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  • #44153
    AvatarGumdrops
    Flatchatter

    Is it acceptable that a strata management company, looking after 15 strata units and charging fees of $12,000 for management also get paid a 20% commission on the strata Insurance amounting to a further $2000 approx? (In WA)

    #44167
    Jimmy-TJimmy-T
    Keymaster
    The current average fees for full-service strata managers are between $250 and $300 per unit per year, although they could be more or less.  On that basis, your scheme should be paying $4,500 p.a. at most. The 20 percent commission on insurances seems excessive too.
    The  fees would obviously be higher if other services such as caretaking/building management were also provided.
    • This reply was modified 1 week, 5 days ago by .
    #44294
    AvatarSilly Cow
    Flatchatter

    Are we in NSW? Do these fees include Part A and Part B fees? What are they doing under Part B? What does the contract with the strata managers say about the commission they get from insurance and getting a kick back from referrals to particular lawyers to do the debt collection for late strata fees and litigation expenses suing people for damaging common property and so on? These kickbacks have to be revealed in the contract which your strata managers have signed so before you go further, you need to read it. If you object to the conditions you can ask your strata committee why they signed it.

    #44296
    AvatarSilly Cow
    Flatchatter

    I now see you are in WA but I can’t see that these basic concepts would not apply to you anyway unless your contracts between Strata Corporations and Managing Agents are different to ours in NSW. Send me your agreement with your strata manager and I will advise further.

    #44365
    Jimmy-TJimmy-T
    Keymaster

    Strata management contracts are different everywhere – because strata laws are different everywhere.  Victoria is only now looking at laws that would require strata managers to reveal their insurance commissions.  WA is reviewing its strata laws and that state is way behind most of the rest of the country in the evolution of its legislation.

    You know what they say about “assume” …

    • This reply was modified 1 week, 5 days ago by .
    #44517
    AvatarCosmo
    Flatchatter

    Hi Gumdrops, just regarding the 20% commission for insurance.  It is common and accepted practice (I think) for insurance brokers to take 20% but this is off the insurance companies profit.

    Our Strata uses an insurance broker and the broker gets paid a 20% commission but we pay the same as if we had purchased the policy directly off the insurance company.

    So if the 20% you referr to is this, it is standard practice.  However having said that your Strata manager appears overly remunerated!!

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