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Better Ways to Approach Strata Differences

Adversarial mindsets in strata buildings mean that most differences become disputes to be won or lost; rather than challenges to be mediated to a fair compromise between affected stakeholders. And, that has many negative impacts on all strata stakeholders.

Inevitably there will be differences between stakeholders in strata, community, and company titled property complexes.

But, it’s not necessary [or desirable] for those differences to escalate into serious and sometimes long-running disputes.

So, we need better ways to handle these differences.

Strata differences occur because of a combination of –

  • the shared use of space and facilities,
  • the closer proximity of living and working spaces,
  • incompatible strata owner/resident demographics, financial capacities, attitudes and interests,
  • the forced interactions generated or necessitated by strata building operations, and
  • a myriad of other unpredictable events.

These differences have significant [obvious and hidden] impacts and should be managed to achieve sustainable strata outcomes for the strata stakeholders and buildings.

But typically differences in strata buildings are handled in sub-optimal ways leading to poor strata outcomes.

In this article, I briefly look at the ways strata differences are typically handled, why things occur that way, the possible consequences, and why it matters.

In the future, I’ll also write a few articles exploring the causes and consequences of the more common strata differences and disputes in more detail and suggesting ways to better address them.

 

How strata differences are currently handled

Right now, differences between strata stakeholders are handled in one of the following ways.

  1. Many strata differences are never dealt with at all. That’s because unhappy stakeholders never communicate them properly or at all due to there’s a lot of ignorance about strata processes and the options available to unhappy people or general apathy and feelings of disempowerment.
  2. Some strata differences are suppressed or overruled by strata power holders [like executives and managers] or by majorities or controlling minorities at strata meetings. This can happen with both well-intentioned and improper motives.
  3. Often strata differences or the underlying issues are delayed or deferred beyond their practical currency because the available mechanisms for raising and considering differences are formal, complex, and slow.
  4. These mechanisms are commonly relied on by executives or managers when issues arise to slow them down and/or suffocate them: citing formal rules, processes, and/or limited authority scopes as the default response.
  5. Some strata differences are quickly, and often automatically, escalated into disputes because there’s a ready-made process for strata disputes, and, there are no obvious, easy, or attractive options. Plus, some stakeholders have vested interests in perpetuating dispute processes in strata buildings.
  6. In a few instances, the stakeholders explore their strata differences with each other directly or with the assistance or intervention of motivated third parties [like managers, executives, or professional facilitators/mediators] and reach agreements that resolve the issues. These outcomes can be either formal or informal and temporary or long term.

Consequently, many issues in strata buildings are never properly considered by strata stakeholders at all, whilst other issues become subject to adversarial processes with third party imposed outcomes that become bad precedents for future similar situations.

I believe we need to devise and implement new and better ways to identify and manage strata differences so that better strata outcomes are achieved for all strata stakeholders.

 

The consequences and impacts on strata stakeholders

Why does this matter?  And, why do we need better outcomes for strata differences since they are, after all, inevitable?

Here are a 13 [is that a lucky or unlucky number?] undesirable impacts I can think of.  There are probably more.

  1. Important issues and differences never surface and never get considered by strata complexes. So, instead of being aware of them and finding solutions that could benefit everyone, they continue and/or get repeated.
  2. Time is lost waiting for issues to go away or when escalated into disputes, for the strata dispute to be finalised. Typically, actions in relation to the issues and related or consequential matters are put on hold pending outcomes.
  3. Disputes often end in equal or greater unhappiness than the original issue or difference. This can be because there is no outcome because the outcome is no better, and/or because the process has exacerbated the problem/s and/or created new problems for the stakeholders.
  4. Resources [money, time, and mental energy] are wasted on disputes by multiple parties [the stakeholders plus the strata building, executives, and managers] which could be saved and/or applied to more constructive strata activities. These resources include those directly applied to the issue or dispute and indirectly utilised, like information reporting to non-involved owners, etc.
  5. Executives, managers, and others are distracted from other important strata operations. Dealing with disputes takes time away from other activities from volunteer executives, overworked managers, and busy third-party service providers.  Even if the issues don’t involve the strata building and are between owners or residents, they can be distractions to everyone.
  6. The unpredictable [and out of your control] outcomes of formal dispute processes mean that involved strata stakeholders increase their exposure on the issues by risking completely adverse [win or lose] results rather than a graduated range of outcomes.
  7. A lack of trust in other strata owners, executives, managers, etc develops when issues are ignored, dismissed, suppressed, or forced into disputes. And those sentiments create a negative culture around the strata building that is hard to change.
  8. Difficulties with future interactions [legacy conflict] usually result from differences or issues that escalate into disputes, regardless of the outcome. Whether a stakeholder is a winner or loser, they can expect that future dealings with the other stakeholder will be more difficult.  In extreme situations, the loser waits or looks for payback opportunities.
  9. Unresolved issues can lead to serious unhappiness with housing or investment choices by strata stakeholders. Leaving owners and non-owner residents feeling like they’d prefer to live or own in another building or, worse, in another kind of [non-strata] building.
  10. The amenity and enjoyment of the strata building are reduced because of the unresolved issues. This impacts the satisfaction and happiness levels of residents and the ‘sense of place’ that people want from their homes.
  11. There can be reduced economic value of the strata building and apartments because the amenity [living circumstances and/or other problems] are affected by the unresolved issue/s or because of the legal uncertainty of the dispute. Right now, there’s no easy way to establish or measure this but it is definitely the case.
  12. Impacts on major investment by commercial operators in strata buildings. There is plenty of adhoc evidence that major commercial operators and investors do not want to buy, own or operate from strata buildings due to the existing mechanisms for resolving strata issues, differences, and disputes.  This leads to the desire to split complexes into part-strata BMC’s with non-judicial based dispute processes. and inefficiently separating governance of shared complexes.
  13. Developing an all or nothing culture in strata buildings that avoids exploring issues based on the stakeholders’ circumstances and preferences in favour of applying universal, formal, and strict rules to them or directing them into adversarial disputes. The temptation to find a ‘universal’ solution to all issues and for all buildings is not the best solution.

Ultimately, these consequences combine to make many people feel that strata property is second rate property that is inferior to separately titled real estate and that they’d prefer to own, rent, live or work in free-standing property.

That’s an outcome that we need to change since more and more people will live, own and work in strata buildings in the future.   Plus, it unfairly over-shadows the many benefits and advantages of strata buildings for the vast majority of Australians and the good work that so many people do to build, manage and service strata complexes.

 

This article was contributed by Francesco Andreone – GoStrata

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