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While there’s a focus on the cost of levies, strata fees and insurance, the little spoken about hidden cost is actually in uninformed decision making in strata management.

Everyday, incorrect decisions are made due to a lack of understanding of the building’s history and unique characteristics which can lead to unnecessary costs for the Owners Corporation.

Strata management can be complicated. Understanding a building’s history and its unique characteristics can stand you in good stead for making informed decisions. Fully understanding a property and its history can become critical for making informed decisions about maintenance, budgeting, compliance, and overall management.

Below are just some of the considerations of a building’s history and unique characteristics which can lead to informed decisions and ultimately cost savings in strata management.

Structural integrity and maintenance planning - Knowledge of past renovations, construction methods and utility details helps strata managers and committee members plan proactive maintenance and repairs.

Understanding previous structural issues allows managers and committee members to anticipate and address recurring problems before they escalate.

Compliance with regulations - Older buildings may have been constructed under different building codes and may require upgrades to meet modern safety and accessibility standards. Historical records help strata managers ensure compliance with fire safety, electrical, and environmental regulations.

Financial planning and budgeting - Knowing the maintenance and repair history aids in accurate financial forecasting for future expenses. Previous expenditures on repairs and refurbishments inform the allocation of capital works funds and reserve budgets.

Insurance considerations - A building’s history, including past claims and structural modifications, impacts insurance premiums and coverage. Understanding previous incidents, such as floods or fires, allows strata managers to implement risk mitigation strategies.

Identifying potential health and safety hazards - Older buildings may contain hazardous materials like asbestos, lead paint, or outdated electrical systems. Awareness of past repairs and environmental assessments helps in ensuring a safe living environment for residents.

Legal and dispute resolution - Historical records of disputes, by-law changes, and legal actions provide insight into recurring issues within the property. Documentation of past resolutions helps guide decision-making and mitigate future conflicts.

An example of the importance of understanding your building’s history and unique characteristics is a building on the northern beaches that has a unique hot water system layout. There is a specific type of contractor required to deal with this type of configuration. The same building also has central air conditioning that is powered by gas. This is extremely unusual that there is only one contractor in the local area that is able to deal with this type of central air conditioning. If the Strata Manager didn’t take the time to understand these unique aspects of the building, listen to the strata committee and do a site inspection, the wrong contractor would have easily been sent out to deal with maintenance issues for these facilities. This would have resulted in unnecessary increased costs for the building. The Strata Manager was extremely experienced, and it was the first time in twenty years that they had seen these unique characteristics in a building.

How do I find the most important building information?

If you are a new owner, or stepping up to become a committee member, there are several ways to find out your building history and unique characteristics.

The most effective way to gather information in relation to the building is to speak with long term residents. They often hold critical information in relation to the building that may not be documented anywhere. Physically seeing the unique characteristics is also the best way to educate yourself as an owner or committee member and be in the best position to make informed decisions in relation to the building. You are then able to work with the Strata Manager to highlight unique considerations as they come up.

The next port of call is to review your buildings documents which should be available to you on an electronic portal. Some of the documents to look out for include:

Consult past meeting minutes and financial statements - Reviewing past strata meetings provides insight into ongoing concerns and budget allocations.

Review original plans - Building drawings will give you an understanding of the foundation and layout of the building.

Review compliance certificates - Lift and fire certificates (if applicable) should be available on our portal and your building noticeboard.

Review financial reports - Reviewing financial reports will give you a good understanding of the main expenses for your building, preferred contractors that have been used in the past and any spikes or large expenses that have been paid.

Review capital works report - Your buildings capital works report will provide details on the future funds that your building will be required to put aside for future spending.

If the building documents are so important to informed decision making, who owns and is the custodian of them?

The historical records of the building are owned by the Owners Corporation. The Strata Management company is responsible for the upkeep and being the custodian of books and records. When an Owners Corporation decides to move on to a different Strata Management company, the books and records including all historic information is also transferred in the process. This is a legislative requirement.

In reality, this transfer process can happen in a less than ideal manner, with historical information becoming lost along the way. It is also possible that the Strata Management company has not kept great records of historic events in the first instance, so the required information is not there to handover.

The biggest way that historical information gets lost can be when a longstanding owner moves on, or a longstanding Strata Manager moves on. Books and records become more critical in these instances because there’s not the verbal knowledge to draw on when it comes time to make decisions for the building.

Whilst it may seem like a lot of unnecessary time to invest in fully understanding the unique characteristics and history of your building, when an issue arises, you’ll be in a strong position to ensure that the best course of action gets taken for your building. You may also be thinking that this is beyond the scope of the job of a committee member. Surely there’s a Building Manager or Strata Manager who has this covered for us? While this may be the case, unless buildings are over a certain size, it’s simply not cost-effective to employ a Building Manager. While you may get lucky with a great Strata Manager that takes the time to visit your building and really understand the unique considerations of your building they may not be there forever. Taking ownership over understanding your building is ultimately the best way to avoid wasting resources through making uninformed decisions.

Understanding the history and unique characteristics of a strata building is not just about knowing its past and unique characteristics. It’s about using that knowledge to make informed, strategic decisions that benefit residents and stakeholders. By understanding and maintaining thorough records and proactively addressing historical concerns, committee members and strata managers can ensure the long-term sustainability, safety, and value of the property. A well-documented building history ultimately leads to better planning, cost savings, and a harmonious living environment for all.

If you are a new owner or are stepping up to becoming a committee member, take the time to seek out the long-term residents of your block and understand your building’s history and unique characteristics. Walk around the block with them so that you can physically see what they’re talking about. Take the time to inspect your building’s most important records. These actions will stand you in good stead for making well-informed decisions in the best interest of your building.