ESSENTIAL GUIDE TO APARTMENT LIVING - PICA Group · is to administer, control, maintain, repair and manage all areas of the common property. They elect a committee to help manage

WHAT TO BUDGET WHEN BUYING AN APARTMENT

COMMON PROPERTY INSPECTIONS CHECKLIST

THINGS TO KNOW BEFORE OWNING A PET

UNDERSTANDING THE ROLE OF AN OWNERS CORPORATION

TIPS AND ADVICE FROM YOUR LOCAL STRATA EXPERTS

INSIDE:

ESSENTIAL GUIDE TO APARTMENT LIVING

APARTMENT LIVING Transform your investment

to suit your lifestyle

The information provided in this document is a general guide only, and is not intended as a substitute for legal advice. The company disclaims all responsibly and all liability for any expenses, losses, damages and costs which might be incurred as a result of the information provided by the company. Last updated on 1 October 2017.

PICA GROUP strata services e-book

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TABLE OF CONTENTS

5 advantages of apartment living

Roles and responsibilities cheat sheet

What happens at an AGM

Strata manager do’s & don’ts

How to change your strata manager

Common mistakes when it comes to apartment living

Living in harmony with your neighbours

Things to consider when budgeting for buying an apartment

Compulsory insurance for apartment buildings

Common property inspections checklist

Things to know before owning a pet

Airbnb tips

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14,000new apartments have been built in Melbourne’s CBD over the past 15 years

14.7%

of Melburnians live in apartments

A TOTAL OF 9,458apartments were approved in 2015

in Docklands and Southbank


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The Government has predicted Melbourne’s population will grow to 7.7 million by 2051, which means 480,000 apartments will be needed.

In the last

2 years, Brunswick East apartment approvals have quadrupled


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A message from Greg Nash,

Managing Director and Group CEO of PICA Group

The property landscape is constantly changing, and with that is the way we live. As more

buildings are being built with communal services and facilities, so has the need to live in

harmony with our neighbours become ever more important. Alongside that, access to

information such as insurance policy changes and accreditations is proving necessary.

Over the last 10 years, Victoria has had the largest population growth out of any Australian

state, and the expertise of our strata services team has had to develop with it. As local

residents, they understand the uniqueness of Melbourne’s vibrant community, and for the

purpose of creating this e-book, we have brought their strengths together to share their

advice on delivering better services directly to our customers – contributing to making

Melbourne the most liveable city seven years in a row.

Buying a property for most of our customers is more than just an investment, it’s their home.

That’s why we not only focus on delivering superior strata management services, but also are

passionate about enhancing community living.

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What does an apartment have that a house doesn’t? The answer is plenty. Long gone are the days that property buyers wish for a house and settle for an apartment. The young, the old and everyone in between are increasingly opting for a new way of living.

#1LOWER COSTS

With the more efficient use of space for apartment living, and having access to a range of shared facilities like swimming pools, gyms and saunas, this often means reduced bills as expenses are shared amongst all owners. Sometimes you can also benefit from bulk or special value-add discounts that are negotiated on behalf of your strata committee.

#2LESS TO CLEAN AND MAINTAIN

Not only is an apartment considerably smaller than a regular sized house, they are usually more modern as well, which makes cleaning and maintenance far easier and quicker. You won’t have to mow the lawn, paint the outside walls or clean the shared pool, as contractor expenses are often included in the owners corporation annual budget.

#3HIGHER SAFETY AND SECURITY MEASURES

Apartment blocks tend to be secure with a gated front door, CCTV cameras and entry code access. Houses will usually only have a lock on the door and/or are fitted with an alarm.

#4MORE ENVIRONMENTALLY FRIENDLY

Many new apartments utilise solar power on their roofs and walls, not only saving you money on your electricity bill, but also saving the planet. The more modern the apartment building, the more likely it was built with sustainability in mind.

#5ACCESSIBILITY

Many houses were built decades ago and don’t have flexible options for mobility needs. They may contain general hazards such as old stairs or carpets that could be worn and frayed. Apartment blocks usually have elevators and wider entrances. And as the apartment itself is usually on a single level, the whole living space is accessible to people with special needs.

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5 advantages ofapartment living


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Spotlight on PICA Group staff

Meet Murray

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Our role is to keep calm, guide owners in the right direction, and get a positive response where it’s a win win situation for everybody.

Phil13 years in the strata industry


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We meet different kinds of people, and you learn something everyday. That’s what I like about this role. Especially when you get those people who are really appreciative and they understand what you do. It really gives you a big high.

Tina8 years in the strata industry


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Strata Manager

CommitteeFor buildings with greater than 13 lots

Owners Corporation

Your strata manager has five main roles:• Mediator • Advisor • Coordinator• Secretary • Chairperson Their job involves co-ordinating committee meetings, recommending contractors, keeping track of records, advising owners on relevant legislation and mediating relationships between owners.

Your committee is an elected representation of the owners corporation. It can have 3-12 members. Generally the committee consists of:• Chairperson • Treasurer • SecretaryThe committee makes the vast majority of the decisions that govern your body corporate scheme. They are elected at each annual general meeting (AGM).

The owners corporation consists of all the property owners of the lots which make up the scheme. They tend to be an owner-occupier or an owner-investor. Their duty is to administer, control, maintain, repair and manage all areas of the common property. They elect a committee to help manage the common property of a building.

Roles and responsibilitiesCheat sheet

Strata Manager

CommitteeFor buildings with greater than 13 lots

Owners Corporation

Your strata manager has five main roles:• Mediator • Advisor • Coordinator• Secretary • Chairperson Their job involves co-ordinating committee meetings, recommending contractors, keeping track of records, advising owners on relevant legislation and mediating relationships between owners.

Your committee is an elected representation of the owners corporation. It can have 3-12 members. Generally the committee consists of:• Chairperson • Treasurer • SecretaryThe committee makes the vast majority of the decisions that govern your body corporate scheme. They are elected at each annual general meeting (AGM).

The owners corporation consists of all the property owners of the lots which make up the scheme. They tend to be an owner-occupier or an owner-investor. Their duty is to administer, control, maintain, repair and manage all areas of the common property. They elect a committee to help manage the common property of a building.


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Going over the minutes from last year’s meeting Regardless of the length of time you have owned your apartment, it’s useful to be aware of any issues that have arisen and how quickly they’ve been resolved.

Look over last year’s financial statement, and plan the building’s finances for the upcoming yearIt’s important you know how the building’s finances are being organised and how they’re being spent because this is where your strata fees go.

Elect your committeeThis committee will make decisions on behalf of your owners corporation, so it’s important to vote for members you think will make the most informed and unbiased decisions.

Discuss the administrative fees and the maintenance fund Administrative fees are used to pay contractors for maintenance, insurance and budgeted repairs. Maintenance funds are set aside for future capital works on common property and is compulsory for buildings with more than 100 lots.

What happensin an AGM

Every year, the owners corporation must hold a meeting of all owners. This is called the annual general meeting (AGM). This is the main opportunity for owners to participate in major decisions, discuss issues relating to their property and elect the committee and office bearers for the next year.

Some of the meeting points will include:


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Strata managerDo’s & Don’ts

The role of a manager is complex. Their job can involve a number of skills and specialities, including acting as a mediator, advisor, coordinator, secretary and chairperson.

Here are the do’s and don’ts when it comes to strata management and apartment living.

DO ask your strata manager for contractor recommendations.

Strata managers have extensive industry connections and can set you up with competent, trustworthy contractors to help you with your property.

DO consult your strata manager for anything relating to legislation.

A good strata manager will know the ins and outs of legislation changes specific to your state and property type, and will be able to advise you of any upcoming changes.

DO understand that your strata manager has your best interests at heart.

The strata managers at PICA Group genuinely care about their customers and do everything in their power to keep them updated and informed.

DON’T verbally abuse your strata manager.

Even if you’re not happy with how your strata manager has been running things, that’s no reason to shout. Treat them respectfully and explain how you want things done and what you want changed.

DON’T renovate your apartment without consulting your strata manager.

Your strata manager will be acutely aware of all the rules and legislation relevant to your building. Consult them before you make any renovations.

DON’T get stuck with the wrong strata manager.

It’s easier than you think to change strata managers. If your strata manager isn’t meeting all your expectations, why not try PICA Group?


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How to change your strata managerin five easy steps

It’s easy to get overwhelmed with the thought of changing strata managers. If you’re not happy with how your property is being managed, it may be time to switch to someone you can rely on. Changing strata managers can be a quick, easy and painless process that could save you a lot of strife in the long run.

Ask your strata manager for a copy of your current strata services contract of appointment.

Obtain quotes: compare the value and expertise they can offer.

Call a committee meeting. You also have the option to invite all owners to a Special General Meeting or arrange a postal ballot to discuss and vote on changing your strata manager to the PICA Group. The team would be happy to discuss the options with you.

Vote to bring a PICA Group strata manager on board. You will need the support of more than 50% of the votes.

If the motion has been successful, simply give the meeting minutes to your new PICA Group contact. We’ll take care of the rest, including notifying your current strata manager.

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Four common mistakeswhen it comes to apartment living

COMMON MISTAKE #1Asking your strata manager to repair your apartment.

COMMON MISTAKE #2Keeping a pet without checking your building’s rules.

Often what exists inside your apartment is NOT common property, and therefore may be your responsibility to maintain and fix. Common property may include things such as shared swimming pools, driveways, etc., and individual property may include items such as stoves, ovens and light switches.

Recommendation:

It is very important that you check your plan of sub-division and the boundaries with your strata manager as common property is defined differently for each strata property. If you are unsure what is common property, consult your strata manager before you do any repairs.

While you may have the right to keep a pet, you need a valid reason to do so. You may need to seek approval from the committee in order to keep a pet.

Recommendation:

Before you pick up your new furry friend, look into the rules and regulations specific to owning a pet in your building.

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Apartment living can be cost effective and convenient, however, you need

to be aware that by living with other residents, decisions you make for your

home may not just affect you. Here are the top five mistakes to avoid when

it comes to apartment living.

COMMON MISTAKE #3Assuming you may smoke on common property.

COMMON MISTAKE #4Altering your backyard without asking your strata manager first.

Most buildings condemn smoking inside an apartment, but you may be prohibited from smoking on common property too. If the smoke drifts into another resident’s apartment, they can file a complaint and get you into trouble.

Recommendation:

Find out what the smoking rules are for your apartment, and what areas in your building are determined as common property.

A common problem that can occur is that a person purchases a unit under the belief that the backyard belongs to the unit, yet it is actually common property. What happens is that over time people install fences on common property to create private backyards for themselves. This can be an issue when the backyard isn’t actually their property.

Recommendation:

Consider asking your committee to lease or license the area to you, that way you have a level of control over your backyard. In such cases, you may also need to check with your strata manager if you are responsible for maintaining it.

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Apartment living means you’ll be in closer proximity to your neighbours than if you were to live in a house. However, this doesn’t have to be an issue. As long as you are aware of the rules specific to your apartment block and what your rights are as an owner occupier, harmonious apartment living is entirely achievable.

Make sure you have budgeted for the fees to fund the annual running expenses of the building and its long term maintenance. Ultimately this will protect the value of your financial investment.

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Five tips toliving in harmonywith your neighbours

Make sure you are clear on the space that is yours and the space that is common property and know what you can and can’t do on common property.

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Acquire a full copy of the rules that are specific to your building, so that you understand the rules that you will be required to live by.

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If you are unaware of the decisions made that affect your building, ask for a copy of previous minutes. Go along to the annual general meeting and get a feel for what’s happening in and around the building. You could even take an active role and become a member of the committee.

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One of the most crucial points to consider when buying off-the-plan is the proposed fees. These cover the cost of electricity, insurance, maintenance and repairs. Aside from factoring this ongoing expense into your budget, it’s worthwhile comparing the fees to other similar properties.

Apartments and townhouses will often require investors and owner occupiers to pay fees for managing the common property. The money is used to maintain areas within the complex, such as lifts, pools and gardens, so the more features within the complex the higher the fees will typically be. Investors should consider these additional costs in their budgets when planning their next purchase.

5. STRATA MANAGEMENT

1. PROPOSED FEES

Things to considerwhen budgeting for buying an apartment

Buying property can be very expensive and for some people will involve large sums of unexpected fees. It’s therefore important to avoid this as much as possible by educating yourself around what you’ve purchased, and the related ongoing costs involved.

Investors and owner occupiers need to buy a property that will suit their budgetary requirements. For example, if they have a small disposable income, they could target properties with higher rental yields, as this will help cover the mortgage repayments. For people with larger disposable incomes, though, they don’t necessarily need to target properties with higher rental yields.

2. MORTGAGE REPAYMENTS

Don’t forget the costs to maintain your own apartment. Investors and owner occupiers should have some buffer funds set aside for annual maintenance costs, whether it be for a yearly gutter clean before winter, to repair or replace an ageing fence or for a fresh coat of paint.

3. MAINTENANCE COSTS

4. PROPERTY MANAGEMENT FEES

The cost of utilising a property manager will vary from company to company, however they shouldn’t be chosen based purely on price. A cheaper property manager probably won’t provide a proactive service to optimise your assets. If you need assistance, the PICA Group can provide names of reputable property managers.

Compulsory insurance forapartment buildings

It is important to take out insurance for your apartment building as it protects you and your assets from any unexpected damage and/or injury. There are two different types of insurance that are compulsory for any owners corporation. They are as follows:

REINSTATEMENT AND REPLACEMENT INSURANCE

What is this?

Reinstatement and replacement insurance should cover:

• Replacement, repair and rebuilding of any damaged property

• Any costs of demolishing and removing debris from the site

• Other costs, such as employing an architect or surveyor

• Shared services

• Replacement of services and structures, such as driveways and fences.

• When renewing insurance, all owners corporations must ensure that the sum insured is more than the value of the building.

PUBLIC LIABILITY INSURANCE

What is this?

Public liability insurance provides the owners corporation with the funds to compensate workers, residents, or other related persons in the case of damage to or loss of property, illness, injury or death.

Consider the structure of your own building insurance policy. There are also other types of insurance that you and your fellow apartment owners may want to consider investing in, depending on your specific situation. This could include office bearers legal liability, voluntary workers insurance, or workers compensation, amongst many others. It is important to only use insurers approved by the Australian Prudential Regulation Authority, and Consumer Affairs Victoria recommends that owners corporations obtain at least three quotes from different insurers.

Common property inspectionschecklist

For buildings with more than 100 lots, every year the owners corporation must inspect their common property and review the maintenance plan. This helps to form an idea of a plan and a budget for the next year. The findings are to be presented at the Annual General Meeting.

At the AGM, the owners corporation must report on:

• maintenance plan

• budget

• proposed contributions to the maintenance fund

The owners corporation could require specialised help for certain elements of the maintenance plan. The cost of this professional advice should come from the owners corporation’s budget and may include:

inspections

risk assessment

maintenance fund forecast

capital works

budgeting

Before any work is done on the property, it may be helpful to survey residents about repairs and maintenance issues.

This survey should:

Identify problems affecting residents

Provide any extra information about the building

Show that the owners corporation is carrying out duties, functions and powers to the best of their ability

Encourage communication between the owners corporation and the residents

Build awareness of legal requirements and any potential legal issues

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Five things to knowbefore owning a pet

Bringing your fluffy friend home for the first time is an exciting moment in a person’s life. It’s important to make sure you comply with your apartment building rules to keep pets, otherwise you and “Fido” could find yourself in a lot of trouble.

#1ALWAYS CHECK THE BUILDING RULES

The rules contain a lot of important information relating to you and your apartment, including details around keeping pets. It’s very important to read up on your by-laws to make sure your new fluffy house mate is allowed to move in.

Recommendation:

The building rules should be easily accessible online or through your committee.

#2IF IN DOUBT, ASK A COMMITTEE MEMBER

If there’s anything in the building rules that you’re confused about, don’t be afraid to approach a member of the committee for an explanation or a second opinion.

Recommendation:

Ask someone on the committee to clarify anything you find confusing. If this person doesn’t know the answer, ask your strata manager, as they will be up-to-date with the rules and regulations relevant to your building.

#3PET SELECTION

There’s a very big difference between a goldfish and a golden retriever. Some pets can be quite relaxed animals that don’t require much exercise, however other animals (like large dog breeds, for example) need daily exercise and a lot of room to move.

Recommendation:

Make sure you research the animal you’re looking to get to make sure they’re the right fit for your apartment and your lifestyle.

#4SAFETY & SECURITY

You may think your puppy is incredibly well behaved, but if he catches a whiff of your neighbour’s grocery shopping in the foyer, he might suddenly get distracted and run right over, knocking over who knows what.

Recommendation:

Ensure that your front door is always shut and keep your pet on a leash when taking it through common areas of the building.

#5ALWAYS CLEAN UP AFTER YOUR PET

No one likes picking up doggy droppings. However, if you decide to get a pet, this comes with the territory. If your puppy decides to do his business in a building’s common area, it’s your responsibility to pick it up and dispose of it.

Recommendation:

Whenever you take your pet for a walk, be sure to carry disposable bags with you, and potty train your pet as soon as possible to minimise mess inside your apartment.


1. http://www.heraldsun.com.au/news/victoria/airbnb-victorian-apartment-owners-given-green-light-to-rent-homes-online/news-story/c6d9dcb692802b8cdbd18712a2ce45b52. http://picagroup.com.au/what-you-should-know-before-hosting-on-airbnb/

Airbnb is an online marketplace that allows people to either host or short-term rent accommodation all over the world. It is most predominantly used as a smartphone app, and currently has 50 million users worldwide. With nearly 14,000 new apartments having been built in Melbourne’s CBD in the last 15 years, it’s highly likely that a percentage of apartment owners would want to be Airbnb hosts. If you want to be host, here’s some advice that may be helpful to you.

5 Airbnbtips

#1 KNOW YOUR BUILDING RULES

#2 MAKE SURE TO LOOK INTO AIRBNB’S LIABILITY INSURANCE POLICY

#4 PUT YOUR VALUABLE FURNITURE INTO STORAGE

#5 SET EASY TO UNDERSTAND HOUSE RULES

#3 CONSIDER YOUR NEIGHBOURS AND THEIR LIFESTYLES

If you wish you be an Airbnb host, you should advise your committee and check the rules to make sure you will not have any conflict or security issues in the interest of harmony in your building.

Quick tip:

Avoid unnecessary hassle or expenses by ensuring you know the rules you should abide by before advertising your apartment on Airbnb.

This policy gives you $1M coverage, but if you have certain risk factors or special items not covered by their policy, you’ll most likely need extra insurance.

Quick tip:

On Airbnb’s website you will find a link to their liability Insurance. Here you can educate yourself on the fineprint.

It’s likely Airbnb’s liability insurance policy won’t cover every item you have in your apartment, so if something is valuable to you, it might be a good idea to remove it while you’re hosting. Better safe than sorry.

Quick tip:

Consider a cheap storage shed while you are renting out your accommodation, or if you have a space in your apartment that can be locked (such as a cupboard) use that instead to house your valuable items.

The most control you have over your Airbnb hosting is setting clear rules and boundaries before the person even books your apartment. This ensures that you have done everything in your power to keep your home running smoothly while you’re away.

Quick tip:

Sit down and brainstorm all the house rules you live by and what you would like your guests to respect. Break it into bullet points, number them and make them easy to understand.

Unfortunately you never really know who is going to be staying in your apartment and it’s likely the person you’re hosting could be excited about their holiday and party a little too hard. If your neighbours get upset by any sort of noise disruption, or start work early in the morning, Airbnb may not be for you.

Quick tip:

If you’ve ever received any noise complaints from your neighbours in the past or if you ever hear any noise from their apartment, your apartment may not be suitable.


Meet Murray

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The first step is actually listening to our customers, and trying to work out what the underlying issue is. From there, it’s trying to work out whether there’s something that the owners corporation can work on, or whether it’s something that they have to work on personally.

Murray6 years in the strata industry

Spotlight on PICA Group staff


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Adrian6 years in the strata industry

It’s the customers that I meet and interact with day to day that motivates me to go to work each day. Dealing with them, trying to create a custom solution for them, because everything is different. That keeps me interested.


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Follow the PICA Group on Facebook and LinkedIn for the latest industry and company news.

TIPS AND ADVICE FROM YOUR LOCAL STRATA EXPERTS

ESSENTIAL GUIDE TO APARTMENT LIVING

Contact us

Melbourne (head office): Level 14, 575 Bourke Street, Melbourne, Victoria, 3000

Phone: 03 9616 1699 Email: [email protected]

www.bcssm.com.au www.picagroup.com.au

Documents

ESSENTIAL GUIDE TO APARTMENT LIVING - PICA Group · is to administer, control, maintain, repair and manage all areas of the common property. They elect a committee to help manage