Author: Liam Kerr

Where are Lithium-ion Batteries Found? 

Lithium-ion batteries are commonly found in cars, e-bikes, e-scooters and other electronic devices. They can be categorised into two main groups: batteries for cars and batteries for e-bikes and e-scooters. Among these, e-bikes and e-scooters pose a higher risk in strata buildings due to their higher flammability and tendency to catch fire when the cells are damaged. 

Do Lithium-ion Battery Explosions Change the Landscape for Insurers in Strata? 

Yes, insurers are increasingly focusing on the installation and management of these batteries in strata buildings to assess and mitigate financial risk. From an insurance point of view, key challenges include: 

• Diverse applications and uses of lithium-ion batteries. 

• Variability in operational conditions and risk factors. 

• Complexity in establishing uniform safety measures. 

• Lack of standardised regulations and standards. 

• Challenges in fire control and environmental risks. 

• Difficulty in implementing intervention procedures during fires or explosions. 

• Limited historical data. 

What Should You Do to Mitigate Lithium-ion Battery Risks?

To mitigate the risks associated with lithium-ion batteries, you should: 

• Implement evacuation plans to ensure there are escape routes in the event of a battery fire. NSW Fire and Rescue can assist in developing these plans (Click here for more information). 

• Establish by-laws to regulate the use of lithium-ion batteries, particularly for e-bikes and e-scooters.  

• Avoid installing EV charging stations in basements as they do not provide optimal fire protection. 

What Should You Tell Residents to Do in the Event of an EV Fire?

Strata managers should advise residents to: 

• Keep e-scooters and e-bikes in spaces far away from living areas, as the time from ignition to a major fire is very short. 

• Ensure that e-scooters and e-bikes are not stored in places that block escape routes. 

If a By-Law Prohibits E-scooters and E-bikes in the Building, can the Owners Corporation Designate a Safe Area for Them?

Yes, a by-law can be created to establish an external charging box. This box can contain any fires caused by battery ignitions, limiting damage to the box itself rather than the entire building. You can also implement other by-laws to regulate the use, location and management of lithium-ion battery vehicles to improve safety in your scheme. 

It is with great excitement that we announce Joshua Baldwin as the next President of Strata Community Association Australasia, becoming the youngest president in SCA’s history.

Joshua’s appointment is the latest progression in a bright career in the strata industry and with SCA, a career that has already spanned decade.

As you may be aware, Joshua’s journey with SCA began in 2013 on the SCA (SA/NT) Board, where he quickly became a key figure within the organisation, subsequently serving as President of the SA/NT Chapter for six years.

His tenure with the chapter was marked by significant achievements, including the pivotal merger of the South Australian and Northern Territory chapters. The merger stands as a testament to his vision of fostering greater cohesion and collaboration within the industry.

Speaking on his appointment, Mr Baldwin said it was an honour to be elected as SCA Australasia President:

“Firstly, I would just like to extend such a massive thank you to outgoing SCA Australasia President Chris Duggan, who has left an incredibly strong legacy of achievement and collaboration that I hope to build on,” said Mr Baldwin.

“Chris has been such an invaluable member of SCA and his contribution to the strata industry really cannot be understated. From his leadership on strata insurance affordability, availability and transparency, to increasing professional standards across the country and driving the creation of the fledgling SCA RTO, he has been a clear and unifying voice for the strata industry.

Mr Baldwin has flagged four areas he will be focusing on during his term of presidency:

“I’m incredibly excited to commence the role at a pivotal time for our organisation and the industry,” he said.

“I like to think of myself as someone who is innovative and collaborative, and I never shy away from a challenge.

“I have a lot of ideas and a great team of volunteers and staff around me to start implementing them.

“Increasing SCA’s brand identity, delivering consistent standards of education, fostering a good working environment for our staff and volunteers and building our ethical standards will be my priorities, and I’m rolling up my sleeves and setting to work straight away.”

SCA Australasia CEO Alisha Fisher welcomed Josh to the role, and spoke warmly about Chris’ contribution to the sector.

“Chris has been an incredible president and will leave a lasting legacy for SCA as someone who always chose collaboration and conversation and knitted so much of the industry together,” she said.

“He has achieved so much in the three years with SCA Australasia, and he will be missed.

“At just 33, Josh has already accumulated 13 years of experience in the strata industry and his career journey of choosing and specialising in strata from the beginning of his career showcases an industry growing in stature and recognition.

“He’s committed, he’s bright and he cares about the industry – I’m really looking forward to continuing to carry out the Board and the organisation’s shared vision with him at the helm,” said Ms Fisher.

Please join us in welcoming Joshua Baldwin as our new SCA Australasia President. As we embark on this new chapter, we encourage all members to get involved, share your ideas, and support Joshua in his efforts to lead our association forward towards even greater heights.

The proposed reforms include:

• Raising the maximum penalties and penalty infringement notices to deter non-compliance, particularly regarding existing obligations by agents to disclose information about commissions.
• Strengthening the conflict-of-interest disclosure requirements to prevent agents from exploiting their positions for personal and/or financial gain.
• Prohibiting agents from receiving a commission on insurance products in cases where they do not assist residents in securing the best deals, ensuring fairer practices.
• Improving NSW Fair Trading’s enforcement and compliance powers to ensure agents adhere to the new regulations.

See SCA NSW’s Statement on the reforms

These reforms follow an $8.4 million investment to bolster resources for the Strata and Property Services Commissioner as part of the NSW 2024-25 Budget.

Anoulack Chanthivong, Minister for Better Regulation and Fair Trading, emphasised the reform’s role in building trust and confidence in strata living.

” The new laws are designed to take immediate action to help restore confidence in living and investing in strata schemes, ensuring more people consider apartment living as a housing option”

Moving forward, the government plans to engage with key stakeholders, including the Owners Corporation Network and Strata Community Association NSW, to refine the draft laws before their presentation to Parliament later this year.

Advocacy Win for strata

Following collaborative, sector-wide campaigning from strata industry and consumer groups. $11.8 million is set aside for the Strata and Property Services Commissioner to educate owners corporations. Also, $3.5 million over the next two years will be dedicated to the Strata Hub, which will centralise information for people living in or owning strata properties.

Better Quality Homes

$35 million is going to the Building Commission NSW to upgrade their digital tools and improve building standards across the state.

Fairer Deal for Renters

They’re also dedicating $8.4 million to hire more rental inspectors and engagement officers to help the Rental Commissioner enforce quality standards for rentals.

For further information head to the NSW Govt website – A Budget to deliver more houses and better homes | NSW Government

A Quick Recap

By-laws are rules and regulations that apply to everyone in a strata scheme: owners, tenants and even visitors. They cover various aspects such as noise levels, pet ownership, use of common areas, parking and more. By-laws are enforceable under strata law and are essential for maintaining order and fair use in strata schemes.

Step-by-Step Guide for Enforcing By-Laws

Step 1: First By-Law Breach Letter

The process begins with issuing a first By-Law Breach Letter upon identifying a breach. This letter, typically drafted by the Owners Corporation Secretary or Building Manager, notifies the offender of the specific by-law violation and urges them to rectify the issue.

While this step is NOT compulsory, the letter serves as an initial warning and courtesy, allowing the alleged offender to defend their position and comply voluntarily without escalating the issue further.

Step 2: Second By-Law Breach Letter (Optional)

If the breach persists despite sending the first letter, a second By-Law Breach Letter may follow within 7-14 days.

Step 3: Notice to Comply

If the issue continues, the Owners Corporation can proceed to issue a Notice to Comply. This formal notice specifies the breached by-law, demands compliance within a specified timeframe (usually 14 days) and warns of potential penalties if ignored.

Key requirements for issuing a Notice to Comply include:

• Prescribed Form – It must be completed using the form provided by NSW Fair Trading.
• Affidavit of Service – After issuing the notice, an Affidavit of Service must be completed and sworn before a solicitor. This affidavit confirms that the notice was properly delivered to all relevant parties.
• Owners Corporations Authority – Only the Owners Corporation can issue the Notice to Comply unless the Strata Manager has been delegated this function, in which case, no resolution of either the Owners Corporation or Strata Committee is required.

New housing estates in the hottest areas around Sydney and Melbourne are dominated by dark rooftops, black roads and minimal tree cover. Dark colours trap and hold heat rather than reflect it. That might be useful in winters in Tasmania, but not where heat is an issue.

A dark roof means you’ll pay considerably more to keep your house cool in summer. Last year, the average household in New South Wales paid A$1827 in electricity. But those with a lighter-coloured cool roof can pay up to $694 less due to lower cooling electricity needs. Put another way, a dark roof in Sydney drives up your power bill by 38%.

When suburbs are full of dark coloured roofs, the whole area heats up. And up. And up. This is part of the urban heat island effect. In January 2020, Penrith in Western Sydney was the hottest place on Earth.

Cool roofs have many benefits. They slash how much heat gets into your house from the sun, keep the air surrounding your home cooler, boost your aircon efficiency, and make your solar panels work more efficiently.

State governments could, at a stroke, penalise dark roofs and give incentives for light-coloured roofs. Scaled up, it would help keep our cities cooler as the world heats up. But outside South Australia, it’s just not happening.

You can clearly see here the difference roof colour makes. On the left, you can see the real view of a new housing estate. On the right, an infrared camera shows you the difference in heat (redder = hotter, green = cooler.

Why won’t state governments act?

To date, our leaders show no interest in encouraging us to shift away from dark roofs.

In New South Wales, plans to ban dark roofs were axed abruptly in 2022 after pushback from developers.

The current NSW planning minister, Paul Scully, has now paused upgrades to the state’s sustainability building standards which would have encouraged light-coloured roofs. Other Australian states and territories have also paused the rollout of new, more ambitious building sustainability standards.

This is short-sighted for several reasons:

1. it costs the same for a light- or dark-coloured roof
2. owners will pay substantially higher electricity bills to keep their houses cool for decades
3. keeping the building status quo makes it harder to reach emission targets
4. dark roofs cut how much power you get from your rooftop solar, especially when it’s hot. This is doubly bad, as blackouts are most likely during the heat.

At present, South Australia is the only state or territory acting on the issue. Early this year, housing minister Nick Champion announced dark roofs will be banned from a large new housing development in the north of Adelaide.

What’s at stake?

At present, the world’s cities account for 75% of all energy-related carbon dioxide emissions. It’s vitally important we understand what makes cities hotter or cooler.

Regular Valuations Are Important

If your building’s sum insured has not been reassessed in the last 2 years, it is likely underinsured. Underinsurance occurs when the coverage amount falls short of the actual cost required to rebuild, repair, or replace a damaged or destroyed property. Hence, it is advisable to do a building valuation every 2-3 years to ensure your insurance coverage is up to date.

What a Valuation Should Include

Valuations should be conducted by qualified professionals and encompass various aspects of the building, including the cost of common areas, external features (e.g., pavements, fencing and recreation facilities) and structural improvements. Additionally, valuations should account for inflation, labour and material cost escalations.

The 75% Rule

Some insurance policies still adhere to the 75% rule, wherein underinsured buildings receive only 75% of the sum insured in the event of a claim. However, this varies depending on the insurance product and its specific terms and conditions. Notably, CHU Underwriting Agencies does not enforce the 75% rule and will pay the full cost of the claim up to the sum insured.

Fact Sheet – Is you Strata Building Underinsured?

How to Avoid the Risk of Underinsurance?

To avoid the risk of underinsurance, you should take the following actions:

1. Reviewing the sum insured annually, regardless of whether a new valuation is obtained.
2. Obtaining valuations every 2-3 years.
3. Factoring in all requirements, including the removal of debris, professional fees and the escalation of costs during the rebuild.
4. Being aware of any undisclosed renovations and improvements by owners.
5. Ensuring owners communicate any works within their unit to the owners corporation to ensure works are incorporated into the overall building sum insured.

Legal Obligations

While there is no legal obligation for regular valuations, owners corporations are legally obliged to ensure there is no shortfall between the sum insured and the building’s replacement costs. Any shortfall will be payable by the owners.

What is an Initial Maintenance Schedule? 

An Initial Maintenance Schedule (IMS) is a document provided by developers to the owners corporation which identifies all common property items that need consistent maintenance and how to carry out such works. The IMS should align with the first Capital Works Fund Plan for the scheme; failing to follow it can void warranties. 

What role does a Maintenance Planning Specialist play? 

A Maintenance Planning Specialist is responsible for determining the remaining useful life of building elements and assets, predicting future repair, maintenance or replacement needs and budgeting for these tasks.  

Which types of work does the Design and Building Practitioners Act impact? 

The Design and Building Practitioners Act 2020 affects repair work and most replacement work for building elements. Examples include balustrading replacements, facade repairs, waterproofing, door/window replacement, roofing and structural repairs. 

What issues make a building hard to insure? 

Buildings may become hard to insure due to factors such as extensive claims history, evidence of poor maintenance planning, defects, unaddressed Work Health and Safety (WH&S) concerns, failure to act on expert advice and combustible cladding. 

What are the selection requirements for engaging contractors? 

Contractors should be licensed, insured and appropriately qualified. Safe work method statements should be provided for high-risk trades and documents should be regularly reviewed and updated. Third-party monitoring companies can assist in this process and minimum criteria for insurance cover and WH&S compliance should be agreed upon with the scheme. 

How should contractors be appointed? 

Contractors should be engaged with a written work order that includes clear instructions. Spending limits should be documented if acting under delegated authority and standard work order terms and conditions should be established. Essential documents relating to WH&S hazards, including asbestos reporting, should be provided or identified on-site before work commences. 

What should be considered regarding contract requirements and legislation?  

Understanding contract requirements and relevant legislation, such as section 106 of the Strata Schemes Management Act 2015, is essential. This includes reviewing the registered strata plan, obtaining necessary approvals for works and complying with the Design & Building Practitioners Act 2020. 

Maintenance Planning Fact Sheet 

Lithium-ion batteries have seamlessly integrated into our daily lives, powering a many everyday items such as smartphones to electric vehicles. Despite their convenience, it’s crucial to recognise the potential risks they pose if not handled properly, especially within strata properties where fire can spread rapidly throughout a building.

This quarter’s articles:

• Lithium-Ion batteries – key steps to Managing the Risk in Apartments (✍️CHU)
• The Importance of a Painting Maintenance Schedule (✍️Premier Painting)
• Making Multi-Site Energy Agreements Easier (✍️Origin Energy)
• Easy Window Maintenance Tips from the Experts (✍️Express Glass)
• No Finger Pointing Allowed – NSW Court of Appeal finds that Proportionate Liability Does Not Apply to Claims Under the DBPA. (✍️Grace Lawyers)
• Why a Quality Site Manager is Essential and What to Look For! (✍️Paynter Dixon)
• NCAT Enforces By-Law for Renovation Works Despite Owner’s Refusal (✍️Bannermans Lawyers)
• Security Access Control Systems and Fobs: What to look out for (✍️Quatrix Security)
• Cleaning, Cleaning, Cleaning – Roof Maintenance in Autumn (✍️AGC roof)