Australian Field Study -
March 2001

Report by Peter Haler, Chief Executive, LEASE

1 General Introduction

1. The invitation to speak at the National Community Titles Institute (NCTI) Conference provided a major opportunity to research the general operation of the strata-title in Australia for the purposes of informing input to current proposals for community-title legislation in England and Wales.

2. Each state in Australia has its own form of strata-title with individual bodies of legislation and practice. By far the greatest population, and therefore, numbers of strata units, is in New South Wales, followed by Queensland, and these two states have made the most progress in development of legislation. In both the latter cases legislation has been amended specifically to facilitate and encourage development.

   There are an estimated one million strata units in Australia.

3. Until this year each state held its own convention for strata agents and others working in the field but liased through the NCTI; 2001 marked the first pan-Australian conference for strata title, held in Queensland.

   Attendance at the conference provided access to a wide range of strata agents, solicitors and other participants in the field including insurers, software producers, search agents and others, plus a limited opportunity for site inspections. In speaking at the Conference, in three presentations, I was able to achieve a sufficiently high profile to ensure interviews and introductions.

   I followed the conference with a week in Sydney with a programme of interviews and site visits.

   I must record my gratitude to the organisers of the Conference both for the invitation and for quite extraordinary level of help, advice and guidance they provided me.

   Appendix 1 provides details of all my interviewees.

4. The principal impression from the study was of highly dynamic property markets in New South Wales and Queensland and the utilisation of the legislation to facilitate a mix of uses within buildings, including major residential provision in city centres.

   In addition to this the main findings, set out in full in this paper, were

   • The degree of specialisation in the management industry;

     • in most buildings the management functions are separated, with the administrative/fiduciary functions being carried out by a strata agent and the general janitorial functions by a site manager

     • the importance of strata agent input at very early stages of development projects.

   • The high level of prescription of documentation and ownership rights/obligations and their public availability;

     • property registration and conveyanceing is simpler

     • by-laws are generally similar between schemes

     • public accessibility to all records, including minutes and accounts of owners' corporations enable simple and comprehensive searches for property purchase by search agents and others.

   • The high percentages of strata title units bought for letting:

     • encouraged by Government through tax breaks for the joint purposes of non-institutional contribution to the maintenance of a private rented sector and individual personal investment for pension arrangements.

   • State provision for mediation and dispute resolution

     • in NSW, a tiered system incorporating a cheap and readily accessible mediation service resolving 70% of disputes

5. For the purposes of this paper I have throughout used the term "owners' corporation" for what we will know as the commonhold association, the company comprising the unit-owners and owning and managing the common parts and land.

   In the Queensland legislation the company is referred to as the "body corporate" but I have not differentiated in the text.

6. The paper comments on the information obtained in the field study, it does not purport to be a full study of Australian legislation and practice. There is little information included on legislation and practice outside New South Wales and Queensland and further study will be made in respect of Victoria, South Australia and Western Australia in due course.

2 Executive Summary

1. There are approximately one million strata-units in Australia, the majority being in New South Wales and Queensland.

2. Legislation in NSW and Queensland has been recently amended to meet developers' and lenders' concerns to provide a legally certain means of horizontal and vertical division of land or buildings to provide individual title to the lot within a common ownership of whole (Para 3.1).

3. NSW legislation provides for the creation of the flying freeholds within a building, with common issues of management and maintenance arranged through a joint Building Management Committee. The BMC is a contractual arrangement, not a corporate body for a title in land. The legislation provides that positive covenants for support and easements for access are deemed to apply. (Section 4)

4. NSW legislation provides for subdivision of development land into defined lots within the whole with the remaining area as common ownership; the lots may be developed independently and/or in stages within a legal structure providing and maintaining the common areas and governing use and development of the lots (Section 5)

5. The NSW and Queensland legislation provides model By-laws which are deemed to apply to any strata-scheme until amended. The By-laws are in place of leasehold covenants and govern all respective obligations and responsibilities of the parties (Section 6).

6. NSW has a state system for dispute resolution in strata-title, under a Commissioner with powers of entry and investigation. The system includes determination both by a single Adjudicator and by Tribunal but places great emphasis on alternative dispute resolution through a cheap and accessible mediation service. Owners' corporations have powers to make orders and seek imposition of statutory fines from the Commissioner. (Section 7)

7. The Strata Agent provides a secretarial/fiduciary function to the owners' corporation, with delegated authority, but does not, generally, manage the building. All decisions are made by the owners' corporation, acting on the advice and proposals of the strata agent; the janitorial/maintenance function is by a site manager. Strata Agents are subject to regulation in NSW, subject to professional training and there are formal rules on appointment, accounting procedures and maintenance of statutory ledgers. (Section 8)

8. Site managers also act as letting agents within schemes and this provides a high level of remuneration sufficient for an active market in the trading of site management contracts. Substantial percentages of strata units are bought for letting encouraged by state tax concessions as a non-institutional contribution to the maintenance of a private rented sector. (Section 9)

9. Title registration documents are primarily in plan form since there are few variables in the title not provided by legislation, e.g. statutory deemed covenants and easements, the statutory by-laws of the owners' corporation. All records of the owners' corporation are publicly - accessible and there is a separate profession evolved of search agent to produce reports for prospective purchasers on the financial situation of the building/owners' corporation. In Queensland, purchasers may require a formal information statement from the owners' corporation. (Section 9)

10. NSW and Queensland impose statutory insurance requirements for full rebuilding cover, to be costed 18 months beyond any damage to the building, plus requirements for insurance for public liability, employees' cover and damage to common property. (Para 11.1)

11. There is a very high level of prescription of documentation in NSW for the owners' corporation, with forms and letters, which provide a model for UK Commonhold proposals. (Para 11.3)

12. There is similarly, a corresponding level of prescription as to the conduct of the corporation's meetings, voting etc. The Queensland legislation provides more detailed rules including different levels of required voting support for specified issues for decision. Again these provide a model for UK legislation. (Para 11.3)

13. One issue of concern arises from the use of proxy votes at meetings of the owner's corporation. With the high levels of buy-to-let and statutory requirements for quorums and voting procedures it is necessary to arrange proxies; however these can be used as block votes and are, or have been allocated to the strata agent or site manager. (Para 11.4)

3 The legislation - vertical and horizontal division of title

1. It is assumed that the general principles of strata-title are understood; their subsequent amendment to include vertical and horizontal division of a building or plot of development land has had a significant effect in facilitating both high-rise and conventional residential estate development.

   Development is moving very rapidly with substantial proportions of buildings in Queensland and New South Wales less than 10 years old; there is also a major market in building conversion/change-of-use from industrial/ commercial to residential. This relates not only to older dockside warehouses and wharves but also to city centre high-rise buildings - the original IBM headquarters building in Sydney is just over ten years old and has already been converted to residential.

   There is also substantial suburban/out-of-town estate development, for example, the massive Newington Olympic Village, built on a brownfield site, and major self-contained developments on greenfield sites incorporating golf-courses, marinas and vineyards.

   Development costs are reduced by the sharing of the structure or the containment of stages in the construction of a large estate in that the system provides a legally reliable basis for communal ownership of common land and facilities.

2. The legislation I investigated in detail for vertical and horizontal division of title is that for New South Wales and the following sections describe NSW law and practice other than where mentioned.

4 Horizontal division of a building

1. In New South Wales horizontal or strata sub-division of a building is commonly used for high-rise city buildings to achieve a diversity of use within the building and to maximise spread of development costs. The classic example in Sydney is the air space development of the Grace Brothers' department store. The original, pre-war, building comprised six storeys of commercial space in the prime shopping area; the airspace was utilised in the construction of a further 30 floors to provide ten floors of hotel, the remainder in strata-title flats. The store, the hotel and the owners' corporation for the flats all have freehold fee-simple title to their sections of the whole, that is, strata title can "sit" on top of freehold interests.

2. It is held that separation of a building to provide horizontal freehold titles is not practical under UK law arising from the principle of positive covenants not running with land. Flying freeholds are considered poor title and are generally difficult to mortgage. Horizontal separation of title therefore has to be on a leased basis in a landlord-tenant relationship.

   New South Wales has dealt with the problem simply through legislating to provide statutory easements for support.

3. The original NSW Strata Schemes (Freehold Development) Act 1973 did not permit a strata scheme to apply to only part of a building on the basis that all matters relating to insurance, management and maintenance of the building should be within the control of one entity, the owners' corporation. The Act was amended in 1996 in direct response to commercial pressure for mixed-use developments, (although all-strata developments can still be established under the "old" legislation) How it works -

   1. Through statutory registration of plans the building is divided in separate cubic spaces, the "stratum lots"; those can then be further divided to allocate individual strata title lots (units) and common property. Where a stratum lot is so divided, the individual lots and the common property become a "stratum parcel". (So, a hotel or an office use over several floors is a stratum lot, the floors of individual, freehold strata title flats and their common parts is a stratum parcel)

   2. Easements for support and shelter come into effect automatically and statutory forms of easements for access and service can be created to regulate the use and maintenance of the building.

   3. All matters relating to overall maintenance of the building, maintenance and operation of common parts and facilities, and the general occupation and use of both are within the remit of a Building Management Committee, made up of members of each stratum lot or parcel. The BMC is not an incorporated company or an owners' corporation; it is not a separate entity and has no form of estate title, it is a contractual relationship between the parties of the scheme but with the force of statutory requirement. The committee must meet at least once a year.

4. Operation -

   1. The developer must deposit the plans and a Strata Management Statement, both of which are public-accessible documents. Legislation requires that the Statement must include provision for the establishment of the BMC, its composition and functions, the allocation of membership to the various stratum lots or parcels and arrangements for dispute resolution. The Statement may, and normally does, also contain provision for controls of access, security, the appointment of a managing agent and general management issues such as noise, prohibited uses etc.

      The deposit of the Statement is intended to provide full disclosure at pre-sale stage of all arrangements for operation of the building, both to purchasers and lenders.

   2. Registration of the plans result in the statutory creation of reciprocal implied easements for shelter and support. These cease only at termination of the scheme and carry obligations for repair and renewal.

      The Act also provides for other easements for rights of personal or vehicular access and passage of services, plus easements for the sharing of their costs of maintenance.

   3. The proprietor of each stratum lot or parcel has full fee-simple ownership, full rights of support and access and the freedom to manage the lot or parcel within the overall constraints of the Strata Management Statement. All matters of maintenance, management, and services to the building and all issues relating to the common parts are facilities are within the remit of the Building Management Committee. Disputes are handled according to the already established arrangements set out in the Statement.

      It should be noted that these procedures only operate in relation to a complete building, the system cannot be used to stage developments. However it is useful in facilitating airspace development without disturbing ownership of the existing building.

   4. Queensland has similar provisions in the Land Title Act 1994 which are considered by some developers to be more commercially attractive than the NSW legislation. This works through the registration of a Building Management Statement with simpler procedures but the general principles are the same- to facilitate development of separate fee-simple ownerships with different needs within a common management structure.

   5. The rapid mixed-use development of central Sydney and coastal Queensland appears to have been greatly facilitated by the State legislatures' flexibility in amending legislation to suit the circumstances. If positive covenants don't run with land then simply legislate that such covenants shall be applied in specific situations.

      This is a major part of New South Wales/Queensland strata-title legislation and, from what I have seen of its effect, I would strongly recommend that similar provisions should be included in UK Commonhold proposals to-

      1. encourage uptake of the new legislation

      2. facilitate mixed-use developments, especially in inner cities.

5 Vertical division of development plots (Community Schemes)

1. This is another example of both the flexibility of the basic form of the title and the willingness of the NSW state legislature to adopt statutes specifically to encourage and facilitate development. Community schemes in NSW allow the separation of an area of land for development into individual lots amongst the communal land and facilities. The lots may be sold or developed by separate individuals or developers independently but within the legal structure and physical envelope of the common areas and facilities.

2. The legislation was to provide a reliable means, through legal registerable title, to common ownership and common governance of land and facilities outside the boundaries of the individual parcels of the ownership. The problem had arisen from the lack of a legally reliable and workable mechanism to implement mutual ownership of common areas in a situation of development of a site by different owners. It is relatively common on larger sites (green or brown field) for the development to be diversified between separate developers providing both a mix of residential/ recreational/ commercial but also a mix of a quality of residential. This allows both a wider spread of development financial input and risk and a more varied use, maximising value of the site.

   Previous attempts at providing the mutual ownership of the overall access and environment had been through tenancies in common, leasehold arrangements with restrictive covenants and licences but none of these provided sufficient certainty or ease of operation and were unattractive to lenders. The new legislation established by statute a legally certain and simple means of arranging this common ownership. The separate parcels of land within the whole may be owned and developed separately but have both common proprietorship of the communal land, access and facilities but are also tied within a flexible legal structure governing present and future uses, diversities of development, building and design styles and other issues.

   The initial entrepreneur can therefore ensure the development over a number of years, and stages, according to an overall concept and design and maintaining the original vision and sale values, whilst being able to diversify risk by selling off the parcels within the land in order to bring in additional investors who are free to carry out their own development on their parcel, subject to overall concept controls, but confident of the supporting infrastructure, access and support services.

3. The basic strata-title legislation was amended by the two linked Acts, the Community Land Development Act 1989 and the Community Land Management Act 1989, both with attached Regulations enacted the following year. The Development Act provides the legal structure for title, plans and registration and is dealt with by the Land Titles office; the Management Act deals with management and financial issues and is administrated by the Office of Fair Trading. How it works -

   1. The developer registers a plan of the development land showing its division into the separate lots and the land intended for communal use. The developer has full freedom to do what he wishes with the lots - to sell them as vacant land within the scheme for development by another builder on the lot, to develop them himself and then sell both building and land or build and then sell individual strata units. The development may be staged over a number of years once the principles and relative areas are defined.

   2. The land not included in the lots is owned communally by all the lot owners in the scheme through the Community Association, a corporate body formed on registration of the sub-division plan. Membership comprises all the owners of lots within the scheme and occurs automatically on purchase of a lot. The association is the registered proprietor of the association property and responsible for its care and maintenance; ("association property" is not the same as "common property" included in the standard strata-title schemes)

      Association property is generally used for access roads, public open spaces plus social facilities such as tennis courts, swimming pools, golf courses, clubhouses etc. However it can also include other uses including dams, irrigation schemes, foreshores etc. The structure has been used to facilitate specific developments, difficult under conventional ownership patterns, such as golfing estates, marinas and a housing estate sharing a vineyard.

   3. The ability, through the legislation, to develop in stages presents several advantages:

      • initial development costs are lower as one stage can be used to finance later stages

      • lower purchase prices resulting from lower initial costs.

      • flexibility in development of the estate.

      Because staged projects can be completed over a period of years the developer is not required to provide full details of the proposed scheme beyond a general outline at the outset and can adapt to changing social or economic factors.

   4. There is further flexibility in terms of management to introduce other tiers, neighbourhoods and precincts. In a very large-scale development the single association management structure is inadequate and the further division ensures both effective management and a sense of local "ownership" of common property through cascading management responsibilities to intermediate bodies.

      For example, in a large scheme the community association may take management responsibility for the overall development concept, including architectural guidelines, and for general community issues such as the road network, landscaping and security.

      The second tier of management is created by registration of a neighbourhood plan, subdividing a lot into separate neighbourhood lots; these lots are administered by a neighbourhood association which automatically becomes a member of the community association. Alternatively, lots may be sub-divided directly into standard strata units, administrated by a strata-title corporation.

      In very large, complex or socially diverse schemes the management can be three-tier, enterprising a precinct association between the community association and the neighbourhood associations or strata corporations.

      This sub-division ensures and enables:

      • very local management and accountability

      • total flexibility in development within an overall scheme -

      for example, the creation of a single exclusive, gated high-security, estate within the development, separately developed, funded and administered, but part of the overall structure in terms of use and upkeep of communal access and facilities.

   5. On registration the developer must submit a Management Statement for the community association, setting out the rules on how the association is to be run, the obligations of its members and their benefits and rights. It forms part of the registered title. Whilst the Strata Schemes Act prescribes almost all of the rules for the running of a strata corporation, a decision was taken in the Community Land Management Act to provide a much lower level of prescription for community schemes to encourage and enable greater flexibility. There was also a recognition that one standard set rule of rules could not possibly cover the wide range of schemes envisaged by the legislation.

   The format of the Management Statement is set by Regulations; these include certain-

   • mandatory matters such as insurance, voting rights and procedures for meetings (similar to strata schemes)

   • discretionary matters peculiar to the scheme such as keeping of pets, security, noise etc, plus any trading arrangements of the association including distribution of profits etc.

   • rules fixing details of development - this is a novel aspect of community schemes allowing the first developer to create, and the community association to maintain, a theme or style of development across the scheme and within sub-divisions by means of a legally enforceable mechanism.
     The rules can be positive or negative and can:

     • limit occupancy to persons of a particular description, e.g. elderly or without children

     • fix architectural, building or landscape styles

     • specify or limit materials used in construction

     • specify or limit uses of buildings or land

   therefore, the Management Statement, on registration of a long-term shared development, can ensure the permanence of the original concept or design for the future, notwithstanding changes of developer.

4. The concept of the Community Scheme, not unlike the US arrangement of Master Community Associations, provides a means of encouraging diversified use of major sites through shared financial investment but within a common, sustainable, concept and purpose. There would be great benefit in the incorporation of this into UK Commonhold proposals.

6 By-Laws

1. The NSW and Queensland legislations set out model by-laws which are deemed to apply to any strata scheme on registration. This section looks at the NSW System (Schedule 1, Strata Schemes Management Act 1996, By-laws 1-9). These may be changed by special resolution of the owners' corporation but subsist until such time they are specifically amended. These set out the basic responsibilities of owners, and residents, in a simple format, and as a standardised form of what would be lessee's covenants under a lease. I understand that, in most cases, the model by-laws are retained, usually only being amended in case of peculiar demands of the schemes.

   The by-laws, model or amended, have the effect of binding the owners' corporation and any unit owner, or occupier, to the same extent as though they were included in a lease or contract entered into by them.

2. Schedule 1 of the NSW legislation provides a useful model for strata by-laws which could be incorporated into Regulations governing the content of the Commonhold Community Statement;

   1. Noise - disturbance and nuisance

   2. Vehicles - parking and access rights and obligations

   3. Obstruction of common property

   4. Damage to lawns and gardens on common property

   5. Damage to structural common property

   6. Behaviour of owners and occupiers (actions likely to cause offence or embarrassment)

   7. Control of children on common property

   8. Behaviour of invitees

   9. Depositing rubbish on common property

   10. Drying of laundry (washing lines etc)

   11. Obligation to clean windows

   12. Storage of inflammable liquids

   13. Movement of furniture etc through common property

   14. Requirement to provide floor coverings to reduce noise

   15. Disposal of household rubbish

   16. Keeping of animals

   17. Appearance of the lot

   18. Notice board to be provided on the common property by the owners' corporation

   19. Notice of any change of use.

   Sections 116 and 117 of the Act provide additional statutory by laws relating to rights of support, rights of passage for water/gas/electricity services etc, structural alterations and general provisions for quiet enjoyment.

3. The degree of detail in the by-laws is a good example of the level of prescription and standardisation imposed by the NSW legislation. The Queensland legislation is similar but, if anything, rather more prescriptive. Using the principle that these specific by-laws shall apply, from the outset, to all strata developments until such time as they are amended ensures a very high level of uniformity between schemes and easy comprehension by unit owners of their rights and, more importantly, responsibilities. In that amendment is only by special resolution of the owners' corporation, unit owners are made aware of proposals for change and such changes require a high level of support, and therefore underwriting, by unit owners.

   The application of the standard clauses and the formal procedures for their amendment provide three immediate market benefits:

   1. Simplicity for the developer in drafting the Strata Management Statement.

   2. Certainty for the lender, based on familiarity with the clauses.

   3. Protection for the unit purchaser.

4. The importance of user-friendly standardisation, making flat ownership similar to freehold house ownership, should not be underestimated and the NSW or Queensland models should be replicated in UK Commonhold proposals.

7 Dispute resolution

1. The States have different approaches to dispute resolution, partly influenced by numbers of strata units; Southern Australian and Victoria have no separate resolution structure and disputes are handled through the normal court system, starting at magistrate level. New South Wales, Queensland and Western Australia have state funded bodies, working to differing levels of service delivery/intervention. The NSW system was investigated in more depth than Queensland and WA on the basis that it appears to offer the best model for the UK. It also, of course, serves the largest number of strata units in Australia and, as a consequence, is better funded and provides a more comprehensive service.

2. Dispute resolution, and the supportive structure for strata-title in NSW is governed by the Strata Management Act 1996. This confirms and complements an existing structure and codifies official response to dispute:

   1. Strata Schemes Commissioner - a position to be held by the Director General of the Department of Fair Trading

      Functions -

      • resolution of complaints and disputes about strata schemes

      • investigation of alleged breaches of the Management Act

      • taking action, including prosecutions, as appropriate

      • providing information on strata schemes and the dispute resolution services

      The Commissioner has powers of entry to any unit or other part of a lot, parcel or scheme and to require information from the owners' corporation and to inspect records; obstruction of the Commissioner is a statutory offence.

   2. Adjudicators - appointed by the Minister for Fair Trading

      Functions -

      • to decide cases referred to them by the Commissioner

      • to refer on to the Board certain complex cases for determination

   3. Strata Schemes Board (the Residential Tribunal)

      Functions -

      • to decide cases made by application to the Tribunal

      • to determine appeals from an order of an Adjudicator.

   4. The Residential Tribunal is responsible for a wide range of residential issues including determination of rents for tenanted property (as UK Rent Assessment Panels) and bonds for tenant deposit schemes (as UK Independent Housing Ombudsman); strata title issues form one of five divisions within the Tribunal. Expenditure of the Tribunal for 2000-01 was A$14.246M (£5.28M) but I was not able to ascertain what proportion of this relates specifically to strata title issues. Funding is standard public finance augmented by income from application fees (A$775,000), interest from rent protection bonds (A$6.49M) and the statutory interest account to the same amount (where agents hold clients' money in a consolidated trust account the bank is required to pay 1% of the interest to the Tribunal). Therefore the net cost of the service to the state appears to be in the region of A$6.98M (£2.58M) per annum (all services, including strata issues).

   5. Dispute resolution is considered by NSW as a significant issue and the Management Act provides a statutory regime, based where possible on conciliation; it is revealing that the legislation has been reactive to the experience of the past 25 years of strata title in recognising that the traditional adversarial approach to conflict resolution is not appropriate to a system of common property ownership.

      Disputes can be sub-divided

      • unit owner/unit owner

      • unit owner/owners' corporation

      • owners' corporation/strata agent

      • unit owner or owners' corporation/occupier where not an owner.

      In all cases the state dispute resolution procedure requires that attempts are made to settle the dispute through internal procedures or mediation before access can be gained to Adjudicators or the Residential Tribunal. The steps in the process are:

      1. Informal proceedings between parties

      2. Mediation

      3. Notice to comply with a by-law

      4. Order by an Adjudicator

      5. Hearing by the Residential Tribunal.

   6. Internal procedures - parties are expected to have taken some steps to resolve matters prior to contact with the state machinery, through discussion, through the informal advisory and mediation role of the strata agent, and, where appropriate, by referral to the owners' corporation to be talked through by a meeting of unit owners. As with Commonhold proposals the owners' corporations are expected to have some dispute resolution mechanism in place.

   7. Mediation - under the 1996 Act, mediation must be attempted before an order can be sought from a Strata Scheme Adjudicator or the Residential Tribunal. The Office of Fair Trading provides a Mediation Service, accessible by application and a flat fee of A$54 (£20). The professional mediator's role is to -

      • identify the issues in dispute

      • assist the parties to understand (and accept) their relative rights and obligations under their by-laws and the Act

      • suggest options and strategies for resolution.

      Any dispute can be referred for mediation but, from the 1999-2000 statistics, the most common appear to be additions or alterations to units (32%), duties of the corporation itself or its secretary (19%) and then the much lesser issues of keeping of pets (6%) and behaviour of unit owners or occupiers (3%). It may seem surprising that the two issues causing most complaint in the UK are very low in the pecking order of disputes; levies for service charges (3%) and problems with the managing agent (1.5%).

      In 1999-2000, the service received 881 applications for mediation, 69% from the unit owner, 14% from the owners' corporation and 7% from the strata agent. Theses applications are dealt with by a staff of around 15-17, including three professional mediators and turnaround of applications averages 4 working weeks.

      The application fee buys a three-hour session with the mediator (average 2.7 hours), this is usually sufficient but further sessions can be provided within the same $54 fee. Where agreement is reached it is binding on both parties and can be confirmed by Notices or Orders (see below). Where no agreement can be reached or an agreement breaks down then either side may apply for an Order. In 1999-2000, of 894 applications dealt with 42.6% were resolved, in 32% of cases mediation was declined by the other party and 6.5% of applications were withdrawn. Therefore, of the cases that proceeded 99% were resolved by the mediation process.

      The view of the civil servant I spoke to is that the mediation service has reduced applications to the Residential Tribunal by 70%.

   8. Notice to comply with a by-law - in appropriate cases, with or without access to mediation, where an owners' corporation is satisfied that a unit owner or occupier has breached a by-law of the corporation, it can issue a Notice requiring that person to comply. If it is not complied with, the corporation may, within 12 months of service, ask the Strata Schemes Board to impose a fine of up to A$550 (£200).

   9. Order by an Adjudicator - the Adjudicator forms the first part of the formal procedures. Application is again subject to a fee of $54 and is made to Department of Fair Trading who refer all applications to the Adjudicators; they may pass these straight to the Residential Tribunal if considered complex or outside the remit of the Adjudicator but the majority of applications are dealt with on a paper-based decision by a single expert Adjudicator. The Adjudicator, like the Independent Housing Ombudsman, may carry out an investigation and has powers of entry where necessary. The decision is made without a hearing and an Order issued, turnaround is 10-14 weeks from application although the target is 6-8 weeks. An Order is valid for two years; the Adjudicator cannot make an order for payment of costs. In certain cases an interim Order may be issued, valid for three months and renewable once, usually to act as an injunction to stabilise a situation pending final settlement.

      There is appeal against an Order of an Adjudicator to the Residential Tribunal (within 21 days) and around 20% of orders are appealed. The Adjudicator system provides an efficient working model for single-expert determinations (as previously proposed by LEASE and others) as a fast track procedure within the LVT, and combines the IH0's procedures for investigation.

      In 1999/2000 there were 455 applications for adjudication. Of the 386 adjudications finalised in the year:

      • 41% resulted in an Order

      • 6% resulted in an interim Order

      • 37% were dismissed

      • 9% were withdrawn

   10. Hearing before the Residential Tribunal - Cases may be referred direct to the Tribunal by the Adjudicator or are the subject to a further $54 application fee. The Tribunal seems to operate at a level somewhat between the LVT and the County Court and has powers akin to both. In addition to the upward appeals from Orders, the Tribunal deals with significant issues including the division or subdivision of lots/common property and the reallocation of unit entitlements within a strata scheme. Applications for reallocation of lots can arise from an allegation of unreasonableness in the original allocation or changes of circumstances since and can be made by Local Authorities and other public bodies in addition to unit owners and the owners' corporation.

       Proceedings are governed by the Residential Tribunal Act 1998 and Regulations; members of the Tribunal are appointed by the Governor, for two years, and are salaried full-time posts. Hearings are usually within 6-8 weeks of application and, in the most part, decisions are issued immediately.

       As with the LVT the Tribunal is not bound by the rules of evidence and proceedings are informal with no requirement for representation. In cases of appeal against an Order of an Adjudicator the Tribunal can admit new evidence and consider the case de novo, to confirm or revoke the order or to substitute its own Order. Unlike the LVT, but like the IHO, the Tribunal has both powers and duties to investigate where considered appropriate.

       Not all applications result in a public hearing in that the Tribunal do not hold a hearing or appeal unless so requested by the parties and may decide to hold an informal hearing, on presented papers and without witnesses. Otherwise hearings are much as the LVT except that, in the majority of cases, the decision or terms of an Order are announced at the end of the hearing

       The Tribunal has rules of contempt governing proceedings, subject to prescribed levels of fines. Similarly, Orders of the Tribunal are supported by prescribed penalties.

       Where a person contravenes an Order of an Adjudicator or the Tribunal an application for enforcement may be made to the Tribunal by the applicant for the original order or by the owners' corporation and the Tribunal may impose a fine to a prescribed scale; similarly as noted above, the Tribunal may impose fines for contravention of a notice from a owners' corporation requiring compliance with a by-law. The Tribunal may also order payment of costs, including reimbursement of the application fee or specify that part of the statutory fine is to be paid to the appellant as damages.

       The fine operates as a judgement by the Court and an unpaid fine will be imposed as a charge on the unit or lot until paid, and will be revealed in searches on the title.

       (As a side issue of fines, it is interesting that where a unit-owner succeeds in an action against an owners' corporation, the corporation is limited in its power to recover costs. The corporation cannot raise a general levy, including the successful owner, to pay the cost nor is it permitted to settle out of existing funds or a sinking fund; instead it must impose a special levy, which the successful owner is excused from paying.)

       Appeal from the Residential Tribunal is to the Supreme Court, only on a point of law. In 1999/200 the Tribunal received 293 applications and 97 appeals on Orders of Adjudicators. 35% of the appeals were upheld and 65% dismissed. Of the 266 general cases processed in the year 32% resulted in orders, 27% were withdrawn and 18% dismissed.

8 Strata Managing Agents

1. "There is a clear distinction between the role of a strata managing agent and that of a residential property manager. The agent is the delegate of the owners' corporation and is responsible for exercising certain of its functions. It is a very special relationship - a fiduciary relationship. The manager is a mere contractor of the owners' corporation who is authorised to provide certain services for lot owners - the relationship is a very purely contractual one." (Strata Schemes Management Handbook, New South Wales).

   In most cases, certainly in Queensland and NSW, there is a separation of functions and duties, the secretarial/fiduciary management and the building/janitorial management (and a degree of professional elitism attracting to the former). Only in cases of small, traditionally-built properties of 6-10 units, will the functions be combined. The general principle applying to strata agents is to act as secretary and treasurer of the owners' corporation, and the agent of the corporation in exercising these functions delegated to them and ensuring that the corporation complies with the legislation. The role differs from the UK managing agent not only in the lack of general management responsibilities but in the degree of legal agency delegated by the corporation.

2. In general the role and duties of the agents are:

   1. Secretarial function - calling, organising and attending meetings of the owners' corporation, producing, distributing and archiving minutes, orders, by-laws, maintenance of all records, notices and statutory information; custody and affixation of the common seal of the corporation.

   2. Accounting function - collection, banking and accounting for levies, maintenance of statutory ledgers, arrangement of audits, preparation, distribution and archiving of annual/quarterly summaries of accounts to unit owners, payments on behalf of the corporation.

   3. Provision of certificates and other statutory informations e.g. to purchasers (in Queensland)

   4. Enforcement of by-laws, applications to the Adjudicator/Residential Tribunal (both in NSW only)

   5. Assessment and proposals for maintenance, insurance, sinking fund levies, arrangement and maintenance of insurance.

   6. advising the corporation on procedures and legislative requirements.

3. Due to the public accessibility rights the agent must store and maintain and make available all records, minutes, decisions etc, and all informations, including tenders, estimates, projections relating to both conduct of the corporation and insurance and maintenance of the building. All of this is to be available to a search prior to a purchase (see section 10.2) and agents have major storage/archival arrangements.

   Illustrations of the agent's duties in this area:

   1. In Queensland the legislation requires the maintenance of a Sinking Fund to cover non-recurring items of capital expenditure for the current year and for 9 years hence; the legislation does not set an amount but simply requires that the levies shall be reasonable. The corporations are highly sensitive in setting the amounts, being bound by reasonableness but aware of future purchasers' abilities to sue the corporation should the fund prove inadequate, in the context that the information on the fund and the levy is publicly accessible and will be revealed in a search by a prospective purchaser.

      The agent will normally arrange an analysis of the 10-year building requirements annually by a building surveyor/engineer and prepare proposals for the corporations' AGM.

   2. Again in Queensland, building and public liability insurance is mandatory and the amount of cover must be projected 18 months beyond any possible future total demolition and rebuild. (see separate section below) If the insurance is inadequate the insurer will only pay the appropriate ratio in settlement. This information too is fully accessible to purchasers, the corporation is open to legal action on the basis of underinsurance and the agent will be responsible for arranging the cover to suit the legislation and the demands of the unit owners.

4. Arising from the degree of delegation of the corporation's functions to the agent, procedures for appointment and termination in NSW are formalised and included in Regulations. There is a restriction on the appointment of the agent during the "initial period" between registration of the strata development and the sale of the units in order to prevent the developer from appointing himself or a subsidiary company as agents for an indefinite period (viz managing agents being included in tripartite leases in the UK). In such cases the appointment may not extend beyond the holding of the first AGM of the corporation. In cases of breach the developer, "the original proprietor", is liable for any losses incurred by the corporation resulting from the breach.

   Appointment of the agent must be by formal resolution of a AGM or EGM of the corporation which must authorise the appointment and specify the functions of the corporation to be delegated to the agent. This must be produced as a written instrument, (in NSW to a prescribed format) bearing the common seal of the corporation.

   (In certain circumstances an agent may be appointed by an Adjudicator, as per Part II, Landlord and Tenant Act 1987)

   There must also be a formal agency agreement entered into and signed by both parties. In NSW this must contain prescribed terms according to the Property, Stock and Business Agents Regulations 1993 (agency agreements are still governed by the 1941 Act of same name. ) It is the agent's responsibility to ensue the existence of the signed agreement since failure on his part to:

   • obtain an agreement in writing

   • have it signed by both parties

   • serve a copy the owners' corporation within 48 hours of signing

   precludes his right to remuneration for his services (if he has already been paid when the omission comes to light the corporation may recover the payment as a debt. In this case the agent is also guilty of an offence to a prescribed level of fine).

   The agent must be in a position to produce the agreement where necessary and, again, failure to do so is punishable by fine. (One of the persons authorised to seek production of the agreement is " a member if the police force of or above the rank of sergeant" - quite why a humble constable should not have this authority remains obscure.)

   Equally, termination of an agent's agreement ( by the owners' corporation) is very formalised. This requires a decision of the executive committee of the corporation to consider a motion to call an EGM and, if passed, the agent is instructed to so convene the EGM. The meeting will the have to pass two motions, to revoke the appointment and the delegation to the agent and to require surrender of books and records from the agent. A notice, to a prescribed format is then duly served on the agent.

   The degree of formality is understandable in the context of the degree of delegation of the powers of the corporation to the agent. There are extensive regulations (and prescribed fines) governing the obligations of the agent in terms of provision of information to the corporation or recovery of records and documents by it.

5. Strata agents are required by the NSW 1941 Agents Act to pay all monies required on behalf of the owners' corporation into a trust account; this must be an account in the name of the agent or his business and described as a "trust account". There is no obligation for separate accounts for separate buildings or estates although the larger agencies maintain separate accounts. The agent has onerous accounting duties, with breach punishable by fines, in maintaining statutory records and ledgers (to be retained for three years) and the trust account must be audited annually.

   The Regulations require that that agent maintains, and keeps at the licensed office -

   • trust receipt book

   • trust deposit book

   • trust account cash book

   • trust account ledger

   In addition, in the position of delegate of the corporation's accounting functions the agent will normally also hold and maintain the statutory levy register for the corporation. All of these documents are accessible, though regulations, both to the owners' corporation and the Strata Commissioner.

   In practice these records are maintained electronically through one of the many very sophisticated IT strata management software systems. There would be advantage in early examination of the leading systems by the property management industry in preparation of management of commonhold.

6. As is well known, strata agents are required to be licensed in NSW although not in other states. The principal effect of the license is that all monies paid through a licensed agent are automatically on trust ( although UK law achieves the same objective, without licensing , through S42, Landlord and Tenant Act 1987)

   The licensing works on two levels, individual agents and corporate. The agency company must be licensed but cannot trade unless:

   • 50% of the Directors are individually licensed agents

   • there is be at least one licensed agent in each office of the company.

   An individual agent must be licensed before being able to practice as a sole trader or manager: qualification is by completion of an approved course plus two years experience within the industry. The two years experience is subject to the putative agent being enrolled in an approved course within the period.

   There is, surprisingly, no single agreed syllabus although there are generally accepted core subjects. The course content and the exams are subject to whichever body is providing it but all have to be verified by a state authority (Vocational and Education Training Board) but not by the Strata Commissioner. In practice many of the larger agencies provide their own internal training and examinations, verified by the Board.

   The licensing system does ensure that agents are formally trained and experienced but there is no doubt that it does impose a burden on operation of a business. The business must cover costs and time spent in training plus the license fees for both individual staff and the agency (annual fee A$225). The requirement for 50% of the Board to be licensed places limitations on Board membership and composition plus the requirement for a licensed manager for each office prevents flexibility in use of staff - and, sometimes, the need to place a higher-paid licensed manager in a small office where the salary may be disproportionate to the size of office and duties.

   Although the industry is a little equivocal about the burdens of licensing there is little doubt that the requirement for an approved course of training has raised both levels of competence and public perceptions of the validity and status of the profession.

   On a final point on licensing, concerns have been expressed in the UK about dangers of litigation on cases of an agent's license, and therefore his ability to trade, being rescinded. There was a case in NSW where the Commissioner rescinded a license and the agent ceased to trade; he took the matter to court and the court ordered the Commissioner to review the matter. The agent subsequently had his license reinstated but was unable to take any action for compensation in that the decision to rescind the license was made by the Commissioner through the Residential Tribunal. Therefore, the action of the recindment was not taken by the regulatory body (which could be sued) but by a semi-judicial body which could not. The only action open to the agent was judicial review of the Tribunal's decision.

   This can, perhaps, quiet the fears in connection with proposals for future licensing of managing agents in the UK.

9 Site Management

1. As noted above, in many cases (and in virtually all cases in large block developments) the market has created a separation of management, with a separate contract let by the owners' corporation for a site manager (residential in larger blocks). The site manager has no formal delegation of authority from the corporation and simply provides the janitorial services, caretaking, cleaning, grounds maintenance and general maintenance of common parts. Contracts are usually lengthy, for 10-25 years, are deemed to roll-over unless terminated and can be assigned; remuneration is generally quite low, a typical, contract for a 100 unit building may be around A$1000 (£370) p.a. per unit.

   However the contracts have become valuable commodities and are freely traded, especially in Queensland where the practice began, changing hands at 3-4.5 times the annual profit before management wages, interest and tax. The attraction is the ability of the site manager to operate as a letting agent for flats in the building in the control of absentee unit owners.

2. The site manager is usually authorised to conduct the letting agency through a written agreement with the corporation; he is engaged to act as contractor and site manager for the annual (relatively modest) fee which, effectively, simply provides the basic cash flow to manage and operate the lettings agency. Recent years in NSW and Queensland have seen a social shift from ownership to fully serviced letting and most strata buildings are 50% let by absentee unit owners, with the proportion rising to around 70% for inner city towers. With this substantial element of letting the site management contract is an attractive proposition.

3. Private letting is encouraged in most states by major tax concessions on borrowing for buy-to-let and ownership of second and third properties for letting is common amongst ordinary citizens. The benefits seen by Government are:

   • private sector, non-institutional, contribution to the maintenance of a healthy private rented sector.

   • encouragement of private investment as personal pension arrangements

   (A more detailed paper will be produced on this subject)

4. In NSW and Queensland the site-manager is required to be licensed as an on-site property manager and is restricted to the letting of residential units within the specific building or estate of his employment.

10 Title Registration/Searches

1. The registration of title is intended to provide simplicity and cheapness. Some reference has already been made above to registration of plans in relation to horizontal and vertical division of strata developments but it is worth reiterating the essentially visual nature of the records. The plans do not include survey information, the only dimensions shown will relate to the overall lot or parcel; there is no separate delineation of common land or easements, all land not included within a lot or unit must be common and the easements will be statutory and therefore need not be specified. Everything is governed by the legislation, the only titles are the common property title and the individual unit or lot titles, or divisions within lots or parcels. The title to the lot or unit gives statutory right to the use of the common parts or community land and so there is no need to record this. In Queensland there is no registered title to the common parts.

   In all cases of new developments in NSW, as previously noted, the corporation is required to adopt the statutory by-laws and these are not recorded on the title but simply taken as read; only where the corporation amends the by-laws or adopts other specific by-laws are these recorded on the title.

   Mortgages and other charges are recorded in a similar way to the UK. The general principle of property registration is that if information exists somewhere else (e.g. the legislation) then there's no need to further record it or to clutter or complicate the simple title information. Most of the registered information is visual (plans) rather than written.

2. With the simplicity of the title information and the statutory public accessibility to the affairs of the owners' corporation title searches by purchasers are greatly facilitated, although to differing degrees in different states. In NSW searches are not normally effected by solicitors but by a new profession of "search agents". The title is a simple issue which the solicitor obtains from the Land Registry, the job of the search agent is to go through the minutes and accounts of the owners' corporation to, firstly, confirm present levies, sinking fund etc but, secondly, to discover from minutes of meetings whether the building exhibits any problems or if any serious expenditure is contemplated in future. The strata agent must provide access to this information and the search agent can then provide an accurate assessment to the purchaser of immediate, regular or potential outgoings. The agent will usually allow little more than 3 hours for the extraction of the information and, consequently, such searches are very cheap, averaging around A$150 (£55). Even taking the low rate of exchange into account this is a very modest sum for full financial information on a possible purchase plus it is revealing that three hours is reckoned sufficient to find all that is required. (Clearly this relates only to single-unit purchases).

3. Matters are even easier in Queensland in that the Body Corporate and Community Management Act 1997 contains disclosure requirements for the seller. The seller must give to the buyer before a contract is entered into a statement, to a prescribed content, detailing the amount of the current annual contributions for the unit, details of any improvements to the common property for which the unit owner is responsible, a list of the owners' corporation's assets plus details of the person responsible for issuing the Body Corporate Information Certificate. (There must also be a copy of a prescribed document headed "Contract Warning" suggesting other searches the buyer should consider, including obtaining a copy of the Community Statement and the Information Certificate).

   The Body Corporate Information Certificate is prepared by the Strata Agent and this will be one of his delegated duties; it sets out in considerable detail all aspects of regular or special levies or contributions, penalties for late payment and a summary of amounts due but unpaid.

   This is a simple legislative requirement and something seen as part and parcel of a strata agent's services; completion is, of course, dependent upon a high level of accounting efficiency by the agent (which is taken as read) and underlines the very high level of IT-based management in Australia, facilitating easy production of these details.

   A model Disclosure Statement and Body Corporate Information Certificate under S162 BCCMA 1997 are attached at Appendix 2

11 Other Matters

1. Insurance - In both NSW and Queensland the legislation imposes requirements for insurance provision;

   • buildings insurance to a full rebuilding value.

   • damage insurance to common property

   • workers' corporation insurance (i.e., employee liability)

   • public liability insurance

   In addition, whilst it is not compulsory for the corporation to take Directors' and Officers' Insurance it is a requirement in NSW that the corporation must formally consider such insurance at every general meeting as an agenda item.

   1. Building insurance - the statutory requirement is a little more complex than standard building insurance in that it assumes that, unless not legally possible, a building which has been wholly or partially destroyed is to be rebuilt, in entirety, to the same condition as when it was new. Therefore the insurance cover must include site clearance, professional fees, potential for delays in obtaining planning consent, alternative accommodation for unit owners, rent loss (if any) and provision for additional costs of construction arising from unforeseen events, particularly earthquakes and storm damage. As noted previously relating to duties of strata managers, the rebuilding programme must be assumed to commence no sooner than 18 months after the destruction of the building, in order to provide a realistic provision for the inevitable delays in the planning, design, tender and building process.

      Valuation for insurance is therefore critical in that the sum must be calculated, to include all the above factors, at a point 18 months beyond the end of the insured period. So, in taking up the insurance the insured sum must be full rebuilding costs, plus contingencies, calculated two an a half years hence.

   2. Damage insurance to common property - this is particularly relevant when the common property is beyond the curtilige of the strata building and can, therefore, include estate buildings and grounds, pools and clubhouses, access roads, etc. Cover is for full reinstatement.

   3. Workers' compensation insurance is compulsory in NSW but optional in Queensland. In NSW failure to have the insurance is an offence, notwithstanding that the corporation employs no direct labour, in that it is intended to cover independent contractors and their employees.

   4. Public liability insurance - in both states this must be for a minimum of A$10M and covers damage to property and compensation for death, illness or injury.
2. Prescription of documents - the NSW legislation provides a very full and comprehensive model of all forms of documents reasonably required for the operation of a strata scheme. These are additional and supplemental to the standard by-laws. Whilst some may appear unnecessarily bureaucratic ("Form 50-letter authorising a clothes line") the prescribed forms do provide a complete guide and should be seriously considered for inclusion on Commonhold regulations. The extent of the prescription is the accumulated wisdom of 25 years of operation of strata- title and should be seriously considered.

   The 111 prescribed forms for NSW are listed at Appendix 3.

3. Prescription of meetings - both the NSW and Queensland legislations prescribe in detail the procedures for calling meetings, their conduct and minuting and voting arrangements. They prescribe types of resolutions to be passed, for specific purposes and the necessary voting requirements for each. As noted below, in relation to proxy votes, in certain circumstances unit-owners may not exercise a vote if they are "non-financial" or if they are in breach of an order of the corporation. The Queensland Body Corporate and Community Management Act 1997 (BCCMA) prescribes three types of resolution:

   1. Resolution without dissent - only passed if no "no" votes are recorded (although not all unit-owners are required to vote, they may abstain). For major issues such as the adoption of new Community Management Statement, borrowing sums of money where the amount is greater than the number of units x A$250, sale of assets or termination of scheme, etc.

   2. Special resolution - only passed if:

      • votes for the motion is greater than votes against and

      • the number of votes against is not more then 25% of the number of units in the scheme.

      • (also, each vote has a "value" allocated corresponding to the unit owner's overall contribution to service charge levies etc; there is a third requirement for a special resolution that the "contribution lot entitlements" for the units voting against the motion shall not amount to more then 25% of the total contribution entitlements for the scheme.)

      For modification of uses of proxy votes, improvements to common property, grant or amendment of leases or easements over common property etc.

   3. Ordinary resolution - only passed if votes for the meeting is greater than votes against.

      For the general operation of the scheme, including approval of costs, fixing of levies and charges, appointment of agents etc.

   The degree of prescription of the general governing arrangements of the owners' corporation, particularly in the BCCMA, may at first sight seem over-paternalistic but they are born out of an acceptance of the need for clear, readily and widely understood rules of conduct for the avoidance of dispute and have been recently revised specifically to resolve problems which have occurred. As with so many areas of strata legislation the prescription provides-

   1. simplicity for the developer in original set-up

   2. certainly for the lender that the investment will be subject to proper management

   3. protection for the unit-purchaser

   If the Australian experience indicates that his level of prescription is necessary to ensure efficient and democratic management of the scheme then this should be seriously considered in the drafting of UK Commonhold legislation and regulations.

4. Proxy Voting - it seems vital, from the Australian experience, that some provision be made in the Commonhold legislation governing the use of proxy votes. This is something that has caused and continues to cause problems, sufficient to merit specific amendment to both NSW and Queensland legislation.

   It is the nature of common ownership for all major decisions on the management of the building to be taken at AGMs or EGMs with the matter being decided on votes by the unit owners. With the high, and rising, proportion of absentee unit owners arrangements have had to be made to provide the absentee owners with a means to vote and the route has been the appointment of proxies. The result has been the grouping within a limited number of hands of substantial blocks of votes allowing control of the building and its finance by a disapropriate small group or even one individual (rather akin to trades unions' block votes at the T.U.C). It has not been uncommon for unit owners to place their proxy with the strata agent or the site manager giving a most inappropriate level of influence to the agents. This practice has now been outlawed in Queensland.

   In NSW there is no provision for postal votes, the voter, or his proxy must be present at the meeting (although postal votes are accepted in Queensland). The form of proxy is prescribed and both state legislations have been amended to time-limit proxies (previously perpetual); in NSW the proxy is valid for 12 months or for two consecutive AGMs, whichever is greater; in Queensland the proxy, wherever granted, will lapse at the end of the corporation's financial year. The proxy is not valid if the relevant unit-owner is "non-financial", that is, in arrears of levies; the strata manager is responsible for checking all proxies for validity against the payment accounts.

   The general view of strata agents is that the use of proxies is vital in the face of the high level of absentee owners and the usual owner lethargy/apathy plus statutory requirements for quorums for meeting making significant decisions. That may be so but it may seem questionable whether, in a collective ownership, an inappropriate level of control should be placed in the hands of a small group.

12 Conclusions

1. The lessons and guidance provided by the Australian route to collective ownership should not be disregarded in the construction of a new title for England and Wales. The numbers of strata units is similar to numbers of leasehold dwelling in the UK and the weight of legislation and amended legislation probably no less; the state support for the system through the various Commissioners, Tribunals and Referees is probably no more in cost and input than the LVTs, Lands Tribunal, LEASE etc. The difference is that, on the whole, strata title works and leasehold, as the prime vehicle for the ownership of flats, does not. The Australian states have shown a great willingness and flexibility in amending their legislation to meet problems arising and, specifically, to facilitate property development.

   The legislation is not perfect and I found some satisfaction in a proposed solution in a community scheme to provide a right for the association to harvest the grapes from the common vineyards to based on the UK ancient common law principle of profits a prendre. However, this demonstrates both the evolving nature of the legislation and its creative use in development.

   The levels of standardisation and prescription provide uniformity with the obvious clear benefits to unit-owners and lenders; transaction and conveyanceing costs are cheaper, information is freely available on charges and costs. Management is democratic, (accepting the concerns over proxy votes,) and dispute resolution is incremental, cheap and effective.

   There is a huge wealth of knowledge and experience for us to draw on, much more closely allied with UK perceptions, practices and common law than the rather different situation prevailing in the United States. From this we have the opportunity, if we are prepared to grasp it, of producing a full state-of-the-art system for England and Wales rather than the basic building block offered by the present Commonhold proposals.

   "I have been over into the future, and it works"

   (Lincoln Steffens)

   Appendix 1 - List of persons interviewed

   Robert Anderson Strata Agent BCS Strata Management Ltd, 323 CastlereaghStreet, Sydney, NSW. Francesco Andreone Solicitor Blessington Judd 133 Castlereagh Street, Sydney, NSW Gary Bugden Solicitor Mallesons Stephen Jaques 1 Eagle Street, Busbane, QLD Peter Blair Leanne Hughes Land Registry Land and Property Information Service Macquarie Street, Sydney,NSW Michael Cambridge Developer Prudential Investment Company of Australia 323 Castlereagh Street, Sydney,NSW Phil Duggan Glenn Ettridge Strata Agent Bright & Duggan Alexander Street, Crows Nest, NSW Anna Edwards Strata Agent Adelaide Strata & Community Management 91a Goodwood Road, Goodwood, SA BryanForby Strata Agent Inscor Services 575 Bourke Street, Melbourne, VIC David Hynes Developer Meriton Apartments 267 Castlereagh Street, Sydney,NSW Rod James Insurer CHU Underwriting Agencies 1 Northcliff Street, Milsons Point, NSW Ros Janes Solicitor Herd & Janes PO Box 8403 Woolloongabba, QLD Robert Kronberger Strata Title Referee Strata Title Referees Office 32 St.Georges Terrace Perth,WA

   John Little Strata Agent Harvie Strata Management 483 Riley Street, Surrey Hills, NSW. Don Logan Strata Agent (Retirement Schemes) Lifestyle Care Services 2 Davies Road, Belrose, NSW Andrew Maclean Strata Mediation Service Dept. of Fair Trading 234 Sussex Street, Sydney ,NSW. David & Margaret O'Connor Strata Agent O'Connor StrataProperty 4-16 Sorrell Street, Parramata, NSW Wally Patterson Strata Agent Dynamic Property Services 162 Golburn Street Sydney, NSW Kristina Pavlinovich Strata Agent Mc Mahon Real Estate 640 Murray Street West Perth, WA MikeRyalls Management Software Maxsoft 60 Santa Cruz Boulevard Clear Island Wales, QLD Michael Silver Howard Stewart Strata Agent Stewart, Silver, King & Burns 116 Bundall road Gold Coast QLD Terry Smith Lucy McEwan Strata Agent Strata Data 557 PortrushRoad, Glenunga, SA Pauline Vamos Civil Servant Australian Securities Investment Commission 1 Martin Place, Sydney, NSW. Robert Van Aalst Solicitor Lawyers Central, 483 Riley Street, Surry Hills, NSW Christine Vieraitis Search Agent Stratascan Buderim,QLD Dominic Votano Strata Agent PremierStrata 18 Kleins Road, Northmead, NSW

   Appendix 2 - Body Corporate Information Certificate (Queensland)

   

   

   

   Appendix 3 - List of prescribed forms (NSW)