But, it's not necessary [or desirable] for those differences to escalate into long running and serious disputes.
We need better ways to handle these differences.
Strata differences occur because of the combination of –
- the shared use of space and facilities,
- closer proximity of living and working spaces,
- incompatible owner/resident demographics, financial capacities, attitudes and interests, and
- the forced interactions generated or necessitated by strata operations.
But, typically differences in strata complexes are handled in sub-optimal ways leading to poor strata outcomes.
In this post, I briefly look at the ways strata differences are typically handled, why things occur that way, the possible consequences and why it matters. In future posts, I’ll explore the causes and consequences in more detail and suggest 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 the unhappy stakeholders never communicate them properly or at all because there’s a lot of ignorance about strata processes and the options available to unhappy people.
2. Some differences are suppressed or overruled by strata power holders [like executives and managers] or by majorities or controlling minorities at strata meetings. This happens when there are both well intentioned and improper motives.
3. Often issues are delayed or deferred beyond their practical currency because the available mechanisms for raising and considering differences are formal, complex and slow. And, these mechanisms are commonly relied on by executives or managers: citing formal rules, processes and/or limited authority scopes; as the default response.
4. Some differences are quickly, and often automatically, escalated into disputes since there’s a ready made process for strata disputes and no obvious, easy or attractive options. Plus, some stakeholders have vested interests in perpetuating dispute processes.
5. In a few instances, the stakeholders explore their 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. The outcomes can be either formal or informal and temporary or long term.
Consequently, many issues in strata complexes are never properly considered by strata stakeholders at all, whilst other issues become subject to adversarial processes with third party imposed outcomes that become precedents for future similar situations.
I believe we need to devise and implement new and better ways to identify strata differences so that better strata outcomes are achieved for all strata stakeholders.
The consequences and impacts on strata stakeholders
But, why does this matter? And, why do we need better outcomes for strata differences since they are, after all, inevitable? Here are a 12 reasons. 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, they continue and/or get repeated.
2. Time is lost waiting for issues to go away or when escalated into disputes, for the dispute to be finalised. Typically, actions in relation to that issue and related or consequential matters are put on hold pending outcomes.
3. Disputes often end in equal or greater unhappiness than the original problem or difference. This can be because the outcome is no better and/or because the process has exacerbated the problem/s and created new problems for the stakeholders.
4. Wasted resources [money, time and mental energy] on disputes by multiple parties [the stakeholders plus the strata corporation, 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, like information reporting to non-involved owners, etc.
5. Distraction of executives and managers from strata operations. Dealing with disputes takes time away from other activities from volunteer executives and overworked managers. Even if the issues don’t involve the strata corporation, they can be distractions.
6. The unpredictable [and out of your control] outcomes of formal dispute processes means that involved stakeholder’s increase their exposure on issues by risking completely adverse [win or lose] results rather than a graduated range of outcomes.
7. A lack of trust in other owners, executives, managers, etc develops when issues are ignored, dismissed, suppressed or forced into disputes. And those sentiments creates a negative culture around strata complexes.
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 the 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 lead to serious unhappiness with housing or investment choices by stakeholders. Leaving owners and non-owner residents left feeling like they prefer to live or own in another property or, worse, in another kind of property [non-strata].
10. Reduced amenity and enjoyment of the strata property because of the unresolved issues. Impacting on the satisfaction and happiness levels of residents and the ‘sense of place’ that people want from their homes.
11. Reduced economic value of the strata property because the amenity [living circumstances and/or other problems] is affected by the unresolved issue/s. Right now there’s no easy way to establish or measure this but it must be the case.
12. Impacts on major investment by commercial operators in strata complexes. There is adhoc evidence that major commercial operators and investors do not want to buy, own or operate from strata lots due to the mechanisms for resolving strata issues, differences and disputes. Leading to the desire to split complexes in to part-strata BMC’s with non-judicial based dispute processes.
13. Developing an all or nothing culture in strata complexes that avoids exploring issues based on the stakeholders circumstances in favour of applying universal, formal and strict rules to them or directing them into adversarial disputes.
Ultimately, these consequences combine to make many people feel that strata is second rate property that is inferior to separately titled real estate: that they’d prefer free standing real estate.
That’s an outcome that we need to change since more and more people will live, own and work in strata complexes in the future. Plus, it unfairly over-shadows the many benefits and advantages of strata property for the vast majority of Australians and the good work that so many people do to build, manage and service strata complexes.
More on this and ideas for strata differences and disputes soon.