It’s the silly season so here’s a silly idea: Strata is a sausage.
Like a sausage, Strata can look good and taste good, but you don’t want to know how it’s made.
Consider your budget. Levies are low and haven’t increased for a few years. No problems at the building lately, things have been quiet for a while. Sure, there’s not much money in the bank, but there’s plenty in your pocket. The budget keeps things as they are. It looks good and tastes good, but there’s a heart attack coming. It’s a high-fat, empty calories budget that hasn’t considered important details like preventative maintenance. Suddenly the pumps fail – no one’s checked on them for a few years. Then termites attack – there’s no insurance coverage for that. Sure, there were termites in the area a few years ago but getting the checks was expensive. Now the buyer you had lined up is getting cold feet. Heart attack.
Strata can look good and taste good but can give you a heart attack later.
How about the Committee? Maybe you’re an investor and just want to see house prices rise. You don’t want to bother with the actual running of the building. Leave that to others. You get the minutes, that’s enough. But do you know how decisions are really made at your plan? Things look OK on paper by behind the scenes the committee are dysfunctional. The committee can’t get along. Some people don’t see the point of following the legislation. A major safety risk at the site took months to fix because a decision couldn’t be reached. While the decision was pending the scheme’s liability risk – which means your liability risk – skyrocketed. In the end, the safety item was fixed, no one got hurt, and everything looks OK from the outside. But Strata is a sausage – if you knew how it got made, you might think twice about eating it.
It can look good and taste good, but inside there’s a little piece of gristle about to chip your tooth.
Think about your building insurance. $20 million public liability, great. The buildings insured for $31 million after a valuation last year, all good. But do you know that your personal contents aren’t insured? So, if a strata pipe bursts and your carpet gets damaged, you are still responsible for the cleaning and replacement of your property. That’s the gristle in the policy. You can cut it out by arranging contents insurance, but you need to know it’s there first.
OK, this metaphor has stretched far enough – sorry, but I was on a roll writing this one. You get the point though. Strata can be pretty good, but it comes with a health warning – read the label before consuming.