I get into so much trouble when I take a pop at strata managers in this column that I try really hard to remind myself that most strata managers are efficient, helpful, underpaid and overworked. Then I get an email like this one.
QUESTION: Our strata manager called the AGM for our small block last October only when reminded by us that it should have been held July or August. When the agenda arrived, financial details for the coming year were based on incorrect figures for income and we were being charged less in levies than we needed to run the building.
We pointed this out but four months later, we have received no revised financial statement and in fact no revised minutes or date for an effective AGM at which correct accounts could be presented and approved.
Worse, we have now received our notices for levies in the incorrect amounts presented at the AGM but never been agreed to by owners. We think perhaps our strata manager is in breach of his duty, and perhaps of the law. Would we be justified in seeking another strata manager? – Underwhelmed
ANSWER: Would you? I reckon! I don’t know if your strata manager has broken any laws but they’re certainly in breach of their duty (not to mention basic customer service). Check their contract isn’t one of those dodgy ones that says they can’t be sacked under any circumstance short of taking hostages and setting fire to your building, get all your documents back and show them the door (it sounds like they’ll have trouble finding it themselves).
But before you rush into a new contract with another firm, consider managing yourselves. The key phrase in your email was “small block”. You’re obviously not worth their trouble and you seem to have more idea of how things should work than they do.
There are a couple of self-management packages on the market (and more coming on stream, I am told). So unless you and your neighbours are involved in rolling feuds, think about doing it yourselves. Fifty percent of strata schemes in NSW are self-managed so it clearly can be done.
Want to buy self-management package !! Please advise!! Lives in a duplex. Cheers!!
—tibor werknerThanks for having some balance in your column. You were right to suggest they shop elsewhere – from the description in the question the strata manager seems to have put in a very poor performance.
The other side to the story of course is the self managed schemes that strata managers pick up from time to time, which have been badly run. Practices from buildings where we have stepped in include:
- An owner letting inflated contracts to mates
- An owner taking over contracts themselves / performing poorly and then bullying to stay in power
- Social conflict to the point where people cannot stand the sight of each other and no sign of a mediator
- Poor or no compliance in OH&S , current building valuations, funding etc
Some self managed buildings do work well but invariably it’s the efforts of a few small and dedicated people. Great when they are there but what happens when they sell , die or get too annoyed to do any more?
The fiduciary nature of a strata agency agreement seeks to ensure that the collectives’ interests (should) be served. Strata Managers are for the most part extremely well skilled in their legal obligations and what they must do to comply with the law. The same cannot be said of self managed schemes.
There is still an incredible gap between what the market is prepared to pay what the expectations of the market are. Under-skilled operators are really the danger here, they drag prices down but take service levels and competence with it giving the industry a bad name.
There are more good strata managers out there than bad and the Institute of Strata Title Management is trying to tip the balance in favour of good through various programs and initiatives.
The best thing your readers can do when looking for a new strata manager is to talk to their other clients and make sure they also communicate well their expectations with the new manager. Most often conflict arises from poor communications and big expectations.
—David FergusonThe Act states the AGM must be held one month either side of the first AGM.
—Eaton CourtThe Act states that accounts presented for adoption must not be more than two months old from the FYE of the strata plan.
Our strata manager has not convened the 2009 AGM as yet which should be held each November.
If and when it is held the accounts will be so old they can not be adopted and how a proper budget based on these figures can be considered is impossible.
The strata manager, a member of the “Institute” does not respond to emails and will not provide information on anything. His “scratch my back” cronies on the ECM do nothing as well so all the other owners are stuck in limbo.
What can be done ?
JimmyT writes: Contact the Institute of Strata Title Management on http://www.istm.org.au and/or call Fair Trading on 13 32 20 and tell them what’s going on. They will advise on the next step.
Dear Jimmy
You say 50% of strata schemes are self managed in NSW – but do you know how well they are managed and are they managed according to strata law? We only find this out when an owner takes the owners corporation to the CTTT or the Supreme Court.
We now have 10 year sinking fund plans that owners corporations have to implement. The problem has been in the past that owners corporations have not wanted to raise the levies to a realistic level to cover the costs of running the strata scheme – this is particularly so with older schemes that are by their nature more expensive to run.
Smaller strata schemes are at a greater risk of mismanagement if self managed. It takes a brave soul to take on the other owner or owners in a smaller scheme and exert your rights under the Strata Schemes Management Act. In this instance, many owners chicken out and let the other owner or owners have their way – as a consequence you have a run down strata scheme. This devalues their unit and when they try to sell they soon find out how much!
May I suggest that if you haven’t already done so you talk about the decision of Seiwa Pty Ltd v Owners Strata Plan 35042 [2006] NSWSC 1157 in your weekly column. This is a “Wake Up Call to Owners Corporations” on NSW.
H. Ackroyd
—H. Ackroyd