dsre

Tips for property investors

Tue, 14 Feb 2017 04:15:24 +0000

Sinking fund changes its name and a lot more

David Shirley — Wed, 08 Feb 2017 02:21:46 +0000

CAPITAL WORKS FUNDS

It all changed 30th November, 2016

What exactly are the new requirements for Capital Works Funds and what does a compliant one look like? How do you best communicate the changes and the need for CWFs to apartment owners? How does it affect developers and how does construction costs drive maintenance needs? Why the heck do we need them anyway? And….. how do you get the most of your CWF?

What’s changed?

The days of getting a quick and dirty Sinking Fund Plan and ignoring it are over. The new legislation (the Strata Schemes Management Act 2015 s 80) states that a CWF must include:

"Plan of anticipated major expenditure ... over the 10-year period’ ; and

For the first time, the law is specific about what a CWF must contain Must include:

Details of the workTiming and anticipated costsSource of funding ; andAny special inclusions you want

A CWF now MUST be implemented!!! Which means…

Owners can no longer ignore a report’s recommendations and under-fund a Capital Works Fund account. There is also a requirement the report accurately represents what is required for the buildings major costs maintenance needs which mean the days of using the cheap and nasty tick and flick report writers is over. These reports will no longer be filed and ignored so report quality is king.

How does a quality CWF Benefit owners?

A CWF is in effect a budget and it can make the cost of unit ownership transparent. How?:

It sets a budget for the predictable costs of maintenance and replacement; which if properly applied, eliminates almost all special levies (especially in building under 20 years old)It helps new owners clearly know the costs of strata maintenance; andEnsures a user pays system.

Is Australia the only country where a CWF is required?

The concept is Australia and was first introduced in 1997 many jurisdictions around the globe have mimicked the concept including most Canadian provinces from 2000,no less than 32 US states, Dubai in 2009, NS in 2010 and south Africa has legislation pending.

Each jurisdiction has separate requirements while with no uniformity. Some use the percentage of the administration fund as a basis for capital works budgeting while some require each item to be funded individually. The cash flow model used in NSW is, based on our research, the most efficient funding model to meet building maintenance expenses.

What’s the make-up of building construction costs and how does the CWF fit?

CWFs are all about building maintenance and building maintenance starts with architectural and engineering decisions before and during construction.in most modern building, the superstructure which makes up 1/3 of the building cost which if kept sealed from the elements (usually with an external coating) has an indefinite life while the finishes, plant and equipment, which has finite Lifespans make up 2/3's of the cost

Maintenance cycles of buildings

A brand new shiny building starts a cycle of maintenance. Here's what you can expect:

- 3 months to 2 years- minor construction defects

- 2 years- initial maintenance free

- <6 years- short cycle items/ high use – pumps, motors, etc

- +7 years- major maintenance costs - paint, carpet, some fire equipment, etc

- 18-20 years- major refurbishment costs - Major plant like lift motors, fences, intercom, failing retaining walls, roof and gutters, etc

lt Affects Developer Too…

Developers will be required to set realistic levies from when the strata plan is registered up until when the developer has sold at least one third of the unit entitlements in the scheme (the initial period) and for the subsequent year after.

So what does a good CWF plan look like?

lt contains a precise list of expenses, with timing included. E.g. replace water pumps, $4,218 in three year’s time, $4,766 in seven years, $5,385 in eleven years etc. lt clearly shows the source of funding –

E.g. 'capital works will be funded from the capital works fundLevies - show levies per unit entitlementOther E.g Sign/cell tower incomeLending if required

It is Tailored to the building in all ways including taking into account:

AgeType of constructionEnvironmentConstruction techniqueRecent sinking fund expenditureExisting Issue/ defects

Four RULES on how to get the most out of your CWF

GIGO (Garbage in Means Garbage out) – Supply your CWF reporting company with as much information as you can about the building and maintenance historyUse the TWO WEEKS after receiving a CWF plan to review and give feedback immediately so the inspector still has your building in his recent memory recallRead a CWF Plan cover to cover – (yes I know – good for solving insomnia) and/or invite your pro into go through it with strata managersTalk worst case scenarios to your executive committee – people are getting sued over not budgeting properly, adhering to CWF recommendations. Saving pennies today will likely cost dollars tomorrow in risk and higher maintenance costs.

In summary…

For the first time CWF must be implemented. There are many compelling reasons to get a foods quality one. For the first time strata managers may have liability if the report proves inadequate. Everyone is affected including developers. So find quality providers and when you get a CWF, read it, work with your provider to get the style and content you want and apply the recommendations/ That’s it….all sorted. Easy!!!

NSW Government Sells The Land Title Office

David Shirley — Thu, 19 Jan 2017 10:57:25 +0000

The ‘top 10’ new strata laws

Adrian Mueller, Senior Lawyer at J.S Mueller & Co — Wed, 30 Nov 2016 04:37:08 +0000

Over 90 new strata laws will come into play later this year and of the 90 these are some changes that will most likely make a difference to your everyday. 1. Parking Owners corporations will be able to reach agreements with local councils to allow parking officers into their schemes to issue fines to rogue parkers. Not only rogue parkers but residents who park over the lines of their parking spaces on to common property or leave their cars in visitor parking (however briefly) could also be ticketed. Read more: http://bit.ly/25je4Zq

2. Fines Almost all fines will be paid to the owners corporation, but this won’t be a cash cow for over-zealous committees; they still have to go through the same tribunal process. Read more: http://bit.ly/1TIJxNx 3. Short term rental Owners corporations can now set limits on the number of people allowed to live in an apartment provided the upper limit is no less than two adults for each bedroom. Failure to abide by this law could result in fines from $11,000 to 22,000. Read more: http://bit.ly/1syyP1z 4. Smoke Simply, an owners corporation can make a strata by-law banning smoking throughout an entire strata building. Orders can also be made against residents who smoke or allow their cigarette or barbeque smoke to drift into other units and landlords can be held liable to their tenants for second hand smoke exposure. Read more: http://bit.ly/1QwdltQ 5. Pets The new strata by-laws will not remove a scheme’s ability to make its own rules about pets. However, if the new model by-law is adopted, the request to keep a pet cannot be unreasonably refused. If the owners believe approval was unreasonably withheld, they can apply to the Tribunal. Read more: http://bit.ly/1UaKmNR 6. Renovations New rules mean hanging pictures; coat hooks and filling cracks can go ahead while “minor alterations” – such as kitchen or bathroom renovations, installing timber or tile floors and replacing wiring or power points no longer need a special resolution by-law. But be aware there are other laws that allow owners corporations to charge owners for any damage caused to common property. Read more: http://bit.ly/1UaJx7E 7. Levies Owners corporations will be able to get compensation if a developer promised unrealistic low levies at time of sale. By the time the owners have to pay the actual bills for services, the developer is out of the picture. Now owners can pursue them for compensation through the tribunal (NCAT). Read more: http://bit.ly/20u5CzM 8. Strata contracts Strata manager contracts will be limited to one year in the first year of a building’s life and three years thereafter. The one-year initial contract gives strata manager’s ample time to prove themselves to the committee … or otherwise. The subsequent three-year contracts allow owners corps to change strata managers more easily if the relationship isn’t working out. Read more: http://bit.ly/1WPaNga 9. Votes The biggest technological changes in our lives have been in communication. Voting electronically, via Skype calls, by email and even good old-fashioned snail mail will be introduced. Read more: http://bit.ly/1OTxWLa 10. Tenants Tenants now have a right under the new laws and will be able to attend owners corporation meetings, no matter how many of the lots are tenanted in their scheme. They may vote if they hold a proxy (giving them voting rights on a lot owner’s behalf). Read more: http://bit.ly/28NWTY7

Why use a consultant?

David Shirley — Mon, 03 Oct 2016 11:47:00 +0000

Advice - The real estate market is continually fluctuating. Your DSRE agent can give you up to the minute information on the current market conditions including pricing, presentation and the terms needed to make your home competitive in the market and to obtain the best price, quickly, and with the minimum of hassle.

Marketing Coordination – Your DSRE consultant can recommend repairs or cosmetic work or other staging ideas that will enhance the saleability of your home. We will market the home through our own network of agents in the Multiple Listing Service but will also use other tools including the internet, print media, mass mailings, personal contacts and by many other means. All of this is intended to give your property the maximum market exposure it deserves.

Objective Evaluation – When you receive an offer on your property, your DSRE consultant will help you objectively evaluate the offer to determine all the ramifications of the proposal including price, required repairs or inspections, timing, buyer qualification, and more. We can assist a legally binding, win-win agreement which will protect your interests and make sure that the purchase will go through to closing.

Legwork – During the listing period, your DSRE consultant will perform all the legwork needed to make the home available through previews, showings, and open houses. They will be present after the offer is accepted for questions or inspections and ensure safe and proper access to your home.

Closing – Between the initial sales agreement and the closing, many questions may arise.

These include unexpected repairs, disclosure issues, title problems and financing difficulties.

The paperwork alone is overwhelming for most sellers. Your DSRE consultant will advise you during this process and help resolve these issues and move the transaction to closing.

Follow-up – Your DSRE consultant will continue to follow-up with you after the closing to ensure that all your questions have been answered and to assist you with any needs in regards to your move to a new location.

Marketing Coordination – Your DSRE consultant can recommend repairs or cosmetic work or other staging ideas that will enhance the saleability of your home. They will market the home through their own network of agents in the Multiple Listing Service but will also use other tools including the internet, print media, mass mailings, personal contacts, and several other strategies.

A guide to selling your home

David Shirley — Mon, 05 Sep 2016 12:43:00 +0000

We have been developing our systems of assisting home sellers over the last eight years. We have excellent market knowledge and a wide range of services. Our dedicated agents increase the efficiency of your home sale by guiding you before, during and after the transaction.

There is no need to spend a great deal of money re-modelling your home before selling. However, a few key improvements to ensure your home shows well in relation to your competitors may result in a quicker home sale, and a potentially higher price. Prospective buyers warm to homes they can visualize themselves living in.

The exterior of your home makes the first impression and should always be well-kept so interested buyers passing by will call your agent for a showing.

A guide to buying at auction

David Shirley — Tue, 01 Mar 2016 11:40:00 +0000

Introduction

Details of the properties and land to be sold are set out in the contract of sale. All lots are sold subject to conditions of sale (see contract of sale). It is most important that purchasers satisfy themselves as to the availability, location, boundaries, conditions, and state of lots prior to the Auction.

Viewing

It is essential that you view the properties which interest you as soon as possible. Viewing arrangements for each lot are available from the agent or consultant. Public viewings for all properties will be at specific times. Buyers arriving late at a confirmed appointment may have only a limited viewing time.

Legal Documentation

For each lot there are special conditions of sale plus other documentation provided by the seller’s solicitors. If you wish to receive these papers please contact the agents’ office and they will advise you of the information held. They can forward the relevant documents to you or your solicitors on request. Contracts of Sale will be sent free of charge. Consultants cannot guarantee that the pack will be complete; we can only despatch the documents we hold. All legal documentation is available for inspection at all viewings and open homes and will be available in the Auction room on the Auction day. The general conditions for sale are announced by the Auctioneer prior to the auction commencing.

Instructing a Solicitor

Before bidding at the Auction, it is advisable to consult a solicitor/licensed conveyancer to advise you on the general and special conditions of sale, any searches that may be necessary, the Land Titles Office copy entries, and any other information provided.

Guide Prices

These are not quoted in the contract but available from the agency/office concerned, they are given for guidance only. A guide price may change at any time. Lots may be sold at above or below the guide price and we cannot accept responsibility for their accuracy.

Reserve Prices

All lots, unless stated by the Auctioneer, are subject to a Reserve price. This is the minimum price at which the seller has authorised the Auctioneer to sell. Bidding must reach or exceed the reserve price for the Auctioneer to be able to sell. The reserve price is confidential. It is set by the seller in consultation with the Auctioneer prior to the Auction and may be subject to change right up to the start of the Auction.

Pre-Auction Offers

Offers must be in writing and will only be considered if the lot has been viewed and the legal documentation inspected. Pre-auction bids are on the basis of an immediate exchange of auction contracts upon acceptance by the seller.

Any offer will be assumed to be your best and final offer and we cannot guarantee that you will be invited to increase your bid in the event of an alternative offer being received prior to exchange.

Our clients have agreed that only pre-auction offers substantially above the top guide price need to be submitted.