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Commercial Strata Management

Commercial Strata Management is vastly different to the management of residential strata schemes although governed by the same Act.

The Strata Agency assists a number of commercial schemes and understands the individual needs of owners, investors, developers and tenants.

As Australia is fast becoming one of the most litigious places in the world, each and every scheme must ensure that it has appropriate risk management strategies in place.

Commercial schemes must adhere to a number of compliance and legislative requirements on a daily basis. These requirements range from contracts management, fire safety, council regulations and occupational, health and safety laws.

For example, in accordance with the Occupational, Health and Safety Act and Regulations an owners corporation has a responsibility to ensure that the common property is assessed and checked to be a safe environment. Specifically that the common property is free from health and safety risks for people working there including volunteer workers, self-employed contractors, and if there are any, employees.

The owner's corporation also has a safety obligation to all those using common property including members of the public, visitors, tenants and owners to ensure that there is appropriate, safe access into and out of the common property, and of course to ensure the common property itself is safe.

Meeting these obligations can be simple, inexpensive and is essential for peace of mind. Effective risk management allows an owners corporation to move forward with managing the business of a strata scheme knowing its obligations have been met to the best of their ability and, should anything go wrong, prove they took reasonable steps to protect peoples safety.

According to the Occupational, Health and Safety Regulations generally the maximum fines for non-compliance are as follows:-

(a) In the case of a corporation (being a previous offender) - $825,000, or

(b) In the case of a corporation (not being a previous offender) - $550,000, or

(c) In the case of an individual (being a previous offender) - $82,500 or Imprisonment for 2 years, or both, or

(d) In the case of an individual (not being a previous offender) - $55,000.

However in the event of a serious or fatal accident the maximum possible fine is now:

$1.65 million for owners corporations and

$165,000 for individuals and up to 5 years jail.

The Strata Agency supports a proactive risk management approach and recommends that a qualified risk assessment officer be appointed to inspect your common property and provide you with a detailed safety report. The report should include:-

• Identify hazards and provide digital photographs illustrating their location.
• Assess risks that may result because of the hazards.
• Assist you in deciding on control measures to prevent, or minimise the level of risks present and future.
• Provide the necessary tools to allow you to implement and control measures and take the hassle out of compliance.
• Monitor and review the effectiveness of these measures as needed by you.
• Provide the Building Manager (if there is one) with a basic introduction to the important elements of occupational health and safety and risk management.

Commercial schemes are also the subject of ongoing scrutiny by Councils, as they endeavour to ensure buildings are adequately maintained. A number of Councils are in the process of writing to schemes reminding them of the importance of regular property maintenance and inspection by qualified professionals.

With the severe weather conditions we are encountering, and when combined with our aging buildings, this may lead to increased risks of failure and damage. Structures at risk include awnings, signs, balconies, retaining walls, sewer lines and trees.

According to Council, property maintenance can often be expensive if not attended to promptly. Property owners are legally liable for damage or injury caused by their property not being properly maintained. Council has provided the following examples of some common problems, to help clarify the schemes responsibilities and provide advice on how best to deal with them:-

• Awnings, signs, balconies, retaining walls and fences - Aging awnings and balconies are at risk of collapse when anchor points fail. Blocked gutters can cause water to accumulate, adding weight to the structure and causing fatigue, rust and failure.
  
  The cause of failure may not be visible from a ground level inspection. Owners have a responsibility to ensure all overhanging items are structurally sound.
  
  Awnings and overhanging structures should be inspected regularly by a structural engineer. Similarly, private retaining walls and fences may become unstable and collapse onto public property such as footpaths.
• Glazing – Window glazing should be checked regularly especially in multi-level buildings that are built close to their boundaries.
  
  Owners should ensure that the silicone base surrounds have not deteriorated.
  
  Weakening of the silicone may lead to the window pane becoming detached and falling onto public walkways and roads.
• Demolition – Owners should check the Council’s requirements before doing any demolition, including internal work. If carried out without the correct approval, the Council may not be able to authorise the work afterwards and may even order the property to be returned to its previous state.
• Trees – Trees are an important part of a pleasant urban environment. However, diseased and damaged trees can be dangerous. Whilst it is Councils preference to retain trees where possible, applications to lop or remove trees that can be demonstrated to pose a serious risk to public safety will be acted on.

The Strata Agency understands the importance of effective property maintenance and risk management. We play an active role in assisting schemes manage and understand their associated risks whilst ensuring compliance with your legal obligations.

We work closely with a panel of experts and professionals including Building Management Groups, Engineers, Fire Safety Consultants and Occupational Health & Safety advisors to best service your needs.

The Strata Agency would welcome the opportunity to discuss the management of your scheme, or if you would like an obligation free management quotation please contact us