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Advice for Property Developers Working with Owners Corporations
When developing a property, especially large-scale residential or mixed-use developments, working alongside an Owners Corporation (OC) is inevitable. The relationship between property developers and OCs plays a pivotal role in ensuring the smooth transition of a development into a thriving community of owners and residents. Here are some essential tips for property developers to foster a productive relationship with the OC and ensure long-term success.
1. Engage Early with OC Management
The earlier you start collaborating with a professional Owners Corporation Manager, the better. Engaging with an experienced OC Manager during the planning and design stages helps anticipate the operational needs of the building. OC Managers can provide valuable insights into maintaining common property, the appropriate configuration of shared amenities, and long-term sustainability.
2. Transparency in Disclosures
Property developers should aim for full transparency in all disclosures to prospective buyers, particularly when selling off-the-plan. Make sure to provide a clear breakdown of what the OC levies will cover, anticipated budgets, and details regarding any special contracts (e.g., caretaking, cleaning, or maintenance contracts) that might be entered into early on. This openness helps establish trust with future owners.
3. Set Realistic Budgets
An essential responsibility of the developer is to set realistic initial budgets for the Owners Corporation. The first annual budget is critical in determining the levies owners will need to pay. Underestimating the budget can result in large shortfalls, leading to dissatisfaction and conflicts when the OC needs to adjust the levies significantly. Consult OC Managers to ensure the proposed budget reflects the true costs of managing and maintaining the building.
4. Compliance with Legislative Requirements
Every state has its own laws governing Owners Corporations. In Victoria, property developers must adhere to the Owners Corporations Act 2006. Be aware of obligations such as the need to establish the OC and ensure proper registration, provide all relevant documentation to the OC at handover, and comply with maintenance plans and warranties. Failure to meet these legal obligations can lead to costly disputes.
5. Handover of Information
The handover process is crucial. Developers are responsible for transferring essential documents, including building plans, engineering reports, warranties, and service agreements, to the OC. This information is critical for the OC to manage the building effectively and address any issues as they arise. Providing complete and organised records helps ensure a seamless transition.
6. Manage Defects Responsibly
Building defects are one of the most contentious issues between property developers and Owners Corporations. It’s essential to address any defects promptly and professionally. Establish a clear process for managing defect claims and ensure that there is open communication with the OC. Proactively addressing issues within the defects liability period prevents costly legal disputes and builds goodwill with owners.
7. Plan for Long-Term Sustainability
More buyers are now prioritising sustainability and environmentally friendly living spaces. Developers should work with Owners Corporations to integrate sustainable features, such as energy-efficient lighting, water conservation systems, and waste management solutions. Sustainable buildings not only attract buyers but also reduce long-term operational costs, benefiting the OC.
8. Avoid Long-Term Binding Contracts
While it’s tempting to lock in suppliers and service providers for long-term contracts during the development phase, this can often lead to friction with the Owners Corporation. OCs should have the flexibility to choose their own providers after handover, based on the needs and preferences of the owners. Ensure that any early contracts entered into for maintenance or caretaking services are fair and offer exit clauses.
9. Ensure Community Spaces Are Fit for Purpose
Common property and shared spaces play a significant role in fostering community life within the development. It’s crucial to design these areas with the needs of the future residents in mind. For instance, make sure that communal areas, like gyms, pools, or gardens, are adequately sized and equipped for the number of units in the development. Additionally, ensure that shared spaces are durable and easy to maintain to minimise ongoing OC costs.
10. Ongoing Support Post-Handover
Even after the handover, offering ongoing support to the Owners Corporation during the initial years can help resolve any emerging issues quickly. Developers who maintain a relationship with the OC, perhaps through regular meetings or check-ins, create a smoother transition and build lasting trust with the owners.
A successful collaboration between property developers and Owners Corporations lays the foundation for a well-managed and harmonious community. Partnering with an experienced Owners Corporation Manager, like Amity Strata Management, can make a significant difference in this process. Amity Strata Management ensures a smooth handover, transparent communication, and the effective management of common property, contributing to the long-term success of both the development and the community it houses.
Date Published
09 October, 2024
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