Director of Australasian Body Corporate Management Chaz Burdett spoke to The Australian Business Executive about the growth, change, and competitive edge in the strata management industry.
Now in its 32nd year, Australasian Body Corporate Management manage over four hundred complexes throughout Queensland and New South Wales, with unprecedented annual growth in excess of 25%.
How did you come to be involved with the industry?
Presently I am partner and managing director of Australasian Body Corporate Management, overseeing the operation of the Brisbane and Gold Coast offices. I have been involved in the Body Corporate/Strata industry and property services industry since 1996. Prior to join Body Corporate/Strata management I was involved in commercial investment sales and leasing, employed with Colliers International and later joined Jones Lang LaSalle when I relocated to Brisbane in 2007. Both rolls involved facilitating the sales and leasing of regional and major shopping centres, office buildings and various commercial facilities and sites throughout Queensland and New South Wales. In 2007 I purchased an apartment located in New Farm, Brisbane and joined the Body Corporate Committee, taking on the Treasurer and Secretary roles. Playing an active role and undertaking major capital works to the complex, including exterior re-painting, exterior lighting upgrade and building security upgrade. Over a six-month period, working closely on these major projects and with the Body Corporate manager of our complex who was also the director of the company. This business relationship lead, to an employment offer with this particular company and this is where I commenced my career in Body Corporate management.
And this led to your involvement with Australasian Body Corporate Management?
In late 2013 a decision was made to explore opportunities in the setting up of a Body Corporate/Strata management company or purchasing an established company. It was further decided that Sydney or Brisbane would be the preferred locations given the growth rates, particularly Brisbane. Following several months of investigations an opportunity arose in Brisbane to purchase Australasian Body Corporate Management. The company held a solid foundation in the market place, had been established 28 years at the time, and employed a small team of 8 staff members. All of which appeared attractive, as we knew we could grow the portfolio to a size where we felt comfortable.
So how is your offering different from others in the space?
Now established 32 years and growing the portfolio to a comfortable size, we aim to deliver our clients the highest financial, legislative and facility management services available. We ensure client satisfaction is achieved and to continue to remain a sought after and respected organisation in the market. Within our organisation comes a diverse range of talent from industries such as building, construction, property services, finance, facilities and project management. Our team is small, however we personally know all our clients and deliver same day service. Our Brisbane office holds 10 staff members and our Gold Coast office holds 5 staff members. Both offices hold facilities to accommodate owner’s attendance during General Meetings and Committee Meetings, as some meeting attract up to 40 owners in attendance. We accommodate attendance in person, teleconference and Skype.
And where is the business headed?
Australasian Body Corporate Management operates in Brisbane, Gold Coast and Sunshine Coast and is licenced and operates in Sydney and Northern New South Wales. Presently we hold the management of over 400 complexes with growth rates exceeding 25% annually.
Would we know of any of your properties under management?
Three properties which come to mind are our Allegra development in Southport, Cathedral Place complex in Fortitude Valley, and the Merrimac Heights Estate. Allegra is a mixed-use development in the corner of Scarborough street and Nind street comprising 117 apartments over sixteen levels, including retail shops on the ground floor.
Cathedral Place is an inner city complex spanning an entire city block and comprising 550 apartments in Brisbane, and which has been registered under BUGTA and comprises a Principle Body Corporate known as the CBC, five Body Corporate schemes known as BUP’s and a commercial precinct comprising of 21 shops and first floor offices.
Finally, Merrimac Heights Estate is a secure gated complex of 150 townhouses, two tennis courts, two swimming pools and ten areas of landscaped grounds.
From an industry standpoint, what changes are taking place in the sector?
Following the announcement of the New South Wales new Strata Schemes Management Act 2015 which came into effect from 30 November 2016, several changes include; The Annual General Meeting, Committee Meetings, Finance, Legal, Insurance, By-laws, Repairs and Maintenance and Strata Management Agreements. Some examples of these changes include:
Notices of the Annual General Meeting must be provided to Lot owners and tenants at least 7 days’ notice prior to the Annual General Meeting. A vote can be held to determine when the owners can hold their Annual General Meeting during the financial year. Should a quorum not be achieved after 30 minutes of the notified commencement time of the Annual General Meeting the Chairperson may adjourn the meeting or may declare those present achieve a quorum and commence the meeting accordingly. Voting on matters may be conducted by secret ballot, however under certain requirements only. Owners in large schemes may receive the Minutes of a General Meeting within 14 days, however only if requested. A maximum of one proxy per person for schemes under 20 Lots and for schemes greater than 20 Lots a person cannot hold proxies for more than 5% of the total number of Lots in the scheme. One co-owner of the same Lot may be elected to the Committee only. A sole owner of a Lot may not nominate more than one person to the Committee unless they own more than one Lot. An explanatory note of not more than 300 words is required when requesting a motion to be placed on a general meeting agenda. Motions must be included on debt recovery management, annual fire safety assessments, known commissions and training services, as well as an estimate of any commissions to be received during the financial period. Owners may requisition motions upon a General Meeting, whether their levies are paid in full or an amount is outstanding.
The Sinking Fund has been renamed Capital Works Fund. Auditing of financial year end statements is compulsory and must be carried out prior to the Annual General Meeting and the distribution of the agenda documents to Lot owners, for schemes greater than 100 Lots and or with an annual budget of more than $250,000. For a scheme greater than 100 Lots, when preparing annual financial budget, a specific amount for each item of expenditure is required and any variances to the 10-year capital works plan must include a reason for the variance. The capital works plan is to be used in budget preparation and should be followed as close as possible. The financial budget will include contributions raised, income received and all known expenditures.
So what are the most important issues facing the strata industry?
A Body Corporate/Strata complex may see a variance in occupancy ‘resident owners or tenants’. Complexes that hold a high tenancy ratio, generally see a low attendance rate during General Meetings. These factors greatly impact the decision-making process and therefore decisions may take longer to determine than normal. The importance of owners participating in the voting process is paramount. Whether owners attend meetings in person or by voting paper, the importance of their vote is valuable.
What are the business lessons you’ve learned?
We recognise that Body Corporate/Strata management is a service based industry therefore our team is committed to working together to ensure all service levels are reached and reviewed where necessary. Ensuring these service levels are achieved is of the upmost importance as our business growth is dependent upon this. The majority of our business growth is received by a referral from an existing client which is a direct result from our service levels. Our team continues to stand by our motto “Our Knowledge is your Body Corporate” to ensure our retention and growth rates are achieved. Furthermore, educating owners of their responsibilities when owning a property within a complex is valuable. Therefore, providing owners of the By-laws that govern the complex ensures all residents are aware of who is responsible and the provisions pertaining to certain aspects of community living.
What misconceptions about the industry do you have to deal with?
Misconceptions in the industry may vary, however a common misconception is that some owners believe their levy contributions paid, all go to the management company, which is not the case. The levy contribution owners pay, is a payment towards all expenses the complex will incur or save during its financial year. The administrative fee paid to the Body Corporate manager is only a small portion of the levy contribution owners pay and it is as small as 5% of the total contribution.
Are there particular issues strata owners should better educate themselves on?
Owners need to be aware of various issues pertaining to their complex and to better educate themselves. Particularly in By-laws, Enforcement of By-laws & Obligations of a Body Corporate and Committee members. Our office regularly distributes information factsheets pertaining to these obligations which include; What is a Committee, What is the role of a Body Corporate Manager, What is the role of a Chairperson, Secretary, Treasurer and Ordinary Member of the Committee & How does a person nominate for Committee positions. Furthermore, matters pertaining to By-law enforcement are included which cover topics such as; What are By-laws and the responsibility of the Body Corporates to enforce its By-laws. Australasian Body Corporate Management finds owners are receptive to receiving these information factsheets which in turn assist owners, property managers and their tenants to better understand who is responsible for what in a complex, therefore directing their enquiries to the correct person.
Operationally, how is Australasian Body Corporate Management different from other providers who work in this space?
Firstly, from a management perspective we emphasis the importance of ensuring our staff are treated with respect. We feel that ‘happy staff equals happy clients’ therefore we ensure each member of our team is provided adequate support in their role to ensure they are not overloaded and able to provide the required service levels our clients require and expect.
Our role is to assist the Committee in administering all Secretarial and Treasurer roles. Under the direction of the Committee, our office assists in the preparation and distribution of all Agendas and Minutes. To ensure effective meetings are conducted, clear communication between our office and the Committee is held in the lead up to any meeting. Draft Minutes are circulated to the Secretary within 7 days or sooner after the meeting for review and approval, prior to distribution. All action items from the meeting are clearly identified upon the Minutes of the meeting and detail who is responsible for what. Our office can assist with these tasks within a timely manner.
Furthermore, our office will assist the Committee, particularly the Secretary in all communication to owners and residents when required and implement any legislative requirements. Given our experience in the creation of By-laws, our office can value add to your existing By-laws if or when needed to help uphold the integrity of the complex.
We pride ourselves in financial management. Our financial controller assists the Treasurer during the financial year to ensure the financial expenditure falls in line with the approved annual budget items and if not, those notations are recorded for transparency to owners. Our financial controller will provide a monthly status report exclusively available to the Committee detailing all payments drawn, payments received, bank account balance, bank statements, financial statements and roll changes.
The Committee may require a review of its operational services. At Australasian Body Corporate Management our office can assist the Committee to obtain alternate options from service providers ensuring the complex is maximising its position. Operational services may include; security services, fire safety services, insurance services, electricity services, gas services, internet services, grounds & garden services, pool services, lift services, cleaning services, remedial repairs and ongoing general maintenance.
Australasian Body Corporate Management can confidently administer all communication to and from all service providers to ensure all owners receive the best possible outcomes. Furthermore, between our office and our legal team we hold a 100% success rate in debt recovery relating to overdue levies including metered energy.
Many of our complexes have saved 50% of their secretarial fees in the first 12 months after appointing Australasian Body Corporate Management.
Australasian Body Corporate Management holds a longstanding reputation in Body Corporate Management. When it comes time to recommend external service providers we prefer to recommend Body Corporate Brokers for their ability to obtain competitive insurance renewals, and their assistance during insurable events.