The Elephant in the Room Property Podcast | Australian real estate
The Elephant In The Room Property Podcast with Veronica Morgan & Chris Bates

Episodes

Episode 68 | How bad can things go with buying strata property | Karen Stiles, Owners Corporation Network of Australia Ltd

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Why Strata owners are left holding the baby & paying the price

Karen Stiles shares her first hand knowledge of strata ownership & her horror story of buying off the plan. Karen is now Executive Officer of Owners Corporation Network & she shares brilliant insights into the hidden world of all things strata. She is extremely passionate about justice in the property world.

Here’s a few of the eye opening topics we covered:

  • How everyone besides the owners know about building defects.

  • What a variation allowance is for builders?

  • How By-Laws can change on a whim & in seconds.

  • Why you need a property lawyer over a standard conveyancer.

  • How bad can defects be & why owners hide them.

  • What is a Build & Design approach ?

  • Got defects, sign this confidentiality agreement  

  • How the there is no justice in the legal system.

Guest Website:

https://www.ocn.org.au/about

Ep 52 - Jenny Tonner

Work with Veronica? info@gooddeeds.com.au
Work with Chris? hello@wealthful.com.au

EPISODE TRANSCRIPT:

Veronica: You're listening to the Elephant in the Room Property Podcast, where the big things that never get talked about actually get talked about. I'm Veronica Morgan, real estate agent, buyers agent, and co host of Fox Sales' Location Location Location Australia.

Chris: And I'm Chris Bates, financial planner, mortgage broker, and wealth coach.

Veronica: And together, we are going to uncover who's really making the decisions when you buy a property.

Chris: In this episode, unfortunately I could not make it. It was a bit of a shame that I wasn't because in this episode, you're going to hear a real personal story from someone who actually bought a property and everything went wrong with the building, and what actually happened, who was left carrying the can. Fortunately though, this led her to her career. And this is exactly what we're going to talk about today, is who's responsible and what happens when it all goes wrong.

Karen: What other products do you have to litigate to get it replaced if it's wrong? A car? It gets recalled. A vacuum cleaner? Gets replaced. A $10 toaster? You get a new one. Why is it that with a million-dollar, or a 10 million-dollar, or some of them in Barangaroo going for $65 million dollars, why is it that you have to litigate to get what you paid for? It is the only product that that happens.

Chris: Please stick around for this week's Elephant Writer Bootcamp. And we have a cracking Dumbo of the week coming up. Before we get started, everything we talk 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 buyers agent. They would tailor and document their advice to your personal circumstances. Now let's get cracking.

Veronica: We're dedicating this episode to apartment owners. Now, there have been a few wishes of late that have really put it into the spotlight, that apartment owners can be left carrying the can when things go wrong with a building. Take Opal tower. That's a classic example. And even though the developer, the builder, and possibly some of the contractors or consultants won't get off scott free, the individual owners are the ones who will suffer as a result of the defects for years, possibly even decades, and some may never recover financially.

Veronica: Then you look at all of the buyers of off the plan who are trying to settle their purchases when they made these agreements back in the boom. And there's now such a term as settlement risk, which I don't even think existed before. And it means that many of them start off owing more than their place is worth, and others have lost everything because the valuations has dropped so much, they simply couldn't get the money to finance the deal.

Veronica: So, today, we're picking the brains of Karen Stiles who has been executive officer of the Owners Corporation Network since 2012. Now interestingly, it was her own personal experience with major building defects that led her to discover this peak body for strata owners in the first place. Karen's experience on strata committees began with her first apartment purchase back in 1984. And today she is on the committee of one relatively new small strata scheme, and secretary of a medium-sized older scheme, which has carried out an extensive fire safety upgrade. So she's got some pretty hands-on skin in the game.

Veronica: Her extensive voluntary and paid membership of regulatory and independent bodies has involved interaction with a broad range of people, from ministers, directors general, and vice Chancellors through to community groups, scientists, teachers and staff on an advocacy, monitoring, lobbying, educational and guest speaker basis. So Karen brings to OCN and us today a wealth of real life experience. And today, we're going to find out more about what's happening in this space. Thank you, Karen.

Karen: Hi, Veronica.

Veronica: Now, can you tell me a bit about your own personal experience with building defects that led you to seek out the Owners Corporation Network in the first place and obviously then to join it in your capacity as executive director?

Karen: Yes. So, I was one of the many people who, with wild abandon, bought off the plan, despite advice from a friend of mine who was in the industry saying, "Don't do it," but I fell in love with the glossy brochure.

Veronica: When was this?

Karen: The dream. 2001, I think, I signed the contract, and about 2003, I inherited what turned out to be a pretty much a white elephant.

Veronica: Oh, dear.

Karen: So, yeah, years of stress, years of financial pressure, and just trying to navigate the maze that is building defects, where everybody else but the owners understands the rules of the game.

Veronica: That's a really interesting point.

Karen: Mm-hmm (affirmative).

Veronica: Yeah, okay. Now, just we'll get to that, because I love that, everybody else but the owners, and yet it's the owners at the end of the day that will carry on ownership of that building and then their individual lot. Okay. So you bought in 2001, and two years later, you started having problems or problems started. Was it finished? When was it finished?

Karen: From memory, 2003. It's a little bit like childbirth, I've blocked out a lot of the memories, Veronica.

Veronica: Do you still own that property?

Karen: Oh, no.

Veronica: Okay. So, you bought it in 2001, several, probably two years later, did you live in it?

Karen: No.

Veronica: Okay. It was always meant to be an investment?

Karen: It was meant to be for my partner who, at the time had, post traumatic stress disorder, and I wanted him in a little apartment so he could have a dog, because it came with a courtyard that opened up into a very large garden area.

Veronica: So that was the reasoning?

Karen: That was the reasoning. That was the dream.

Veronica: Okay.

Karen: The nightmare was that that courtyard became a walled courtyard, I might add, became a glass-surrounded balcony, and the pet friendly bylaws that were sent out with the contract were changed at the first AGM to no animals. And it happened in a blink of an eye. I was there. I was prepared. I had my clipboard. I had my notes, and yet everything fell apart.

Veronica: Wow. Okay. There's a couple things there. One is that what you're buying, you didn't get.

Karen: Yeah.

Veronica: And there's a variation allowance, isn't there, in these contracts? So that's obviously something you found out about retrospectively by the sounds of it.

Karen: Well, I knew that it could vary by up to 5%, and still be allowable. I guess I just hadn't understood what that might mean. I was very lucky when I was purchasing that my friend, who was in the industry, went through the contract with a fine tooth comb and listed absolutely everything. And so, when you're in the display apartment, it's all very gorgeous, and you're in love. You're seeing yourself with your coffee, and croissants, and it's just terrific. He was jotting down all the things. And he asked the agent, "Will the air-conditioner be included?" And he said, "Well, it's in the display unit, so yeah." And so that got put on the contract.

Karen: When I got to see the apartment after it was finished, there was no air-conditioner. There was no extra toilet. The courtyard had become a balcony. Pets weren't allowed. My local lawyer, who I used, just a local solicitor, said, "Well, too bad. It's under your 5%. That's how it goes." Fortunately, I had another friend who was more canny, and he said, "Go to these lawyers who specialize in off the plan contract," and he got me a $10,000 compensation for the lack of the toilet, and I got the air-conditioner installed. Nobody else was that lucky because they didn't have the support that I did.

Veronica: Support. That's a big word there. Okay. God, unpacking this is massive. That was the variance side of things, and obviously like you said, you knew there was a 5% variance, but what that means you were unaware of. And clearly they overstepped the mark, which is why your lawyer was able to get you some compensation. And obviously people don't know where to turn to, they're not going to get right legal help.

Veronica: We had, actually, Jenny Tonner, who's a conveyancer. Back in Episode 52 when she did talk at length about off the plan contracts and the issues with them. So, yes, I think that just highlights exactly why you need the right representation. And then of course the bylaw that was promised as a sales pitch that you could have pets, of course at the end of the day, the developer can't guarantee that because then all the owners basely banded together and said, "No, we don't want pets." Right?

Karen: Well, actually no. It was a complete coup. The starter manager who had been appointed by the developer ran the first AGM. So, let me just set the scene for that. We're was standing in an underground car park. None of these people have met each other before. They come from all walks of life. Most of them don't know what they're doing. It was in the time when everyone was saying, "You're a mug if you don't have a collection of investment properties."

Karen: So all these moms and dads with no idea, were running about picking up properties. So there you've got this array of people, and you've got the developer's representative basically running the meeting with the starter manager, and the developer still owned 26 of the 102 lots. So they've got real skin in the game. They've got 26 votes. So there we all are, huddled, standing in this thing. And that was done quite deliberately so that people don't hang about.

Veronica: Get to know each other in the car park.

Karen: Precisely. Anyway, the strata manager who it turned out had sold this business in the interim of being appointed in the first AGM... And in fact I'd had to chase him to get to the AGM because they hold that when 30% of the lots have been sold, lots or apartments, have been sold, but they don't always get everybody's names right.

Karen: So, anyway, I had actually chased him. So I was, A, lucky to be at the meeting. B, prepared because I had owned strata before, although not straight off the plant. And one of the men said, "We've got a problem. There is water running down the inside walls of six of the apartments." Now this is before people have moved in. And another woman said, "But my son's parking space is too narrow, and I'm going to go to the media."

Karen: And the developer's rep immediately focused his attention on the woman and the car space and divided the entire place, and completely distracted everybody, all the other owners, and took them away from the leaking units. It was exquisitely executed, even though evil.

Veronica: So, you respected the skill in which... Yeah, okay.

Karen: And then the strata manager said, "This building really doesn't suit animals so I propose we change it. Anyone opposed?" And before I had my hand up, it was done. It was just so amazing. So that was the pet-friendly buildings. Yet we had a courtyard the size of a football field, and what should've been individual courtyards opening onto it, but there you go.

Veronica: Right. So, okay. So, not a good experience. That's back in 2003 when that started happening. You joined OCN in 2012. So, there's another nine years of discovering or searching for support and help and all the rest of it. I mean, I want to hear more about what OCN does, obviously. And you came to my attention, and a couple things actually, once because it led to the legislation changed in 2016, didn't it?

Karen: Mm-hmm (affirmative).

Veronica: And pets as part of that, I understand.

Karen: Yes.

Veronica: So, you can clarify actually for us what that is now, because there is a lot of misinformation out there currently on... My own strata manager doesn't appear to understand what the current legislation is around pets. So, that's number one. And that's the first time I came across the Owners Corporation Network actually.

Veronica: And then the other time was on LinkedIn, following the Opal Tower debacle, if you can call it that. Catastrophe is probably a better word for it. And I've just noticed a lot of your commentary on your posts in LinkedIn around that, as well. And that really does point to ultimately the people suffering the most. There's individual owners who have bought those lots or those apartments and they are going to be suffering for a long time.

Veronica: So, I think it's important that people understand the risks when they're buying into strata. Strata obviously has a lot of benefits. It's not like it's all negative. Otherwise, we would never do it. But clearly, there's a lot of risks that people just are blind to. So, let's sort of dive in there a bit. But don't just clear up the pet thing first because it's obviously relevant to your own situation here, too.

Karen: When the strata law reform started in 2012, they were the largest changes ever since strata law was introduced in New South Wales in 1961. There'd been a bit of tinkering, but not much. It actually took four years of consultation to get those through.

Karen: So the legislation came in in 2015 and then 2016. And it was aimed at being much more pet-friendly than the default no pets allowed, because obviously it's been proved through research that pets are good for individual people, and also for communities, and connection, and all those kinds of things. And values are improved. So places like Jackson's landing, which is a large community in-

Veronica: Pyrmont.

Karen: Pyrmont is very pet friendly. They've got dog walking clubs and all sorts of things. And it is very, very stable. People love living there. They have a real sense of community, and the values are high, because owners and renters value being able to have a pet. And they will pay a premium for that. And a lot of people do not understand that very simple math when they exclude animals. If you manage them, that's fine. They have had no problems.

Veronica: It's very true. I mean, it's interesting that a lot of people... Well, two sides of this. I mean, I find it astounding that people are going to buy dogs before they actually found a home.

Karen: Yes.

Veronica: That astounds me. But on the flip side of that, I also find it bizarre that people won't allow a cat, or a bird, into a... Cats can be contained, believe it or not. But I've had a cat in an apartment. I remember having to actually submit to her in references. So there are ways that these can be addressed.

Veronica: But there's a lot of prejudice around it. A lot of people worry about noise, they worry about dirt, they worry about waste. Waste, that's the word. Thank you. Waste. They worry about all those sorts of things, but I think when pet owners feel very grateful and thankful to be able to have their pet, they go to great pains to look after it, right?

Karen: Yes. It's when they are illegal that you've got the problem of the kitty litter going down the toilet, because the kitty litter bag says, "Can be flushed" in really big letters. But then in really tiny letters under that, it goes in 70 ml lots, which is like a ton of cup full.

Karen: So of course everyone just throws the kitty litter down. They're 34 stories up. It's fine until an elbow joint blows. But if they are allowed to have that animal, they would be taking that the waste room and making sure that there were no problems so that they could keep their animal. It just makes sense.

Veronica: Okay. But it's still not in every building. So, what's the legislation now around that?

Karen: Well, they've provided model bylaws which are pet friendly, but people have to decide to take those up. And strata runners were required to review their bylaws in relation to the new model bylaws in 2016, 2017. I imagine a lot of them still haven't done that, but those that did might've said, "We like what we've got, so you've got the status quo."

Veronica: So there's no compunction now?

Karen: No.

Veronica: Well, I was under the impression that it couldn't be refused on unreasonable grounds.

Karen: Yeah. But then you've got to take that to NCAT, which is like the chocolate wheel of justice really.

Veronica: You sound so cynical, Karen.

Karen: Well, I should tell you that I actually found OCN before 2012. A friend said, "I think you might really benefit from meeting these people" in about 2004 when I was chairman, secretary, and treasurer of my body corporate trying to go through a multimillion dollar defect.

Veronica: You were chairman, secretary and treasurer? Does that mean nobody else wanted to get involved?

Karen: Yeah.

Veronica: Right. Okay.

Karen: Yeah. It was a joy. So, I went to the first meeting and I threw myself at their feet. So I've been a member since then. I made a suggestion at one point, and it was obviously one suggestion too many, that they should create a guide on something that was being talked about on the members only forum, and it was really pertinent. I said, "You must create a guide on this." And they said, "Want a job."

Veronica: There you go.

Karen: Yeah. So here I am now as executive officer, and still dealing with defects for other people. It's the reason that most people come to OCN.

Veronica: Right. So, I've heard various stats around the amount of buildings that have defects or amount of new buildings that have defects. When I say new, sort of, say within the first 10 years, shall we say?

Karen: Yeah.

Veronica: I've heard in varying stats, from 40% up to 70, even up to 90% of buildings have defects. I mean, what would your experience of that be?

Karen: The vast majority of new buildings have defects. City Futures did a study in 2011 that was published in 2012. The study was actually about governance, and what factors influenced being able to effectively manage a building. And the surprise answer to that was building defects. And 72% of respondents who were in buildings built before 2000 said they knew of at least one major defect, and 85% of people in buildings built since 2000 reported at least one major defect. So that's pretty significant.

Veronica: From that, you could draw two conclusions, or probably more than two. One is that defects are on the rise, or the other is that older buildings, pre-2000, people have forgotten.

Karen: No. It's not about forgetting. The pyramids still stand. And you've got new buildings like mine. Really, if we'd been absolutely honest about it, it was a knockdown rebuild. There were so many problems. The two frequent-flier defects-

Veronica: You mean the building that you subsequently sold?

Karen: Yes.

Veronica: Or the apartment you-

Karen: Yes. The fire safety issues were so endemic. You really needed to... It's impossibly expensive and difficult to retrofit serious issues, like fire safety defects and waterproofing. We're talking about not just bathrooms, but balconies. We had 102 boundaries.

Veronica: Pools and roofs.

Karen: Oh, discuss.

Veronica: Garden beds above garages and stuff... I mean, yeah, the water will find the path of least resistance, and water defects are, I know, are just a nightmare for people.

Karen: Yes.

Veronica: So, you're finding this in the vast majority, as you say, of buildings?

Karen: Yeah.

Veronica: Mm-hmm (affirmative). And these defects, are they always making themselves known within the statutory period?

Karen: Oh, no. No, no, no. So, if I used my own building as an example, we knew about the six apartments that the water was flowing through. I did discover when we're doing an inspection that the young single mom with three little kids was plugging in her bar heater on that wall. And we did suggest to her that that might not be a great idea.

Karen: But anyway, we knew about those. But every time it rained, and the wind was blowing in a different direction, we found new leaks. And it's just lucky that I live with a pen and paper in my hand. And I would note every time. And another thing that happened was that the lights shorted in one of the kitchens. And everyone went, "Okay, we'll get that fixed." And I went, "Well, why did it short?" And it turned out that there was, whoever put the insulation in, had put it in over halogen lights. They get really, really hot, and it had this off. Then we had to ask ourselves, "Is that in everyone?" Of course, it was in a substantial number of them.

Karen: So, you've got endemic problems like that. And a lot of that stems back from... The training has deteriorated. TAIF used to be the most wonderful institution. It turned out industry-ready people excited and very well-equipped. That's all gone. There's no supervisors anymore. And the quality of the training for that has just diminished terribly. There used to be a clock of works, and he would go around with like a golf ball and bounce it on the concrete to make sure it wasn't drummy, to see the falls were going the right way to the drains. That doesn't exist anymore. So, all of those things as well.

Veronica: These are all sort of compliance measures, right? Or steps in the compliance process that you're saying that really don't exist?

Karen: Yeah. Well, it starts from training. The other thing is, of course-

Veronica: That's compliance as well, isn't it? I mean, you've got to be able to pass exams to show that you can do the job really.

Karen: Yeah.

Veronica: Yeah.

Karen: And even if the waterproofer does know what he's doing and does use the right products in the right order, the electrician might come stomping in with these hobnail boots and ruin it.

Veronica: Puncture it, yeah.

Karen: So with a clock of works, those things wouldn't have happened. It was very organized. And people were proud of their work.

Veronica: And the clock of works used to work for counsels, right?

Karen: Well, yes all for the builder. But certainly counsel inspectors were very much out there. And I remember my own planter box experience in an older building. There was the building services commission at the time. And builders were afraid of them. They would come out and say, "This is wrong. Here's the scope of works that needs to be fixed, and I will inspect it. And if it's wrong, you will pay for someone else to fix it again."

Veronica: So, why has that layer evaporated?

Karen: The idea of deregulation, and less red tape, and innovation, and all of those things. I mean, my six leaking apartments, which turned out to be many more, were the product of a new wall cladding system, which hadn't been properly waterproofed in between the sections.

Veronica: So it was in the installation?

Karen: Yeah. And I mean, not so long ago, there were hot water pipes coming from Germany. So, you would expect them to be of high quality. Turns out they don't like hot water.

Veronica: What's the [crosstalk 00:24:20] leak?

Karen: So they leaked.

Veronica: Right.

Karen: And I know of one building that had to be completely retrofitted. We're talking about a 28-story building. All of the hot water pipes had to be replaced in a new building.

Veronica: So, okay. So, we all heard about Opal Tower, because that was pretty dramatic. Christmas Eve, and a whole bunch of people have to get... Well, the whole building gets evacuated, and some very, very visible, very frightening structural cracks and issues there. And we hear about Grenfell Tower and the Cross Tower and the actual cladding, the flammable cladding. Why when we heard stories about in a 28-story building having to have all its hot water plumbing retrofitted?

Karen: Usually, it's because the people are completely overwhelmed trying to deal with the issues at the time, they don't want word to get out that there are problems with their building because that will affect values.

Veronica: That's an interesting one, yeah.

Karen: With my own building, we made the decision, or I did, that we would be completely transparent. So we actually spoke with local leasing agents. We were very transparent in our minutes about the fact that we had defects, and what we were doing about them. So people could feel confident that the committee was on top of this, that it was going to be fixed. But most don't.

Karen: It's all under the carpet. So even if you do your strata search... And we need to talk about due diligence. But even if you do your strata search, you're not necessarily going to find what you need to know, because it may not be documented. And the other problem is also, there's no quality assurance of the people who do strata searches.

Veronica: No. I know. In fact, we interviewed Amanda Farmer back in Episode 25. And she's got a property podcast called Your Strata Property. And we talked about that whole issue of strata searches and what is in them, and what is not in them, and the lack of consistency, and the lack of... We have a performer in our office, for instance, and we evaluate a strata report for our client before they buy a property. And we're looking for what's missing. One of the things that Amanda talks about is ask for the emails. Who's in the correspondence with stuffs hidden? They may not minute it, because they may not be officially discussed in any meetings. That's actually frightening, isn't it?

Karen: Yes, it is. We do need to talk about due diligence when you're looking at buying off the plant. And I did that. I actually researched the developer and the builder.

Veronica: You know, I wrote a post on LinkedIn just this morning on exactly that. And I've got a flawed thinking series. I'm up to number 77. I'll get to 100. It's turning into a book. And this is about the people think that the only thing they need to worry about is researching the developer and the builder, and once they do that, they'll be fine. It's just interesting you should say that just today, because as you say, there's so much else that can go wrong, right?

Karen: Oh, yeah.

Veronica: And you could have a builder that builds one building really well and not another, or one developer... It doesn't necessarily one in line.

Karen: No. And of course the builder that was assigned to our building, it was a family company. They established 70 years ago. I checked out their previous projects very good. They sold. In the time between me signing the contract and work starting, they sold the company.

Veronica: [crosstalk 00:27:41] And that would've been perfect, otherwise. You got 70 years. You can get a better builder.

Karen: Yeah. So even with that research, it was just-

Veronica: Not enough.

Karen: A mess. Yeah. That's right. And it was a design and construct, which means that the developer gives more or less an artist's impression to the builder and goes, "Deliver me that and I'm going to give you 10 bucks. It should cost you 20, but I'm only going to give you 10." So you figure it out. And people wonder why there's cost-cutting. And of course the builder on that particular project went into administration between Christmas and new year, which is a favorite habit of-

Veronica: So, they bought a business that had been in existence for 70 years, and then went to administration?

Karen: Yeah.

Veronica: So they're doing a Phoenix-

Karen: Oh, yes.

Veronica: On a business they paid for?

Karen: Yes.

Veronica: That's really bizarre, isn't it?

Karen: Yeah. But it meant that they avoided defects rectification, which the final negotiated settlement was $7 million dollars. I can say that because I wasn't required to sign a nondisclosure agreement, which most people are. And that's the other reason why people don't know what they don't know. Because people are often bound by confidentiality by the developer who won't settle without it. Then they can't speak.

Veronica: Haven't even thought about that.

Karen: Yeah, which is why OCN has been calling for a special commission of inquiry, because they can compel evidence, and people can speak.

Veronica: Wow. And of course, because if you find yourself taking a developer to court... Which I think people don't realize how often this happens. And then you got to fund the legal bills whilst you're waiting for a settlement as well. So it's special levies galore, and all that sort of thing, and then a lot of people just don't. As I said, if they haven't been through it, they just don't know what can go wrong. And then of course is that terms of the settlement is that they can't disclose. Wow. Okay. So you can disclose $7 million-dollar settlement.

Karen: Yeah. But it wasn't enough to fix all the problems?

Veronica: No. So you're still short. Okay. So you pay your legal bills, and you pay for part of it, but then obviously you've got to stump up the rest of the cash. So that's special levy territory, right?

Karen: Oh, well, we actually took out strata finance because it's a brand-new building. There is nothing in the kitty.

Veronica: Of course.

Karen: Nothing. And you've got all these moms, and dads, and new marrieds. So they're stretched. They're potentially on fixed incomes, the older people, and there was no money for special levies. That was a particular demographic.

Veronica: So this is like bought by a lot of first-time buyers then, was it? So people have saved every cent to get the property in the first place have got nothing extra?

Karen: Absolutely. We were like deer in the headlights. Anyway, somehow or other, I found out about strata finance. And we organized to take out a million-dollar facility of a line of credit. So we only drew down what we needed for bills. But it was a comfort to know... And it was also a signal to the builder until he Phoenixed, to say, "We're cashed up and we're committed to getting justice." I now know that there is no justice. There is a legal system. It works very slowly. It doesn't necessarily work in favor of owners. But anyway, at the time, that seemed like a very clever thing to do. And it meant that the levies only went up a tiny bit for people. It was very achievable at the time.

Veronica: That's actually really interesting that you say that there is no justice, there is a legal system, but there is no justice.

Karen: What other products do you have to litigate to get it replaced if it's wrong? A car? It gets recalled. A vacuum cleaner? Gets replaced. A $10 toaster? You get a new one. Why is it that with a million-dollar, or a 10 million-dollar, or some of them in Barangaroo going for $65 million dollars, why is it that you have to litigate to get what you paid for? It is the only product that that happens.

Veronica: So, you still own apartments?

Karen: I do.

Veronica: Because you own two owners corporations.

Karen: Yes, for my sins.

Veronica: So, it hasn't turned you off.

Karen: Oh, my next purchase was a 50 year old building.

Veronica: Right, okay.

Karen: You bet it turned me off.

Veronica: Right, right. So, yes. It turned you into a more discerning purchaser and-

Karen: That's very diplomatic of you. Thank you, Veronica.

Veronica: Yeah. Yeah. Okay. I'm trying to-

Karen: I ran screaming.

Veronica: I'm trying to think of the words. Look, it actually breaks my heart. Because I hear stories and I talk to people all the time that have had terrible, terrible situations. And I still find other people trying to justify why they've recommend... And particularly in my industry. Because I'm talking with other professionals who actually recommend that people buy them. And then you've got the AOP, who've got a whole tax system structured around encouraging more individual investors into buying new stock.

Veronica: And I get that we've got to provide housing. I do understand that. And I do understand that developers need to make money, and builders need to make money, and all that sort of stuff. But what I don't understand is why we're encouraging them to do things where they don't bear the responsibility for what they're building. And that just encourages them to do it quickly. And I'm not saying they're all like that, but I'm just saying the system currently doesn't work.

Karen: No. The system is broken. And industry itself, the good players in the industry, are saying this and have been saying it for quite a few years. I can remember being in discussions with developers and builders during the strata law reforms, because they were looking at a building defects bond at the time, to bridge the gap between the builder and the subsequent owner. So the people that purchase from the developer.

Karen: Because the contract is between the builder and the developer. There's no contractual rights-

Veronica: Hence why the law is a problem.

Karen: Yes.

Veronica: Because the law relies on those direct contractual arrangements, right?

Karen: Yeah.

Veronica: Mm-hmm (affirmative). Okay.

Karen: And we were talking about it. And they were really unhappy about this bond. And my chairman at the time said to them, "We are trying to save you from yourselves. This is a race to the bottom. Nobodies going to win out of this."

Veronica: And this is something a lot of people don't realize, and until a few years ago I didn't know it either. There's no such thing as homeowners warranty for a building that's more than four stories high.

Karen: Four or more. That's correct. And the reason the government stopped that... Because it used to be that everybody was covered. They stopped it because there were too many claims. So, just think about-

Veronica: What does that say?

Karen: Yeah. Let's think about that for a second. There were so many claims they removed the protection. When-

Veronica: Who are they easing the burden on?

Karen: Gosh. The owners. Innocent owners who had nothing to do with any of this. I don't understand why governments do not understand that prevention is so much cheaper than cure.

Veronica: Oh, it's not just in this area, though, is it? It's just generally speaking.

Karen: Oh, emergency flood mitigation. I look at the Insurance Council of Australia begging federal government to put in mitigation structures, and they won't. So then they get to bail out all the poor people whose lives are being ruined.

Veronica: Okay. But there has been a fund now put in place, right? So the developers do need to put, what, was it 2% of the build cost? Or, what is it? There's [inaudible 00:35:37] as well, anyway. There's this-

Karen: Yes.

Veronica: Explain what that is.

Karen: Okay. So, yes. The developer since the first of January, 2018, any contract signed on or after that date, the developer has to put in a 2% bond. In reality, they're going to extend the claims on the builder so the builder will have to pay it. They can do that either by an insurance bond, or a bank guarantee, or if they're cash strapped, they'll be required to pay cash because they can't get those other things. There's another crazy little situation.

Karen: Anyway, if you look at... So, the 2%. I haven't got this in writing, but it was apparently accosted at being at least 5% was necessary. I know from my own experience in another building where I've rented it costs $16 million to build in 2002 and it cost $9 and a half million dollars to fix between 2010 and 2012 when they finally won against the insurer after the building had gone belly up. That's-

Veronica: Little bit more than 2%.

Karen: Yeah.

Veronica: Little bit more than 5%.

Karen: It's more than 50%.

Veronica: Yes, exactly.

Karen: So-

Veronica: Oh, dear. That's-

Karen: And certainly, the private insurers got out of the home owners warranty scheme because they were saying something like 27% cost. But nobody's stopping the Phoenix [inaudible 00:37:10].

Veronica: No. Yeah. Very convenient.

Karen: It's astonishing.

Veronica: Well, I think probably what actually happens is that then it's up to individual owners, or individual owners corporations, to band together to fight, well, A, a system. But B, they've got to take so much additional action in order to force court orders in many times.

Veronica: For instance, if the court has ordered that a builder or a developer pays a certain amount of money and that person decided to go broke, then they're not up to the court to enforce that they pay the owners corporation, it's actually the owners corporation to instigate more legal action, correct?

Karen: Yes.

Veronica: Yeah.

Karen: So, the Owners Corporation Network was actually born in 2002 after the chairman and secretary of a large new building were grappling with building defects, expensive insurance, unfair contracts with, for example, building managers that have been signed by the developer before the first AGM. So, because they sell those, they make money out of those. And then, the contractors have to get their money back through the owners.

Karen: So, there's overcharging, no KPR's. In one situation I know that there was no termination clause at all. So, no ability to terminate the contract. It's better now in New South Wales, but in Queensland, you can still have 25 year contracts, and they just keep rolling them over. So, there's all of that.

Karen: Anyway, I thought, "My God, are we alone?" They did a bit of a ring around. And a number of large new buildings got together. And as they were sharing their stories, it was hashtag me too. And so, the Owners Corporation Network became. Pretty much it started as a group hug, a self help group. And then they started getting speakers, and then they started advocating.

Karen: And I know when OCN was called to testify at the senate hearing into cladding a couple of years ago, Steven [Gooddard 00:39:20] stood up and said, "I stood before another parliamentary committee in 2004 telling them how bad building quality was. Here I am again."

Veronica: Wow. It's actually frightening. Now, I'm also mindful that you and I, we're both sitting here telling these totally woeful stories, and they are woeful stories. I don't want to come across like a absolute negative, always talking down buildings, always talking down developers, always talking down builders. Although, there's obviously clearly compelling evidence that there's a real issue here.

Veronica: And you mention that there is some good players in this area, in this industry. And so I guess it'd be good to give them a bit of a shout out. Because I'd like to interview them, too. I'm putting it out there. We want to talk to more people on both sides. I want to put some shonky developers. Come on, shonky developers, come and tell us. Give us your peach. Tell us why you're doing it. We want to feel like there's some hope. Is there any hope?

Karen: Yes, there is hope. And again, it comes back to your due diligence. Doing your [essex 00:40:27] searches, checking on the directors to see if they've had companies that have folded in the past. Go and look at previous project, make sure you've got a specialist lawyer. But there's a couple of developers in particular where people queue up to get their next property and their next property.

Veronica: And why is that?

Karen: Because they know that if there are defects... It's almost impossible to deliver a defects free building. Despite best attempts, there's going to be things. But the good developers come back and they fix them.

Veronica: So it's the approach to that rather than-

Karen: Yeah.

Veronica: Yeah.

Karen: They deliver all the as-built drawings. Which are required by law, but many don't bother. So, when you're trying to work out what's wrong with your plumbing and you've got no plumbing diagrams, that's really exciting.

Veronica: That's [inaudible 00:41:15].

Karen: Oh, yes.

Veronica: Do you have a resource on these that we can make available for our listeners?

Karen: We've got a broad feature item on our website homepage on off-the-plan purchasing and what you need to... Buyer beware. I think there's a lot more that we could do on that. We'd like to institute, for example, an award of the best five year old building.

Veronica: Oh, wow. [crosstalk 00:41:41]

Karen: Yeah. Well, at the moment you got awards for brand new buildings. And, "Oh, isn't it gorgeous?"

Veronica: I love it.

Karen: And the building that caused the creation of the Owners Corporation Network, actually, it won architectural awards. Just a pity about the build quality. So we want to have that. Because often the paint isn't dried before they're getting these awards.

Veronica: Yeah, it's all about what it looks like.

Karen: Yes. So, we want to see a statutory duty of care. And certainly, the minister prior to the March election announced that that would be coming in. We now have to work with whoever our new minister is to make sure that becomes a reality. It is insane that you have more protections for a $10 toaster than you do for an apartment.

Veronica: It is insane. Funny you use the metaphor for a toaster because I, years ago when I was selling real estate for a living, one of my old colleagues said to me, "Do you know, more people spend time choosing a toaster than they do a home?"

Karen: Yes. And it's funny. Because I've been looking at Choice, because they're my heroes for consumer protection on other issues, and there is a $200 toaster that has apparently failed the testing. And people are really unhappy. "$200 for a toaster and it doesn't toast?" And I'm thinking a million dollars for an apartment and it's leaking?

Karen: I'm picturing one now where an elderly couple actually had to build a moat in their lounge room to stop the water running through their unit every time it rained. A moat. So what they had was a little hob like you have in the old fashioned showers. A little step up. And then they had a-

Veronica: They built a channel?

Karen: Yes. So that they could then vacuum up the water. So, if there was any chance of rain, they couldn't leave. They had to be ready to vacuum up the water. That affected their health, their mental health. That's just-

Veronica: Are you for real? I mean, it just... Beggars belief. That's just awful.

Karen: Yeah. And it's not an isolated case. I mean, I think the mode is. Not everybody's-

Veronica: Yeah. [crosstalk 00:43:59] solution. But oh my God, that's just horrendous.

Karen: Yeah.

Veronica: And it's not because they were just waiting for these defects to basically get addressed? So this is their stop gap measure once they wait. Because this stuff doesn't get fixed tomorrow, does it?

Karen: Oh no.

Veronica: You're not going to get a leak today and then go, "Oh, God, let's get onto it. Let's get this sorted." It has to go through a whole process.

Karen: Yes. And you got the builder saying, "I will do this." And the shonky ones will come back with [inaudible 00:44:25] and just do a little bandaid job knowing that that's not a real solution, but hoping it gets past the two year statutory warranty period.

Veronica: Right, so just hold the-

Karen: And then it's not their problem.

Veronica: Water up until you get a little crack in the silicone.

Karen: Exactly. And then if you have the builder go belly up then the insurance says, "Don't you dare do any repairs or else we're going to say that it's your repairs that caused the problem." So everybody dodges responsibility. It's just he said she said all the way down the line. And the owners are left with it.

Karen: I can remember when I put a call out on the OCN forum, "Does anybody know a good defects lawyer?" Because we had 21 days to act or else the developer was saying we lost our client. There's a lot of bullying that goes on, a lot of bluff. And I spoke to this lawyer.

Karen: And he was very soothing, which was just wonderful. Because I needed soothing. And I said, "How long will this take?" And he said, "Karen, it takes as long as it takes." And what I've seen since... And that's really stayed with me. Because it seems to take about seven years. And everybody else playing this game knows that except the owners.

Veronica: Yeah. And it's horrendous living with that. Particularly with water because you just can't sell it. You can't sell it and get full value for it.

Karen: Or you can patch it up, and sell it, and then live with yourself.

Veronica: Yeah, you're passing it on to somebody else who probably doesn't know about it because of the strata. Everyone's agreed not to talk about it. [inaudible 00:46:04]

Karen: That's right.

Veronica: It's a real concern, isn't it? Unless you're like Opal Tower and it's splashed all over the front pages. And what's that going to do to their values? Even if this thing gets bandaided, and fixed, and all the rest of it, will they ever recover? It's hard to know.

Karen: Yeah, but I see them as the lucky ones.

Veronica: Why is that?

Karen: Because it's out in the open.

Veronica: Right.

Karen: And most people just die a slow death of a thousand cuts with their defects. They're not equipped to deal with this. The quality of support out there is patchy, at best. So very bad to very good. Which reminds me, you're asking about, say, the good developers and the good builders.

Karen: I work with them a lot because they're being disenfranchised by the dodgy brothers. They are trying to do the right thing and they're being constantly undercut by people who know that they're going to... It costs about $300 to waterproof an average bathroom, probably. Costs about $10,000 to fix it.

Karen: [crosstalk 00:47:18] Just insane. So they get undercut all the time. And then they're also dealing with the lack of qualified staff, particularly contractors, particularly in a boom time. They're training. I think multiplexes set up it's own university to train people in the important bits. They've just taken it on themselves because they can't rely on TAIF or government education. So, it really goes from go to woe.

Veronica: So, yeah. Does the OCN, do you have a register for reliable builders and developers? Do you have that as a resource? So, I guess that's scary to you because then you got to ensure your own register. But I mean, where do people... Yes, you said you got to go online and check it all out, check this, check that, check history, look at other buildings on the register, but is there one central trusted resource that people can use to go to to get information that they can, I guess, highlights those that they can favor, and maybe rings the alarms bells of anyone that's not on it?

Karen: Yes. Not really. There is a website that supposedly rates developers and builders, but then they pay to be rated.

Veronica: Oh, yeah.

Karen: And they can remove comments. So, at OCN, we've certainly talked about that for a long time. What we need to do is set up the structure, so it would be a positive thing. As you say, we would name the good guys with ratings from our members on that and just not talk about-

Veronica: Yeah. If you're not on there... The whole goal is to get on it rather than to-

Karen: Yeah. So it's carrot and stick. It needs to be stick. That got thrown away by government a long time ago and we need to work on that. But there also needs to be carrot. There are builders and developers doing good work, who are proud of their work. And they should be showcased.

Veronica: Well, I'm pleased to hear that. So, what would you like to see addressed by our governments? What are some really, really... Your eyes lit up and you said, like, "Oh, would I?" I'd like to just look at your whole page there. That's the short version, right? What would you like governments to do?

Karen: Gosh. Have you got another hour? We might have to do a sequel-

Veronica: I know.

Karen: Or a prequel.

Veronica: Yeah, yeah. It's quite often that we sit here and chat for an hour and it's not enough.

Karen: Yeah. We want to see a statutory duty of care. The builder having a statutory duty of care to the subsequent owners. So, you and me who purchase from the developer. We'd like to see a special commission of inquiry that looks into the lack of consumer protections. Even the announcement at the Building Ministers Forum in February.

Karen: And they were talking about cladding. And there was a very, "Yes minister" statement put out by the BMF which said they would investigate banning flammable cladding dependent on the, and I'm paraphrasing, the impact on industry. Hello? Did I hear consumers? Consumers, anybody? Anyone?

Veronica: Lives, even apart from anything else. You're saying investigate banning flammable cladding. Even they used the word "flammable cladding." And would investigate banning it. I forget even the rest of it. It's just, "We'll investigate banning flammable cladding."

Karen: Yeah. And the industry's been calling for the federal government to stem the avalanche of non compliant products coming into the country for years. And nothing's happened. And then you've got state governments. It's all very confusing, really.

Veronica: It's bizarre isn't it? Because you're right. Okay, well, we don't want red tape. No one wants red tape. But it clearly sounds like we need it.

Karen: We need some tape.

Veronica: Yes. [crosstalk 00:51:35] I mean, it looks the same-

Karen: Pick another color. But just-

Veronica: Yeah. Whatever. Make it purple. Yeah. I mean, look, I've got the same issue in the real estate licensing end of things. In New South Wales government they're changing the licensing requirements from the rest of it but they don't want to burden the industry. It was the actual words used. When questioned about why is the [inaudible 00:51:57] entry so low.

Karen: And you've got the-

Veronica: [crosstalk 00:51:59] Don't want to burden the industry. Once again, what about the consumer?

Karen: Well, and the Real Estate Institute of New South Wales is begging government to do this. They want to lift the standards. They've tried to introduce things. And they just... Ask Tim [McKibbon 00:52:12] [inaudible 00:52:12]

Veronica: [crosstalk 00:52:12] Yeah, we had him actually on. We actually interviewed Tim a few episodes back, yeah.

Karen: Oh, God. He's fun. He and I have a lot of laughs and cry.

Veronica: It's infuriatingly frustrating. There's no doubt about it.

Karen: It's incredible. And again, there is research that proves that low level training increases the risk of fraud. And so, there's the Real Estate Institute trying to lift standards and being [inaudible 00:52:44] by government. Oh, no. That's red tape.

Veronica: I know. It's insane. It absolutely is insane. Yeah. And I find it interesting that government seems to be so supportive of industry. And it's like, well actually, who in our industry pays a lot of political donations, and all the rest of it. But at the end of the day, it's individuals that vote the government in to look after us. So-

Karen: And the crazy thing is that the governments economic and population growth plans are predicated on high rise living.

Veronica: Yes.

Karen: And yet, everything that's going on now is eroding consumer confidence.

Veronica: Absolutely. And we also have this situation where we've got buildings that are not built for longevity.

Karen: No.

Veronica: And almost like they're deliberately built with a use by date. I'm a little worried about that. Extraordinarily worried about that. So we have governments on both federal and state level that are both encouraging new construction. We have a population growth problem. It's not really a problem because there's lots of good things about population growth. Lots of huge good things about population growth, but particularly in Sydney and Melbourne.

Veronica: We have targets, yes. We have a reality, that's what we have. And those people need to be housed. And we have a stock shortage. And so, builders and developers are going to have to construct more and more apartments and yet, as you say, consumer confidence is being eroded. Not just on the quality, though, also on the values.

Veronica: Because now we've got a situation where values are being falling and settlements aren't going ahead because evaluations aren't coming in at the same price that the contract is at. And so, there's a massive area where people are understanding the real risk of negative equity.

Karen: Well, they're losing their deposits if they can't proceed to purchase.

Veronica: It's not just their deposits.

Karen: Well, they've also lost that market opportunity.

Veronica: And if they get sued... They can actually be sued for the difference between their purchase price and the ultimate sell price. So, the consequences there are very far reaching. They may never, ever, ever get back into a position where they can buy a property.

Karen: Which is wicked.

Veronica: It is wicked. Yeah.

Karen: What other consumer product would you see this happening to?

Veronica: Very, very interesting. So, I wish we could go... Oh, let's just do this now. And I wish I could give you some guidance. A bit of guidance to our listeners on these. But I think the point of this episode really is a little bit of fear mongering. It's a bit of a grim reaper, in a way.

Veronica: But I just really passionately want people to understand the risks that they're taking on when they buy off the plan. And I'm heartened to hear that your experiences that there are some good developers out there. And we're going to have to find a way for them to put their hands up so that people can easily identify who they are.

Veronica: Is there anything else that you could give, part from all the due diligence that buyers need to do, and obviously I'll include the links to the OCN on the show notes here. But is there anything else that you can suggest that anybody looking at buying an apartment needs to do that we haven't discussed today?

Karen: Ask around. So, go and visit previous projects. And if you can find names of committee members on the notice board, for examples, talk to them. Talk to somebody coming in and out. Are you happy?

Karen: Have you had problems with the building? Talk to people around you to ask them their experiences. People may have bought from this one, or that one, and had a good or a bad experience. So ask around.

Karen: It's really, really important. It's a huge... It's a lottery.

Veronica: Well, yeah. I mean [inaudible 00:56:26] that you're buying into a community as well. I mean, some people call it the fourth layer of government.

Karen: Yes.

Veronica: So you're buying into that system if you like them with other people. So there's a social element of it and just a personality element of it as well. But I guess that's great advice to actually ask people to live there. Not just owners, as tenants as well. I imagine they're going to understand if the building's got issues.

Karen: Yeah. Because they've got the intrusion of all the inspections of trying to work that out. Or they're living with water, and grizzle, whatever it is. So, yeah. It's really important to ask real people about that. Maybe we need to crowdfund to set up a register-

Veronica: Yeah.

Karen: Of the good guys.

Veronica: I like your idea of a award for the best five year old building. I love that. Every week we hear incredible stories about the dumb things that property buyers do. Dumb things that cost a lot of money and cause a whole lot of stress. Mistakes that can be avoided. And please, Karen, have you got a property Dumbo for us? Because we can all learn what not to do from these stories.

Karen: Well, it's probably me.

Veronica: Right.

Karen: Just check out the ears. I fell in love with a brochure. I proceeded to purchase that despite the exhortations of a friend in the industry. I didn't sell before I settled, which he begged me to do. And I would've made a profit on it then and then not have use of grief.

Karen: I did everything wrong. I used a local solicitor who didn't understand off the plan. And can I say, these contracts are like an inch thick. Or for millennials, 2.5 centimeters.

Veronica: I actually saw one recently. It was 1,800 pages.

Karen: Yeah. Yeah. And they chuck a block of get out of jail free cards for the developer. And very stringent requirements on the owner.

Veronica: Yeah. Yeah.

Karen: Including if you settle, you agree that there are no building defects.

Veronica: Yes. In fact, Jenny [Tonosir 00:58:43] back in episode 52, she talked about that. Often that they have... Buyers are expected to... They [inaudible 00:58:49] inspection before the building's even complete.

Karen: Yes.

Veronica: And then they don't get a second opportunity to add defects to that. So, it's a real trap [inaudible 00:58:58] plays, that one.

Karen: Oh, yes.

Veronica: So you're the Dumbo because against all the advice of somebody else who actually knew a lot of this stuff, you fell in love and you let your elephant, because that's the metaphor for the subconscious mind, your elephant was going left when your brain, your little rational mind on top matter wanted to go and ride. And you suffered years, and years, and years of financial and obviously stress, as a consequence.

Karen: I was iridescent with stress.

Veronica: Iridescent? That's a word. Right.

Karen: That's what a friend said to me when I walked into a room one time. "You are iridescent with stress." Because I can't overemphasize the conflict that it causes within your community when you've got those defects. And you've got people who don't understand why they have to build a moat in their land room, why this can't be fixed now.

Karen: There was one guy who said, "This unit is not fit for habitation. We want it knocked down." And proceeded to sue the Owners Corporation. This is not happy living. This is not getting out of the family home to have a nice, easy life and lock the door when you go on holidays.

Veronica: Yeah. So you got down sizes, for argument sake that he called out here. And you got, obviously, first time buyers who can get called out. You've got investors, can get called out. Anyone, basically, buying a brand new, probably anything... Well, some experts that we've had on the show said, "Don't buy anything less than 10 years old."

Karen: Yeah.

Veronica: Because it takes that long for all this stuff to work its way out of the system. Look, Karen. Thanks so much for coming in and thanks for sharing your story as well. Because I think that we just want to get it across to people the risks.

Veronica: If you're aware of the risks, and don't fall in love with the brochure, and ignore all the good advice that's given to you, then you can make really good decisions about property. And when you make good decisions, your life become easier and you don't live with regret. And obviously, you've lived with a lot of regret, which has sort of led you down a career path in a weird way.

Karen: Well, hath no fury.

Veronica: Well on that note, thank you so much for joining us today, Karen.

Karen: Thanks, Veronica.

Chris: We want to make you a better elephant rider. And this weeks elephant rider training is-

Veronica: All around understanding some of the other mistakes that developers can make that owners end up carrying the can for. Now these are one of the things that we didn't talk about during this episode. But one of the issues is the actual design of the apartment itself.

Veronica: So, unless you can read plans really well, when you're buying off the plan, it's really easy not to realize certain things are there. Such as ceiling lights, for instance. A lot of developers will engage in architect, for instance.

Veronica: And just because a development is architect design doesn't actually mean that it's well designed and really good to live in. Now, I'll give you an example. There's an apartment in a suburb close to me that's currently on the market.

Veronica: Now, it was built and completed in 2015. This particular apartment is top floor. It's a two level apartment. It's got city views, got lovely B terrace, three bedrooms, two bathrooms. You'd think that it'd fly out the door. It's a really pleasant place. But it's got some major issues.

Veronica: Now, the major issues are where the biggest terrace is located is off the main bedroom, not off the living room. And that's weird because it's got a tiny little balcony off the living area and this huge terrace off the bedroom. Now, nobody wants to entertain off their bedroom. They want to entertain off their living area.

Veronica: So, that's the first thing. The second thing is where the main bathroom is located. It is located directly off the living area. And I just look at this and I think, "When this was built, really, they had complete clean slate." They could've designed whatever they wanted. But instead, they've created a property that has a really terrible floor plan.

Veronica: Now, it was sold off the plan back in September 2015. They paid $1.4 million for it. So they paid a premium for being brand new anyway. And obviously, the market was pretty hot back there. But the owner has inherited that poor floor plan. And they can't do anything about it. And now it's on the market and it's been on the market for a long time.

Veronica: And now they're asking $1.35 million for it. The price drop is not because of the market, that price drop is because that is terribly designed. Now, that is something that developer really didn't pay for in terms of costing them enormously, but subsequent owners will always be paying for the fact that that property has a terrible floor plan.

Veronica: So, the elephant rider bootcamp here is about understanding, if you want to buy brand new, and we are not encouraging it, but if you're going to do it, learn how to read plans. And be really critical about the room layout, and also, work out the actual size of those rooms. Because quite often, there's no dimensions on these plans. And visual, they look big. But in reality, they're not that big.

Veronica: Please join us for our next episode when we interview a Motley Fool. What is a Motley Fool, you may ask? Well, Motley Fool is an online subscription based service for advising people on the stock market. Scott Phillips is their chief investment advisor and he joins us to talk about investment fundamentals.

Veronica: He talks about whether people should use a share market in order to accelerate their saving for a home deposit. Also, alternatives for would be investors who can't afford to buy investment grade property. It's a very, very interesting, educational episode. I encourage you to join us.

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

Veronica: Or, you can connect with us on theelephantintheroom.com.au. The links are all there for you.

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

Veronica: The Elephant in the Room Property Podcast is recorded at the Sydney Sound Brewery. This weeks podcast was recorded by John Risk, editorial by Gordy Fletcher.

Chris: Until next week, don't be a Dumbo.

Veronica: 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 buyers agent who will tailor and document their advice to your personal circumstances with a statement of advice.



Hello, World!

Chris Bates