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Welcome to The OMB Law Board, the podcast where legal insights meet practical advice. Hosted by Simon Bennett, Managing Partner at OMB Solicitors, this show delves into what you can expect when engaging with OMB Solicitors. Specialising in property law and commercial law, OMB also boasts dedicated teams for estate planning, contested estates, body corporate matters, litigation, and family law.
Each episode features in-depth discussions led by experienced team leaders, some with over 20 years of expertise. You'll gain valuable knowledge on initial consultations, cost assessments, timelines, and the importance of clear communication and confidentiality in legal matters.
Join us to break down barriers and navigate your legal journey with confidence. Tune in for expert advice, client stories, and tips on how to prepare for your legal needs. The OMB Law Board is your trusted source for all things legal.
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Welcome back to the OMB Law Board. I'm Simon Bennett and today I've got with me Juliette Nairn, our partner from Body Corporates. Juliette, welcome back to the podcast. Thank you very much. So Juliette, expert of all things Body Corporate, I want to look into and help our boarders and our viewers and listeners understand why does some buildings have caretakers or body corporate managers or onsite managers and some don't? Yeah, that's a really interesting question, Simon, because we actually get asked that a lot, particularly as we act on behalf of a lot of body corporates. A lot of individual, a lot of owners come to us and committees come to us to talk about, we want to live in onsite manager.
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We want a facilities manager to do all the caretaking and letting for us instead. So what's the difference and why does it come about?
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It's because how the building was originally created in terms of the size and the style of the building. Sometimes we have just a 31 lot scheme, which might just need a facilities manager to come in and do the gardening and the cleaning, which is a much easier regime for the committee to organise versus a 300 lot strata scheme where we have an in and onsite living building manager to take care of everything to do with the body corporate.(...) I always talk about it a little bit like this. A lot of people ask why do we pay body corporate levies? Well, we pay body corporate levies because we need to do repair and maintenance in the building.(...) I'm one of those lot owners who like to just sit there and pay my levies and I expect the magic fairies will go around and take care of everything for me. Get it all done. Get it all done. I don't mind who does it, I just want it to be done. Well, behind the scenes is a committee and a body corporate manager that works really hard with your building manager to just do it and make it happen. As a committee, they actually make the decision as to what's best for the building and the best style of management arrangement to have in place for the building.
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Depending on the size and the complexity of what needs to be arranged, if it was, say, a fairly small scheme, it could be that the body corporate just contracts out services. That's right. We might have a gardening contractor and we might have a cleaner and we might have someone who comes in and does repair and maintenance. They might be three separate contracts that the body corporate committee manages.(...) Different to that, let's say we had 50 lots and it was a residential scheme and the committee is like, ""Whoa, hang on. This is getting a bit hard for us to manage altogether.(...) We're going to engage someone who's a facilities manager being like a supervisor and that supervisor is then going to do all the review of the quotes, all the review of the contracts, bring that to the body corporate committee and say, ""This is what I recommend you engage as your gardener for the next 12 months."" Okay. That makes it a little bit easier for a body corporate. That's exactly right. Then you've got the bigger ones where it's really logistically a requirement to have someone on site a lot more than not. Yes. The bigger your building gets and the more facilities that you have,(...) think here in Surface Paradise, Seoul, sitting right there on our beach front at Surface Paradise. Our field terrace, yeah. That is a massive development with respect to that and it is a business of running the building. We have hydraulic engineers, we have structural engineers, we have Queensland fire services, we have compliance, we have registries of all our improvements and assets to the body corporate. There are a lot of people who turn up to that building to help it manage itself so that we, the lot of owners, can sit back and say, ""Is it now building sparkling?""(...) One of the benefits of living in a community title scheme like that is you can walk into your apartment and everything else is taken care of. That's right. The pool's clean, the bins are taken out. That's exactly right. The foyer's are clean, the grass is mowed. It's one of the real exciting things about living in Strata is that you can just lock it up and everything happens for you. But obviously that comes at a cost and that's where your body corporate levies come in. It's one of the things when I sit down with body corporate committees, sometimes I get a chairman's report which starts where a lot of owners as well, so as a consequence we've tried to keep the levies as low as possible. I hate hearing that line because if I'm my own homeowner and think of recently we just had the cyclone, think of how much time and effort you spent preparing your own home for a cyclone event happening. Imagine living in Strata and preparing your Strata building for a cyclone event.
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The money goes towards the levies into that repair and maintenance into all of these key experts to make the building sparkle. They're our magic fairies. Which maintains the value of your investment? That's right, generational value for on selling the lot. So a lot of it has to do with size, complexity of management and also the appetite of the particular body corporate to spend money and keep their building in good shape. Good shape, that's exactly right. And thinking of those insurance consequences that come with that as well. In Queensland obviously it's mandatory that a Strata building is insured.
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You need to repair and maintain it and that's your subscription to making sure you have good insurance.(...) We say insurance does not take the place of maintenance.(...) Okay, so let's talk about that insurance component. What does a common body corporate insurance scheme look like? What do you insure? What do you need to insure? So a common building and what we're going to talk about is a building that might be three or four levels, like a little building block, a residential block, might have a swimming pool.
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You insure all of the common property. So that's all the roof, the walls, the windows, the doors, the swimming pool, everything that's part of the physical building structure. I as an individual lot owner, I own the cubic airspace within my lot. So the kitchen cabinets, the bench, those sorts of things. I don't own the walls. In property we often talk about you earning the paint inwards. That's right. That's exactly right in terms of that. As part of that, the reason why the body corporate controls that through its insurance is we want to make sure that it is maintained and the building sparkles to that standard because we don't want copious insurance claims and we want the building to be watertight. So it is better for that to go as a separate legal entity, which is our body corporate, as opposed to individual lot owners. And then public liability for common facilities, pools, gyms, foyers, etc. Because people fall. They do. People slip around our pool areas. We have little trips and falls, those sorts of things. So we have appropriate public liability insurance for that. Car parks. Mm hmm. Yup. That's exactly right. Rams. In addition to that, let's say we have a full onsite caretaker. Our caretaker will also have their own professional indemnity insurance that they take out themselves. So we might have some appropriate workplace health and safety insurance for those independent contractors coming to our site to make sure we're covered for those people as well.(...) And I think our viewers and listeners would have also heard the term letting agent. Oh yes. With caretaking. That's right. How does that interact? So sometimes I can have a management rights package and if I'm, let's do beach front and surface paradise as well. And it might be very resort style, so holiday style. So although individual owners still own all the lots, they might put those lots in the letting pool with the onsite manager to get a holiday letting income as part of that. Hmm. Now if I do own one of those apartments, do I have to, and I want to rent it out, do I have to use the onsite letting person or can I use the agent down the road? You can use the agent down the road. You can use anybody you want in terms of that and all of that's governed by Department of Fair Trading. But to use the onsite letting agent, there might be benefits associated with that separate to let's say if I wanted to do Airbnb.
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Yeah. Those sorts of things. And particularly as, you know, if a building has more of a name that people want to come and stay at that building, they will probably ring the building before they ring someone else. That's exactly right. So you ring the building first, you ring the building direct, the building manager letting agent answers on their mobile and you're able to arrange those bookings in place with respect to that. In addition to that, and we often talk about different types of occupants. So we have our full-time occupant who lives there. We have our lockup occupant. So I might be resident in Melbourne and I fly up and have six months of the year on the Gold Coast and six months of the years in Melbourne, but I don't rent it out. And then I might have part of it in a renting pool where I could be long-term renting or short-term renting.
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Wow. So there's a lot to unpack there. I certainly feel like I've got a better insight now, at least into the different styles of buildings. Not the difference. How the caretaking, if you like, arrangements or contracting arrangements could be done, either, you know, subcontracted out by the body corporate or engaged by an onsite, live-in caretaker. That's right. It's very important as well because a lot of people downsize into Strata or it might be their first home that they've ever had. If we think about the cost of repairing and maintaining a standalone home, basically take that cost and multiply that a little bit to go into Strata. I know people think it should be cheaper to live in Strata, but if we want our buildings to sparkle, we actually need to make sure we are repairing and maintaining them and caretakers, building managers, facilities managers, letting agents all play a massive role in all of that.
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Well, fantastic stuff there, Juliette. Thank you so much for coming in and sharing your knowledge on all things caretakers in body corporates in Queensland. Thank you for having me. And to our listeners and viewers, if you've got further questions or comments, drop us a line below and Juliette and her body corporate team, we'll try to address them or alternatively,(...) we'll run a session in our law board on another topic of your choosing. Thanks for joining us today and we look forward to seeing you back on the OMB.
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The OMB Law Board very soon.(...) Thank you for joining us and we look forward to seeing you back on the Law Board very soon.
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I got so close.
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Well, thank you for joining us today with Juliette and learning all things caretaking in body corporates and we look forward to seeing you back on the OMB Law Board very soon."