The good, the bad and the strata manager

A few weeks ago we looked at the role of the building facilities manager in a block and how a good one can enhance liveability and property values while a bad one can be horrendously costly in every regard.

The same applies to strata managers – or strata managing agents, to give them their correct title.  They can be an absolute boon to a building, or a complete disaster, depending on the individual, their abilities, and the strata schemes’ expectations.

So what does a strata manager do?  One of the common misconceptions about strata managers is that they run the building and the committee only does what the SM tells them.

While that may happen in the odd (very odd) scheme, it should be the other way round.

At a very basic level, they collect all the levies and fees and pay all the invoices for things like power, water, cleaners and insurance.

Apart from handling the finances, strata managers arrange meetings and send out agendas and minutes. 

Now, any of these duties could be carried out by the chair, secretary and treasurer of the committee – and in some schemes they are.

But committee members come and go and the SM can be more of a constant. They also have (or should have) a profound and detailed knowledges of strata law and your block’s by-laws.

They might be expert and experienced mediators, diplomats and political strategists – in strata, everything is political.

They will have access to the best and most reliable tradies, cleaners and concierges. In some schemes they are given all the committee’s responsibilities, especially where owners have no interest in the nuts and bolts of running their schemes.

Many schemes – possibly about half – have no strata manager because they are either capable of arranging their own finances and meetings or they have little idea of their statutory obligations but survive regardless.

One recurring bone of contention is that strata managers can collect commission for arranging compulsory strata insurance.  Even when owners arrange their own policies, they don’t get a discount for the unpaid strata manager commission. That’s probably a topic for a whole other column.

The schemes that benefit most from having a strata manager are the very large and the very small.  The former for obvious reasons, the latter because disputes are more likely to get personal and an independent arbiter can be very handy.

Another misconception about strata managers is that they get paid enormous sums of money.  In a large scheme, they do collect huge amounts of money, but then they pay most of it out on the scheme’s bills.

In fact, strata manager’s fees average about $250 – $350 per unit per year.  So the next time you get on your high horse about your strata manager, try starting with “I don’t pay you $5 a week to be treated like (whatever).”

The status of strata managers is different everywhere. In NSW they have recently established their Professional Standards status, which brings with it a code of conduct.

In Victoria, unlike elsewhere, strata managers must be appointed to blocks of more than 100 lots (and are highly recommended for smaller ones too). 

So what makes a good strata manager and how would you define a bad one?

Basically, a good strata manager will alert a committee and its office-bearers when they are about to do something immoral or illegal or both, and advise them on what to do that benefits all owners and residents. 

A bad strata manager will turn a blind eye to committee misdemeanours in the hope that their complacency and complicity, often to the benefit of the committee members and at the cost of other owners and residents, will ensure their contract is renewed.

In short, strata managers are people too … with all the good and bad that that implies.

This column first appeared in the Australian Financial Review.

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