Strata laws change occasionally. Strata systems change every day …

Governments like to think that reform changes systems.

A problem is identified. There is consultation. A policy response is developed. Legislation is drafted, debated and passed. Regulations are prepared. Eventually, the new rules commence.

And the system changes.

Or, so the theory goes.

But strata systems do not wait patiently for governments to finish reforming them. They are already moving.

Owners are making decisions. Committees are responding to problems. Strata managers are changing procedures. Lawyers are giving advice. Insurers are repricing risk. Developers are restructuring transactions. Consultants are developing new services. Contractors are changing what they will do and what they will charge.

Sometimes those changes occur after strata reform. Sometimes they begin while strata reform is being developed. And, sometimes the system starts adapting as soon as it can see strata reform coming.

That creates an uncomfortable possibility for strata reform.

By the time a reform arrives, the strata system it was designed to change may already have started changing around it.

How Strata Decisions Transform, Consume, Transfer and Reveal Capital …

This article introduces the principle of Capital Conversion, a central foundation of GoStrata’s Capital Distortion Doctrine, and provides a more complete way to understand what happens when strata money appears to disappear.