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  • #53325

    I find the debate about the $ cost of levys a bit misleading.  Surely it is the value you get that is important.

    Transparency is important as is making sure a strata gets value for it’s money.  These are more important than the absolute cost of levys.

    Things like jobs for mates or waste are the killer that rightly so make owners resent levys.

    Better higher levys and have the place up to code and repair than cheap levys and the place falling and failing.

    [This post popped up ina discussion about strata management fees, so I moved it here – JT]

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  • #53384

    A lot of people (me included) are ignorant of how the levies are used.  The quarterly financial statement never looked like a fun read.

    Since joining the strata committee, I had a close look at our financial statements and I read the strata manager’s contract.  Our strata manager had a rule in our contract where they could spend up to $500 on a repair without asking for permission of the owners corporation.  Every three months, I perused our financial statement and noticed many repairs costing $495 or $450.

    If the strata manager sought a quote, the price was always exhorbitant.  The strata manager doesn’t care about the price because it is not the strata manager’s money.  i.e. If the work was being done on the strata manager’s own home, they’d get a better price.

    Our owners corporation now works without the “$500 rule” (and the strata manager).  Executive committee can advertise for a job to be done.  We typically receive quotes half the price or less than under the old regime.

    It pays to study your strata manager contract and every transaction in your financial statement.  Go back a few years so that you get an idea of all the recurring costs and problems.

    Call a few other strata management firms and ask for quotes.  When I did that, the strata management price varied a lot.  A couple of them had the “$500 rule”.

    I would expect levies to be higher in a smaller strata plan and if there are paid employees (building concierge) and facilities like swimming pool, gym, elevators.

    Our biggest expenditures are strata insurance, water usage (we’re not individually metered) and strata manager.


    I hear the claims of overcharging, jobs for the boys etc. The loudest voices come from owners who are not on the committee and who rarely turn up to meetings.

    One  cause of this issue is a lack of  communication by the committee,  that is if one is active.  Let owners know what is going on and why. If owners understand why decisions are made or  costs incurred they can be a little more understanding.

    Another cause is not the lack of  committee involvement. When did your  committee last audit the accounts.  I don’t mean by an accountant I mean looked at every expense and queried them with the strata  manager. I’ve recovered almost 10% of our budget because supplies charged incorrectly.

    How often has the committee gotten heir own quotes for work around the building? The companies that strata managers use are some of the most expensive trades around. You can do better finding local tradesmen.

    When was the last time you tendered for your strata management. Many strata managers have an automatic 5% rise clause, After  a few years there fees get out of alignment with the market. Firstly  at the next renewal challenge this clause. Most strata managers will alter this to a lower % if asked. At the next renewal ask other strata managers to tender and let your current strata  manager know that this is what you are doing.  They’ll sharpen the pencil.

    Whilst many will disagree with me, property is not a passive investment. Whether you are just owning your own place or letting, you need to be involved. That way you can be incharge of the running costs.

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