On 25 November 2014, a fire started on a balcony of the 23-storey Lacrosse apartment building in Docklands and spread quickly to the balconies and apartments directly above it.
Tests subsequently conducted by CSIRO on the Alucobest cladding of the building showed that it was combustible and did not meet Building Code of Australia Standards.
We wrote previously about two conferences of interest to Owners Corporations in September 2014 and March 2015:
- All Energy Australia, 7-8 October 2015, Melbourne Convention and Exhibition Centre,
- Strata and Community Title for the 21st Century, 2-4 September 2015, Marriott Surfers Paradise Resort & Spa, Gold Coast.
More details about them are now available.
The early bird registration for Strata and Community Title for the 21st Century (http://www.griffith.edu.au/conference/strata-community-title-australia-21st-century-2015) closed on 7 June 2015. The conference program is available on their website. The conference aims to stimulate debate and research consistent with building and strengthening partnerships across the spectrum of stakeholders.
All Energy Australia 2015 (http://www.all-energy.com.au/) is the country's largest clean energy conference and it features four zones: solar; alternative technologies; energy efficiency; and energy storage.
LED lighting technology has been increasingly adopted in inner-city Melbourne and has proven to provide similar or better lighting with lower power requirements, e.g. 6W globes vs 35W halogen globes, and total cost.
Victorian residents can contact Haielo (www.haielo.com) to have existing halogens changed to LED globes free of charge. This is possible because of a Victorian Government incentive to change to LEDs.
All-Energy Australia should provide an update on energy sources for apartment and office buildings, e.g. solar power and gas co-generation, and provide recent information for initial business cases.
For example, energy storage for solar power has recently been in the news. The 7:30 Report on 20 May 2015 (http://www.abc.net.au/7.30/content/2015/s4240286.htm) included an interview with Heath Walker of Tesla Australia.
Tesla, who produce electric cars in the USA, have developed rechargeable lithium ion batteries that can be used for buildings. They are called Powerwall (http://www.teslamotors.com/en_AU/powerwall). There is a 7kWh model for home use and a 10 kWh version for business. It may be feasible to use the 10 kWh model to reduce costs of common area electricity usage.
The Maintenance Plan and Maintenance Fund are regulated by Divisions 3 and 4 of the Owners Corporation Act in Victoria. The Plan must set out the major capital items of the common property that are expected to be repaired or replaced in the next 10 years.
Owners Corporations frequently use Maintenance Plans created by quantity surveyors. The Maintenance Plan usually includes a schedule of annual levies and annual targets of the Maintenance Fund.
It can become very complicated to implement a Maintenance Plan correctly.
The Owners Corporation is responsible for ensuring that the Plan remains useful and the Fund's targets are attained so that owners will not be surprised in the future by high levies.
This is a large responsibility and the Maintenance Plan may provide no guidance about how to do this.
Firstly, the plan may not be complete and items that need fixing may not be in the plan. They may be oversights or new items that could not have been reasonably foreseen.
It is important that the Plan is kept up to date and it may need to be reviewed every few years. The should be done by a quantity survey in conjunction with the Building Manager or Facilities Manager, and the Owners Corporation manager. The plan should be reviewed carefully by the Owners Corporation to ensure it is complete and makes sense.
Assumptions used in the Plan about inflation or interest rates will become incorrect over time and affect future years of the Plan.
Items in the plan which are due for replacement or repair in the future may need to be repaired earlier or later and their estimated cost at that time found. The actual cost of this work may be higher or lower than forecast in the plan and higher costs need to be met by sufficient contingency reserves.
Some items in the plan may turn out not to be required and this may affect forecasted contributions and interest. An example of this would be where an item of plant is no longer needed because of a change of technology.
Funds for major capital items should be accumulated over several years. With the changes described above, the Owners Corporation also needs to plan for the annual levy contributions. The annual changes in levies should be gradual where possible and justifiable with respect to the Plan.
According to a report by Leanne Hodyl, the co-ordinator of city plans and policy at Melbourne City Council, apartments in central Melbourne are being built at four times the maximum densities allowed in some of the world's most crowded cities.
The cities studied included New York, Vancouver, Tokyo, Hong Kong and Seoul.
A summary of its statistics in The Age of 9 February 2015 shows that while New York city has 2560 people per hectare and 1.1 m open space per person, and Hong Kong has 2620 people per hectare and 1.5 m open space per person, Melbourne has 6290 people per hectare and just 0.1 m open space per person. That is a surprising conclusion.
However the measurements were made, according to the summary of the report, the four other cities have more planning controls; ones which involve funding of nearby parks, plazas and childcare facilities for example. Their planning controls also were stated to have stricter apartment design standards.
In August 2014, we wrote about draft Victorian apartment design standards. They were to have ensured studio apartments have at least 37 square meters and one-bedroom apartments have at least 50 square meters. Also 90% of apartments should have direct sunlight and there should be no more than eight apartments per lift per floor.
What has happened to the draft? The current Planning Minister, Richard Wynne, has recently "vowed to bring in long-discussed minimum standards for Victoria."
In the meantime, according to an article in the Australian Financial Review of 11 February 2015, "the average size of a one bedroom apartment fell from 47 square metres to 44 square metres while two bedroom apartment sizes fell from 62 to 59 square metres" according to a report by the Oliver Hume Real Estate Group. The average size of a one-bedroom apartment is apparently now 12% less than the draft minimum standard size.
In February 2015, we wrote about rectifying building defects in developments with strata title and that external project management can make this complex activity more efficient.
The City Futures Research Centre at University of NSW published a report "Dealing with Defects" in December 2014 which underlines this.
Section 2.3 concerns dealing with building defects in high-density living and states "Although high-density apartments may be sold with the allure of modernity and the promise of recreational opportunity, the occupied reality of conflict between residents can corrode the resilience of communities and diminish individual capacities to deal with complex and financially difficult issues, such as the collective resolution of defects in the buildings occupied. "
It makes informative reading.
Ocelot Consulting was recently contacted by Mohd Fabian Hasna to help advertise a research project on understanding people’s experiences and emotions in urban public spaces in Docklands, Melbourne which may promote recovery from stress and mental fatigue.
We are very happy to assist with this.
Fabian Hasna is a PhD student in School of Social and Political Science, Faculty of Arts at Monash University. His supervisors are Dr Michelle Duffy and Dr Elizabeth Coleman.
The Letter of Information about the project and survey invites Melbourne's Docklands residents or workers to participate voluntarily in an online survey that takes 10-15 minutes to complete.
The research seeks to understand their experiences and opinions about the outdoor public spaces located in the Docklands, e.g. Victoria Harbour, Harbour Esplanade, Docklands Sports Court, Monument Park, and Docklands Community Garden.
The Letter states "This study is to understand the possible role of certain outdoor urban public spaces that may contribute towards restorative environment through people’s experiences and emotions. The term restorative environment refers to a particular environment and environmental configuration which promote recovery from stress and mental fatigue."
This is the link to the survey: http://www.surveygizmo.com/s3/1735152/MelbDockRestorativeMap
There is a further Explanatory Statement about the research project, e.g. on what is involved, consent to participate and withdraw from the research, possible benefits and risks, confidentiality, storage of data, results and contact details for any complaints.
Please send all questions about this to Fabian Hasna.
Ocelot Consulting hopes many residents and workers in Docklands participate in this survey and provide data for this worthy research project.
This sixth biennial conference is being held this year from 2-4 September at the Gold Coast at Surfers Paradise Marriott Resort and Spa.
The conference is chaired by Professor Chris Guilding of the Griffith University Business School.
Its program covers a wide variety of topics in strata living including
- How will the 'strata world' cope with major changes in demographics, culture and the environment?
- International and Australian views on larger and more complex strata schemes
- Explorations of key strata challenges by stakeholder groups
- The expanding legal environment in which Owners Corporations operate
- Building defects
- Adequacy of Maintenance or Sinking Funds
- Management rights model
- Retrofitting efficient energy systems.
Some of these topics have been discussed at a high level in this blog.
This conference should bring together a wide cross-section of specialists with current information and insights into new trends.
The conference website is at http://www.griffith.edu.au/conference/strata-community-title-australia-21st-century-2015 with full details about the program and registration information.
On 27 October 2014, we commented on building defects and Owners Corporations in the context of the High Court decision, Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 & Anor. Since then, new state government laws in NSW (Home Building Amendment Act) are in force from 16 January 2015.
These laws reduce the time limit for many potential claims by an Owners Corporation to two years except for “major defects”: ones which would cause a new building to be uninhabitable or under threat of collapse. Such major defects are covered under a six-year statutory warranty. (See Sydney Morning Herald article: http://goo.gl/s7Ws8F.)
According to the Owners Corporation Network (NSW) which was mentioned in our blog of 17 November 2014, the new laws “fail to deal with poor-quality workmanship and erode the ability of owners to make claims about defects” because of the definition of “major defect”. This excludes other serious defects such as fire safety or waterproofing, according to the Sydney Morning Herald article of 28 September 2014.
How prevalent are building defects in new apartment buildings? They are remarkably common according to a Sydney Morning Herald article of 15 January 2015 (See http://goo.gl/3YahCE) which refers to a 2012 finding of the University of NSW City Futures Research Centre that more than 85 per cent of apartment blocks built since 2000 have defects. Examples included internal water leaks (42%); water penetration from the outside (40%); guttering faults (25%); defective plumbing (22%) ; and lack of, or defective, fire safety measures (15%) amongst others from a survey of more than 1000 people.
Many of these may not be classified as “major defects” and may not be identified within the first two years of occupancy. It may be impossible or prohibitively expensive for a prospective owner to engage a building inspector to provide a report on a new apartment. The apartment may have been purchased "off the plan" and not have been built or completed, or the defect may involve a major system, such as stormwater drainage, that could entail extensive diagnostic work.
Without more consumer protection in NSW, owners will be required to pay for rectification works, possibly through special levies.
The building laws are different in Victoria and other states. In Queensland, for example, there are no statutory warranties. It is very important to owners and the industry that building standards are maintained and there is adequate consumer protection against defective design and construction.
A recent example of a building defect occurred in the Gold Coast where apartments were subject to flooding because windows leaked. Owners may be required to pay the rectification costs that are estimated to be $2 million (see http://goo.gl/HAvvFq).
The identification, claims for costs, diagnosis and rectification planning and implementation for building defects is a complex activity that may lie outside the skills and time constraints for Owners Corporation Committees and Owners Corporation managers. With new laws such as those in NSW, efficient and comprehensive rectification project management is even more vital.
Common property electricity is usually one of the three highest costs for an Owners Corporation. A proven way to reduce consumption is through voltage optimisation.
This is usually a unit that is installed just after the electricity meter and has the effect of changing the incoming electricity supply so that some electrical equipment such as AC induction motors and fluorescent lights run more efficiently and uses less energy.
Australia’s supply voltage can be higher than the design voltage of 220 V to run some kinds of equipment optimally. Higher voltages do not conform to an Australian standard in introduced in 2000 of 230 V ± 6%. The ‘overvoltage’ issue can also reduce the expected life of some equipment, e.g. incandescent lights.
Other changes to the power supply that voltage optimizers provide include reduction of harmonics, transients and power dips.
Harmonics are multiples of the fundamental frequency, usually 50 or 60 Hz, of the supply current. Harmonics can reduce the efficiency of transformers.
Transients are large and brief surges in voltage and power dips are reductions in voltage, sometimes of longer duration.
To ensure voltage optimization provide a suitable return on investment, an evaluation should first be done for a property to measure maximum demand and power quality.
It is also important to record how power is used and whether the devices in the common property that use electricity will be more efficient after a voltage optimizer is installed, and to tailor the voltage optimizer’s specifications for the site. The evaluation should also allow for future changes to electrical equipment, e.g. changes to LED lighting or installation of new water pumps.
With these measurements, it should then be possible to assess the installation costs, savings per kWh, pay-back period, and CO2 reductions.
Voltage optimization is a mature technology that can reduce electricity costs, improve the expected lifetime of some electrical equipment, and improve environmental outcomes.
Details in this blog entry have been checked with Wikipedia and technical information from suppliers of voltage optimisers.
The decision-making body of the Owners Corporation is the Committee. It comprises members of the Owners Corporation who generally have nominated to do this at an Annual General Meeting.
The Committee can have large responsibilities such as deciding on the annual budget for administrative expenses and long-term maintenance expenses, ensuring the common property is maintained, and ensuring the special rules are complied with and Owners Corporation disputes are resolved.
Often Committees have difficulty attracting owners to do this voluntary work. Another issue is that owners may join the committee who are unsuited to the work or who lack appropriate skills or experience.
For example, an owner or their proxy nominates to join the Committee because they
• have a friend on the Committee
• think it is impressive, powerful or ‘glamorous’
• believe it will improve their resume
• have had a disagreement with the management of the Owners Corporation about a private matter such as an overdue levy notice
• run a company that has a commercial interest in the building and they are joining the committee to maximise returns only
• are trying to sell their apartment for a larger capital gain.
Committee members need to act with due diligence and care and represent the interests of all owners fairly. Owners or their proxies who nominate for the committee for personal reasons or with narrow agendas may lose interest quickly or become spectators.
One way to encourage owners to nominate for the committee who can contribute to its work is to communicate with them about the role, expectations and the skills required. The Committee may have its own set of guidelines which can also be circulated.
Nominations can be reviewed by a subcommittee before the AGM especially when there are more nominees than open positions. Recommendations can be made to the Committee and the results announced at the AGM.
The process needs to be run fairly and ideally the committee should have a wide variety of skills and points of view.
Owners Corporation Committee members sometimes receive requests or complaints about property-related matters from occupiers. Often they are from residents who know the committee member as an acquaintance or friend.
These requests or complaints may not be related to the responsibilities of the Owners Corporation Committee and need to be re-directed.
• complaints about noise, e.g. a barking dog
• maintenance concerns about common property, e.g. a broken light or pool cleaning
• maintenance concerns about private property, e.g. balcony tiling
• a disagreement about overdue Owners Corporation levies and interest charges.
Sometimes when a committee member re-directs an enquiry to the OC Manager, or Facilities or Building Manager it can be misinterpreted by a resident that the committee member is avoiding responsibility or being uncaring.
From the Committee Member’s perspective, they are not messengers between occupiers and companies employed to deal with such matters.
Noise complaints may require the security guards to be involved and find the occupiers in breach of the special rules. They may receive a warning or a breach letter of the issue persists.
Maintenance of private property is usually up to owners to organise, except for renovations that may require formal approval from the Owners Corporation such as replacing carpet with wooden flooring.
Disagreements on levies should first be taken up with the Owners Corporation manager. If the owner believes the Act or a special rule has been contravened, they can lodge a formal grievance with the Committee.
The onus is on the committee to help educate owners about the Owners Corporation’s role and responsibilities. The committee is the decision-making body of the Owners Corporation and representative group of owners.
Educating owners may require several approaches in tandem. Part of the issue may be that residents do not know whom to contact. Is there sufficient information such as a website or signs about the contact details and hours of the OC Manager, or Facilities or Building Manager? Another approach may to increase the level of engagement of owners with the functions of the Owners Corporation through information sessions.