Episode 106 | Dodgy developers & Strata Living | Jimmy Thomson, FLAT CHAT

The multi-talented Jimmy Thomson chronicles the good, the bad, and the ugly of strata living.
We have a cracker of an episode for you. Today we interview Jimmy Thomson, the writer of the Flat Chat column, which you may have seen featured in Domain, AFR and SMH. The multi-talented Jimmy has authored 15 books, is a screenwriter, a university lecturer and has his own podcast “Flat Chat Wrap”, which is all about strata living.
Jimmy tells a screenwriter's dark, but ultimately hopeful tale about strata living, which includes exposing dodgy developers who over promise and under deliver.
Here’s what we covered:

How one email revealed a developers dodgy intentions
Developers putting their own people in building management positions
The deep corruption of developers in Queensland
Does building warranty actually protect you?
Positives of strata living
The darkside of short term subletting
How extra facilities of strata property can greatly increase rent and property value
Adding value vs maintaining in strata property
When should Strata owners contact NSW Civil and Administrative Tribunal (NCAT)?
Who enforces the bylaws of an apartment complex?
Will company titles make a comeback?
Where to find the bylaws
And the crazy but true story of the guy who turned his balcony into a fish tank (yes, really)

MENTIONED EPISODES:
Episode 103 | Amanda Farmer
Episode 25 | Amanda Farmer
Episode 18 | Reena Van Aalst

GUEST LINKS:
Flat Chat Column
Flat Chat Wrap
StrataBox

HOST LINKS:
Looking for a Sydney Buyers Agent? www.gooddeeds.com.au
Work with Veronica: info@gooddeeds.com.au

Looking for a Mortgage Broker? www.wealthful.com.au
Work with Chris: hello@wealthful.com.au

EPISODE TRANSCRIPT:
Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness…
This episode was recorded on 30 January, 2020.

Veronica Morgan: Your listening to the elephant in the room property podcast where the big things and never get talked about actually get talked about. I'm Veronica Morgan real estate agent buyer's agent, cohost of Foxtel's location, location, location Australia and author of a new book auction ready how to buy property even though you're scared shitless.

Chris Bates: And I'm Chris Bates, financial planner, mortgage broker, and together we're going to uncover who's really making the decisions when you buy a property.

Veronica Morgan: Don't forget that you can access the transcript for this episode on the website as well as download our free food or forecaster report. Which experts can you trust to get it right, the elephantintheroom.com.au

Chris Bates: Please stick around for this week's elephant rider bootcamp and we have a cracking Dumbo, the weight coming up

Chris Bates: Before we get started, everything we talk about on this podcast is generally nature and should never be considered to be personal financial advice. If you're looking to get advice, please seek the help of a licensed financial advisor or buyer's agent. They will tailor and document their advice to your personal circumstances. Now let's get cracking.

Veronica Morgan: If you've ever lived in a strata building, you'll know that people aren't always easy to live with. There's issues with parking, noise, pets, partying, who's dominating the owner's corporation, and then you have problems with the buildings themselves, light bulbs blowing, maintenance, water leaks, lifts breaking down and then who is responsible for making sure the whole complex runs smoothly. The individual stories of apartment occupies owners and associated professionals have provided a decades worth of content in the forum hosted by today's guest. We're honored to be joined by Jimmy Thomson, well known in the property area as the writer of the long running flat chat newspaper column. Now I remember reading it in good weekend, but now it's in the AFR or the Australian financial review every weekend. He's also the editor of the related website which is flat. I love this. You've got to say flat-chat.com.au

Veronica Morgan: Co presenter of the podcast, the flat chat rep. He's also the author of 15 published books, TV script writer, travel writer, tour guide, university lecturer and journalist and he's an experienced public speaker and has regular guest spots on James Valentine's afternoon on ABC radio. Multitalented on back on the apartment side of things is or the strata side of things. He's campaigned on a number of apartment related issues and hasn't managed to get property law changed in at least two occasions. And I want to him, we want to hear more about that. Prides himself on being Airbnb's public enemy number two, number one being former Sydney side of Marie Cox. And I'm sure we'll hear more about that later in our chat. Thank you very much for joining us today. Jimmy.

Jimmy Thomson: Thanks for having me.

Chris Bates: Thank you Jimmy. I just have to say I through like flicking through the AFR or when I do kind of spot your articles, I do stop and have a good rate. So thanks for coming on. Cause they're always interesting and I think the strata conversations, I mean that's a, you need to kind of keep going deeper and deeper in it because once you bought into a strata building, it's kind of you don't want to be finding out some of the issues you should have looked at before you bought. What made you start flat chat?

Jimmy Thomson: Ah, ah we had, we bought off the plan and that's my partner and I, my wife and I, and we bought into a building, which we thought we were pretty smart and savvy and it turned out we were not at all and the building had problems had been taken over halfway through its development. So that people who bought in immediately, they want to cut costs. Yeah. They, they had planted one of their clients from another part of their business in our building as the, the chairman of the, the owners corporation. He was doing deals with the developers on defects and, and came in one day and said basically I, they, the developers offered a $60,000 for all the defects. That's a really good figure. But we've got to say that after that, we don't claim anything else. Unfortunately, because he was not the most computer savvy person on the planet. He accidentally sent copied an email to two members of the committee, say to the developer, I think I can get these idiots across.

Veronica Morgan: That's fantastic.

Jimmy Thomson: So then it started a campaign. And funnily enough, the, funnily enough, the it just all started was pets because we have two cats and it was essential for us to move into a building that was pet friendly. And back then it was even less pet friendly in strata than it is now. And so we'd signed up and the, the real estate agent had said it's pet friendly and we got the first AGM and this guy stands up and says, okay, the first thing we're changing the Bi-kaw no pets. And the place just went nuts.

Chris Bates: And what the cats, the cats went nuts.

Jimmy Thomson: And the dogs allowed pigeons? No, no. Beating the pigeons, flying rats. So what it did was it brought together a whole disparate bunch of people who, the only thing we had in common was that the own pets and that organized into a group.

Jimmy Thomson: And then that, and then, and then we went after the defects and we got really bad advice and lost millions of dollars and my wife and I are sitting there going, what have we done here? And, and she said, you know, we are journalists, we should be writing about this. So we wrote a call, wrote a book, and the Sydney morning Herald called her up. I said, love the book. Can you do a weekly newspaper column or.

Chris Bates: Straight to it? That's not bad.

Jimmy Thomson: And she said, no, he goes, I've contractually committed to another publisher live with this idiot. He'll probably turn out for you. All right. So I started doing the column and I reckoned I had probably about six weeks before they phoned me out. So I just went for it by just attacking developers and everyone, everyone, everybody who needed attacking got attack. Wow. And then people, well, people started responding to it and and they did a survey and they realized that that was back in domain actually, that they they did realize that my column was the second most read part of the paper.

Veronica Morgan: I'm sorry I got that wrong it was in domain. Not in good, but it was at the weekend.

Jimmy Thomson: The weekend. One of my rules of broadcasting is never correct. The host.

Veronica Morgan: Very, but you can do that because if he did do it, I could edit it out. See now I can't, we've got too far into it now and we going to delete my era sole custody.

Chris Bates: I'm glad I asked that question because thanks for putting it on the list here Veronica. But the question, yeah, cause it was very interesting this story, right, because there's a number of things there that you kind of just glossed over or you were just explaining the story. Like the mole. I haven't heard of that happening before where a developer has kind of silently put in somebody who's related to them into the builder, into the building to kind of look after their interests and not the other tenants and then basically sabotage the building to force everyone to agree to a special levy and on a sign off on an NDA basically that you kind of have to just unheard of. I've never heard of that. Have you heard of that again?

Jimmy Thomson: Yeah, it happens. I mean, but the funniest thing is cause Sue, my wife got on to the committee and in the early days, and of course, because you know, like you tell this guy, I shouldn't, I can't name them because we'll all get sued. But he, he basically went, Oh, you're a journalist. Great. That means you can type, you can be secretary, you know, this thinking. And, and she was so suddenly she's an office bearer and the, the developers said, would you like to have a look at, you know, some of the rest of the building we'll show you in very new. And and she's getting shown round. And the guy said, no, we've got a couple of developments elsewhere coming up. You will get first choice. Yeah. We're putting you on the list for first choice of the new apartments coming up.

Jimmy Thomson: It's just wrong. Yeah. But you know, there's some people who would have jumped at, but you know, this is, this guy had rented space from them in another building and he came in, they brought in a building manager who was just awful,

Chris Bates: Just probably getting paid out to building that, bringing our own building manager.

Jimmy Thomson: I must maybe. Yeah, because they are going, Hey, well, you know, we built the building. Who knows it better than us. Let us be the building manager. They bring in this guy who was, you know, first he was obsessed with his Christmas bonus. He said, Oh, I've saved so much money. I'm going to get a great Christmas bonus. And we're going, the lobbies, the lift lobbies are filthy. Why aren't they being cleaned over? The cleaners were costing too much money. It's all about his Christmas bonus. And then the clincher, the clincher was the committee, once we, we'd had a coup, which was fairly inevitable and we got rid of the dead wood and the people, the insiders, the moles as you call them.

Jimmy Thomson: The next thing was to get rid of the building manager. And you know, we had this list of, you know, is how incompetent and dishonesty was and suddenly the, they'd never signed the building management contract and suddenly it turns up signed and with this seal on it, the strata seal and an extra clause in it saying if we forced them to sack him from his job, we would have to pay his wages until such times as he found a similar job elsewhere. And that had never been in the original thing. And our strata manage her, put the seal on it and, and we just went, look, nah.

Veronica Morgan: Does this try to manager was also in with the developer?

Chris Bates: Yeah. Well that's something we say quite a lot isn't it? So a lot of the new developments, I think they're trying to change the law as you would know this 20 times better than me. But you know, some of the developments have got building their own building managers in the contract and then they have to be in there for say 10 years and that their fees go up greater than inflation over that 10 years. Have you heard of those type of forced the bars? Yeah,

Jimmy Thomson: But the differentiate, there's, there's a differential there, which is that the strata manager and the building manager are different people. The building manager is a guy who comes around and changes the light bulbs and tells you you've parked in the wrong place. Yeah. They've strata manager and basically he may never even set foot in the building because he's, he's taking in all the invoices and taking in all the money and if he's any good or she has a lot of women there, they're giving advice, you know, we've got, when you phoned them up and say we've got a problem or a tenant or a resident has a problem, they should be able to say, Oh, look under strata law, this is what you need to do. The building manager is a different beast. The strata managers a few years ago they changed the law so that the first, yeah, the first time you sign them up at your first AGM, the first year they were only allowed to have a contract for one year and then after that it's three years maximum.

Jimmy Thomson: Okay and that's good because the strata managers do a lot about setting up the bylaws and things and it's good for them to be able to at least show what they can do once the owners are in the, the building manager thing is definitely that is going to become an issue because some of them are locked in for those 10 year contracts. Ridiculous man.

Veronica Morgan: Amanda farmer I think just talked about a 25 year class is Queensland,

Jimmy Thomson: Queensland and Queensland is, I have to say it's the system there is so profoundly corrupt, right? Yep. What it basically starts with is they, the developer builds a building. He then puts a tender out to onsite strata managers. They come and pay him tens, maybe hundreds of thousands of dollars for the contract. Yep. Yep. The owners who have to then service as that contract and pay all the bills have no say in who it is or what the terms of the contract. They just get the hang of the contract. So the developer has made all this money for what? Yeah, or what for putting an ad in the paper. The tenants, the owners.

Chris Bates: The owners probably because they've got that for the strata committee to pay that a hundred grand to the developer, they're going to have to charge more to the, exactly. Exactly.

Jimmy Thomson: So it's just a way of funneling money into the developers. People are having to serve as 25 year contracts they had every time for years and years. I've been saying, this is so obviously wrong, everybody knows it's wrong. It's of no benefit to the owners of the apartments. Why is it allowed to happen? And somebody told me just the other day, every time the government thinks we're, we're going to change this in some significant way, the bank step in and go, nah,

Veronica Morgan: Why does the bank step in?

Jimmy Thomson: I wonder where do you think that the strata, the, the onsite managers are getting those tens or hundreds of thousands of dollars to buy bank loans?

Chris Bates: Yeah, against the book. Yep. Yep. So yeah, because it's an ongoing revenue stream for them. So let's say they safe, I need that loan of 100,000 because that'll guarantee us $50,000 a year of work. And so the bank will happily give them 100,000 cause they've got this secure ongoing revenue stream to to lend the most. That makes a lot of sense I think. I mean it's not just the banks, it's the government really. I mean that's why you can't say you can't say the word regulation and property in the same sentence because you know people kick off, right. So it's unregulated for a reason and as soon as you start, I guess opening the leaves up on things like this, there's people who are going to be upset because the government doesn't want to slow down the sale of these buildings and the profits of developers because then they can keep on building more and it keeps the whole system churning.

Veronica Morgan: What is so alarming. No. Is that despite the fact we're all a bit cynical in Australia, we're not cynical enough. We all do believe we're protected but we are not.

Jimmy Thomson: Absolutely not. Absolutely you, you think you know you go, if I go and buy a toaster at it doesn't work.

Chris Bates: Everyone uses the toast I want.

Jimmy Thomson: And then they built a building called the toaster intribute to that idea. So you take your electric kettle just to be different and you take it home, you plug it in, it doesn't work. You take it back to the shop and they got to give you a new one or give you your money. But can you imagine if you walked into, you got your apartment, you know you're, you're 500 $750,000 apartment. You get the keys, you go and you go, all these lifts don't work and I can't and the pool stinks and you go back, but your keys and you say, here, here's the keys back. Can I have my money back please? Cause you have not, you have not sold me something that's fit for purpose or what you promised me I was going to get.

Chris Bates: I actually had this conversation literally yesterday. You know a client who's settling on a property this week refers a mate in the office who's thinking about buying their retirement. Are there any early thirties but the thing about buying their retirement place where they want to live, and that's a strategy that's generally quite forward because they haven't bought a home yet. But, and who, who's, yeah, just a 30 year old know what they want when they're 65 like you know, they've just got engaged.

Jimmy Thomson: They don't know what they want when they're 31

Chris Bates: Explain that. And he got it and he's like, well yeah, I mean life's so unpredictable. Who knows what I'm gonna want in 30 years? But it was a new building that they're wanting. Yeah. And he said, Oh, but they've got building warranty, haven't I? And I said, well yeah, I mean warranties generally you can take it back and get a refund but can't refund you four stories or four stories or more. Right. So yeah, I said that to him. I said, look, you know how being taught in a theater was under like, I think it was in Elwood, in Melbourne and it was not a bad area and things like that. And it was just though that his perception though was it's got warranty. And so cause that we'd hit and that's just how bad the consumer and the developers kind of washing it. You know what I mean?

Jimmy Thomson: It's funny that I, I love apartment living and I can't imagine living in any other way older all the time. I'm telling people how bad it is. It's kind of ironic, but you have to warn people, go in with your eyes wide open.

Veronica Morgan: Do you still live in that apartment that you bought? So, wow. So you've, you've, you've persisted and, and

Jimmy Thomson: We are the second people in the building then we've now been there for 20 years.

Veronica Morgan: Hopefully you've ironed out all the, bumps.

Jimmy Thomson: No other people have done that. They, they wouldn't let me anywhere near the committee.

Veronica Morgan: This is the end. This is sort of taking you, so you've, you've gone on inadvertently found yourself in a situation where you go, Oh my God, I have no idea. There's just Pandora's box. Right. thought we were smart. You know, we've gone and done something that seems so logical and sensible and all of a sudden we just, everything that we could not possibly have anticipated is, is come up. Then you find yourself actually, you know, banning together a bunch of other pet owners and then you find yourself writing a column. Then you find yourself, you know, hosting a forum and it's taken a life of its own and you become an expert in straddle living or from being a journalist. So wanting to have their cats allowed in the building.

Chris Bates: And I want to go back to that story as well because, sorry, because I mean you also said there, which I don't know if you, I heard of Veronica as well way you said that the developer went bankrupt development, mid development and this has actually happened for a client just looking at an apartment just a couple of weeks ago. Yeah. You know, sadly it hasn't gone ahead. Like it's, what's positives and negatives. But that development for example, exactly that happened. It was an apartment in Deewhy and the building, basically a Mead development went under. And I was doing research on this building to kind of talk through some of the reasons why not to buy the place and how and I was looking at the sales of the building and there's all these kind of funny transactions where they're kind of one company selling it to another company and then that same company selling them two, three years down the line. And so can you explain like that have that problem and how, how you've heard about it a few times and what happens and things like that.

Jimmy Thomson: I, in generalities, it's what happens is, you know, you've got somebody who goes into development and overextends they, they, they find that it's going to be more difficult to build the thing at the cost that they'd planned and they're not going to make their, their profit on it. And, and maybe even they're not selling off the plan cause they extent they wanted to or needed to and they don't have the marketing budget or whatever. Or maybe there's some idiot on a podcast going, Don buy off the plan. Yeah. So they, they, they, for business reasons, just go, look, we've got somebody who buy the thing Monoprice price and we can get out without, you know, too much of a loss or maybe no loss.

Chris Bates: Or Phoenix,

Jimmy Thomson: Well, our Phoenix thing, well those, those next people come in and they look at the project, we're paying X amount for this and we can make X amount, we can sell it at this. So the first thing we're going to do is all this stuff that's been put in, in the lower floors, we ain't putting that on the upper floors because that's, that's too um it's too costly.

Chris Bates: It's no longer marble. It's now laminate.

Jimmy Thomson: Yeah. I mean we've, we've actually see it in our building that there's a point where everything was really fantastic and then it became slightly less fantastic.

Veronica Morgan: Are you above or below that line?

Jimmy Thomson: Above the line of fantasticness. Fantastic. Hello. The line in the building. Yeah, I got it.

Veronica Morgan: It's hilarious. I'm sorry. It's not hilarious. Sorry. It's threatened my life. But actually.

Chris Bates: Interesting because as a comparison, like if you were thinking about how to value a property, what is the best comparable for that property? Is a recent sale in that building, probably that's below the line. So it's, it's actually the, what's above the line. It's one of the poor apartments. So if you're comparing yourself to that, but you don't really comparing like for like,

Jimmy Thomson: Well, you know, the thing is, unless you're an expert in these things, you could go into one apartment and and open and shut the doors and feel the carpet and all the rest of it and go to the next apartment and go, man, it's pretty much the same. Yeah. But you're not going to know that all the fittings are 30% cheaper. Yeah. And repeated and repeated and repeated. And that's where they make their margins. Phoenix thing is a whole different thing, which our government seem to be totally incapable of. And it's such an, an obvious thing, but you, you'll notice it. I mean a, a warning to your listeners if you going for a new development and that development is, you know flat chat developments brackets 11 botany road. Yeah. Ben, that's the name of the company. That's the company. Now, flat chat developments might be a terrific brand name. By the way, if there's anybody who's finance out there, I'm waiting. But no, it could, it could be a fantastic brand name, but once you put in brackets the address, then that's the company that if it goes under, that's the one you, I have to go after it for the money, not the parent company. And that is happening a lot, even with some very reputable developers are putting in firewalls like that.

Veronica Morgan: Well, given, given our system, it's fully shared them not to. Yeah. Really. Cause they can protect all the assets in their other companies and their own homes and et cetera, et cetera, et cetera, by doing that. And that's what, you know, smart lawyers will advise them to do because they, our legal system allows that to happen. Yeah. I.

Chris Bates: Mean you do it and it's not just him developments and property and things like that. You know, lots of companies you, if you're starting a new company or a new venture yeah. You wouldn't do that in the same company that you're in now because of if that company goes belly up, you don't want them that damaging pulling the other one down another one down. And so it kind of makes sense when you think about them as a developer to do this. The problem is that there's lives attached to this that yeah. Actually destroyed in the sign of the prophet and it's like, well yeah, we're not going to damage our brand. What? But we'll just kind of hide this as one of our floor developments and we'll truthfully, no one hears about it. That's the real issue here is it's actually people's lives that are, yeah. And, and some people, I mean you think about these people in Moscow, Howard, you know, and the all pool. Yeah. Can you imagine, you're like two weeks after you've been evacuated, you're allowed back in and you're getting a note under your door saying, I will buy the property off you for 10% of what you paid for it.

Jimmy Thomson: And I don't know if anybody ever to contact it, but I'm sure there were people who've attempted cause he just wanted to get out emotional.

Chris Bates: Well, there's no way to get out because if they did, I mean, I mean yes there were a cash buyer maybe, but a lot of people aren't cash buyers in the apartments a lot. Unfortunately. A lot of them are borrowing 80 90% if they can, when we get to settle and most comp are 90% to be Frank, a lot of these apartments can only borrow 80% on. Yeah. And so you know, you got an 80% loan to the bank, you've pretty much lost all your money already. Yeah. Now your only options, I just got bankrupt. Yeah. Back to the bank, which is the same thing. Yeah. So yeah, I don't even know if they're allowed to transact. That's true.

Jimmy Thomson: No, but I thought that it was, it was notable that people had the, the brass neck to even make that kind of,

Chris Bates: There's always people willing to take opportunity in people's, you know,

Jimmy Thomson: Oh misfortune Yeah. Yeah.

Chris Bates: So let's talk about a positive that's shifted, shifted. I'm sort of, Veronica is actually crying here. What are some of the positives in sort of strata living that you think that homeowners don't know what they're missing?

Jimmy Thomson: Alright. the, and there's been a few surveys done. The one thing that comes up and it, it surprised me the first time, but it makes perfect sense. Security. I mean, I live in Kings cross, which is, has a reputation but it's losing sadly. But Potts point, yeah, I got, I gotta be absolutely honest. It's Darlinghurst. Ah, it's, cause I line between Potts point and Darwin hooks goes right down the middle of our road.

Veronica Morgan: I love that part of the world age. I mean, yeah,

Jimmy Thomson: It's great and it's lively and, but we live in a building and if somebody wants to come and personally interact with me they have got to get past the front door. They've got to get past into on CEO's. They've got to get in the lift, they gotta have the, they have to have a swipe card that takes the lift to my floor. Or I have to be stupid enough just to buzz them in. Hey, I'm really angry with you. I want to come and talk to you. Yeah, come on up. But you know, that level of security, especially for retirees you know, like that downsizers that the kids have the empty nesters, the kids have gone and they've got the five bedroom mentioned the rattling around in that and the, the trade that in [inaudible] by themselves and apartment and now they got all this money and spend half their lives and cruise ships because they can literally, unless not lock up and leave.

Jimmy Thomson: Yeah. So there's that. There's also the potential or a sense of community. I mean, the phrase, I don't know if I was the first person to coin the phrase vertical village, I hope not because I feel I would feel so liable for that. But the phrase is vertical villages is bandied around. It has the potential for that, especially when you have a cafe on the ground floor, you go communal gym, swimming pool, that kind of thing. I have, I mean, I know of buildings where they have a travel club where somebody says, Hey, let's go and psych. Let's go cycling in Vietnam and a dozen people in the building sign up and they'll.

Veronica Morgan: So an enterprising thief would have carte blanche that building if they just waited till everyone evacuated to Vietnam for holiday. Yeah. Watching, Oh wait, we had an hour building.

Jimmy Thomson: Just to backtrack slightly. In the early days we, there was even a story in the daily Telegraph about the Spiderman cat burglar, which has been a big Nixon. Yeah. You know, theoretically, you know, this guy had found a way of, or a woman had found a way of climbing up the outside of the building, going into people's apartments and stealing this stuff and they getting down the problem. Right. More stuff. Obviously you don't need to swipe to get down. Ah, yeah. Our fire escape, it was nothing like that. Remember the building manager, he was giving swipes to the alleged security guys and they were going, he would watch people go off to work, like cars leaving the garage. They go, Oh, well that apartments empty. And this was discovered when a young woman whose partner had gone to work, but she was having the day off of the shower and found a large security guy sitting in on her lunch going through her magazines. And that's right. We, we discovered that there was no narrow Spiderman cat burglar. Yeah, exactly. A large rat,

Chris Bates: So cycling. So in Vietnam, yes, it would, if the whole building's kind of going away, let's say, I would say 50% or 20% doesn't really matter. Wouldn't it make sense to those retirees to supplement their income with a bit of Airbnb?

Veronica Morgan: It would

Chris Bates: Not a good idea to have a BNB within that building to allow those retirees to, to fund that cycling in their big expensive apartment.

Jimmy Thomson: Yeah. there's Airbnb and Airbnb, we should talk about short term holiday, letting Airbnb, it's a brand name, it's a brand name and it is the biggest operator and some people call them the evil empire. And I do, but look the idea that you could go away for two or three weeks. Hmm. Two or three times a year and let your apartment doesn't. That doesn't bother me because you're coming back and your neighbors are going to say to you, who was that that you put in your apartment? Don't let them come back here again. They did this in the swimming pool and they did this in the gym or whatever, or they were really nice people, whatever, you know, but there's still a connection. The problem with Airbnb is when somebody, or short term holiday letting is somebody buys or even rents an apartment, well it's purely for that purpose and it's week after week after week.

Jimmy Thomson: You don't know who's staying in the, the apartment next to you. The music cranks up at 11 o'clock at night. You knock on the door, you say, you know you're not allowed to do this, and they go, Oh, we're on holiday. Yeah, yeah. It doesn't matter. That's fine. You get your deal with that. Hopefully next week another bunch of people come in, the music cranks up, knock on the door again, and after three weeks of this you're ready to kill basically. Yeah, so it's using short term holiday. Renting in residential apartment blocks as a business. That's the problem. But even

Chris Bates: So, I feel like you want to even be one or the other though, because if you think it's okay to have three weeks, if 10 people in the building are doing three weeks, then there's always people in the building that are on a subletting and there's always people having party, cause everyone's always on holiday. So you kind of the buildings either we don't let anyone do it. Oh people do do it.

Veronica Morgan: You don't then get one, one resident with the one next door to them that's always available. Do you know what I mean? It gets to move around the building. So she's sharing the burden.

Chris Bates: Might have six or seven apartments on the floor. So you know, odds on there's always potentially someone air being being.

Jimmy Thomson: I agree. I agree. It should be all or nothing. In fact, I think, why are they not just building apartment blocks for short term holiday?

Veronica Morgan: Letting well they are.

Chris Bates: Exactly. I agree. And I think that's, to me, the problem as well is a subleasing thing. Sure. horrendous I've got a client, it's a hilarious story. So she's in Perth and uh he has two apartments near you in Potts point, right? On the Victoria, which is yup. Yup. She saw her apartment on the news? Oh that's pretty good. A guy was bragging, but he was making so much money on Airbnb and he's like, that's mine. He's like, that's our apartment. Wow. So she was subleased, she was leasing it to this guy and then he scratched and he was sub leasing it room by room. And the only way they found out was on it was on like channel, like late at night or some of the Airbnb story. And this guy was,

Veronica Morgan: You got to wonder what her property manager was doing, you know, cause it, you know, one of the reasons I like strata is, is for an investor for instance, you've got an extra layer of management. If you've got a good manager, you've got a good strata manager, great tick, you've got a good property manager, great tip. If you've got a crap property manager you know, just doesn't do inspections, you know, or always basically hoodwinked by, by the the tenant, then.

Chris Bates: The inspections are always like, it's 'em you're always going to tidy it up, right. If you've got pets and you've got, you know, you've got it,

Veronica Morgan: You give seven days notice for an inspection, right? Yeah. And if you've already made your Airbnb bookings canceled, well you're going to have to, but like, you know, then, then you, then you risk your Superhost status and all that sort of stuff. So it becomes harder.

Chris Bates: I just think it's easy to get around and inspection, you know, like if you're saying you're not allowed pets, well, you know, you put the cats in the drawer and.

Jimmy Thomson: We did that when we were renting, we had the inspection and normally we had friends in the building who would take the cat or the couple of hours of the inspection. They were away on holiday and probably on a cruise. And and so the, the guy from the real estate company comes round and he's standing there and he's going, Oh yeah, this is fine. This is cool. Yup, yup. Can I just open this door? And he opens the door and the cat literally run up his leg, scratched him and then disappeared.

Jimmy Thomson: And he just stood there and just paused for a second. I went and the reason being that we paid our rent, yeah. On time. Every time we didn't ask for stuff, we never complained about anything. We were perfect tenants apart from the cats. He wasn't going to go through the hassle of kicking us out or trying to get rid of the cats.

Chris Bates: Well, let's say you're a good example of how pet owners can be great tenants, you know, so yeah, hopefully the RSPC, I'd never heard that story with the cat locked up in the cupboard, but I've got a room that's good. A little bit of air in there, but hopefully got rid of the cat scratches as well. Like you didn't leave any other, I

Jimmy Thomson: Don't know. I don't know. He, we checked, we checked, we checked as we walked past the office to see if were still standing up. It wasn't lying in a corner somewhere, some terrible disease,

Chris Bates: So the elephant in the room is 100% for you.

Veronica Morgan: The reason that Chris and I do this podcast is because we passionately believe that property buyers can do it better. We really want to help all of you understand all the risks, but also the ways in which you can avoid your elephant making the decisions.

Chris Bates: For what we would love for you to do is just to share this episode and share other episodes with people around you that are going through the property process.

Veronica Morgan: Give us a review on iTunes. Five-Star, please will be very appreciated because this is about making sure that we all benefit from the wonderful information that our guests have been sharing with us.

Chris Bates: So you said security. What's one positive? What are some of the others.

Jimmy Thomson: We talked about briefly about the potential for community.

Veronica Morgan: Yeah, talk more about that, but keep, we'll keep going on the positives.

Jimmy Thomson: If you've got fussy, and I know that there's a whole range of of apartment blocks in terms of the facilities that they have, but if you've got a swimming pool, if you've got a swimming pool and a hose, you have a lot of work maintaining this. Yeah. So you got a swimming pool in a an apartment block, that's someone else's problem. Totally.

Chris Bates: Also more people to make it dirty. You have to deal with their sort of problems as well.

Jimmy Thomson: You're a very negative person favor to make it dirty. Yeah.

Chris Bates: It's not like private is it dip and.

Jimmy Thomson: Especially when you've got the Airbnb people in there like you don't know who's that guy when they own chiquito and it's all.

Chris Bates: I agree like is yeah that's the lock up and leave kind of argument. But location we'd probably argue on the lightens one as well. Maintenance. It's actually ours cost someone to do that. That's money. So, you know, if you're thinking about from an investors point of view, a lot of these pools, the gyms, the concierge, the security,

Jimmy Thomson: But that's all shared and it's all shared on the basis of how big your apartment is basically. Yeah. But you, I mean here we are sitting in a studio and there's, there's John on the other side of the glass. They're muddling knobs and things. Now presumably you guys are savvy enough, two, when this is all recorded to sit down with the computer program and edit it.

Veronica Morgan: And I know we not, but Gordy's well, well the hipster thing.

Jimmy Thomson: Do you pay Gordy? Right? So you could be doing that. That's just, I'm telling you, I do it myself. So if I can do it, anybody can do it. But it takes time. It takes time. The point I'm trying to make is, yeah, either do it yourself and that's your time, which is valuable or you pay someone else to do it. Yeah.

Chris Bates: The problem I'm saying here though is that you're talking about facility. It's good when your you know, you're thinking about, let's say you got a, an apartment block and you need to, yeah, keep the gardens up and things like that. You want to try to limit how much outgoings there is in a building because then they, any investor has to pay that. So, you know, I wouldn't want to go buy in a building with all these amazing features because I don't get a substantially better rent to buy on the apartment cause I only get say 700 bucks a week for this new build.

Chris Bates: It's an older apartment. I might get 600 or six 50 is not only investors that listen to this podcast, I agree from the homeowner, but still they have to pay for that. So they must say, yeah,

Veronica Morgan: But you have to pay when you maintain a house too, you know, and you, you have no discretion. Well I guess with straddle levies you have no discretion as to when that that's when you contributing to that. Right. Whereas with a house you got more discretion. But the reality is the roof goes in the house and windows go on a house. God needs work in a house, hundred percent, your responsibility, 100%, your build pay. And you're not necessarily budgeting and accounting for it over time and in a more disciplined way as you would in an apartment.

Jimmy Thomson: But you're also, you're, there's the value, you know, the actual value of an in a you know, I know the markets fluctuate and it, but if you are, if your apartment block people walk through the front door, it's clean. They're met with a smart guy by a smart guy, you know, in a suit. Those getting paid to stand there and you know, as a concierge and they go and they look at the, the apartment, no, that's up to the owner of the apartment. But on the way there, they're in the lift. They're in the lift lobby. They go down and look at the gym and they look at the swimming pool and they come away with a sense this is a value property that is going to help your rent and your, your your resale. And, and a lot of people, one of the biggest problems in strata is where people want to spend money on the building to just paint it occasionally and things like that. Keep it clean, keep it nice, do things up that need fixed. And there are people in there who don't want to spend any money, any that, the money, they don't have to. And when you say to them, but what about the value of the property? And they say, well, I'm not thinking of selling.

Veronica Morgan: Yeah. Yeah.

Jimmy Thomson: So it's irrelevant to me.

Chris Bates: Yeah. It's so bad because you know, that's your only basically delaying the inevitable. A lot of time, a lot of it's maintenance, right? If you're, you know, you don't fix that hole in the wall, then it becomes something a bigger problem, you know? And so, and then you're probably arguing whether it's repairs or whether it's maintenance or whether it's, you know, and then how does that actually work though? Like, so for ladies painting, yeah. How can you force the strata to say that this is actually real needs urgent work? Like how do you manage that? We're trying to add value versus we're just trying to maintain,

Jimmy Thomson: Well that's a, I mean painting is a really good example because it's to some point it's an aesthetic thing. Like you might look, go in and think this place looking really shabby and it, you know, an a, a like a pain would make all the difference. He probably say that about your own apartment every four or five years. But then when it comes to the building and it's gradually allowed to deteriorate, you can go to the tribunal and I've talked about new South Wales mostly here. Yep. And this applies in other States to some extent. You can go to the tribunal and say the committee is not maintaining the building properly. Okay. Now before that you could just go to a meeting, you could put a motion at your AGM that we want the paint work to be done up. If the owners corporation or if the committee refuses to even consider the idea, you can step up, you can go to fair trading and go to tribunal and all that stuff.

Jimmy Thomson: And there are, there's a point at which the tribunal has the power to force owners, corporations to fulfill their responsibilities in terms of the management and upkeep of the building. For instance, if you've got a noisy neighbor, and this is a classic, you got a noisy neighbor and you go to the committee and say, look, this guy is, or woman is causing a lot of noise, great. And then a nuisance, they will often say, Oh, it's a personal thing between you and them and nothing to do with us. Well that's not true. If they are breaching bylaws, then it does have something to do with the committee. But the committee doesn't want to get involved because it just don't, you know, so you can go to the tribunal and say, we want you to order them to do something about it.

Veronica Morgan: And this is a really good point too, because we haven't actually discussed this in the podcast when we were, we've had strata managers on, we've had Reena Van Alast announced, I've had Amanda Farmer on strata lawyer twice. And we did talk about the obligation and most recent episode with Amanda. We talked about the obligation of the owner's corporation in order the has to maintain the building basically it's legislated. But this idea that if you're not on the owners corporation, if you're not on the committee, then you you still have an opportunity to actually affect change by going to NCAT. You just have to basically do a lot more work and you have to know what the rules are basically. But that's an interesting and I know that you talk about that in your podcast a bit. I've, I've sort of listened to a few of your episodes and so and that's quite, that's, that's a different aspect that we haven't actually discussed thus far on this podcast.

Jimmy Thomson: I mean, the problem, it's theoretically, it's great. The problem is the tribunal, which is a, yeah, it's like a casino to some extent. The, if you're lucky enough to get a member who is savvy w you may even have lived in strata and they'd go on to understand the problems that you're presenting, then you're going to get a fair and reasonable result. But you are just in fact probably more likely to go in and somebody who sees property in the old freestanding HomeAway and, and we'll say, well you can't be telling people that they've got to do this and that and you're going, well it says in the law. Yes. But you know, and so that's why you get some very strange results coming out of actually tribute tribunals.

Chris Bates: They come in with a detached house view that you can't see if your neighbor is banging around the kitchen and you can't be going around there and say, can I buy it? You know, keep it down. But in apartments, you know, that's kind of how it works. I mean I've made it. Yeah.

Veronica Morgan: In terms of the tribunal, you would think that that's a, that's that that's the mechanism or the, you know, meant to understand strategy?

Jimmy Thomson: No, they have, some of them do. A lot of them have no clue and have no desire to learn. And they, the nightmare segmented scenario that's I've heard a couple of times is, you know, you take, you pay your solicitor, your strata lawyer, and they pay the other side, pays their strata lawyer and you walk into the tribunal and the other side's lawyer, the member goes, Oh Jeff, how are you going man, I haven't seen you for ages. What's kind of catch up for another round of golf when you think people say, you know, you might as well just walk out. You're not going to get a result. It doesn't matter whether it's right or wrong. These cause a lot of tribunal members are retired solicitors. So those, that old, it might work in your favor though.

Chris Bates: Are they generally pro-tenant or pro developer or pro owners corp or,

Jimmy Thomson: Ooh, I'd say it depends who's up against whom. I'd say if it was developer versus the owner's corporation, they'd favor the developer. And you don't that, you don't normally get that level at that tribunal. It usually goes up to the Supreme court. But for tenants versus the, the owners, they'll favor the tenants because they see them as being bullied by this. Yeah. This big organization, this faceless people sitting in a room making decisions

Veronica Morgan: And yet no one seems to go in there, you know, really championing, championing the individual owners rights. It's sort of like the, it's like they're the last, do you want, I mean, like, I mean, in terms of the, because individual owners do suffer at the hands of all the big powerful, I mean, I don't know. I'm not, Chris is a conspiracy theorist. He not me like, you know, but you know, the reality is the system is set up to really set up individual owners as you showing in your experience as well. It's like, you know, we want construction to keep the economy going. You know, we want strata managers you know, paying off developers, Hey, the banks can align more money. You know, I mean, there's this bigger interests that are benefiting from the fact that their system doesn't work very well. And fundamentally at the end of it all, the owner person buys these properties is paying in one way or the other. And then they might have a tenant who may or may not be doing the right thing and then, and then they, they, you know, the tenant is favored then tribunal. It's almost like the owner doesn't make sure I have many people representing them.

Jimmy Thomson: No. And you, I mean, I'm just thinking of a couple of cases that I've come across the, the flat chat forum of people who have genuine, bonafide complaints against the owner's corporation. Or the committee, the committee for whatever reason, doesn't want to do the right thing. They go to the tribunal. The tribunal says, yep, you're right, the committee, the committee should fix this. So they go back and see the, the tribunal says, you've got to fix it. And they go, yeah, okay, well we'rqe going to fix it in this way. No, no, but that's not fixing it. And so then they have to go back to the tribunal and back to the tribunal and they end up spending literally hundreds of thousands of dollars because every time they go back, they get a more expensive lawyer.

Chris Bates: Yeah.

Veronica Morgan: And it's also ties up your life. You know what I mean? This is back way back to the downsides of communal living. But I mean, you know, there is enormous, her luck isn't it, in terms of getting yourself into a, a good building with well run with good people and, and

Jimmy Thomson: Yeah. And it does, that's the factor that a lot of people don't realize. Especially when you feel you're in the right and you're energized and angry and you start, yeah, you're the first angry email gets sent and the first shot has been fired and the next thing you know, you're lying awake at night. Every night going over in your head. What should I have said? What should I have done? And the I keep meaning to, I think somebody's done it. No. But I keep meaning to write a book about the power of doing nothing because, because that will free you up to do stuff that you really want to do rather than dealing with people who either don't understand your point of view or don't care.

Chris Bates: Yeah. It's when you've got fairness too high on your values, unfortunately it's a not service serving you in the right way because you're too busy trying to get the right thing and make sure everything's, and when you're getting set off and this isn't fair or I want to get this sorted and you end up just fighting a losing fight against the, of the control freaks or the, you know, it's not right. And so yeah,

Jimmy Thomson: I would start in primary school, I'd have the kids every morning. Chan life is not fair deal.

Chris Bates: Maybe they do that in Scotland, but not in Australia. Was buying properties in an apartment block. Yeah. You highlighted one of them before and you know, without doubt we are, you know, not right now it's front page. But I think there are a lot of first time buyers. Hope is back. And you know, cause of 2018 was on the market kind of came down 2017 first time buyers, much lower percentage of the buyers, F investors and upgraders and downsizes were smashing them the last couple of years they've been getting back in the market and they're hopeful the being able to afford houses and things like that. But you know, unfortunately that'll probably end. And then there'll be back buying apartments again and there were, yeah. Yeah. So, and this isn't just a first time buy, you know, young couple who were thinking about buying a house. This is a family that are going, we're never going to buy a detached house. We are going to make apartment living for us and that, that'll be the Achilles for forever. So what are some of the things that they need to be really careful around? Like some of the things that you just don't know they can bring in bylaws like pets, barbecues. What are some of the things where you thought you could have it but maybe the building can stop you.

Jimmy Thomson: Okay. The first thing and the simple answer. And this applies to everybody, read the bylaws before you even sign the check for the deposit. Read the bylaws of the building that you're going into. And I would also, and I know this is an expense for people who are just starting out yet a forensic check, none of the minutes of the strata committee and by the fondant. Well they, they gotta be somewhere and if they're [inaudible] and one of the things I say is if you get a building and you're not sure about how things are being run and you get the minutes and there's never been any problems warning. Absolutely. That's a flashing light.

Chris Bates: Yes. Exact same minutes. I a different date.

Jimmy Thomson: Yeah. Yeah. And you, and you know, what you want to read in your minutes is there has been a problem and it's been dealt with in a reasonable manner and a reasonable manner. But you know, so many people go, go into buildings. I have told this story so many times, early doors, there's loud music coming from an apartment and you know, the, the people next door are getting driven to distraction. So a couple of us go down and knock on the door. The guy comes out, is he, your music's a bit loud. You guys are right. Yeah. Yeah. But I'm allowed and no, there's bylaws. The bylaws say you cannot play loud music, you know, beyond these hours or whatever. And he said, Don, I'm, I'm an owner man. I own the place we're different. Well your bylaws are for tenants. Yeah. An interesting perception.

Jimmy Thomson: Yeah. No it's for everybody. It's all occupants. Yeah. But there is that attitude of other bylaws. I remember once getting involved in a discussion and then the Herald and the paper about bylaws and, and this guy wrote, he said, I'm a tenant, I will read the, and I will choose which ones I'm going to obey, the ones I don't want to be, I will just ignore. And somebody wrote back said, check for a new apartment. Yeah. You will be looking for somewhere else to say stay quite soon. Because I mean that's something, I don't know how strictly it's enforced, but it's implied in your residential tenancy lease that you will obey the bylaws of the building. Yeah.

Veronica Morgan: And it's sort of, there's certain people that really don't belong in strata and Oh for sure has it an anarchist or someone who feels it's their right to pick and choose which rules they want to follow. It doesn't actually belong in strata,

Jimmy Thomson: But that the, the landlord, the owner of the apartment can, if they get enough complaints from the committee, say you've breached your, your residential tenancy agreement by breaching the bylaws,

Chris Bates: Property manager explained to the person who's renting the apartment or the bylaws on the strata. Probably not. So the person is kind of going into the apartment who's renting it probably doesn't even understand that these bylaws even exist. Don't even know what a bylaw is. Right. And so as an education pros process before the person even moves in. And so mixing, you know, the, you know, it's either, you know, it's just stereotypical young, you know, 20 year olds having people on a Friday, Saturday night and you're saying, well the music's up too loud after 9:00 PM and they're like, well mate, it's only nine 30. Yeah. Get a life. And you're like, well no, it's in the bylaws. So they don't even know what a bylaw side, you know, it's very quick to probably yeah, we're all 21 and so I think that's, it's a, it's a hard thing to understand. These are some of these bylaws though, because obviously you've got noise barbecues. Everyone thinks they can have a barbecue, but

Jimmy Thomson: Oh, barbecues are the bane of my life. I still goes back to that first corrupt chairman. He insisted on having a barbecue, which meant the whole building has barbecues. And then you tried to say to people, you know, that thing you do where you turn the barbecue up to the max, the Burnoff last month's fat has been festering there since you last said a barbecue. Have you noticed the smoke tends to go up somewhere?

Veronica Morgan: Yeah. Your above the line above the barbecue. Like rancid fats make lovely. Yeah.

Jimmy Thomson: And you know, and people go, Oh really? Oh, I hadn't really thought about it. Well here's a, here's a wee lesson for you the next time, leave your window open when you're doing the barbecue. Oh, I know. I can do that. My place would be filled with smoke. Exactly. So that smoke is coming into my place. So I hate barbecues. Bylaws are things like parking and visitor parking and, and that's one that's probably gets neglected because define what a visitor is.

Veronica Morgan: Yeah. Someone's staying for two weeks. Yeah, yeah,

Jimmy Thomson: Yeah. It always says, all it says on it is visitor. And you know, usually I'll say to people, we'll get a bylaw in that says a visitor. Visitor parking is somebody like for two hours during the day and after six 30 at night, but they must be out by seven 30 in the morning and that kind of thing. Yeah. So that

Chris Bates: Defines early dating or something for a second date here and there, but not someone who's moving in.

Veronica Morgan: I love it. I love it as defined. Second time, not first date. We don't want any of that sort of stuff. No team, no Tinder going on this building. You mentioned the community that may or may not develop in a building. And I know this is a buyer's agent. Of course, you know, we look at buildings that are, you know, pre, preferably 20 or more years old. We know, we can see the ones that have developed a community within them, you know, and, and that's an interesting value add because then people want to stay in the building and there's, this is, you know, this is desire to, or was it great community. I mean, there's obviously real benefits in that in terms of our living, these just not just these days, but all the time. In your experience, in terms of the people that you've been talking to over the last decade or so, a flat chat, you know, what do you think sets off a good community? I mean, is it a, is it organic? Is it by design or is it a bit of all of the above?

Jimmy Thomson: I think it's organic and I think it starts on the floor that you live on. And we make a bite. Well very unsociable person, but Sue makes a point, you know, when somebody moves into the apartment next door, she knocks on the door, says hello, I must come and have a cup of tea. And you know, and cause she basically, she says, I want to know who they are.

Veronica Morgan: She's not being friendly. She's being nosy. Yeah,

Jimmy Thomson: She is. So that's how that starts. And then it's things like, I'm going to be away for the weekend. Could you water the plants or could you feed the cat or that kind of thing. And then it moves from the floor and it moves vertically up and down. People that you meet in the lobby. Some places I've heard of will do things like if you've got a bottle shop near you, they'll say, come in on a Thursday night, set up a table in the, in the foyer and do wine tasting. But they can't obviously sell the wine there, but they can take orders and deliver it. And then you've got, you've created as kind of impromptu social situation where people, you know, get to get to know each other,

Veronica Morgan: Find out the other one. He knows, none of them haven't listened, and then none of the T title is turning up. Don't do it in October.

Chris Bates: So the community thing, I, I definitely think, I mean, I'm, I mean, have you had an apartment at the moment and you know, all the tools for the, you know, dismantling the wardrobe from Ikea? We're at a house in Newport and so we were like, Oh, we can't dismantle this. And so I'm friends with one of the designed to be dismantled and remantled. Is that all? No, we'll try to get it out out of the hallways. And art deco is a little bit lower. The the doorway. Right. And so I bit too narrow and it wasn't,

Jimmy Thomson: And we probably don't know the song that's playing in my head right now, but it's called right. Said Fred, check it out, I'll check it out. It's an old British comedies

Chris Bates: Then it to me to or the empowerment or the Brexit people were singing last night. Did you hear that? It's finally happened. But anyway, unnecessarily. I texted my neighbor upstairs and I was like, Hey, have you got any ask who drove miles an hour keys seven 30 at night. He's like, yeah, I'll leave him outside. Outside. You're not going up there. The stairs that are getting renovated at the moment and there's now is everywhere and got them and you know, problems sorted. Right. I mean, but you could do that in a house, but it was nice to know cause you had that little community,

Jimmy Thomson: Some buildings. I mean the first time I heard of this, it was a Facebook page or an apartment block and somebody who went on the Facebook page and said, I can't reach this thing that I need to fix. Has anybody got a ladder? 10 minutes later somebody said, yeah, I've got a ladder to come in. Oh, I'll bring it down. That kind of thing. There's a thing called have you come across strata box, right? Straight a box is a kind of, it's a, an integrated social management tool where it's kind of like a centralized website for the building. Yeah. And it will carry things like notices of meetings and stuff like that, but it also has a social component where people can message each other and, you know, has anybody, you know, know how to look after this kind of platen plant because I'm killing it. That kind of thing.

Chris Bates: I mean, there's Facebook groups for buildings, right? Like that's another way. Or

Jimmy Thomson: The problem with that is I found is that the people who set it up, it's great. It's really enthusiastic, and then they moved to another apartment and the Facebook page is like, well, who's running it now? Yeah,

Chris Bates: Yeah. Okay. Yeah, exactly. You got to need someone who's always constantly passing the Baton on to someone else. So that's why it's better. Yeah.

Jimmy Thomson: There is I actually offsite so it will always be working. It doesn't matter who's on the committee or whatever.

Chris Bates: So there's different titles and company title common.

Jimmy Thomson: Yes. Yeah. I think company, I think company title is going to make a comeback. I agree with it because, because we talk about Airbnb, you know, we talk about pets, it gives me more control, I E. Under strata law you cannot, you can't prevent children from coming into the building.

Chris Bates: Well that is just not ethical.

Veronica Morgan: Some kids seriously, I don't want them anywhere near me.

Jimmy Thomson: Those are built, there's an apartment block, there's an apartment block in Brisbane where they do not allow children and it's a company title block. It says children are allowed to live there. I don't certainly resolve. I know you're about to come in the front door. Well they can visit but they're not allowed to live there. And there was a story and this, this was revealed pregnant woman and her partner went to look at an apartment to buy and, and the real estate agent is going, Oh, I don't mean to be personal, but you're pregnant. Is that a baby you're carrying there? Have you brought extra lunch and and she said, yeah you know, going to be three months time. He says, no, you can't that live here. You cannot buy, you cannot buy into this building. So w the point I was going to make, I'm not saying it's right for the owners.

Chris Bates: I mean from a, from a market point of view, you've completely ruled out the family market, which

Veronica Morgan: It's just this restrictive company, total buildings in Sydney. And some of them are actually very valuable. I mean there's obviously a very small, very exclusive market for them. But yeah, it sort of is a different issue on.

Jimmy Thomson: Some of those buildings in Macleay street for instance, you know, those beautiful old 1930s twenties buildings where they do have those kinds of restrictions. They, they work around it as, as people evolve. But if they say there are no pets, then there are no pets. If they say you cannot do holiday letting, you cannot do holiday letting.

Veronica Morgan: And they are not as something, they're not subject to the strata legislation, I think. Exactly. So, you know, these days it's changing rap. Even with pets, people are going to the tribunal and saying, this ban on pets, which has always been in this building is unfair and unreasonable. And, and the tribunal is going yet we agree pets have to be allowed, which is crazy. I'm obviously pro pet, but I think

Chris Bates: Cat's mother passed away and now you're going back the other side and

Jimmy Thomson: The cats are fine. But the the, yeah, the, the choice for people has to be there. It does have to be able to, there are people who, for religious reasons or for health reasons, just don't want to be around animals. And you've got to have the choice of a.

Chris Bates: Company titles to come back, which is, you met initially on this conversation you mentioned about the banks are the ones who kind of don't want to get into involved with the tribunal's, et cetera. The banks will have to come back to company title cause the banks one, Oh, avoid company title at all costs will lend less money on it. Sometimes they won't even lend it all. You know, they just don't wanna go anywhere near it. So it's interesting cause you'd have to have the banks to come back. I.

Jimmy Thomson: T's for rich people. It's for people who can afford the, the 50% deposit, the luxury dictating right now in Melbourne, the high end new apartment blocks going up and you have to sign a waiver the saying you will never let your apartment on Airbnb and they won't let you buy. Now that could be challenged at some point as a restrictive covenant or something like that. But basically they're saying because the short term holiday letting thing is creating absolute havoc in Melbourne. It's, you know, you can imagine, somebody was telling me the other day there's a big apartment block of about 300 apartments, a footie team coming in and somebody has realized that there are 20 or 30 apartments in this block on Airbnb. So the whole of the supporters club book in to Airbnb in that apartment block, they all get there. There's no space for socializing cause it's not a hotel. So the foyer becomes where their party is. So you've got 50, 60 boot ball fans who are perfectly nice people, I'm sure, but they've had a few drinks and people are coming home from work and going, what is going on here?

Chris Bates: I mean, do you you go on holidays too? I, I go a lot. I spend a lot of time on holidays. Do you use airbnb? Work in holidays? Increases on a mission.

Jimmy Thomson: I having written about Airbnb and, and not very complimentary terms. Yeah. I thought I should check this out. Okay. So the last time.

Chris Bates: It was fact-finding, it was research.

Jimmy Thomson: No, seriously. I've, I went, I went to, I, I like, I love Vietnam. So I went to Saigon. I got into I was Airbnb. It was effectively, it was an Airbnb and, and it was up. There's alleyway and there's these little shops. It was so authentic and real. And I went up the stairs and I've got a really nice space and very cheap. But on the second or third day, I noticed as I'm walking up I don't know if you've been in Vietnam, but they're the friendliest people in the world.

Jimmy Thomson: I love what people smile. They see when they see you for a second time or they'll actually engage in some way. I was just getting lower debt, just that, the daggers of hatred and I thought this is unusual even for me, but people to hate me that much. Yep. And then I realized they're, they're sitting there, these people live in the other apartments and there's blog and they're going, yeah, he's, and that one and literally the one next door to me was being renovated for holiday lets. Yeah. As I was there. And gradually they were going to take over because the place was half a block from the cathedral and it was less than 80 bucks. It was. But I and I, so after three days I said, I can't I, I just, I'm moving into a hotel. And the funny thing is the refund from Airbnb came through in about 40 minutes. Wow. That's a positive. I think they might have known I was there January. I was

Chris Bates: Watching you. I wouldn't surprise me, but I mean, there's so many positives with there being V though. It's, it's just interesting. I mean a lot of people on the ground level of say, I don't want any of my building and I don't want, I don't want to. And then they'll go to the Portugal Lord and I will love it. Bean bean, they'll use air BNB. And I think it's probably a bit, can be careful we're not hypocrites in life because you know, Airbnb when done well is opens up. So how many opportunities that we just didn't have before in terms of like locations, even renting beautiful houses in kangaroo Valley or all sorts of, you know, amazing places. Yeah. That traditional bog standard Dayana old bed in a boring hotel did an offer and I think it's, it's just about doing it better and I think that's where a bean, but he's not going to go away.

Jimmy Thomson: Oh, for sure. Yeah. And I actually praise them recently for their thing they did about Australian pubs, traditional Australian pubs, you know, that you can go and live, stay in a room above an, an Australian pub, which is an authentic experience. I've done it a couple of times. When you look at the color, you look at the color in the sink, in the room and you go, somebody didn't make it. It's a very authentic experience.

Chris Bates: Every week we hear incredible stories, the dumb things, property buyers do, dumb things that end up costing a whole lot of money and, or a whole lot of stress mistakes that can be avoided. Please Jimmy, can you give us an example of a property Dumbo, we can all learn what not to do from these stories.

Jimmy Thomson: So I, a building manager friend of mine gets a call from somebody saying, I've got this dampness and my ceiling. And he goes, he goes, I'll come and have a look. And he goes, yay. Definitely there's a patch of dampers there was just check next door. Right. And, and he he knocks on the next door and he said, are you at any problem with them? And the person goes, yeah, I've been meaning to call you guys. I've got a knee, had much more done. So he traces this along various apartments in a row until he stops. It goes, all right. We've found the point where the dampness comes up. So he goes up the next floor, knocks on this guy's door, and he says, have you got any problem was damp? And the guys have, I got a problem with damp. Look at this. This carpet is absolutely sodden. And he said, he's walking around and he sees a water coming up through the Titanic and he's going, Oh my God, where's this coming from? And he's looking at the walls to see if there's a Bush pipe. And then he looks out in the balcony and the guy had blocked the drains on the balcony and filled up to the podium level was water and had goldfish. No, he turned his balcony into it. Yeah. And then he's going couldn't work out. Why? Oh, he's a screw. Loose fear and loathing. Yeah, that's true. Absolutely true. Welcome to the goldfish, I guess. Well, I think we've got a tank or let's hope that they

Veronica Morgan: Pleasantly disposed. He then goes, Oh yeah, I've got a real problem with water. And it hasn't even because he thought,

Jimmy Thomson: You know, the, the, the balcony was properly sealed.

Veronica Morgan: Uh Oh, there's a mistake. That's a real Dumbo. I get thinking the balcony was actually waterproofed,

Jimmy Thomson: But yeah, that's, that's about as dumb as I've heard.

Chris Bates: It's not bad idea though. Like if you did want a bit of a ship, Julie, it's great. They will come around and you can go, Oh, look at the model, you know? Yeah, we'll aquarium out there and,

Jimmy Thomson: But people don't realize that the, you know, the bill, the everything looks as if it's connected and sealed and, and you, unless you're a building engineer, you have no idea.

Chris Bates: Damp is a bad one though and it's, you know, even if you're in the apartment, can you say, can you get that fixed? Okay. And I think you got to get the tent of the landlord to do it. She did go get the agency store to live in the place. Yeah. It's, it's a, it's a classic, the health issues.

Jimmy Thomson: But you know, you go in and you say, as a tenant, I've got damn in the bedroom and there's a chance the rental agent will say, Oh, you've got to keep the windows open. You're not airing.

Veronica Morgan: That's it properly. They actually, sometimes that is the problem. Oh, sometimes it is. Yes. And that's, that's an issue. I mean, I've had that house that I've got printed out and you know, yeah, I've had Nope. Problems with mold. And then all of a sudden I've got tenants with a massive problem. So I've had to go on, you know, treat this mold and put in a humidifier and a whole bean. And it comes down to the fact that these tenants don't open windows. So they've had to then sign an agreement to say that they will open windows. So I've done my bid, I fixed it. Yeah. But it's been caused by them not opening windows, which is weird. I mean, it's an air conditioned or not. I don't know how they'd lived without opening the windows.

Chris Bates: Bathrooms don't have any. But they're not, well, not some don't. No, I've been in apartments. We don't have exhaust fans, I have to the door open and then that goes into the lounge room. Mechanical ventilation. Right. So my first ever apartment I lived in, and I remember thinking the exhaust fan doesn't work and didn't actually have an exhaust fan. It's got mechanical ventilation and the test for whether it works on it is whether it holds a tissue yes to it. And that's all it is. That's actually building code. It ticked the box building code, but it doesn't actually do anything when it comes to actually having a shower with the door shop.

Jimmy Thomson: Yeah. I have a, a shower sauna because of that. And they, and just last week the building manager came and did the tissue thing and he said that's within the limits of the, is that other story. That's just a code to me. If I, if I can Dumbos are always good. So this person moves into a new apartment and goes, Oh, this smell of cigarette smoke from next door is appalling. And a nice touch to the building manager and says, you know the people next door, they smoke so much and the smoke is coming into my, my room says, I'll have a word wisdom. And he said, they don't smoke. And he said, well, come into my coming into my apartment. And the building manager is, wow, the smell echo in here is incredible. And they think, well, maybe it's coming through the the air conditioning vents because sometimes they're connected to two or three apartments.

Jimmy Thomson: So they, they check this out and they're doing smoke and nut. It's not coming from there. And they're just standing there scratching their heads, wondering where the smell is coming from. And the building manager goes over to the corner, pulls up the carpet on it, hundreds of cigarette ends, thousands, thousands of cigarettes. What had happened was that apartment, while they were building the building, that was the break. That was a smoker room or as a builders. And then when the carpet layer comes in, the builders have gone, it's just a matte of cigarette ends on the floor and the carpet layer goes, I'm here to lay carpet. I'm not here to sweep floors, we'd sit down. And so that was the, the, the smell was just gradually seeping up.

Veronica Morgan: Oh my God. There you go. I've never heard that one before.

Chris Bates: You know, I think it happens with you. People are renovating, right? Like they have ripped up the fours and then they'll be like, Oh, where's lunch down there? There's our bottles under the house under the house. Like the lot of the builders are like wow, damn. Doesn't matter. Farmer lunch down there. And I was ever going to see that 20 years later they renovated it and you go back in 1920 highly valuable Coke bottle now

Jimmy Thomson: Like my kitchen cupboards, like, like an archeological dig.

Veronica Morgan: There was nothing under my floor when I ripped it. I've lied fortunately. Yeah,

Jimmy Thomson: It's funny you aren't thinking back in the things I've done in apartments that we've owned and one of them was ripping up the carpets and finding floorboards underneath and then these complaints from the people.

Chris Bates: Neighbor right through the gap. And that's been a great chat. Hopefully been quite funny for our listeners too cause it was quite hilarious. But anyway, good to meet.

Jimmy Thomson: Thank you very much for having me in.

Veronica Morgan: That was a very quick wrap up there Chris. But I, we do appreciate your time Jimmy. It was lovely to meet you finally after reading all your columns over the years and yeah and there was some really great insights and some different different angles on the straddle living for us and for our listeners. So thank you very much for joining us. Thank you.

Chris Bates: We want to make you a better elephant rider and this week's elephant rider training is, well,

Veronica Morgan: It's going to be a short one because Jimmy gave us so many good points. The one thing I just want to add too is when he talked about before you buy an apartment reading the bylaws, I just want to tell you where to find them. So first of all, in a contract of sale, you will have a copy of the bylaws in there, but you have to understand that they may not be up to date. So when you get your strata report, make sure you ask for a full up to date copy of the bylaws in that report.

Veronica Morgan: Please join us for our next episode and we are going to be talking about my new book auction ready, how to buy property at auction even though you're scared shitless, Chris is going to interview me and I'm going to be talking about all the things that I've written about in this book, which is all designed to help demystify the whole auction process and you know, really get people to tackle the big mistakes that I see people making at auction all the time. So please join us any few. Listen to the end. You'll also be given a little gift from me, a bonus code with 30% discount for buying the book. You can get it online and you'll have to listen to find out how.

Chris Bates: Don't forget, we're on all the social channels. We're on Facebook, we're on LinkedIn, we're on Twitter.

Veronica Morgan: Or you can connect with us on the elephant in the room.com today you, the links are all there for you.

Chris Bates: Please connect and send us a message we'd love to hear from you.

Veronica Morgan: The elephant in the room property podcast is recorded at the Sydney sound brewery. This week's podcast was recorded by John risk editorial by Gordie Fletcher. Until next week, don't be done by

Veronica Morgan: Now. Remember, everything we talked about on this podcast is general in nature and should never be considered to be personal financial advice. If you're looking to get advice, please seek the help of a licensed financial advisor or buyer's agent who will tailor and document their advice to your personal circumstances with a statement of advice.

Veronica MorganFebruary 10, 2020de-index

Episodes

Episode 106 | Dodgy developers & Strata Living | Jimmy Thomson, FLAT CHAT