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[Peyronnet]

I am new  EC member (because of my concerns) and  as the former long term Chairman and Secretary sold their units and resigned, I am continually being shocked at what I am seeing and experiencing, I hope someone can help me with just a couple of the anomalies I am coming across.

For the last 10 yrs our Strata Manager (SM) has had the Building Managers (BM) Agreement  prepared annually and the AGM  Agenda 2013 and  2014 included particulars of  the annual renewal of the  BM Agreement as follows  –“Resolved to renew the terms of the BM Agreement dated 1 July 2006 with  xxxxxx  for a further 12 months according to NSW CPI increase”.

We are a very large Strata and there’s never been a quorum for the AGMs, so following necessary adjournments Minutes are issued. These Minutes do not mention the BM Agreement at all. The process  then seems to be the BM invoices the OC/SM monthly for his fee and  the SM pay on behalf of the OC. 

I have noticed that his invoiced fee paid  last financial year had been increased by a figure greater than the usual ABS CPI and as well it was increased by another 10% . This is not in accordance with statement in the AGM agenda circulated to owners. Upon querying with the SM if  the GST had been  included or not in the BM Fee I was advised “to take this up with the BM”.

 I have reviewed  the last 2 years BM Agreements  and there is no mention at all  of any GST, which could equate to the extra 10% paid ? The AGM and EC Minutes provide no mention of any increase or changes to the 2006 Agreement..  

BM Fee 2012-13 – $ 120,000.00 out of which the BM Schedule of Duties  included Garden Maintenance

BM Fee 2013-14 -$127,000.00 + a new fee of $20,000 pa for the Garden Maintenance which had been previously included in  the Schedule of duties for the  previous years.  No mention of this additional Fee can be found in EC or AGM Minutes and this increase is being paid by the SM!

Questions

What is the normal practice  for approval and payment of BM invoiced fees ?

Who normally is liable for payment of the CPI for BM services?

Can SM’s pay Fees /variation/increases that have no approval from the AGM, EC or without adequate  documentation?

Is there any  way major costs can be Benchmarked?  It would seem we are paying exorbitant charges for items for a 15 year old building  eg Fire annual

To mulch several  medium sized garden beds $4,000, the work being carried out by the gardener employed by the BM for the $20,000 fee above

Payments have also been made for work never undertaken  and the more I look the more horrified I am becoming.

 

Advice would be most welcome.

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