Australian Strata Disputes Analysed by the Numbers

Is there really a strata dispute problem, when formal dispute numbers are so low …

Jan 21, 2021

When you examine the number of strata disputes running through the formal dispute processes in Australia they seem insignificant compared to the number of strata buildings, owners, residents, and other stakeholders.

So, is there a strata dispute problem in Australia or not?

Strata title laws around Australia provide specific and detailed dispute resolution processes for stakeholders directing most disputes to specialist divisions of consumer tribunals [except for South Australia where they still go to the Magistrate’s Court]. And, most [but not all] of those Tribunals report dispute numbers in annual reports.

There are also plenty of strata stakeholders in buildings with competing interests that are likely to end in disputes such as strata committees, strata, and building managers, owners, residents, service providers, and more.

And, we’ve all experienced strata conflicts and told or heard the stories of disputes being rife in strata buildings.

But, the numbers don’t actually indicate a serious problem.

I’ve collated the latest reported strata dispute numbers from tribunals around Australia in the table below and compared them to the best available information and estimates of strata buildings, owners, and resident numbers. It’s not exact and I’ve had to make a few assumptions and adjustments as noted due to data gaps, but the overall ratios it demonstrates are pretty clear.

Study it more closely at your leisure. But, here are my takeaways.

There are approximately 4,000 Australian strata disputes a year
Queensland tops the dispute tables by total numbers and disputes per building, owners, and all stakeholders with 1500 disputes and 3.2%, 0.32%, and 0.24% ratios
New South Wales runs second with 1500 disputes too, but with 60% more buildings and 50% more owners
All other states have less than a 1.0% ratio of disputes by buildings
The Australian average of disputes per building is approximately 1.25%
The Australian average of disputes by owners is approximately 0.2%

To put that in context, only 1 in 77 Australian strata buildings will be involved in any kind of formal dispute each year.

* See notes about table information sources and assumptions below

That seems to be a pretty low dispute ratio to me and to most people I’ve discussed this with.

Plus, formal research indicates that there are so many sources of potential conflict in strata buildings that real burdens are placed on all owners, committees, and managers to deal with disagreements so they do not escalate into unhealthy and costly disputes.

The numerous potential sources of conflict in strata are outlined in stark terms in the 2012 City Futures Research Centre's report "Governing the Compact City: the role and effectiveness of in strata management" and showcased by Kathy Douglas from RMIT in her paper “Addressing Conflict Within an Owners Corporations”.

Some reasons I can contemplate for the disconnect between the numbers and the reality of strata disputes are as follows.

1. Despite the rhetoric, strata disputes are more urban myth than reality, there are in fact very few disputes in strata buildings, and it’s just that when disputes occur, they get disproportionate attention and publicity.

I’m not convinced that’s true. But, the data points to a smaller, rather than larger, problem here.

2. Strata disputes are actually resolved informally and internally by stakeholders [owners, residents, committees, and managers] so they never enter the formal dispute regimes.

That’s definitely the case in some situations as managers and others seek to head off issues before they escalate.

But, my experience and anecdotal information indicate that there are many unresolved issues in Australian strata buildings despite these ‘strata angels’ best efforts to resolve problems.

3. There’s a disproportionately lower use of Tribunals to resolve disputes as a result of problems with the processes and Tribunals than there should be.

Some reasons for this include:

delays in getting Tribunal decisions,
required paperwork and issue complexities in disputes are excessive,
costs of Tribunal disputes are high and usually not recoverable,
Tribunal orders are weak, unenforceable, and/or difficult to enforce, and
Tribunal decisions are inconsistent and unpredictable.

In my view, this is definitely a key factor in the low dispute numbers in the data.

4. Many strata disputes also just get left unresolved and vanish or evaporate over time.

That’s very likely to be the case for a range of reasons including:

stakeholders simply do not know their rights and how to access them,
stakeholders don’t have the time, energy, skills, or resources to pursue their issues,
lack of access to strata information relevant to the issues is available,
misinformation and/or the suppression of information by committees, officeholders, and managers hinder stakeholders,
harassment, bullying, or shaming of complainants by committees, officeholders other owners, and managers deters stakeholders,
the use of majority voting in meetings to overrule and/or quash individual stakeholders’ issues.

I’ve seen all these things occur in strata disputes [and even participated in these techniques for my clients] so, I know this is a relevant factor.

All this tells me that we all need to take a wider and multi-faceted approach to improve dispute management in strata buildings that cover stakeholder engagement, internal and other informal processes, new formal processes, improved formal processes at Tribunals, better outcome predictability, faster outcomes, and effective enforcement.

Francesco …

22 Jan, 2021

NOTES ABOUT DISPUTES TABLE

Table Information Sources:

ACT: ACT Civil & Administrative Tribunal Annual Review 2018-2019

NSW: NSW Civil & Administrative Tribunal Annual Report 2019-2020

NT: Northern Territory Civil & Administrative Tribunal Annual Report 2018-2019

QLD: Queensland Civil & Administrative Tribunal Annual 2019-2020

SA: Courts Administration Authority of South Australia; Court Performance Statistics

TAS: Resource Management & Planning Appeal Tribunal Annual Report 2018-2019

VIC: Victorian Civil & Administrative Tribunal Annual Report 2018-2019

WA: State Administrative Tribunal [WA] Annual Report 2019-2020