Stuart Denney, our Associate Director of New Developments at Strata Choice shares his thoughts on to BMC or not to BMC.
Great interaction and vibrant community is the product of mixed-use strata developments done well.
The mix of uses in strata communities is ever expanding with residential, affordable and social housing, commercial, serviced offices, retail, car parking, medical, hotel, serviced apartments and energy generation are some of the constituents that can make up these complex developments.
The most enlivened developments create a symbiotic dynamic through the connection and mix of these uses.
These were well highlighted by the Sydney Committee in their recent post. There are, however, some naturally conflicting priorities within the mix of tenancies so creating clean separation and removing obstacles inhibiting uses should be worked through in detail when planning for the development.
To BMC and the SMS
The separation provided by a stratum subdivision under the management of a Building Management Committee (BMC) is often the go-to vehicle and has distinct advantages.
There is assurance provided in the Strata Management Statement (SMS) which details the interaction between stratums around the shared areas.
This is of course dependent on a well drafted SMS and a detailed shared facility schedule with fair and equitable cost sharing. Unravelling or making changes to these core documents following registration can be difficult as it generally requires unanimous agreement of all members and special resolutions by owners corporations captured within the BMC.
During the planning stages, it is crucial to engage around these shared areas with the team who will be managing the building on completion. They will provide input and insights to enhance the function of the development and help avoid costly errors resulting in inefficiencies and causes of conflict in these mixed use communities.
The Shared Areas
Areas that require this focus include the design of shared accessways, parking (tenancy, visitor, shared and EV), loading and waste areas, use of communal facilities, mechanical, retail exhaust and hydraulic systems, fire services, utility metering and supply agreements, on site management services and spaces, mail and parcel handling, tenancy fitouts and signage, acoustic controls, security access and CCTV systems to name a few.
Strata Management Statements need to be deeply reviewed through the lens of the management team who will be taking on the completed development, so it works practically for the most effective operation and provides clarity and equity in the function of the shared areas and the overarching mixed-use dynamic. This includes items such as member meetings, voting rights, changing or adding to shared facilities, approval of works, resolving disputes and other stratum obligations and responsibilities.
BMC structures are now reasonably commonplace with the number of larger scale, vertical developments and are being used in smaller boutique developments with limited mixed-use tenancies.
To not BMC
The separation into a stratum subdivision comes with management complexity and in turn costs for the establishment of titles, the Strata Management Statement documentation and for ongoing management once the development is complete.
The ongoing management costs can make the sale / leasing of a smaller stratum asset decidedly less attractive. The complexity of a BMC can also put off purchasers who want more vanilla titling and management structures.
For smaller mixed-use strata developments, there are other options available that can allow for separation of uses which may be more cost effective and appealing than creating separate titles within a stratum structure.
Well drafted by-laws detailing car park usage, loading dock, waste handling, creating separate use areas and cost centres, drafting explicit approvals for intended uses, operating hours, building works / fitout approval processes, behaviour, noise and odour controls all can enable mixed use to function well within a single strata scheme.
Provisioning for mixed use
Provisioning services to tenancies for the possible end uses will also mean a much simpler process for the potential sale, leasing, fitout and occupation of these premises. Proper provisioning for the connection of future services such as air conditioning, kitchen exhaust and liquid waste mean proposed works approvals are likely to be minor requiring a much simpler approval process rather than more complex works approvals.
At Strata Choice we can help work through titling options, scenarios and the strata documentation with significant experience across a broad range of developments and mixed-use schemes. Whether it be large or small multi-use developments we will assist unpacking and repacking the less visible framework around the shared interactions that will improve outcomes of the completed development.
Our focus is establishing and fostering thriving community that withstands the test of time.
ABOUT THE AUTHOR
Stuart is a highly experienced Strata Managing Agent. For more than 15 years he has been working with developers to assist in the successful establishment of strata and community subdivisions ranging from small residential to some of Sydney’s largest and most complex mixed-use developments.
Stuart’s passion lies in creating thriving communities and excels in offering guidance on the essential framework needed to ensure sustainable, efficient, and effective management of every development.