In operation since 1994, Network Pacific Strata Management is one of Australia’s largest and most successful strata management organisations, with offices in Melbourne, Queensland, Europe and South East Asia.
John Botha is Managing Director of JFB Management Services, a franchise business of Network Pacific Strata Management. Mr Botha has been with the Network Pacific Group since 2008, providing Owners Corporation Management Services to a large portfolio of key clients. After demonstrating long term success in management and retention of key high rise and multi Owners Corporations, the group gave him the opportunity to expand the portfolio as an independent franchised business, whilst remaining part of the successful Network Pacific Group. Mr Botha spoke to The Australian Business Executive about the success of his franchise business, the ongoing issues being dealt with in the strata industry, and the value-added services that help Network Pacific serve its clients.
JFB Management Services
“Network Pacific Strata Management as a company has grown enormously since its humble beginnings in 1994 as a home office operation in Doncaster East in Victoria,” Mr Botha says. “The group now operate offices in Victoria, Queensland and Malta.”
After moving to Melbourne in 2008 and joining the group, Mr Botha took on the lead role as Senior Owners Corporation Manager, before being given the opportunity to purchase his portfolio of clients and set up as a franchise of the group.
“We officially started trading on the 1st of January 2015, with 11 buildings and 1,500 lots under management. We’ve now managed to grow that to 55 buildings and nearly 4,000 lots under management. The team has obviously expanded significantly in that time, going from one staff member, to now having seven members within the team.”
The last few years have seen significant success for JFB Management Services. Following Mr Botha’s individual title of Strata Manager of the Year for Victoria in 2015, the business was awarded Small Owners Corporation Management Firm of the Year for Victoria in 2017.
“In 2018, we then competed against all of the other states and took out the inaugural national award as Small Owners Corporation Strata Management Business for Australia, [and] we had one of our staff members take out a Corporate Support role for Victoria.”
Most recently, the company has been honoured with the 2019 award for Medium Strata Community Management Business at the Victorian awards, and it will now be competing nationally in the same newly-introduced category.
Strata industry issues
The Australian strata industry as a whole continues to face many of the same challenges it has been up against for some years. Legislative change is ongoing and ever-evolving, with many in the industry still waiting for several key changes to come into effect.
“We have seen the introduction of the new Owners Corporations Regulations, in 2018, which did seek to address some issues, such as external appearance of lots, with owners needing approval from the owners corporation formally prior to proceeding with works.”
In accordance with these regulations, owners are now formally required to make notification to the Owners Corporation for any intended renovations to their lots, especially those that will affect the common property or amenities of the development.
“The Owners Corporations Amendment (Short-stay Accommodation) Act came through in 2018, which really sought to regulate the so-called Air BnB ‘party houses’, and actually provide some avenues for redress for people that don’t comply and make life hard for other residents within the properties.”
The big change still on the horizon for the industry is the long-overdue overhaul of the Owners Corporations Act of 2006, announced in August 2015 by the minister for Consumer Affairs at the time, Jane Garrett.
A 2014 review of regulations for strata managers resulted in the formation of the Consumer Affairs Legislation Further Amendment Bill. However, with the change in government that year, the bill was never passed.
“There have been numerous speculations as to when this is actually due to come to a conclusion and fruition, and most of those dates have actually passed already, so I wouldn’t be game enough to put another date forward for you. But at this stage it is mooted that on the 1st of January 2021, hopefully the new legislation will actually come into effect.”
When legislation is finally passed, it will represent the largest and most comprehensive overhaul of the original 2006 legislation, and will also include regulation of real estate agents involved in strata sales.
With some high-profile issues around strata-maintained properties being seen worldwide, there is increased scrutiny on the sector, as well as a number of government safety initiatives designed to tackle the biggest problems.
“I think you’ve got about 1 in 3, if not more, of Australians actually living in, investing in, or somehow affected by Strata Management properties,” Mr Botha says, “so there is certainly a lot of people affected by that.”
The 2014 Lacrosse building fire in Melbourne’s Docklands area was a major event, exposing a wide-range of safety concerns for buildings fitted with aluminium composite panelling (ACP). This has led to much-publicised proceedings and government intervention, aiming to alleviate concerns around the safety of these buildings.
“The Lacrosse building apartment owners were recently awarded $5.7 million in damages against the builder, however that has also predominantly gone against the architect, the building surveyor and the fire engineers involved in the project. That particular one is under appeal at the moment as well, so we’ll see where that finishes up.”
After the tragic Grenfell Tower fire in London in 2017, state government was forced to pay closer attention to ongoing safety issues. A taskforce was established to investigate and address the issue of non-compliant building materials used on Victorian buildings.
“The taskforce sought to oversee and provide a report on just how far-reaching the risk associated with inferior cladding materials were within Victoria. Once the audit was completed, the government announced that local government would seek to create cladding rectification agreements.”
These agreements allowed buildings to borrow money to fix any cladding issues, paying the loans back through each individual apartment’s council rates contributions over the coming years. Unfortunately for state government, very few local councils took it up.
“Most recently, this year the Victorian government announced a funding package of $600 million, which will be funded through increased permit costs and development costs for any new developments as they come through. The issue certainly remains a live subject. The likely outcome is that lot owners are ultimately the ones left to foot the repair bill.”
A major concern for the industry in recent years has been the emergence of general building defects, issues that are separate from the non-compliant building materials issue, such as cladding.
“That’s predominantly come about since deregulation and privatisation of the building approvals process for the industry,” Mr Botha says. “There are a number of defective properties around the place, and that seems to be increasing exponentially.”
The biggest changes saw councils in Victoria effectively removed from the building approvals process, with the majority of building permits now being issued by private sector building surveyors.
“Until 2015, builders were even allowed to appoint their own surveyor to sign off on works being compliant and meeting code. These surveyors are now being held to account, with many of them finding difficulties obtaining indemnity insurance moving forward, especially after being caught up in the cladding fiasco.”
The client base of JFB Management Services continues to shift generationally, with the adoption of new technologies bringing new dynamics and changing the demand and service delivery expected by clients, with instant communication via email now commonplace.
“Clients and owners in strata-type properties need to be aware that the strata manager is a trusted advisor and an industry professional,” Mr Botha says. “We do strive to deliver the best service we can to our buildings, the residents and the lot owners, within the ever-shortening time that we have available.”
Network Pacific Strata Management’s value-added services helps it take care of all aspects of its clients’ property management, maintenance and compliance needs. Find out more about Network Pacific by visiting www.networkpacific.com.au.