Body corporate group sets standards to improve industry

An apartment building in Pantin, France. In New Zealand, the apartment and multi-unit property sector is not waiting for ...

An apartment building in Pantin, France. In New Zealand, the apartment and multi-unit property sector is not waiting for government reforms to clean up the industry.

Safeguards for apartment and unit owners are being stepped up, as voluntary qualifications are brought in to eliminate "rogue" body corporates.  

Industry body Strata Community Association New Zealand launched the new standards this week in Auckland.

It's the first time qualification standards have been put forward for the $50 billion strata property sector, and SCANZ believes it could help prevent theft or mismanagement of what are often multi-million dollar assets.

"We have observed a recent incident where apartment owners in Auckland received invoices for hundreds of thousands of dollars' worth of body corporate fees that were not genuine," its president Joanne Barreto​ said

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Other concerns included the way some managers looked after funds or reported back to their body corporate committees, and undisclosed conflicts of interest.

Barreto said that as it stood, anyone could become a strata manager, "without needing any training whatsoever," opening the door to cowboys.

For that reason, ​SCANZ is rolling out an accreditation course for body corporates managers.
It is voluntary but Barreto sees scope for the Government making such programmes compulsory.

"Mandatory education and training for industry professionals would re-shape the sector not only in terms of the trust and confidence owners have in body corporate professionals, but also regarding the jobs and careers available."

The rapid growth of apartment living in New Zealand has raised questions about how well owners are being served by the current regulations.

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Last year Auckland Central MP Nikki Kaye successfully led a campaign to get the Unit Titles Act reviewed, and submissions on that review document close on March 3.

Charles Levin, the chairman of a stakeholder group feeding into the review, said there had been some debate about whether the act should be rewritten from scratch.

But generally reaction had been positive, "in terms of making it less legalistic and more accessible to the lay person".

"Just running your own administration, whether as a body corporate committee member or unit holder, it's really difficult. Even for a lawyer, it's a really difficult piece of legislation."

One aspect the review had not touched on was a call for an ombudsman or commissioner, similar to Queensland's. 

Levin said most people seemed to think its omission was not a concern, "because to be honest it had its down side as well as its upside".

"We're aware that other ombudsmen have been under-resourced and if you're going to under-resource something, it doesn't work."

The review does suggest streamlining body corporate disputes through the tenancy tribunal and courts, making the process easier and more affordable.

Some people have also called for a register of body corporates to help improve the transparency of information in the sector.

This was also excluded from the review. However, it does tackle the need to beef up security around funds, and for compulsory long-term maintenance plans.

Levin said body corporates had earned a "Wild West" reputation and he supported the idea that all body corporate members do a course.

"It's really important that everyone in the sector lifts their game and the review is just part of the process."

SCANZ's suggestions for the strata property sector:

* Better disclosure rules at the time of purchase

* Strengthening body corporate governance

* Increasing professionalism of body corporate managers

* Ensuring proper maintenance plans

* Variable compliance requirements relating to complex size

* Improving the accessibility of dispute resolution.

 - Stuff


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