As an individual owner, you have complete control over how your own property is maintained, managed, and even designed.
However, in some instances, such as apartment buildings, owners share space or property.
Common property is defined in Victoria as any part of the land, structures, or airspace that is not designated as a lot on the subdivision plan. It may consist of gardens, passageways, walls, paths, driveways, stairs, elevators, foyers, and fences.
The lot owners collectively own the common property.
Since it is collectively owned, it is critical that the owners make decisions collaboratively, as it will impact everyone including landlords who do not actually live at the property.
Additionally, there is a cost consideration associated with the upkeep and management of these shared places. All these issues, and many more, are discussed during an AGM.
As a landlord, you may be affected by decisions made at Strata Meetings in the following ways:
- Increase in quarterly or annual levies
- Tenants who are displeased with the state of common property
- Tenants who look to end their lease due to ongoing property maintenance issues
As a landlord, the most important meeting to attend is the Annual General Meeting.
The Annual General Meeting is abbreviated as AGM.
As the name implies, it is a once-a-year meeting (often conducted every 12-15 months) in which lot owners gather to address a variety of issues concerning public spaces or common property.
An AGM addresses a variety of issues affecting all lot owners and common spaces under the owner’s corporation.
These meetings are available to all owners or their proxies and often begin with attendance checks to determine whether a Quorum* of owners is present.
An AGM allows owners to examine their Owners Corporation’s financial statements, determine a budget for the coming fiscal year, debate issues connected to their property’s insurance, general repairs and upkeep, or any other general business that owners wish to raise.
At this gathering, a Strata committee and/or chairman are also elected who then, represent the remaining owners throughout the year.
So, why is it necessary to attend an AGM as a landlord?.
Here are five reasons to attend your annual general meeting (AGM) and subsequent Strata Meetings.
1. Gain a better understanding of how your property is managed.
As noted previously, the AGMs address issues concerning the upkeep and management of your common property. Attending an AGM not only provides an excellent learning opportunity for property owners, but it also provides an in-depth look at how the Owners Corporation’s financials work.
Consider it as an extension of your property investment. You’ve already invested in your own property; ensure that you also devote time in shared property!
Assuring the proper management of your shared spaces also helps protect the investment you’ve already made in your private property.
2. Best opportunity to be heard
Simply because a committee exists and works with your Strata Manager does not mean you have no say. The common properties are collectively held by the lot owners, which means you have a voice.
To put it another way, your vote counts!
Most matters of an Owners Corporation are decided by the way of a vote. By being present at a meeting, you have the chance to speak your mind.
If you have issues about how common property or shared areas are managed, or if you have suggestions for how they can be managed better, this is the ideal time to bring them to the attention of your fellow owners and the Strata Committee.
Fact: Your Strata Manager does not make the decisions that affect common property. Instead, they merely implement the decisions made by owners at Strata Meetings.
Only owners have the authority to make choices. Your Strata Manager might evaluate the prior years’ financial statements, maintenance items, and general business operations and make suggestions, but the ultimate decision lie with the owners
3. Assume some control over critical choices
As a landlord you might receive feedback from your tenants or managing agents about how the common property could be improved to make it more attractive to current or future tenants.
These changes might allow you to charge extra rent for your property.
To implement the changes, financial resources are required and since the recommendations relate to common property, no one owner can make decisions on their own.
However, if properly presented to fellow owners at a Strata Meeting, it is possible that these changes may be considered, budgeted for, and accepted for execution.
This is another reason why it is critical for landlords to attend their Annual General Meeting or other Strata Meetings.
4. Protect your investment
Properties are significant assets, and a sound investment necessitates proper care.
Often, owners take care of their private property but neglect to engage in the maintenance of communal places.
Each lot owner has an obligation to the common areas and participating actively in your Strata Meetings ensures that your investment is adequately looked after.
Furthermore, if no one attends an AGM, your Strata Manager will be obliged to carry over the previous year’s budget, which may no longer be adequate to ensure the property gets the care that it needs.
If building budgets are insufficient to cover the expenses, the Owners Corporation may become insolvent and fail to pay for ordinary maintenance and upkeep.
The ripple effect this negligence initiates is going to impact the owners and the overall state of the property.
5. Get to know your fellow owners and your Strata Manager.
Meeting the other owners within your property and getting to know your Strata Manager in person can provide an insight into how the property is administered in ways that may not be adequately communicated in writing alone.
By cultivating relationships and fostering a sense of community and teamwork inside your Strata property, you can assure the continued viability of your property, both private and common.