Research

How to deal with the hassle of strata related legal processes

By Bianca Dabu
Avoid

Ian McKnight of ClarkeKann Lawyers have spent years of his life dealing with several legal issues, helping people get through the process in the most effective and efficient way possible.

He—together with fellow lawyer James Nickless—recently handled CK Strata, a new division of the established law firm, and has since witnessed different types of hassle and trauma that property investors go through to detangle an issue.

"I imagine a lot of people when they think of strata, they think about the financing or the purchasing opportunity for them. It's a bit of an afterthought... the need to be proactive about it, [and] when you get to the back end of it, when you're trying to detangle a strata issue, it puts a lot of emotional toll and stress on people, if they get to that point," Smart Property Investment's Phil Tarrant said.

According to Ian, the legal process can definitely affect relationships and even one's health, that's why he always tells his clients to practice being proactive from the get-go.

He said: "People should make themselves very aware of what they're buying into... [and] they need to understand how this owners’ corporation functions. The owners’ corporation is responsible, in effect, for the administration or management of the building—arranging maintenance, insurance, all those sorts of things."

"It can only do that through the vehicle of a meeting and it's really important that owners, when they buy into a strata situation, understand that," the lawyer added.

"It's unlike a situation where you and I, for instance, can make decisions about painting our house. If we live in a standalone house, we can just go off, being natural people, and make that decision.

"An owners’ corporation's quite different. It can only do so through the vehicle of a meeting. It's a bit like a company—operating through a board of directors or [like a] general meeting."

For property investors looking into investing on strata, one of the things that they should look for is full transparency among all parties involved, Ian said.

"It's also important for people to understand the vehicle of meetings and what they do—their proper regulation notices, minutes, all those sorts of things," he said.

"To come to your specific point about disputations... all these things should [have been] gone through at a meeting, where proper notice is given, [and a] proper discussion.

"There should be, I suppose, full transparency given and that can take the form of documents being annexed to the notice paper or even bringing in people who know something about the dispute."

People only have to deal with a high level of emotional stress if they don't know how to handle the situation involving strata, and if they have no clear idea of their goals and objectives as property investors. Ian said a lot of disputes and complications can be avoided or reduced by all citizens of the strata if personal feelings are taken out of the picture.

After all, like any other investment, putting money on strata is also just a form of business.

"A lot of the disputation can be reduced if the emotion is taken out because once you start to bring in people's feelings and their concerns, [their] emotions, it can spin out of control," Ian said.

"I gave some advice... to a client who's got a major issue involving trees, as a matter of fact," he shared further.

"Now this is really important to her and I said, 'Well, basically, there are two ways you can deal with this.' I said, 'You can pretend your life is like a room and you spread your dispute out and you've got all the papers lined out and tables right through the room and when you need to deal with a particular aspect, you just walk over to the table and pick up a piece of paper.' That's way one.

"Way two is to put all the papers in a box, and when you need to deal with some aspect, you get the box out of the cupboard, put them on the table. Then look at it. When you're finished, put them back and put them in the cupboard. I say way two is the way to do it.

"I know that's very difficult for people because, obviously, it affects amenity of life, maybe their financial situation, but... that option two that I've just described is certainly the way that I'd be recommending. Do away with emotion because people become very distracted and warped in their thinking," Ian reiterated.

"I say to clients... if worry was going to help you, and [if] stressing out would help, then yes, please do it. Absolutely, bring it on. But unfortunately, it's not [helping]," he concluded.

Tune in to Ian McKnight and James Nickless' episode in The Smart Property Investment Show to know more about the rules behind strata, the politics involved with the owners' corporation, as well as their tips and tricks to ensuring buyers receive the right advice at the right time.

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  ["title"]=>
  string(72) "Mortgages in a tighter lending economy and why Brisbane is a good option"
  ["alias"]=>
  string(72) "mortgages-in-a-tighter-lending-economy-and-why-brisbane-is-a-good-option"
  ["introtext"]=>
  string(255) "

Tune in to the latest episode of Property Showcase, the podcast with the inside track on the products and businesses that will help turbocharge your portfolio, maximise returns and make your overall investment experience seamless and stress-free!

" ["fulltext"]=> string(818) "

To hear more about these services, make sure to tune in to this episode of Property Showcase!

 Make sure you never miss an episode by subscribing to us now on iTunes!

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Son Pham is the accredited Head of Mortgages at Rethink Financing\/Rethink Investing. He has over 6 years\u2019 experience writing loans, over 12 years in the wealth management industry working for the likes of CBA, AMP and private practice and he is also a licenced financial planner (AFSL 326450). He has multiple investment properties that are cash flow positive which help pay his mortgage on his home and fund his lifestyle.<\/p>\r\n

Son is able to write all types of residential and commercial property loans.<\/p>\r\n

In this episode of Property Showcase, head of mortgages at Rethink investing Son Pham joins host Tim Neary to unpack how an investor should approach getting a mortgage in place with banks tightening down on serviceability.<\/p>\r\n

Hear from\u00a0Son\u00a0about:\u00a0<\/p>\r\n

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  • The pitfalls that he has seen people get into<\/li>\r\n
  • Interest only loans and if that is the way to go<\/li>\r\n
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    Whether it\u2019s building a successful property portfolio or investing in one of their Development Funds, Open Corp can help you through every stage of your investment journey. The team has 40 property specialists who collectively have been involved in over $4 billion worth of property transactions and the acquisition of more than 8000 homes and investment properties.<\/p>\r\n

    In this episode of Property Showcase, director of investment services for Open Corp Michael Beresford,\u00a0joins\u00a0editor of Real Estate, Tim Neary to share why he disagrees that the cooling market means that the best times are behind us.<\/p>\r\n

    In this episode, hear from\u00a0Michael\u00a0about:\u00a0<\/p>\r\n

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Mortgages in a tighter lending economy and why Brisbane is a good option
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Will Magee has had ambitions to enter into the Australian property market for quite some time, but it has been more than just finances holding him back.  Having been granted permanent residency just two weeks ago, Will is wasting no time and is now in the process of signing papers and finding his first investment property.

" ["fulltext"]=> string(2483) "

In this episode of the Smart Property Investment Show, Will joins host Phil Tarrant to share why he is purchasing his first property in partnership with his brother, discuss the complications that can arise from such a strategy, and unpack the ongoing plan for building a joint property portfolio with his brother.

Will will also share how they approached saving for their first property, why he is taking out the mortgage in his name exclusively, and share their savings plan for the year ahead.

If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: FacebookTwitter and LinkedIn.

If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!

RELATED AREAS OF INTEREST:

From property in Australia to a ski lodge in Japan
Mortgage Trusts, an alternative first step for property investors
Should a real estate title be in one person’s name only?

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A property investment plan years in the making
object(stdClass)#1180 (52) {
  ["id"]=>
  string(5) "18287"
  ["title"]=>
  string(75) "Regional Victoria showing up Melbourne in price performance, new data finds"
  ["alias"]=>
  string(74) "regional-victoria-showing-up-melbourne-in-price-performance-new-data-finds"
  ["introtext"]=>
  string(139) "

Median house prices in regional Victoria outperformed that of Melbourne in the June quarter, the latest REIV figures reveal. 

" ["fulltext"]=> string(2323) "

Median house prices in the regions rose 4.0 per cent to $419,500 but in Melbourne they dipped by 0.6 of a percentage point to $840,000.

The result in Melbourne was due to a 0.8 of a percentage point fall in prices achieved at auction; this was despite a lift of 2.3 per cent in private sales.

Inner Melbourne suffered due to auction prices, where median prices fell by 4.9 per cent to $1,459,000 but it was middle Melbourne that was hardest hit, with a 5.4 per cent drop to $974,500.

Outer Melbourne had a good quarter with the median rising by 0.5 of a percentage point to $681,000.

Apartment prices in regional Victoria grew by 3.7 per cent to $304,500 while the metro media was up by 0.5 of a percentage point to $604,000.

REIV President Richard Simpson said that despite fewer sales, many sectors of the market were performing well.

“2017 was a bumper year and while the trendline has flattened, despite the fall in median house prices in the June quarter, median prices are still up this calendar year for both houses and units, in Melbourne and in the regions,” Mr Simpson said. 

In particular there was been strong growth in regional centres which is probably due to the first-home buyers’ concessions said Mr Simpsons.

“The first-home buyers’ concession has been a boon for regional areas. A new entrant to the property market buying a house at the regional median will pay no stamp duty, while a first home buyer of an apartment in Melbourne at the median price would pay stamp duty of nearly $25,000,” he said.

Mr Simpson said that more prospective buyers are looking towards regional Victoria which is also having an effect in Melbourne.

“Melbourne’s outer perimeter continues to grow. Small increases in the June quarter mean that the median prices for both houses and units have risen over 10.5 per cent from a year ago.

Mr Simpson said moving forward that vendors need more realistic expectations as the highs of 2017 are now over.

“Negative chatter about the future of the sector coupled with stronger lending controls by financial institutions has created some uncertainty and vendors need to be realistic with their price expectations,” Mr Simpson said.

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Regional Victoria showing up Melbourne in price performance, new data finds

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