Meet the Hillbillies of Strata Land
or, what about our renter strata cousins …
A Quick Take
Half of all Australian strata apartments are investment properties that are tenanted. Strata renters must follow all the strata laws, by laws and rules. But strata renters have almost no strata rights, have no say in how strata buildings operate, and they’re treated as second rate strata citizens. But they’re not. So, why is that and how did it happen? Plus, where do Australian strata renters have the most rights?
[a 8:50 minute read, with 1687 words]
The Full Article
INTRODUCTION
According to the best and latest strata research in Australia close to half of strata apartments are rented. As at 2022 it was 47% nationally according to the UNSW City Futures Research Centre’s Australasian Strata Insights 2022.
So, since there are 3.1 Million strata apartment lots, there may be as many as 1.457 Million strata renters in buildings around Australia right now.
But strata renters are denied many property rights in strata buildings and are much maligned by strata buildings, strata committees, strata owners, strata managers and [even their landlords]. So much so. that in my opinion they’re like the hillbillies of Strata Land [and not in the good and romanticised sense of that term popularised by the book Hillbilly Elegy: A Memoir of a Family and Culture in Crisis by JD Vance.
That makes no sense to me for social, economic, governance and moral reasons. And it’s unproductive for the strata sector to do so.
In this article I explore some of the perceptions and realities of and for strata renters.
WHY ARE STRATA RENTERS SO MALIGNED?
There’s a perception that strata renters are inferior to strata owner investors and strata owner residents.
But it’s a just a stereotype or trope.
And, like all stereotypes, it isn't true [universally or in most instances] and perpetuates negative biases.
Most, if not all, strata renters are hard working, respectable, and fully integrated members of their strata communities [or at least as much so as most strata owners]. And half of Australian strata owners [the investors] rely on the rent they get from strata renters to cover their negatively geared mortgages, strata levies and other ownership and lifestyle expenses.
The strata renter stereotype and these sentiments can be attributed to the following perceptions.
Financial Stake: Strata owners have a financial stake in the strata building which supposedly translates into a greater commitment to the upkeep, value, and long term wellbeing of the strata building. So, there's a perception that strata renters, without this financial stake, don’t treat the strata building with the same care and commitment.
Transience: Strata renters are seen as more transient in strata buildings, potentially moving out when their lease is up, whereas strata owners may reside there for many years. This also lead to perceptions that strata renters don’t have a long term interest, and therefore commitment.
No Decision Making Power: In all Australian strata buildings only the strata owners [not strata renters] have voting rights and can make decisions on strata matters. Plus, in most states strata renters also don’t have access to strata information, can’t attend meetings and can’t liaise with strata managers. This create perceptions that strata renters are irrelevant to strata building operations and foster an ‘US versus THEM’ mindset.
Negative Experiences: Even occasional negative experiences with strata renters in strata buildings (such as disruptive behaviour, not following by laws or rules, or moving in/out issues, etc) taint perceptions of strata renters which get generalised about all strata renters, even the vast majority don’t act that way and are responsible and respectful strata residents.
Cultural or Societal Norms: In Australia, owning property is perceived as socially and economically desirable way to live, associated with stability, success, wealth and prestige. Renting, in contrast, is often viewed as a lesser or inferior way to live.
Economic Disparities: In some [but not all] situations, strata owners are in a different socioeconomic class than strata renters. This can also create biases, perceptions of superiority/inferiorities and anti renter prejudices by strata building stakeholders.
Knowledge Asymmetry and Communication Barriers: Strata renters are generally less well informed about strata title matters including about laws, by laws, rules, procedures and the culture of strata title buildings than strata owners [not that they are that well informed]. Plus, in some situations, there are cultural and language differences between strata renters and strata owners and other stakeholders. This leads to strata misunderstandings, adding to negative perceptions about strata renters.
But it's important to remember that generalisations and stereotypes about any group, including about strata renters, are mostly unfounded, don’t apply to the whole group, and become self perpetuating.
Plus, in Australian strata buildings, they’re wrong as you’ll realise if you critically assess these perceptions.
STRATA RENTERS MUST FOLLOW STRATA LAWS, BY LAWS AND RULES, BUT WITHOUT EQUIVALENT RIGHTS
Australian strata renters are also caught in a terrible power, rights and monetary imbalance characterised by the following features of strata renting.
First, strata renters have to follow all strata laws, by laws, rules and strata building operational requirements as they apply to them. But, in most places, strata renters cannot make Tribunal applications for orders about strata building issues or raise disputes in their strata buildings.
Second, strata renters are given the strata by laws and rules to comply with, But strata renters cannot inspect strata records or get access to most strata information.
Third, strata renters are told what do by strata buildings, strata committees and strata managers in relation to the strata building. But strata renters don’t have access to strata committees or strata managers to get information or raise issues about the strata buildings as they typically insist on the strata owner or their property manager [rather than the strata renter] liaising with them.
Fourth, strata renters are effectively paying half the strata levies of all strata buildings. But strata renters have no say on how strata funds are spent. And they can’t find out.
Fifth, strata renters are affected by decisions made in their strata buildings at strata owners meetings, by strata committees and by strata managers under delegated powers. But strata renters cannot submit matters for consideration or decision making at strata owner meetings.
And there’s many more examples.
But these power, rights and monetary imbalances for strata renters in strata buildings has not been intentionally created.
Rather, they are the result of strata law makers and strata stakeholders simply not focusing on strata renters enough [or at all] over the last 50 years and, instead focusing on strata owners’ position, interests and issues.
Plus, most strata stakeholders [including governments] don’t realise what a significant part of the strata community strata renters comprise; it was certainly a surprise to me when I first learned that 50% of all Australian strata apartments are rented.
THE BEST STRATA RENTERS’ RIGHTS IN AUSTRALIA
In that context, which Australian states give strata renters more rights [and what are they]?
New South Wales
New South Wales has introduced some improved rights for strata renters over the last 10 years into their strata laws that include the following.
Strata renters can give their details to the strata building if strata owners don’t do so.
First AGM notices must be sent to strata renters, but not notices of other meetings.
If strata renters are more than half of a strata building’s residents, a yearly meeting must be arranged for them at least 14 days before the annual general meeting.
Strata renters can select a representative at their annual meeting to be a non voting member of the strata committee.
Strata renters representative may be restricted from addressing strata committee meetings and excluded from hearing about financial matters.
Strata renters can attend general meetings but not speak or vote at them, but strata buildings are not required to notify them about those meetings.
Strata renters can only make NCAT applications as occupiers of a strata lot to enforce restrictions on utility lots although NCAT orders can be made against them.
But NSW strata renter rights are controversial.
Strata renters feel that have not been given enough in the way of participation rights, and strata owners and strata managers will resent the additional costs, time and complexity of the strata renter meeting and representation provisions. The result might be that strata owners do not to give notices about the existence of strata renters to avoid the provisions.
Queensland
Queensland recognises strata renters throughout its strata laws but mostly in relation to strata renters obligations to comply with strata laws and by laws.
However, Queensland strata renters also have the following improved strata rights.
Strata renters are recognised as having occupation and use rights over common property and their strata lot.
Strata renters cannot be discriminated against under by laws as a different type of occupier.
Strata renters can make applications for orders to resolve disputes about most matters in the strata building to the Office of the Commissioner for Body Corporate and Community Management.
Victoria
In Victoria strata renters have the following improved strata rights.
Strata renters can [as occupiers] make a compliant to strata buildings about a dispute.
Strata renters can [as occupiers] make a complaint to the Director of Consumer Affairs for conciliation by it.
Strata renters can [as occupiers] make applications for orders to resolve disputes about most matters in the strata building to VCAT.
Western Australia
In Western Australia strata renters have the following improved strata rights.
Strata renters can [as scheme participants] make applications for orders to resolve disputes about most matters in the strata building to SAT.
CONCLUSIONS
The treatment of Australian strata renters is wrong given their numbers, their significant financial contribution to strata building and owner cashflows, their importance to day-to-day strata operations ,and the fact that they are also strata citizens. That’s because of misapprehensions.
I’ve tried to dispel the misapprehensions about strata renters and explain why inviting them to the strata party is a good thing.
And, even though some Australian states have created rights for strata renters in relation to disputes, to give them limited participation rights, and to recognise them under the strata laws, those rights are limited and not very useful for most strata renters.
So, the sooner strata stakeholders recognise that, act accordingly and make changes to bring strata renters into the strata community, the better things will be.
March 12, 2024
Francesco …