You should ask for a copy of the proposed strata management agreement and read it carefully. You can ask them to change the terms of the agreement.
I recently went through the process of seeking a new strata manager. I received about 8 quotes. There was a big price difference between them. I used a spreadsheet to compare them. Some have a management fee plus disbursements (postage, calls, photocopying etc) plus GST. With a spreadsheet, I could add all these costs.
Check your state’s licensing authority to make sure they are a licensed strata manager.
Some of the strata managers use a template strata management agreement. That template had an annual increase of 5% p.a. and a minimum term of two or three years.
Ask about exit conditions. If you are not happy with the new manager after six months, and the contract says you have a term of three years, you may struggle to get the strata manager to agree to an earlier termination.
Some contracts allow the strata manager to incur expenditure up to $500 or $1,000 without notifying the owners corporation. Make sure you are comfortable with that idea. I’ve seen a lot of invoices for $495 – intended to avoid the attention of the owners corporation.
Also, they almost always want to have unlimited spending for an emergency situation. I think you should find out what they consider an emergency situation to be or work out a plan that does not leave you in bill shock.
Ask them about their debt collection process: how they handle non-payment of levies.
See if the strata manager expects to do all or most of your communications via email / SMS / phone call instead of paper mail. This would help reduce costs and be faster.
Be clear about what is included and what is NOT included in the basic management fee. There may be a long list of tasks which incur extra costs.
The cost of holding the annual general meeting should be included in the basic management fee. Some strata managers allow one extraordinary general meeting at no extra cost.
How much does an extraordinary general meeting (EGM) cost? Is it cheaper if electronic pre-voting is allowed?
Check the cost of updating your by-laws. My previous strata manager charged $550 for adding a by-law change to an EGM agenda. Even though I wrote the by-law myself, they wanted to charge $550 plus the cost of registering it ($141).