Earlier this month Elias sat down with Liz Florence from Abode Strata to discuss the Revised Strata Titles Act reform that came into play in 2020, including mandatory 10 Year maintenance plans for 10 Lots and over or have a replacement cost of more than $5 million.
These 10-year plans are to be in 5 year “rolling” increments. The Strata company may pass a motion at an AGM which considers the 10-year plan and levies to fund the expenditure throughout the 10-year plan cycle and beyond. Some strata companies are going one step further and obtaining a 20-year plan.
Listen to the Podcast here.
Transcript of Podcast:
Transcript of Podcast:
Liz Florence:
Hello and welcome Strata Chat, where you can listen to real stories about real people and all things Strata. Our goal is to help you understand Strata and inspire you to create your own thriving Strata Community.
Liz Florence:
Hi, everyone, and good afternoon. Welcome to Strata Chat. Today, we’re actually speaking with Elias Oostveen from Home Integrity. Elias is actually speaking to us under the banner of the Home Integrity Strata Consultant brand, and Home Integrity is the winner of the Strata Community WA Award for Strata Service Business 2020. Congratulations on that massive achievement.
Elias Oostveen:
Thank you very much, Liz.
Liz Florence:
I bet you’re very excited with that.
Elias Oostveen:
Very proud.
Liz Florence:
Yeah, awesome.
Elias Oostveen:
Got a great team.
Liz Florence:
Yeah. Well, I think it takes a great leader, too. And then you went on to win the Australasia, the National Strata Services Business Award for 2021. How was that?
Elias Oostveen:
That was quite a watershed moment for me. That one did blow me away. The competition was extremely fierce, and yeah, it was amazing night that Strata put on in Adelaide that we were fortunate enough to go to, just snuck in and out.
Liz Florence:
Oh, the borders.
Elias Oostveen:
With the lockdowns, yep. But yeah, it was absolutely brilliant, and I’m very humbled and grateful to receive such a prestigious award.
Liz Florence:
That’s awesome. Well done.
Elias Oostveen:
Thank you.
Liz Florence:
I might actually get you to let everyone know your background and how you actually came into your own business of Home Integrity.
Elias Oostveen:
Yeah, sure. Yeah, I’m obviously CEO of Home Integrity Building Consultants, and a division of what we do is in the Strata space. Since the reforms came through in 2019, yeah, we’ve been instrumental in completing well over 100 10-year plans. Yeah, what else can I say? I’m a builder, I’m chairman of InspectWA, the largest association of building inspectors in Western Australia. I’m a partner, I’m a father, I’m a super keen surfer when I’m not working and running this business. But yeah, I’ve got a real passion for the Strata space and the Strata complexes in general and the communities that they serve, just because of the diversity, really. It’s a really professional space. We did all sorts of building inspections, but the Strata space, it’s quite unique because there’s such a dynamic. You’ve got owner-occupier, you’ve got investors, you’ve got retailers, you’ve got residents, you’ve got transient residents, so there’s really such a mixed bag, and no two buildings are the same.
Liz Florence:
Yeah, exactly, no two buildings are the same. That’s the interesting part, and especially if you’ve actually built Strata developments yourself.
Elias Oostveen:
Yes, yes, in the previous life.
Liz Florence:
You’d understand the complexities and all about common areas, lots, and… Yeah.
Elias Oostveen:
Yep. I’ve been the builder, I’ve been the developer, I’ve had owned Strata properties myself, so I do feel for all stakeholders.
Liz Florence:
Yeah, which is actually perfect, isn’t it? Because you can sort of understand from the people’s level, the owners that you’re going to see on site, the chairperson, or dealing with the Strata manager, and I think that’s pretty critical in our industry, so awesome.
Liz Florence:
Today, we’re actually going to be covering off on the topic of the 10-year plan. So we were speaking earlier about, yeah, the 10-year plan has come into to place. What do we need to know? And as you said, it’s now a mandatory requirement for all designated properties and a designated Strata company. A designated Strata company is one with 10 lots or more, or a replacement cost of more than $5 million. For a Strata survey, if the replacement cost of the improvements on the common property is more than $5 million, obviously, and this will be the interesting part of our discussion today, some Strata companies may decide to prepare a plan on a voluntary basis. However, inevitably, personally, I believe just for business purposes, because really, this is Strata company and should really run it as a business, and risk management and transparency, you’re better off having an independent person anyway. I’ll hand over to you. What have you learned completing over 100? That’s a lot 10-year plans, because they’re quite detailed, aren’t they?
Elias Oostveen:
They’re very detailed. Look, they vary from 30 pages to well over 200 pages when you put the 10 year-plan part together with the condition report, because it is a two-part report. And you’re right, Liz, we have definitely seen some council of owners have a crack at the plan themselves, got too hard, other council of owners weren’t happy with plan that an individual has prepared, so then they’ve called in to prepare a new plan. We’ve had council of owners have the other professionals come in and prepare a plan that, again, they haven’t been happy with, so we’ve come in again and they paid for a second plan, and obviously, they’ve been happy with ours. So it doesn’t surprise me that people see these teething problems and they’ll just see these teething problems.
Elias Oostveen:
Right from the get-go, it was really important to us that not only was the plan compliant, so that’s why we did get Sean Macfarlane, the author of the plan, to verify our reports do comply, which just seemed like a no-brainer to me and very obvious, but still, I think we’re the only company with that ticket of approval, which is strange. But anyway, the plan is for the use of the council of owners. So it’s not my plan, it’s their plan. It is our best guidance for them using industry-best practice, maintenance, scheduling, and forecasting, but ultimately, it’s their plan. So if they want to slice and dice it in a particular way, well, we have that flexibility with the way we construct our plans, and the way we break down our gold package, in particular, it really does allow for that, and we’re finding a lot of council owners are happy to take us up on that.
Liz Florence:
So when you say, “Break it down,” can you explain what you mean by that? Because obviously, like you say, it’s part of the whole change process. Some people attempt these 10-year plans by themselves. You’ve had the best person, obviously, help you prepare the template, which is Sean Macfarlane, who was instrumental with the revised Strata Titles Act when he was with Landgate. So when you’re talking about, obviously, your gold plan, how do people normally put that and how do they implement it and dissect?
Elias Oostveen:
Sure. Look, we understand some people just want to tick the box of compliance, having a 10-year plan in place by the next AGM in May. So we understand that that is just important for some people, but we also understand that people appreciate the level of detail that we go to as builders, the amount of photos we take, the descriptions that we give, and just the level of forecasting. Because our 10-year plan, actually, we go a step further, and we actually forecasted 20 years because a lot of the visibility you find, it’s too compressed in 10 years, and we’re finding that certainly, for some of the bigger schemes and for some of the schemes that aren’t as well maintained as others, having the 10-year forecast is-
Liz Florence:
It’s not a true picture, is it really, on the 10-year?
Elias Oostveen:
Not a great picture.
Liz Florence:
And then someone else could come on board, depending on who they’re going to get next. Hopefully, they get you to come back again, which makes total sense, but they may not see the vision in the same way that you’ve actually staged it out, and some of the bigger items may get looked upon in a different matter, discarded, or discredited. Yeah.
Elias Oostveen:
Yeah, exactly. So getting back to your original question, how do we massage the plan to suit the council of owners, I’ll give you a really practical example. We did a project out on Terrace Road, a big building and required a lot of painting, and if we just put that in as one line item of painting to be completed, it’s like a $1.2 million exercise. That’s a big chunk of change for any Council of Owner to pull out of the back pocket or any lot owners to pull out of the back pocket in one big hit. But we as builders understand that at different elevations, whether at different rates, so the west elevation cops a lot more weather than the east or the south elevation. So we found that those elevations, we could push the requirements to paint those elevations out, so we’re able to slice it up into four different levels, which, instead of having huge lumpy levies for the lot owners to pay, it was a lot smoother for everybody.
Liz Florence:
That’s a brilliant idea. I don’t think many people actually think about that. Do they generally? They normally bundle in the lump sum, don’t they? You’ve probably seen that quite a-
Elias Oostveen:
It seems obvious to us, but yeah, yeah. The graph tells you. It doesn’t lie to you.
Liz Florence:
And obviously, having exactly what you said, like the information to present to the owners, they can understand it and make an informed decision, can’t they?
Elias Oostveen:
Well, we just don’t dump a condition report and plan on the council of owners’ desk and walk away. There is a consultation period with all of our gold reports where we make sure they understand exactly what we’ve documented, that it does suit their financial requirements, and if it doesn’t, we work with them to…
Liz Florence:
Oh, you say you’ll actually adjust the plan, because as we know, obviously, the 10-year plan, the intention is it’s a saving plan, not a spending plan, a good governance savings model. The act basically says it’s got to have regard or due regard for the 10-year plan. It doesn’t say must, but obviously, it’s best practice. And typically then, the CEO would, therefore, consider the plan and advise and include it in a motion at the AGM to table it. So when you’re talking about the levies and the allocations, everyone has the opportunity to also consider that and see whether or not it’s doable.
Elias Oostveen:
Yeah. “Considered it” is an interesting word. Sometimes, they get a little bit excited, and sometimes, it’s considered, yep, and everything in between, as I’m sure you’ve experienced this.
Liz Florence:
I couldn’t imagine your role, to be honest, with those then now that we’ve actually just mentioned that. Yeah. That’s awesome. And then, 10-year plans, we’re also been talking about, you’ve mentioned water ingress, especially with new buildings, and works in over the last, gosh, 10 years, I suppose, with a lot more sealants being used and different building methods, a lot more water ingress, aren’t we? Because what’s the story with sealants, they’re not really made, a lot of the barriers haven’t been tested, I suppose you could say. What is it?
Elias Oostveen:
Combination of a few things, Liz. This, certainly, we can see that some corners have been cut and some building technologies have definitely improved over time. But look, having been an expert witness at quite a few SAT cases to deal with water ingress on some newer builds, I can definitely see there’s a common thread of annual maintenance. So builders are quick to ask the council of owners for their maintenance plan, the general maintenance plan to make sure that all those mastic seals, all the joints, and all the grout joints have been attended to and maintained on a regular basis, and where they’re not, I’ve found, yeah, it doesn’t always go the way of the council of owners.
Liz Florence:
Oh, that’s interesting you mentioned that, but we’re actually going to discuss this a little bit more thoroughly when we come into episode two, because this is obviously one of the three-part series that we’re doing today, and we’ll be discussing structural engineering and water ingress reports, so we might tackle more off on that when we go into two.
Elias Oostveen:
Looking forward to it.
Liz Florence:
And do you know that with regarding common areas at handover and logging of issues for the common areas?
Elias Oostveen:
Yeah, really pleased you brought that one up. I was chatting to one of our inspectors, Lachlan, today and just asking him what he’s been experienced. He’s obviously at the coalface, reporting back to us, but anyone moving into a new complex before they take possession, we thoroughly recommend very thorough inspection of the common area, because the first thing that’s going to happen is when you list any maintenance issues is the builder’s going to turn around. Potentially. I shouldn’t say that. Not all builders, some builders.
Liz Florence:
I suppose it’s only because lately, we’ve actually heard about a few of the naughty ones and not necessarily the good ones, so I understand why that’s in your mind, because you would see a lot of that, yeah.
Elias Oostveen:
Yes, yeah, yeah. No, it’s kind of more of the same brush. Yeah, because there are some brilliant builders out there.
Liz Florence:
And you’re a good builder, too, aren’t you?
Elias Oostveen:
Thank you. We did win a couple of industry awards. But yeah, just getting that snapshot in time of, “This is the condition of the common area. This dent was before we moved in. This water stain was always there,” because yeah, we don’t want to get into an argy-bargy of, “Well, that wasn’t there when you guys moved in, and that’s a maintenance issue.” That’s a lot harder argument to win.
Liz Florence:
But is it a maintenance issue?
Elias Oostveen:
It largely depends on the problem. What the Building Act does cover owners for is faulty and defective workmanship, and goes far beyond the structural elements of the building, so it’s water ingress, it’s deflection, it’s cracking, it’s subsidence, operational, installational. It’s a very broad range of defects. For some reason, a lot of people have it in their head that it’s just structural defects, which, 100%, is not.
Liz Florence:
No. And I have seen on a price, that case as well, or even lodging with the Building Commission, or actually going to the builder first, where the builder turned around and said, “No, that’s a maintenance item,” and it was a big crack above the lift well, where the sealant had broken down. It was in year two or three, and I said to him, “Well, no, because actually, that building should be watertight and secure for that period,” and obviously, the Building Commission’s a same sort of thing.
Liz Florence:
But even when we’re talking about a videography or a photographic evidence with a date periods of the building, they’re critical and, obviously, they then get that and underpin it with some written notations, and the same applies for anyone who’s moving into the property inside their own lot. Critical to do the same, because when these, if you do have issues, the Strata company, being all owners as the entity, cannot go on and assist the lot owners or represent them for inside their lot. That is actually an individual line separate to the common area. So yeah, that’s actually quite interesting.
Liz Florence:
Another one we were sort of looking at was passive fire separation, and that’s actually a whole other topic, which we can also discuss at a later date. Because obviously, it’s critical and people’s lives are involved. It does go into a bit of gray area, and it’s part of the pun, and there’s some interest in fire service contractors around, that’s all I’ll say, so some people are very unsure of what they should do and what they shouldn’t do for maintenance, and yeah.
Elias Oostveen:
Yeah. Yeah, look, that’s a whole separate conversation around passive fire protection, smoke seals, fire collars, party walls in between units. The largest cause of deaths are carrying from the neighboring property, not within their own property.
Liz Florence:
Really?
Elias Oostveen:
Yeah, just from neighboring property, so that passive fire protection is extremely important in a strata complex. Yeah, we are picking up those sorts of deficiencies in some of the new builds, which I’m pleased about.
Liz Florence:
When you say the new builds, so you’re obviously going into the roof space on some of them? How do you actually test or check for-
Elias Oostveen:
Where we can access the roof void area. Yeah, absolutely, we will definitely recommend the roof void areas get checked, because that’s where we can assess the fire separation, yeah.
Liz Florence:
Because even some people don’t understand with their attached dwellings is that it’s also an issue, and they won’t necessarily have them checked, and that’s an interesting one too.
Elias Oostveen:
Yeah, it’s correct.
Liz Florence:
I hear you utilize drones on some of the sites, yeah.
Elias Oostveen:
Oh, absolutely, yeah. Why not use the tech that’s there to keep the inspectors safe? Some of these areas that we like to get into are just access nightmare. So yeah, we’ve got partners at Asset Reports who take care of all of our forecasting. They’re all qualified drone, not all of them, but they do have qualified drone pilots on staff. So yeah, we partner up with those guys, and they’ll come and fly a drone and take some photos of areas that we like to get into, just in case to see going on.
Liz Florence:
And that’s also, especially you mentioned before painting, so it’s a really good way to assess the painting requirement of a multi-story property as well, isn’t it, like you say, to difficult to access areas. Yeah.
Elias Oostveen:
Exactly. Not all complexes, certainly old ones, have adequate roof safety-
Liz Florence:
Harnesses, yeah.
Elias Oostveen:
… access equipment. But yeah, drones are perfect in that instance.
Liz Florence:
Right. So you mentioned that you’ve got a gold service for the 10-year plans. What other type of services do you offer for the 10-year plans?
Elias Oostveen:
So we do have Gold and a Silver service. So the Silver service to people who basically, or council of owners who want to tick that compliance box to say they’ve got a 10-year plan in place. What we do there is we group the covered items. So what I mean by that is a covered item might be the roof exterior, okay? We know the roof exterior is made up of different building elements, and those elements are like the roof cover, gutters, flashings, downpipes, penetration through the roof. So there’s six different items. So in the Gold package, we’ll break up those six different items. So we’ll say, “This is-“
Liz Florence:
They’re more detailed, very specific. Okay.
Elias Oostveen:
More detailed, and we can spread the costs associated with how that building element is going to deteriorate or the maintenance that will be required.
Liz Florence:
Oh, that’s excellent. That’s good to know.
Elias Oostveen:
Yeah. Well, we can do that because we partner with Asset Reports, and they are our quantity surveyors. So with their insights into building costs and our knowledge’s registered builders, we’re able to get those budgets pretty accurate.
Liz Florence:
And in the end, people might balk at the cost of a building report. However, it’s very similar to the cost of an independent experienced professional for evaluation or any other professional service. It’s the difference between plucking a figure out of the sky or doing a fast drive-by and filling in an Excel spreadsheet with, “Oh yeah, that building looks similar to the one down the road,” or a tailored, specific outcome that you can, as you say, adopt, implement, work through, and sectionalize and segment, depending on your needs, if you need to move it around slightly or work it.
Elias Oostveen:
Look, it was a lot like I said before, Liz. It seemed very obvious to me. We didn’t want to leave our council of owners and the Strata managers with a report that was just a big headache, with a bunch of money that needed to be spent.
Liz Florence:
Which people balk at, rather than implement.
Elias Oostveen:
Exactly. Let’s call it for what it is. So we went one step further, and everything that needs attention in the next 12 months, when we do a Gold plan, we produce a request for quotation documents. So the Strata management should use those documents to send out, because as we know, everything over $500 needs three prices. So they can use those documents, they send it out to get all their quotes, they can liaise with the counselor bonus, “Are you happy with these prices?” Then they-
Liz Florence:
So you help them? So you actually detail the specific work orders?
Elias Oostveen:
Yeah, we do.
Liz Florence:
Wow. So they-
Elias Oostveen:
I wouldn’t say it’s a detailed work order, but it’s certainly more-
Liz Florence:
Sufficient.
Elias Oostveen:
… sufficient to get quoting, yeah. So then, in most cases that were found, the council of owners will action the items that are required in the 12 months. And what we do with our Gold packages is we’ve got an annual subscription fee. So the council of owners will have us go back to check all those works have been done, and then we’ll provide another updated plan. So every year, the plan gets updated. You don’t need to wait five years for a new plan. There’s going to be property transactions in the meantime, so why not, if you’ve gone and spent two or three million dollars on your property?
Liz Florence:
Well, it’s a living, isn’t it? It’s a living document, yeah.
Elias Oostveen:
It’s a living document. It is. It’s dynamic. It’s not meant to be static.
Liz Florence:
Yeah, totally, no. Well, sounds like you’ve got it all organized. A lot of work.
Elias Oostveen:
Yeah, yeah. Yeah, it’s a well thought out service, that’s for sure.
Liz Florence:
Yeah, awesome. Well done.
Elias Oostveen:
Thank you.
Liz Florence:
Elias Oostveen from Home Integrity Strata Consultants, winner of the 2020 WA Award and winner of the Strata Community Australasia, or Australia National Service Strata Services Business Award 2021. Thank you for your time today, and I look forward to chatting with you for the next couple of episodes, where we discuss structural engineering and water ingress, and new complexes, building defects, and bringing a complaint to the Building Commission. And you never know, there could be another one in the pipeline for passive fire protection.
Elias Oostveen:
All right. Sounds good.
Liz Florence:
Okay, wonderful. Thank you, Elias. Have a great afternoon.
Elias Oostveen:
My pleasure.
