Fire Resistance Level or FRL
required for that wall and you cannot simply change to un-tested components without impacting the performance in a fire situation.

You should first check with the manufacturer of the door (look for a phone number on the door tag) whether there is an electronic smart lock approved for that door type and

If the manufacturer does not have this on file or is uncontactable, the Australian Standard for Fire Door installation – AS1905.1-2005 states: “A different lockset shall
only be substituted for the lockset on the tested specimen if it has been subjected to the fire resistance test on a door set of similar construction, or if the essential latching components from the same manufacturer are substituted by those constructed from materials of greater or equal melting point”.

Hence, if you can get a certificate from the lock manufacturer stating the lock has been tested successfully on a similarly rated fire door (FRL -/60/30 is the term to look for with
unit doors), you could use it once approval to modify common property is received from the strata manager.

We highly recommend you show the documentation and gain advice from your building’s Accredited Practitioner (Fire Safety) prior to undertaking the works too